Freedom (US:FRHC)2025-11-07 21:07Customer Growth - As of September 30, 2025, the number of banking customers increased to 3,617,000 from 2,515,000 as of March 31, 2025, representing a growth of 43.8%[204] - The number of retail brokerage customers rose to approximately 776,000 as of September 30, 2025, compared to approximately 683,000 as of March 31, 2025[238] - Freedom Life had 488,876 active contracts as of September 30, 2025, down from 1,038,516 active contracts as of March 31, 2025, due to regulatory changes affecting new business volumes[215] - Freedom Insurance saw an increase in active contracts to 1,388,832 as of September 30, 2025, up from 824,838 as of March 31, 2025[216] Financial Performance - Total revenues for the three months ended September 30, 2025, were $526.1 million, a decrease of $60.0 million or 10% compared to $586.1 million for the same period in 2024[235] - Net income for the three months ended September 30, 2025, was $38.7 million, down from $114.5 million in the same period of 2024[236] - Total assets increased to $10.3 billion as of September 30, 2025, from $9.9 billion as of March 31, 2025[237] - For the three months ended September 30, 2025, the company reported a net income of $38.7 million, a decrease of 66% compared to $114.5 million for the same period in 2024[294] Revenue Breakdown - Fee and commission income for the three months ended September 30, 2025, was $132.2 million, an increase of $11.2 million or 9% compared to $121.1 million for the same period in 2024[240] - Brokerage services generated $137.6 million in fee and commission income, a 28% increase from $107.4 million in the prior year, driven by an increase in retail brokerage customers from 555,000 to 776,000[248] - Interest income for the three months ended September 30, 2025, was $211.7 million, a slight increase of 1% compared to $210.3 million in 2024, primarily due to a 78% increase in interest income on margin loans to customers[255] - Insurance premiums earned, net of reinsurance, decreased by $35.1 million or 22% to $125.2 million for the three months ended September 30, 2025, compared to $160.3 million in 2024[240] Expenses and Losses - Total expenses for the three months ended September 30, 2025, were $465.6 million, a slight increase of $8.0 million or 2% compared to $457.7 million for the same period in 2024[265] - Payroll and bonuses expense rose to $93.1 million, an increase of $26.9 million or 41% compared to $66.2 million in Q3 2024, attributed to workforce expansion and higher salary amounts[286] - Insurance claims incurred, net of reinsurance, increased by $13.2 million, or 20%, to $79.9 million in Q3 2025, mainly due to a $19.6 million rise in claims paid for compulsory motor third-party liability[284] - The provision for expected credit losses was $11.9 million in Q3 2025, up from $10.4 million in Q3 2024, reflecting a deterioration in macroeconomic conditions[291] Market Expansion - The company aims to expand its banking segment by establishing a bank in Georgia, pending regulatory approvals[211] - The company is expanding into the telecommunications market in Kazakhstan through its subsidiary Freedom Telecom, aiming to provide a range of telecommunications services[228] - Freedom Media was established as a subsidiary of Freedom Telecom to become a national media platform in Kazakhstan, targeting the Central Asia market[229] Regulatory and Compliance - S&P Global Ratings revised its outlook to positive from stable for several subsidiaries, reflecting achievements in risk management and compliance[230] - The company is in the process of obtaining a license to provide brokerage services in Turkey following regulatory approval[205] Capital Expenditures - Capital expenditures for the telecommunications expansion in Kazakhstan are expected to be significant, with a $200 million domestic bond placement completed on December 19, 2023, to finance these expenditures[384] - As of September 30, 2025, capital expenditure commitments related to telecommunications equipment and software amounted to $116.8 million[385] - Total capital expenditures for the newly established subsidiary Freedom Media in Kazakhstan reached $16.5 million as of September 30, 2025[386] Dividend Policy - The company does not anticipate paying any cash dividends on common stock in the foreseeable future, as future earnings will be retained for business development and expansion[387] - No cash dividends were declared or paid during the three months ended September 30, 2025[388] - Future cash dividend payments will depend on operational results, earnings, capital requirements, and other relevant factors[389]