ePlus(PLUS) - 2025 H1 - Earnings Call Transcript

Financial Data and Key Metrics Changes - The company reported revenue of $415 million for the first half of 2025, representing a year-on-year growth of 4% [40] - EBITDA grew significantly by 1512% year-on-year, reaching $185 million [39] - Total customer deposits more than doubled to $3.1 billion, with an average deposit per active customer increasing to approximately $17,000 [25][39] - The company ended the period with cash balances of approximately $938 million and no debt, indicating a strong financial position [42] Business Line Data and Key Metrics Changes - Non-OTC revenues accounted for approximately 13% of the group's total revenue in 2025, up from just 1% when the futures business was acquired in 2021 [24] - The futures business saw customer segregated funds grow to approximately $850 million, a 140% increase from the previous year [26] - 66% of OTC revenue was derived from customers who have been trading with the company for over three years, highlighting customer retention [9] Market Data and Key Metrics Changes - The company expanded its operations into new markets, including the UAE and Canada, and secured a new license in Japan [10][20] - The acquisition of MetaEquities in India is expected to enhance the company's presence in a significant market [18][14] - The company operates in over 60 countries, serving approximately 32 million registered customers [21] Company Strategy and Development Direction - The company aims to deepen customer engagement and enhance retention through investments in technology and customer service [10] - A strategic roadmap has been established to focus on growth, innovation, and diversification into non-OTC products [48] - The company is committed to maintaining its competitive advantage through proprietary technology and expanding its product offerings [30][10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the structural growth opportunities ahead and the positive momentum in the business [4] - The company views regulatory changes in India as positive for long-term growth and market stability [54] - There is a focus on balancing growth between non-OTC and OTC segments to ensure robust returns [57] Other Important Information - The company has returned approximately $365 million to shareholders year-to-date, equivalent to 11% of its market capitalization [6] - Plus500 has been recognized as the best-performing share in the FTSE All Share Index over the last twelve years [7] - The company is committed to being carbon negative by 2030 and has moved to a more energy-efficient headquarters [15] Q&A Session Summary Question: What are the implications of regulatory changes in India for MetaEquities? - Management views the new regulatory changes as positive, as they support a more structured and regulated market, which can attract new customers [55] Question: What is driving the growth in non-OTC customer deposits? - The growth is primarily driven by recruiting introducing brokers, which brings in their customers, thus increasing deposits [63] Question: What strategies have been implemented to improve customer retention? - The company has focused on enhancing its technology stack and integrating AI and big data capabilities to improve customer retention and reduce churn rates [65] Question: When can we expect revenue from non-OTC products to accelerate? - Management anticipates continued growth in revenues as investments in new products and geographies yield results [68] Question: What changes have been made to improve marketing efficiency? - The company has optimized its marketing processes, leading to lower customer acquisition costs while increasing the quality of earnings and customer longevity [71]