Release Date: August 19, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Plus500 Ltd (FRA:P55, Financial) reported an 8% increase in revenue and a 6% increase in EBITDA for the first half of 2024 compared to the same period in 2023.
- The company announced significant additional shareholder returns of $185.5 million, contributing to a total of $360 million in shareholder returns for 2024.
- Plus500 Ltd (FRA:P55) has a strong balance sheet with over $1 billion in owned cash and no debt.
- The company continues to invest in its proprietary technology, which drives product innovation and enhances the trading experience for customers.
- Plus500 Ltd (FRA:P55) has a sizable and established customer base of over 27 million registered customers across more than 60 countries, providing a significant source of current and future value.
Negative Points
- Marketing expenses increased to approximately $85 million due to higher levels of activity and investment in the business.
- Payment processing costs decreased by around 8%, indicating potential challenges in managing operational efficiencies.
- The company faces increased competition in the US futures market, requiring substantial financial and personnel resources to maintain its position.
- Plus500 Ltd (FRA:P55) has a blended tax rate of approximately 19%, which is higher than the preferential tax rate of 12% in Israel, due to operations in multiple jurisdictions.
- The company is dependent on market volatility to drive trading activity, which can be unpredictable and affect financial performance.
Q & A Highlights
Q: Do you plan for any new product launches in Japan or other geographies?
A: Yes, we expect to launch our full product offering in Japan by the end of the year. Currently, we have initiated the product in Japan with Forex offering and knock-out options of Forex only. We will release our multi-asset account by year-end. Additionally, we are working on other products and will announce them when applicable. β Elad Even-Chen, CFO
Q: What are the key differentiators for Plus500 COSMOS in the US B2B market?
A: Our reference point for customers is innovation, particularly from a technological standpoint. Plus500 COSMOS provides visibility to various kinds of introducing brokers, regulators, and institutional parties. It includes a new CRM system that enables cash-in, cash-out, treasury capabilities, risk management, and other features. This technological stack is unique and leads the way in the market. β David Zruia, CEO
Q: Can you explain the rationale behind upgrading guidance today?
A: The upgrade reflects the Board's belief in the strength of the business. The strong start to Q3, helped by increased volatility, indicates that the slowdown in activity seen at the end of Q2 was short-term. β Elad Even-Chen, CFO
Q: How much of the active user growth or new customer growth is attributable to the US business?
A: We have a few thousand active customers in the US, contributing to the numbers announced today. We expect to provide more detailed KPIs about the US business at the end of the year. β David Zruia, CEO
Q: How did the idea and design for Plus500 COSMOS come about?
A: We identified a missing part in the industry for a proper client portal. COSMOS was developed internally in collaboration with some of our customers and potential customers. It provides solutions for IBs and their customers, including online onboarding, depositing, and various dashboards. β David Zruia, CEO
Q: Can you provide more details on the revenue contribution from the US B2B and B2C segments in H1 '24?
A: We will elaborate on the US numbers with more KPIs at the end of the year. β David Zruia, CEO
Q: Can you help us understand the 19% group tax rate given the 12% rate in Israel?
A: The blended figure of approximately 19% results from operations in multiple jurisdictions, including the US, UK, and Australia, which have higher tax rates. Additionally, FX impacts contribute to the overall tax rate. β Elad Even-Chen, CFO
Q: How does Plus500 benefit from changes in volatility?
A: Plus500's strength lies in its ability to generate strong results even when market conditions are not at their peak. This is due to our retention technologies, customer support, and technological advancements, which increase customer longevity and appreciation. β Elad Even-Chen, CFO
Q: What contingency plans does Plus500 have in place for different scenarios?
A: Plus500 has built a global operation with redundancy teams for all crucial operations around the globe. Our servers are located in the UK, and most operations are managed from Bulgaria, ensuring that nothing depends on any specific country. β David Zruia, CEO
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
