Plus500 Reports Strong Q1 Results, Lifts Forecast For Full Year
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Plus500 has reported a solid financial performance for the first quarter of the year, showing a 13% increase in revenue compared to the last quarter of the previous year. The company has updated its outlook for the rest of the year, predicting stronger results than what analysts have been expecting.
Although revenue dropped 5% when compared with the same quarter one year ago, the company pointed to progress in important areas. Plus500 earned $205.8 million between January and March, rising from $182.8 million in the last three months of last year. Earnings before interest, tax, depreciation, and amortization (EBITDA) went up 23% to reach $93.8 million.
The chief executive officer, David Zruia, explained that Plus500 had started the year with progress across several key areas. He also shared that the company expects the full-year results to be better than what the market currently predicts.
Plus500 Expands Futures And Diversifies Revenue
The company reported that its efforts to diversify are working. Revenue from non-over-the-counter (non-OTC) business rose to about 12% of total income, compared to 10% for the full previous year. Management believes this part of the business could bring in close to $100 million in revenue by the end of this year.
Plus500 also saw strong growth in its U.S. futures business. Customer-segregated funds reached around $630 million by the end of March, showing an 80% increase from the end of December.
The group recently announced a deal to acquire Mehta Equities in India, a move that allows it to enter one of the largest futures trading markets in the world. The Indian market, according to the company, handled more than 150 billion contracts last year, which is over 75% of global trading volume.
The firm’s Financial Strength Maintained Despite Drop In Customer Numbers
Zruia noted that the Mehta Equities deal would help the firm bring together its U.S. and Indian futures operations. This would strengthen its global presence in this part of the trading market.
Plus500 ended the quarter with over $885 million in cash, even after spending around $52 million on share buybacks. During the period, it purchased more than 1.5 million of its shares at an average price of £27.41 each.
Operational results showed mixed signs. From the previous quarter, the number new customers dropped by 26%, landing at 26,897. Active traders also declined by 4%, totaling 130,514. However, the company earned more from each customer. Average revenue per user climbed 18% to $1,577, and the cost to gain each new user dropped 11% to $1,205.
Customer deposits reached $1.6 billion for the quarter, doubling the $0.8 billion recorded in the last quarter of last year. The average deposit per active user went up 106% to about $12,450, which Plus500 attributed to stronger trust from high-value clients.
The company received a new regulatory license in the UAE earlier this year, allowing it to grow its product range in that region. It also introduced a multi-asset platform for traders in Japan, featuring new instruments based on indices, stocks, and ETFs.
