Freedom Holding Corp. Reports Fiscal Year 2025 Financial Results

Freedom Holding Corp. (FRHC) reported fiscal year 2025 revenue of $2.05 billion, a 23% increase compared to $1.67 billion in fiscal year 2024; however, net income decreased to $84.5 million, or $1.40 earnings per diluted share, compared to $375 million, or $6.33 per share, in the previous year. The company highlighted growth in its brokerage and insurance businesses, driven by investments in digital infrastructure and the success of its Freedom SuperApp, which has garnered over 1 million monthly active users since its launch in April 2024. FRHC is also expanding into telecommunications and media markets following its acquisition of Astel Group Ltd. and will be added to the Russell 3000 Index on June 27, 2025.

Analysis

Freedom Holding Corp. (FRHC) reported robust top-line growth for fiscal year 2025, with revenues increasing 23% year-over-year to $2.05 billion, primarily fueled by a 15% rise in fee and commission income to $505 million and a significant 133.7% surge in insurance underwriting income to $617.6 million. This revenue growth was supported by continued expansion in its customer base, with retail brokerage customers growing to 683,000, bank customers at Freedom Bank KZ reaching approximately 2.5 million, and insurance customers more than doubling to 1.17 million, alongside the successful launch and adoption of its Freedom SuperApp, which achieved over 1 million monthly active users. However, this strong revenue performance was sharply contrasted by a significant 77.5% decline in net income to $84.5 million from $375 million in the prior year, resulting in diluted earnings per share of $1.40 compared to $6.33. The primary drivers for this profitability decline were a substantial 57.4% increase in total operating expenses to $1.94 billion – with notable increases in fee and commission expense, payroll, advertising, and allowance for credit losses – and a critical negative swing in net trading securities results, which recorded a loss of $57.8 million in FY2025 compared to a gain of $133.9 million in FY2024. This was partially offset by a positive turnaround in derivatives trading, which posted a $12.4 million gain versus a $103.8 million loss previously. Strategically, the company is advancing its diversification with investments in digital infrastructure and AI, the acquisition of Astel Group Ltd. for $22.6 million to enter the telecommunications market in Kazakhstan, and plans to venture into media, supported by a $200 million bond offering. The upcoming inclusion in the Russell 3000 Index on June 27, 2025, is anticipated to enhance FRHC's market visibility.

Key Decisions for Investors

• Investors should carefully weigh Freedom Holding Corp.'s strong 23% revenue growth and successful customer acquisition against the significant 77.5% contraction in net income, which was primarily impacted by sharply increased operating expenses and a substantial negative turnaround in trading securities gains.
• It will be critical to monitor FRHC's ability to implement effective cost controls and improve profitability margins in fiscal year 2026, particularly as it integrates new acquisitions like Astel Group Ltd. and pursues its ambitious expansion into the telecommunications and media sectors.
• While the forthcoming inclusion in the Russell 3000 Index may offer a positive catalyst for share liquidity and investor awareness, sustained long-term investment appeal will hinge on the company's capacity to convert its strategic growth and diversification initiatives into consistent and improved bottom-line results.