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SEC filingRevenue declined 5% driven by lower insurance premiums, while net income fell 2% as gains from securities sales offset a tax hike.
For the three months ended December 31, 2025, Freedom Holding Corp. reported total revenue of $628.6 million, down 5% from $664.6 million in the same period last year. The decline was driven primarily by a 40% drop in insurance premiums earned (to $106.9 million) due to a regulatory cap on commissions paid to insurance agents for policies associated with bank and microfinance loan products. Net gain on trading securities fell to $43.5 million from $89.6 million, as a realized gain of $52.3 million was partially offset by an unrealized loss of $8.8 million. Fee and commission income decreased 12% to $126.1 million, largely because of active use of a cashback-based loyalty program that reduced banking service revenue by $27.4 million. Net gain on foreign exchange operations surged to $45.8 million (from $3.9 million) on a 7.9% appreciation of the Kazakhstan tenge. Income before income tax slipped 4% to $93.9 million, while net income attributable to common shareholders fell 2% to $76.2 million. Earnings per share (basic) were $1.27, compared to $1.32 in the prior year.
Total assets increased to $12.4 billion as of December 31, 2025, up from $9.9 billion on March 31, 2025. The growth was driven by a tripling of restricted cash to $2.64 billion (mainly brokerage customer segregated cash), a rise in investment securities to $3.13 billion, and an increase in loans issued to $1.98 billion. Total liabilities expanded to $10.98 billion, with customer liabilities rising to $6.82 billion (from $4.30 billion) and debt securities issued more than doubling to $1.08 billion. Shareholders' equity grew to $1.39 billion from $1.21 billion, supported by retained earnings of $1.23 billion. The company had $869 million in unrestricted cash and equivalents.
For the nine months ended December 31, 2025, operating cash flow was $1.73 billion, far exceeding net income of $145 million. This was largely due to a $1.73 billion increase in brokerage customer liabilities (and corresponding restricted cash). Investing activities used $941 million, primarily for loan originations ($396 million), purchases of available-for-sale and held-to-maturity securities ($673 million), and capex ($176 million). Financing activities provided $1.00 billion, including $599 million from debt issuance and $669 million from bank customer deposits. The net change in cash, equivalents, and restricted cash was $1.87 billion.
Management attributed the revenue decline to the insurance regulatory cap and superapp cashback program, while highlighting growth in customer counts across segments (banking customers rose 78% to 4.47 million, brokerage customers 21% to 828,000). The company is expanding its digital fintech ecosystem, including telecom operations (Freedom Telecom) and a proposed Sovereign AI Hub in Kazakhstan. Risks include ongoing SEC inquiries, the Einride arbitration case ($10 million claim), and geopolitical tensions. No specific fiscal guidance was provided.
Segment results showed wide variance: Brokerage net income was $81.0 million (up from $102.3 million in the prior year), Banking net income was $79.6 million (up from $34.5 million), Insurance net income was $23.6 million (up from a loss of $5.2 million), and Other segment posted a net loss of $108.0 million (vs. a loss of $53.4 million), driven by telecom and e-commerce startup costs. Fee and commission income from a single market-maker customer accounted for 68% of total fee income in the quarter. The provision for credit losses fell to $6.3 million from $30.6 million, reflecting improved macroeconomic assumptions. Stock-based compensation was $15.4 million. The effective tax rate rose to 25.4% for the nine months (from 15.5%) due to Kazakhstan tax law changes. Capital expenditures included $112 million in committed telecom equipment purchases.