25 October 2021
Plus500 Ltd.
("Plus500", the "Company" or together with its subsidiaries the "Group")
Q3 2021 Trading Update
Plus500, a global multi-asset fintech group operating technology-based trading platforms, today issues the following trading update for the three months ended 30 September 2021.
Financial Highlights (unaudited):
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| Q3 2021 | Q3 2020 | Change % | Q3 2019 | Change % |
| Revenue | $211.4m | $216.4m | (2%) | $110.6m | 91% |
| EBITDA[1] | $128.6m | $134.2m | (4%) | $70.1m | 83% |
| EBITDA Margin % | 61% | 62% | (2%) | 63% | (3%) |
|
| YTD[2] 2021 | YTD 2020 | Change % | YTD 2019 | Change % |
| Revenue | $557.6m | $780.6m | (29%) | $258.6m | 116% |
| EBITDA | $316.2m | $496.0m | (36%) | $135.7m | 133% |
| EBITDA Margin % | 57% | 64% | (11%) | 52% | 10% |
Operational Highlights (unaudited):
|
| Q3 2021 | Q3 2020 | Change % | Q3 2019 | Change % |
| New Customers[3] | 26,169 | 46,238 | (43%) | 24,359 | 7% |
| Active Customers[4] | 166,310 | 197,976 | (16%) | 110,939 | 50% |
| ARPU[5] | $1,271 | $1,093 | 16% | $997 | 27% |
| AUAC[6] | $1,416 | $1,066 | 33% | $921 | 54% |
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| YTD 2021 | YTD 2020 | Change % | YTD 2019 | Change % |
| New Customers | 163,149 | 244,414 | (33%) | 71,899 | 127% |
| Active Customers | 367,573 | 378,862 | (3%) | 175,526 | 109% |
| ARPU | $1,517 | $2,061 | (26%) | $1,473 | 3% |
| AUAC | $750 | $716 | 5% | $1,026 | (27%) |
Key Headlines:
· Another period of positive momentum, further building on Plus500's strong track record and ensuring the Group remains well positioned to access significant growth opportunities
o Key metrics well ahead of pre-pandemic levels, in particular strong Customer Income[7] performance throughout the year-to-date
o Customers confidence in Plus500's platforms and products remains high, with client deposits of approximately $1.6 billion during the year-to-date
o Robust financial position maintained, with strong balance sheet and cash balances of $766.9m, at end of Q3 2021
· Excellent progress made in establishing Plus500 as a global, multi-asset fintech group, with plans in place to further consolidate this position going forward
o Additional substantial marketing investment now being made to develop Plus500's market position in the US futures retail market over the coming quarters and to support further launches of 'Plus500 Invest', the Company's new share dealing platform
· The Board remains confident about the outlook for Plus500
o Given the excellent performance delivered so far this year, the Board expects FY 2021 revenue and EBITDA to be ahead of current compiled analysts' consensus forecasts[8]
o Supported by significant investments to access future growth - moderately impacting EBITDA margin over the coming quarters, but enabling sustainable medium to long term growth
Overview of trading during Q3 2021
Revenue in Q3 2021 remained resilient and well ahead of pre-pandemic levels at $211.4m (Q3 2020: $216.4m, Q3 2019: $110.6m). This was driven by the consistent strength of Customer Income, which was $156.9m during the quarter (Q3 2020: $240.0m, Q3 2019: $107.1m), broadly in line with the sequential quarter.
EBITDA and EBITDA margin were also robust at $128.6m (Q3 2020: $134.2m, Q3 2019: $70.1m) and 61%, respectively (Q3 2020: 62%, Q3 2019: 63%), in line with the strong margin achieved during H1 2021.
Plus500's Active Customer base has grown significantly in recent years, further supported by the Group's on-going success in onboarding New Customers during FY 2021 to date. This has been delivered as a result of significant investment in the Company's marketing technology to drive attractive return-on-investment, which will continue to be made, in order to drive further platform engagement in the future.
During the quarter, the Group on-boarded a total of 26,169 New Customers, (Q3 2020: 46,238, Q3 2019: 24,359) and the number of Active Customers was 166,310 (Q3 2020: 197,976, Q3 2019: 110,939).
Driven by increased platform engagement and the stable base of Active Customers, ARPU increased by 16% to $1,271 in Q3 2021 (Q3 2020: $1,093, Q3 2019: $997). As previously guided, the Group's customer profile continues to shift towards higher value customers, as evidenced by this strong ARPU performance. Consequently, and as anticipated, this continued investment drove AUAC up by 33% to $1,416 in Q3 2021 (Q3 2020: $1,066, Q3 2019: $921).
Customer Churn[9] remains at a normalised level of 33% in Q3 2021 (Q3 2020: 43%, Q3 2019: 20%) as a consequence of the Company's on-going investment in customer retention initiatives.
Reflecting customers' continued confidence in Plus500's platform and product, client deposits remained high at $457.3m in Q3 2021 (Q3 2020: $634.6m, Q3 2019: $280.8m) and at approximately $1.6 billion for the year-to-date.
Cash balances as at 30 September 2021 were $766.9m (30 June 2021: $722.5m), following a dividend payment of $84.9m on 12 July 2021, reflecting continued strong cash generation and the Group's robust financial position, supporting the scalability of the business.
Strategic progress
The Group's strong operational track record and robust financial position enables continued investment in future growth, through further organic investment and by actively targeting potential bolt-on acquisitions.
During the period, Plus500 made further progress in establishing its position as a global multi-asset fintech group, which will further diversify the Group's revenue profile, broaden its product portfolio and widen its geographic footprint.
The Company continues to invest in its market-leading proprietary CFD technology platform, to help further improve and enrich the product experience for its customers.
The integration of Cunningham Commodities LLC., a regulated Futures Commission Merchant, and Cunningham Trading Systems LLC., a technology trading platform provider in the US, remains on track and the businesses are performing in line with expectations.
'Plus500 Invest', the Company's new share dealing platform, is now operational in a number of countries in Europe, following its initial launch earlier this year.
The Company continues to invest in the development of new products, features and services, in driving innovation and in scaling its technology platform. To this end, in recent months since the Company's announcement regarding its intention for increased investment in R&D, a range of highly skilled engineers, programmers, web designers and product managers have been recruited at the Company's R&D centres in Haifa and Tel-Aviv, Israel.
Going forward, the Company is now making additional substantial investments to develop Plus500's market position in the significantly growing US retail trading market in futures and options on futures and to support further launches of 'Plus500 Invest' in key strategic European countries over the coming quarters.
Outlook
As a result of the significant positive momentum achieved over the last 18 months, supported by the continued progress made in establishing Plus500 as a global multi-asset fintech group, and in thereby diversifying its product and geographic profile, the Board remains confident about the outlook for the Company.
Given the excellent performance delivered so far this year, the Board expects FY 2021 revenue and EBITDA to be ahead of current compiled analysts' consensus forecasts.
The Board's confidence about the outlook for Plus500 is further bolstered by the significant strategic and operational investments now being made by the Company, enabled by the Group's strong financial position and cash generative and scalable business model. While these investments will moderately impact EBITDA margin over the coming quarters, they will enable the Group to deliver sustainable growth over the medium to long term.
David Zruia, Chief Executive Officer, commented:
"Plus500 delivered another excellent performance in Q3 2021, maintaining the strong operational momentum achieved in previous periods. This has been primarily driven by the strength and agility of our technology and our ability to effectively respond rapidly to market developments, news events and customer requirements.
"We aim to access future growth through continued organic investment and targeted bolt-on acquisitions, as we continue to expand our CFD offering, launch new products and deepen engagement with our customers. Supported by our on-going success in accessing such growth opportunities, we look forward to delivering sustainable growth over the medium to long term."
| For further details Plus500 Ltd
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About Plus500
Plus500 is a global multi-asset fintech group operating technology-based trading platforms. Plus500 offers customers a range of trading products, including Contracts for Difference ("CFDs") and share dealing, as well as futures and options on futures in the US.
The Group retains operating licenses and is regulated in the United Kingdom, Australia, Cyprus, Israel, New Zealand, South Africa, Singapore and the Seychelles and through its CFDs product portfolio, offers more than 2,500 different underlying global financial instruments, comprising equities, indices, commodities, options, ETFs, foreign exchange and cryptocurrencies. Customers of the Group can trade CFDs in more than 50 countries and in 30 languages. Plus500 does not permit persons located in the US to trade CFDs.
In July 2021, the Company acquired Cunningham Commodities LLC, a Futures Commission Merchant, and Cunningham Trading Systems LLC, a technology trading platform provider, both of which operate in the futures and options on futures market in the US, enabling Plus500 immediate access to that sizable and growing market. Also in 2021, the Company launched a new share dealing platform, 'Plus500 Invest', across a number of product offerings, including a wide range of financial instruments comprising of the world's most popular equities and ETFs, listed on major exchanges worldwide.
Plus500 does not utilise cold calling techniques and does not offer binary options. Plus500's trading platforms are accessible from multiple operating systems (Windows, iOS, Android and Surface) and web browsers. Customer care is and has always been integral to Plus500, as such, customers cannot be subject to negative balances. A free demo account is available on an unlimited basis for CFD platform users and sophisticated risk management tools are provided free of charge to manage leveraged exposure, and stop losses to help customers protect profits, while limiting capital losses.
Plus500 shares have a premium listing on the Main Market of the London Stock Exchange (symbol: PLUS) and are a constituent of the FTSE 250 index. www.plus500.com
The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulation ("MAR"). Upon the publication of this announcement via Regulatory Information Service ("RIS"), this inside information is now considered to be in the public domain.
Forward looking statements
This announcement contains statements that are or may be forward-looking statements. All statements other than statements of historical facts included in this announcement may be forward-looking statements, including statements that relate to the Company's future prospects, developments and strategies. The Company does not accept any responsibility for the accuracy or completeness of any information reported by the press or other media, nor the fairness or appropriateness of any forecasts, views or opinions express by the press or other media regarding the Group. The Company makes no representation as to the appropriateness, accuracy, completeness or reliability of any such information or publication.
Forward-looking statements are identified by their use of terms and phrases such as "believe", "targets", "expects", "aim", "anticipate", "projects", "would", "could", "envisage", "estimate", "intend", "may", "plan", "will" or the negative of those, variations or comparable expressions, including references to assumptions. The forward-looking statements in this announcement are based on current expectations and are subject to known and unknown risks and uncertainties that could cause actual results, performance and achievements to differ materially from any results, performance or achievements expressed or implied by such forward-looking statements. Factors that may cause actual results to differ materially from those expressed or implied by such forward looking statements include, but are not limited to, those described in the risk factors. These forward-looking statements are based on numerous assumptions regarding the present and future business strategies of such entity and the environment in which each will operate in the future. All subsequent oral or written forward-looking statements attributed to the Company or any persons acting on its behalf are expressly qualified in their entirety by the cautionary statement above. Each forward-looking statement speaks only as at the date of this announcement. Except as required by law, regulatory requirement, the Listing Rules and the Disclosure Guidance and Transparency Rules, neither the Company nor any other party intends to update or revise these forward-looking statements, whether as a result of new information, future events or otherwise.
[1] EBITDA - Earnings before interest, taxes, depreciation and amortisation
[2] YTD - "Year to Date" refers to first nine months of the year, from 1 January to 30 September
[3] New Customers - Customers depositing for the first time
[4] Active Customers - Customers who made at least one real money trade during the period
[5] ARPU - Average Revenue Per User
[6] AUAC - Average User Acquisition Cost
[7] Customer Income - Revenue from customer spreads and overnight charges
[8] Compiled analysts' consensus forecasts can be found on the Investor Relations section of the Company's website
[9] Customer Churn = [(Active Customers (T) + New Customers (T+1)) - Active Customers (T+1)]/ Active Customers (T)
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