REG - Plus500 Ltd - Q3 2023 Trading Update

Plus500Announcement

24/10/2023 07:00

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RNS Number : 0234R  Plus500 Limited  24 October 2023

24 October
2023

Plus500 Ltd.

("Plus500", the "Company" or together with its subsidiaries the "Group")

Q3 2023 Trading Update

Plus500, a global multi-asset fintech group operating proprietary
technology-based trading platforms, today issues the following trading update
for the three months period ended 30 September 2023 1 .

David Zruia, Chief Executive Officer of Plus500, commented:

"I am pleased to announce that Plus500 continued to perform well during the
third quarter of 2023, driven by our focus on higher-value customer
acquisition, geographic expansion and product innovation, despite lower
volatility and trading volumes across the global financial markets. The Group
continues to make good progress against its strategic plans with the expansion
into the US, Japan and the UAE markets.

Our consistent good performance is enabled, supported and progressed by our
market-leading, proprietary technology which is developed and maintained
entirely by our highly experienced teams. As a diversified, global business
with a clear and proven strategy, Plus500 is well positioned to continue
delivering strong results and attractive returns to its shareholders."

Operational highlights:

·      Plus500 continued to execute against its strategic objectives
during the period with further geographic expansion and product innovation

·      Major milestone reached in Japan with the launch of a new
proprietary trading platform tailored specifically for the Japanese retail
market

·      Launched 'Plus500 Futures', an intuitive new B2C futures trading
platform in the US, supported by proprietary technology

·      The Company's board of directors (the "Board") anticipates that
revenue and EBITDA 2  (#_ftn2) for FY 2023 will be in-line with recently
upgraded market expectations 3  (#_ftn3) , driven by execution against the
strategic plan

Financial highlights:

·      Group revenue, comprising trading income of $153.7m and interest
income of $14.4m, increased by 5% to $168.1m in Q3 2023 versus $160.6m in Q2
2023

·      Customer Income 4  (#_ftn4) , a key measure of the Group's
underlying performance, increased by 5% to $153.6m in Q3 2023 compared to
$146.5m in Q2 2023

·      EBITDA increased by 10% to $80.3m in Q3 2023, with an EBITDA
margin of 48%, compared to $73.2m and 46% in Q2 2023

·      The average deposit per Active Customer 5  (#_ftn5) for Q3 2023
increased by 18% to approximately $5,250 versus approximately $4,450 in Q2
2023

Strategic progress

The Group continued to make good progress against its strategic plan during
the period. The aim is to continue developing the Group's position as a global
multi-asset fintech group, expanding its position in the US market and
continuing to invest in its market leading technology. During the period, good
progress was made with growing the US B2B and B2C businesses, and through the
successful launch of a localised trading platform tailored for the Japanese
retail market.

Further optimisation of Plus500's growing position in the substantial US
futures market

Two years after its acquisitions, Plus500 has completed the integration of the
US businesses it acquired and has established a new B2B business with superior
technological capabilities not previously available within the Group. The
Group has also developed and launched 'Plus500 Futures' during the period, a
futures trading platform designed for retail clients. Furthermore, since the
acquisition of the US businesses, the Group has secured additional clearing
memberships and extended its offering in the US futures market, while growing
the number of clients within its US B2B and B2C businesses. All of these
efforts are supported by the Group's capital resources and its high-calibre
workforce.

US B2B Opportunity

The Group has continued to establish itself as a provider of market
infrastructure services for institutional customers in the US futures market,
including brokerage-execution and clearing services via its memberships with
the CME Group. This includes being a full clearing member of the CME Group, as
well as the Minneapolis Grain Exchange (MGEX). During the third quarter of FY
2023, the Group made good progress against its strategic objectives in this
market, including onboarding additional Introducing Brokers, working to
increase the number of clearing memberships and recruiting new customers.

US B2C Opportunity

Alongside its B2B business in the US, Plus500 has recently launched 'Plus500
Futures', a futures trading platform tailored specifically for retail
customers, which is designed to be intuitive and easy to use. The platform has
a unique operational and technological edge, providing a fully holistic
solution of onboarding, depositing and trading in futures contracts. 'Plus500
Futures' also features advanced risk management tools such as
auto-liquidation, and is available on iOS, Android and web. All of these
features are enabled by Plus500's market-leading technology and engineering
expertise. Following its launch during the period, the platform gained good
levels of traction in the market, enabling expansion of its customer base.

Launch of a new proprietary trading platform tailored specifically for the
Japanese retail market

Plus500 established its strategic presence in the Japanese market via the
acquisition of a local, regulated firm. The Group is proud to have
successfully launched a new proprietary trading platform tailored specifically
for the Japanese retail market. The new trading platform was launched in
September 2023 and is fully operational, with an initial offering of OTC FX
pairings. Over time, the Group will enhance its local offering to include
additional asset classes and trading products.

Plus500 recognises Japan as a key strategic market and will apply the Group's
financial and technological strengths to scale and develop its position within
this market. As previously noted, the Group intends to allocate substantial
financial and personnel resources in order to maximise the opportunity over
the medium-term.

Significant progress made in the high-growth UAE market

The Group also continues to make good strategic progress in the UAE market
following the grant of a regulatory licence from the Dubai Financial Services
Authority (DFSA) in Q1 2023. The Group's customer base in this market is
expanding, driven by operational improvements and a deeper understanding of
local market requirements.

A new regulatory licence obtained in the Bahamas

In July 2023, the Group obtained a new regulatory licence from the Securities
Commission of the Bahamas (SCB) which takes the Group's total to 13 regulatory
licences globally and further establishes its position as a global fintech
Group.

Trading overview

Plus500 continued to perform well during Q3 2023, despite lower volumes and
volatility experienced across global financial markets during the period. This
was driven by the strengths of the Group's market-leading proprietary
technology and its ability to consistently attract and retain higher value
customers over the long-term across a diverse range of markets, products and
financial instruments.

As a result, revenue during the first nine months of FY 2023 was $536.6m (YTD
2022: $705.9m), including $168.1m in Q3 2023 (Q2 2023: $160.6m).

Customer Income, a key measure of the Group's underlying performance, remained
robust at $457.9m in the first nine months of FY 2023 (YTD 2022: $489.2m)
including $153.6m in Q3 2023 (Q2 2023: $146.5m, Q3 2022: $149.4m). This
consistent performance highlights the Group's on-going focus on customer
engagement, as well as its continued investment in product development and
retention initiatives.

Customer Trading Performance 6  (#_ftn6) in the first nine months of FY 2023
stood at $42.0m (YTD 2022: $216.7m) including $0.1m in Q3 2023 (Q2 2023:
$(8.2m), Q3 2022: $45.1m). The Group continues to expect that the contribution
from Customer Trading Performance will be broadly neutral over time.

EBITDA in the first nine months of FY 2023 was $254.4m, with an EBITDA margin
of 47% (YTD 2022: $407.1m and 58%, respectively). This included EBITDA of
$80.3m and an EBITDA margin of 48% in Q3 2023 (Q2 2023: $73.2m with an EBITDA
margin of 46%).

Customer engagement and activity levels on Plus500's trading platforms
remained robust, supported by the Group's on-going investments in its
proprietary technological solutions for customer retention, monetisation and
activation. The Group also invested significantly in various marketing
initiatives during the period.

The Group onboarded 20,640 New Customers 7  (#_ftn7) during Q3 2023 (Q2 2023:
22,248) enabled by its diversified marketing approach, targeted technological
marketing investment strategy and ongoing structural expansion efforts. This
takes the total New Customers for the first nine months of FY 2023 to 71,089
(YTD 2022: 81,022).

The number of Active Customers during the first nine months of FY 2023 was at
205,343 (YTD 2022: 250,553), including 118,501 in Q3 2023 (Q2 2023: 122,833),
driven by Plus500's focus on customer engagement initiatives and investments
in product development.

ARPU 8  (#_ftn8) remained robust at $2,613 during the first nine months of FY
2023 (YTD 2022: $2,817), including $1,418 in Q3 2023 (Q2 2023: $1,308), driven
by the Group's strong revenue performance.

AUAC 9  (#_ftn9) during the first nine months of FY 2023 was stable at of
$1,463 (YTD 2022: $1,487), including $1,398 in Q3 2023 (Q2 2023: $1,627),
driven by the Group's continued investments to attract high value, long term
customers, through various marketing and retention initiatives including the
Premium Service offering. With further investments expected to be made going
forward, the Group continues to expect that AUAC will rise steadily over time.

Average deposit per Active Customer increased by 25% to approximately $8,500
during the first nine months of FY 2023 (YTD 2022: approximately $6,800) and
approximately $5,250 in Q3 2023 (Q2 2023: approximately $4,450, Q3 2022:
approximately $3,900), highlighting customers' on-going loyalty and confidence
in Plus500's technology, diverse product portfolio and excellent customer
experience.

The Group remained debt-free and maintained strong financial position during
the period, with cash balances above $875m as of 30 September 2023 (30 June
2023: $849.0m). A strong balance sheet, with no debt, is a key differentiator
for Plus500 which enables it to invest in its long-term strategic
objectives.

Financial Key Performance Indicators (unaudited):

                Q3 2023  Q2 2023  Change %            Q3 2022  Change %

                                  (Q3 23 vs. Q2 23)            (Q3 23 vs. Q3 22)
 Revenue (m)    $168.1   $160.6   5%                  $194.5   (14%)
 EBITDA (m)     $80.3    $73.2    10%                 $101.8   (21%)
 EBITDA Margin  48%      46%      4%                  52%      (8%)

Operational Key Performance Indicators (unaudited):

                   Q3 2023  Q2 2023  Change %            Q3 2022  Change %

                                     (Q3 23 vs. Q2 23)            (Q3 23 vs. Q3 22)
 ARPU              $1,418   $1,308   8%                  $1,445   (2%)
 AUAC              $1,398   $1,627   (14%)               $1,598   (13%)
 New Customers     20,640   22,248   (7%)                23,747   (13%)
 Active Customers  118,501  122,833  (4%)                134,657  (12%)

Shareholder returns

During Q3 2023, the Company repurchased a total of 1,641,458 shares, at an
average price of £14.36, for a total cash consideration of $29.8m. As of 30
September 2023, the remaining number of the Company's ordinary shares in issue
was 80,664,453.

Reflecting its strong financial position, the Company expects to continue with
its highly attractive and sustainable shareholder returns policy consisting of
dividends and share buybacks. Since its IPO in 2013, Plus500 has returned
approximately $2bn to its shareholders, including approximately $350m
announced so far in FY 2023 which equates to c.25% of the Company's market
capitalisation at the end of September 2023.

Outlook

The Board remains confident in the Group's outlook based on its strong
competitive positioning, robust balance sheet and clearly stated strategic
plans. Reflecting the ongoing improvement in attracting and retaining
high-value, long-term customers, the Group anticipates that it will deliver
revenue and EBITDA for FY 2023 that are in-line with recently upgraded market
expectations 10  (#_ftn10) . Despite the lower market activity levels seen
during the period, Plus500's ability to attract and retain higher value
customers continued, enabled by its technology, broad product offering,
innovative customer solutions and retention initiatives.

For the remainder of FY 2023 and beyond, the Group will continue to invest in
its technology to ensure that its competitive advantages across customer
acquisition, marketing and retention, as well as the progress in launching new
products and entering new markets, is maintained. Over the medium-term,
Plus500's strategy is to further develop its position as a global multi-asset
fintech group by launching new products, entering new markets, expanding its
offering in existing markets and deepening engagement with customers.

For further details

 Plus500 Ltd.
   Elad Even-Chen, Chief Financial Officer   +972 4 8189503

   Owen Jones, Head of Investor Relations    +44 (0) 7551 654208

                                             ir@Plus500.com (mailto:ir@Plus500.com)
 Dentons Global Advisors
   James Melville-Ross                       +44 (0)20 7664 5095

   James Styles                              Plus500@dentonsglobaladvisors.com (mailto:Plus500@dentonsglobaladvisors.com)

   Methuselah Tanyanyiwa

About Plus500

Plus500 is a global multi-asset fintech group operating proprietary
technology-based trading platforms. Plus500 offers customers a range of
trading products, including OTC ("Over-the-Counter" products, namely Contracts
for Difference (CFDs)), share dealing, as well as futures and options on
futures.

The Group retains operating licences and is regulated in the United Kingdom,
Australia, Cyprus, Israel, New Zealand, South Africa, Singapore, the
Seychelles, the United States, Estonia, Japan, the UAE and the Bahamas and
through its OTC 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 its OTC products in more than 50 countries and in 30 languages.

Plus500's trading platforms are accessible from multiple operating systems
(iOS, Android and Windows) and web browsers. Customer care is, and has always
been, integral to Plus500. As such, OTC customers cannot be subject to
negative balances. A free demo account is available on an unlimited basis for
OTC trading 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 (http://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 Group'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", "project",
"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 Management Framework section of the Company's most
recent Annual Report. These forward-looking statements are based on numerous
assumptions regarding the present and future business strategies of the Group
and the environment in which it is and 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.

(#_ftnref1) (1) All figures for the period ended 30 September 2023 and 30
September 2022 included in this announcement are unaudited

(( 2  (#_ftnref2) )) EBITDA - Revenue (trading income and interest income)
minus operating expenses plus depreciation and amortisation

(( 3  (#_ftnref3) )) Market expectations based on compiled analysts'
consensus forecasts, which can be found on the Investor Relations section of
the Company's website. As of 23 October 2023, consensus forecasts for FY 2023
Revenue and EBITDA are $645m and $300m, respectively

(#_ftnref4) (4) Customer Income - Revenue from OTC Customer Income (customer
spreads and overnight charges) and Non-OTC Customer Income (commissions from
the Group's futures and options on futures operation and from 'Plus500
Invest', the Group's share dealing platform)

 5  (#_ftnref5) Active Customer - Customer who made at least one real money
trade during the period

(( 6  (#_ftnref6) )) Customer Trading Performance - Gains/losses on customers'
trading positions

 7  (#_ftnref7) New Customers - Customers depositing for the first time

 8  (#_ftnref8) ARPU - Average Revenue Per User

 9  (#_ftnref9) AUAC - Average User Acquisition Cost

 10  (#_ftnref10) Market expectations based on compiled analysts' consensus
forecasts, which can be found on the Investor Relations section of the
Company's website. As of 23 October 2023, consensus forecasts for FY 2023
Revenue and EBITDA are $645m and $300m, respectively

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