Plus500 Ltd (LSE:PLUS), which operates a platform on which customers can trade contracts for differences (CFD), has raised full-year expectations.
In its third-quarter trading update, the fintech firm said it expects full-year revenue and underlying earnings (EBITDA) will be ahead of the market’s consensus forecasts.
The third quarter saw revenue and earnings decline slightly from a year earlier when lockdown restrictions across the globe seemed to encourage people to do more trading.
Revenue declined 2% to US$211.4mln from US$216.4mln a year earlier but was up 91% from revenue of US$110.6mln in pre-pandemic third-quarter 2019.
EBITDA dipped 4% to US$128.6mln from US$134.2mln a year earlier but shot up 83% from US$70.1mln two years earlier. The EBITDA margin retreated to 61% from 62% a year earlier and 63% two years prior. Plus500 said that because of the significant strategic and operational investments it is making, the EBITDA margin might take a small hit in the forthcoming quarters.
The firm added 26,169 new customers in the quarter, down 43% from 46,236 the year before but up 7% on the 24,359 added in the third quarter of 2019.
The number of active customers declined 16% to 166,310 from 197,976 the previous year but was half as much again as the 110,939 active customers Plus500 had in the third quarter of 2019.
The average revenue per user (ARPU) improved by 16% to US$1,271 from US$1,093 the year before and was 27% higher than ARPU of US$997 in the same period of 2019.
The average user acquisition cost (AUAC) jumped 5% to US$750 from US$716 the prior year but was 27% lower than the US$1,026 AUAC in the same quarter of 2019.
Customer churn – the proportion of customers leaving the platform – remained at what the firm called a normalised level of 33% in the quarter (Q3 2020: 43%, Q3 2019: 20%) as a consequence of the company's ongoing investment in customer retention initiatives.
Cash balances as at 30 September 2021 were US$766.9mln (30 June 2021: US$722.5mln), following a dividend payment of US$84.9mln on 12 July 2021.
"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,” David Zruia, the chief executive officer of Plus500.
"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 ongoing success in accessing such growth opportunities, we look forward to delivering sustainable growth over the medium to long term,” he added.