LONDON - Plus500 (LON:PLUSP) Ltd. (LSE:PLUS), a global multi-asset fintech group, reported a decline in annual revenue, triggering a 9% drop in its share price. Despite delivering a core profit that surpassed market expectations, the company's revenue for the full year ended December 31, 2023, fell from the previous year's figures.
The firm's robust financial performance was highlighted by a core profit of $340.5 million for the full year, significantly exceeding the analyst consensus of $300 million. However, this financial achievement was overshadowed by a year-over-year (YoY) decrease in revenue, which led to a sharp sell-off in the market. The company's stock experienced a considerable decline, suggesting investor concern over the revenue drop.
David Zruia, Chief Executive Officer of Plus500, commented on the company's strategic progress and its impact on the financial results. "2023 saw further progress against all three strategic objectives: we expanded our US futures businesses, launched a new retail FX OTC trading platform in Japan and extended our portfolio of global regulatory licences to 13," said Zruia. He also noted the achievement of a record high average deposit per active customer, reflecting the company's focus on higher value customers and the intuitive nature of its market-leading technology.
Despite the strategic advancements and a strong core profit, the company's revenue was $726.2 million, a combination of $674.3 million in trading income and $51.9 million in interest income. This represents a decline from the previous year, which was the primary driver of the negative market reaction.
In response to its financial strength, Plus500 announced significant additional shareholder returns totaling $175 million, including $100 million in new share buyback programs and $75 million in dividends. This decision aligns with the Group's disciplined capital allocation framework and reflects the Board's confidence in the company's prospects.
Operational highlights indicated a decrease in new and active customers, with new customers down 15% YoY and active customers down 17% YoY. However, the company did see a slight increase in the average user acquisition cost (AUAC) and a 5% increase in average revenue per user (ARPU) compared to the previous year.
Looking ahead, Plus500's Board remains confident about the Group's future prospects, citing significant strategic, operational, and financial progress in recent years and a robust financial position. The company's focus on innovation, particularly in mobile services, remains a cornerstone of its strategy, with over 87% of the Group's OTC revenue generated from mobile or tablet devices.
Investors will be closely monitoring Plus500's future performance to see if the company can leverage its strategic initiatives to reverse the revenue decline and restore market confidence.
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