CFD broker Plus500 Ltd (LON:PLUS) has provided a trading update for the three and nine months ended 30 September 2016.
In the nine months ended 30 September 2016, revenue was $236.3m an increase of 14% compared to the same period last year. However, strictly Q3 revenue compared to last year was slightly down 4% to $77.5m from $80.9m in 2015, mostly due to a less volatile summer trading season.
Plus500 Quarterly Revenue
Key customer and revenue metrics for the three and nine month periods ended 30 September 2016 were as follows:
| FY2015 | 3 months to 30 Sept* | % Growth | 9 months to 30 Sept* | % Growth | |||
| 2015 | 2016 | 2015 | 2016 | ||||
| Revenue | $275.6m | $80.9m | $77.5m | -4% | $207.9m | $236.3m | 14% |
| Number of new customers1 | 84,858 | 17,047 | 25,083 | 47% | 69,333 | 82,012 | 18% |
| Number of active customers2 | 136,540 | 52,727 | 69,989 | 33% | 117,569 | 131,346 | 12% |
| ARPU3 | $2,019 | $1,534 | $1,107 | -28% | $1,769 | $1,799 | 2% |
| AUAC4 | $1,227 | $1,468 | $1,300 | -11% | $1,142 | $1,320 | 16% |
*Unaudited, [1] A customer who has deposited real money into their own account for the first time, [2] A customer who makes at least one trade using real money on the Trading Platform during the relevant period, [3] Average revenue per user, [4] Average user acquisition cost
Overview
Plus500 has reported another consistent quarter’s trading, in line with trading reported at the time of the half year results. The Company has continued to experience strong growth in new and active customers and has generated record revenues year to date.
As anticipated, there was an improvement in the EBITDA margin from 37% in H1 2016 to 43% in Q3 2016.
Plus500 also increased its global presence during the period. It announced new licences in Israel (on 30 September 2016) and in New Zealand (on 3 October 2016).
Plus500 is now regulated by five different regulators: FCA in the United Kingdom, ASIC in Australia, CySEC in Cyprus, ISA in Israel and FMA in New Zealand. This emphasises the importance the Board puts on compliance best practice in the different jurisdictions the Company operates in and the steps the Company has taken in order to provide its customers with appropriately regulated services.
Results
The Company’s marketing activity has resulted in revenue from Western European countries being stable and accounting for 75% of total revenue in the third quarter 2016 (Q3 2015: 75%).
In Q3 2016, ARPU stood at $1,107 compared to $1,037 in Q2 2016 and $1,534 in Q3 2015. This is due to a combination of a continuing increase in active and new customers (as new customers do not contribute significant revenue in the quarter they are recruited in) and a slight decrease in customer churn which is consistent with the previous quarter.
Plus500’s AUAC for Q3 2016 was $1,300 compared to $1,347 in Q2 2016 and $1,468 in Q3 2015, and stands at $1,320 for the nine months ended 30 September 2016. The Company continues to make efforts to improve the efficiency of the Company’s marketing strategies for acquiring new customers.
Outlook
The Company intends to focus on profitability for the remainder of the year and consolidate the benefits of this expenditure. Plus500 has entered Q4 2016 with positive momentum and the Board believes the Company is on track to meet market expectations.
Asaf Elimelech, Chief Executive Officer of Plus500, commented:
Our third quarter continued the strong progress of the first half, with a significant number of new customers being gained, and margins recovering. We remain on track to achieve our expectations for the year as a whole.