Back on the 14th of February, the company released preliminary results that showed Plus500 revenues had grown by a third. During the financial year ended 31st December 2017, Plus500 recorded revenues of $437.2 million compared to 2016’s $327.9 million. This was 33% higher than that from the previous year, which was remarkable. The earnings reports have now been confirmed when the final annual results were announced yesterday on the 21st of March.
What are the highlights from the financial reports?
Plus500 revenues have kept growing over the past years, even in 2016, but this latest report shows exponential growth. Back in the fiscal year 2015, revenues were $275.6 million. This figure then grew to $327.9 million in the fiscal year 2016, a 19% growth. Now with $437.2 million in Plus500 revenues, the company has made even more by raising revenues by 33%. Out of these revenues, $199.7 million was the net profit, which had grown by 70% from 2016’s net profits of $117.2 million. So far, 2017 seems to be the best year for Plus500 since its launch in 2008.
Earnings before interest, taxes, depreciation, and amortization (EBITDA) were $259.2 million in 2017, more than a 70% increase over 2016’s 4151 million EBITDA. Furthermore, EBITDA margins rose to 59.3% from the previous year’s 47%. Shareholders will this year earn $1.75 per share up from last year’s $1.02 per share. Upon the news of Plus500 revenues, the company’s share price improved by almost 3% before retreating back to its initial value today.
What was behind the positive Plus500 revenues?
Part of the reason for the rising Plus500 revenues was the increase in client numbers who rose to 317,175 up from 2016’s figure of 246,946. This was especially impressive given that the company had cut spending on marketing. The company opted to reduce the money spent on online marketing and instead divert that money to affiliates. Perhaps they didn’t need to advertise as aggressively anyway since the cryptocurrency boom in 2017 did the job for them. In fact, the company had announced back in January that the addition of cryptocurrency offerings had led to a spike in client numbers toward the end of 2017.
Furthermore, the company also produced a detailed report on the business structure. Apparently, most of their clients were using mobile devices rather than desktop computers, with 60% of the client signups being done over the phone. More than a half of those were done on Android devices, while 28% was through Apple devices. However, revenues generated by Apple users were 40% of the total revenues while Android users generated 30% of the Plus500 revenues.
In 2018, regulatory changes expected to come into effect may affect the company’s revenues. Nevertheless, the company’s CEO isn’t worried since he stated that the company already has many of the measures outlined in the proposed changes. Besides, they are planning to expand their client acquisition by getting more licenses from different regions as well as raising their marketing budget this year.