6 consecutive record months of trades (33k in Jan, 42k in Feb, 88k in March, then 340k in the next qtr = 103k, 113k, 123k?
- Trades volume has kept up.
Each of the 3 months cashflow positive.
June cashflow benefited from EOFY sale in particular.
March was the strongest month of trader growth.
Partner for US - Phillip Capital
US trading - Q4CY
Allowing pre-registration of US sub-accounts.
App due - coming months.
Next quarter - investment in growth and new revenue streams - international, and app.
No update in Advisor platform?
Didn't bother mentioning ETF.
It's good to see that I wasn't too far off with my estimates for the very strong quarter.
Revenue $2.08m -> $4.18m (+101.3%)
Trades 161k -> 340k (+111.2%)
Active Traders 32.3k -> 46.4k (+43.7%) (historically 20-30% QoQ average)
Client Cash $359m -> $366m (+1.9%) (cash per trader already pulled back quite close to baseline)
Cash Per Active Trader
Q420
End-Mar
End-Feb
End-Jan
Q220
Q120
Q419
Q319
Q219
1
Cash Per Active Trader
7.88k
11.11k
8.34k
6.95k
6.26k
6.56k
6.5k
6.49k
6.51k
Long term $6500 average. $11,110 in March, back to $7880 now, so we were cashflow positive even with cash per trader having pulled back most of the way to baseline.
Trades Per Trader Per Month Trades per trader only fell back a little, from 1.2-1.5 long term average, to 2.65 in March, to 2.44 this quarter. I'd guess 2.3 in June. So the Corona volume is still ongoing. I'd expect a pull-back in this metric is possible after some months, and obviously in the seasonally low Christmas period.
This is how revenue and cashflow was so high. Lots of trades. Cash per trader pulled back, but trades didn't.
Annualised Revenue Per Active Trader Stayed elevated, due to the higher trades per user.
Market Share It's hard to know with the market growing so fast. 5-6%?
Average Revenue Per Trade (inclusive of all revenue streams)
Q420
End-Mar
End-Feb
End-Jan
Q220
Q120
Q419
Q319
Q219
1
Revenue Per Trade
12.29
12.03
13.33
14.59
15.01
15.02
17.97
16.80
15.36
Still below the long term average. Sometimes this can be suggestive of an increase in the rate of free trades, but I think this time it just shows that there was a change in revenue breakdown, with trades revenue outgrowing interest revenue.
Fixed Costs / Product Operating Costs Relative to Revenue (Beautiful Numbers) Fixed costs is what I've been speaking about for a while - that the fixed expenses can be overcome by increasing volume, leading to improving margins.
Fixed costs got down to 32% of revenue! Last quarter's 61% was getting pretty good, 80-100% before that was not so good. 32% is great. An obvious benefit of the increased scale.
Maybe it'll spike up a little soon if trades pulled back, or if these are quite a few new employees whose wages will fully show up next quarter, but if they can reach <32% again in the long term, it's nice.
Product Operating Costs - $5.49 last quarter was deceptive, because of delayed payment terms on the March brokerage to OM. This quarter's $6.26 is more reflective of reality, and it's still a good number. So call $6.26, the cost of providing a trade - $5k brokerage plus $1.26 for servers, data fees, whatever else. I'm assuming a bit there.
It's getting a lot better. The increased volume is (I think) allowing their POC to get down toward the OM brokerage costs, meaning, the server costs etc are benefiting from scale efficiencies.
Total Expenses - The 83% total means that their cashflow profit margin was about 17%. Last quarter they were on the verge of cashflow profit with -3%. 17% is a drastic improvement, but also including EOFY Sale. Call it 10%, after normalising for that. An obvious improvement. In time, they could have a stronger margin than 10%, maybe 20%+.
Expenses Categories Breakdown
Q420
Q320
Q220
Q120
Q419
Q319
Q219
1
Expenses Breakdown
141%
-13%
44%
14%
39%
-20%
138%
2
R&D
38
0
0
0
0
0
0
3
Product Operating Costs
2128
884
1013
705
616
443
553
4
Ads / Marketing
158
179
143
75
146
301
483
5
Leased Assets
29
47
33
21
42
29
32
6
Staff Costs
831
696
613
582
551
550
508
7
Admin / Corporate Costs
300
340
389
259
239
240
361
8
Total Expenses
3484
2146
2191
1642
1594
1563
1937
9
Cash Flow (excluding grants)
696
-70
-999
-464
-580
-823
-1415
10
Cash Flow Per Trade
$2.05
$(0.43)
$(12.58)
$(5.91)
$(10.28)
$(18.68)
$(41.62)
11
Cash Balance
5260
4304
1544
2085
2349
2937
2494
12
13
Expenses Relative to Revenue
83%
103%
184%
139%
157%
211%
371%
R&D - New category. POC - Up in line with trades growth, plus the fact that the March brokerage payment was pushed into this quarter. Ads - Down marginally. They obviously had more than enough organic growth (the backlog of sign-ups and hiring for customer support). Clearly a fixed expense right now. Leaded Assets - Kept well under control. Staff - Under control. Up less than revenue. Might rise more next quarter, since I assume they were hiring half way through the quarter. Admin - Under control. Didn't rise, but you wouldn't expect it to rise so fast. Keep an eye on it in 3-9 months. If it stays low like this, then great, it's another fixed expense.
Cash Flow - $700k. I didn't dare predict cashflow this high. It's a big jump. They didn't mention how much of a boost the EOFY Sale gave. $300k? Cash Flow Profit Margin Per Trade (inclusive of all revenue) - $2.05. This metric was for the guy who previously described SWF as 'losing $x per trade'. So they made $2.05 cashflow profit on average per trade, after taking into account interest etc.
(20min delay)