Yes they did say that TTV margins are now expected to be 6.4% vs the 7% they were expecting. However, this is due to the "customer financial incentive agreements (overrides)" which I referenced above. These are basically extra discounts/coupon codes/cashback to entice customers in order to boost TTV/Revenue/market share, which they have successfully achieved. Think of these as a sort of marketing spend. Going forward, they can easily reduce these incentives using a few mouse clicks as the trading environment improves. Then, margins will go up as discounts reduce and they keep their existing customers. Also, competitors collapsing makes it better for the other firms left in the market as there is less competion going forward and so there is less need for steep discounts to keep/attract customers. The game now is to boost TTV/Revenue and keep market share using discounts as times are slightly tough. As times improve/interest rates come down, discounts can be scaled back to improve margins from the boosted TTV/Revenue.
Also, I might add that the collapse of FTI Group, Paris Olympics, European Football Championship, high interest rates, high inflation, etc. are short-term/transitory and these effects will not remain for long.
WEB Price at posting:
$4.60 Sentiment: Hold Disclosure: Held
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