Ann: Quarterly 4C and Activities Report, page-13

Last quarter received lump sum pre-payments for annual subscriptions. This quarter has a higher rate of free trades from EOFY sale free trades. A pullback in cashflow was always likely. If you considered 'underlying cashflow', it would not show such a pullback.

Trades:+11.6% QoQ.
Last Q: Apr 96k, May 110k, Jun 134k
This Q: July 117k, Aug 127k, Sept 137k.
Very close to my estimate, and an overall quite good result. Considering that previously, analyst reports had expect COVID volume to be short-lived, but it's still pushing up (due to continued high sign-ups).
Trades per trader per month: down from 2.44 to 2.19 QoQ, compared to 1.2-1.5 historically, pre-COVID. So this quarter's trades included a gradual change back toward 'regular' trader behaviour. (Trades were up, even though trades per trader was down, thanks to user growth. So Commsec/NABTrade for example, might have seen falling trades.)

Revenue:
+4.6% QoQ. Can't complain, considering last Q having a tailwind and this Q having a headwind, but it still rose.

Active Traders:57,816 from 46,445 QoQ. +24.5% is a strong growth rate, and from a large base. Historically, trader growth was unusually 20-30%, but 43-49% during COVID. +24.5% is high, and likely means increasing market share.

Client Cash:
$409m is roughly the all time high. Only +11.7% QoQ, because cash per active trader pulled back from 7.88k to 7.07k QoQ (compared to 11.11k at its COVID peak, and 6k-7k historically. So being at $7.07k now means that it's getting close to baseline, and it should grow more similar to user growth going forward. +11.7% is still good, since any increase in interest earned should help to cover fixed expenses like Staff.

Advisor Platform:
No update. Somebody should ask sometime.

ETF:
~$30k costs per month, ~$3k revenue per month. Needs to outperform at some point, so it has more chance of growing. Potentially the ETF is better suited to bull markets. Some of the picks hurt them, like Treasury Wines.

Overall:
This was a more 'regular' quarter, since less of the metrics were skewed up from COVID. Sept is a seasonally lowish cashflow quarter (due to the June EOFY sale, mainly), so being cashflow positive this quarter suggests good things to come by March Q - potentially stronger cashflow. Since by Jan-Mar, brokerage costs are scheduled to fall, it's a seasonally fine quarter, users may have grown more by then and trades could have risen (if trades per trader is still at least marginally elevated from COVID).



ASX:
The presentation mentioned them outperforming ASX. It's true, and it's an easy comparison, though not a truly direct comparison, with ASX
numbers including instos and robots, I think. Still a positive, suggesting increasing market share. They grew trades, when some others were losing trades.

Expenses:
Product Operating Costs: +20.4%, vs trades +11.6%. Likely due to cashflow timing. Last quarter, June had high trades compared to Apr-May, but June brokerage would have been paid this quarter. This quarter had 3 consistently strong trading months, so the brokerage cashflow would have been more representative. So it's not POC getting out of hand, but POC being more representative.
Ads: Low enough. Marketing per sign-up was near to the all-time low.
Staff: +7.6%. Can't complain. Active traders +24.5%, but staff +7.6% - should mean improving leverage.
Admin: +40% (+7.7% above the all-time high). Not sure why.




- Fixed costs remained low relative to revenue. 34%. Marginally above the all-time low.
- POC as a % of revenue. Up, but to do with cashflow timing skewing up last Q, and EOFY sale skewing up last Q, and EOFY sale free trades skewing down this Q.
- Expenses relative to revenue - 93% (sort of like 7% cashflow margin). Not as good as the 83% last Q, but last Q was skewed up a fair bit. So 93% is more representative, and it's a base to improve from here.

Overall: As expected, and it's a fairly strong base to move towards Jan-March, when it can improve more. Most important is that user growth keeps up, and that they deliver some strong improvements to the business, like successful new revenue streams (international trades, being the near-term hopeful).