Great. Mostly above expectations.
March came in even stronger than expected. A big step up from the already strong February.
Revenue: +74.2% QoQ
Trades: +102.7% (Jan: 32934, Feb: 42396, Mar: 85670) Big skew toward March, which could push into Q4, though ASX is showing a pull-back from March's peak.
Active Traders: +48.8% (usually 20-30%, and this is off a larger base). (Jan: +1741, Feb: +2581, Mar: +6221) Big skew toward March. That on its own should push metrics up in the coming quarter.
Client Cash: +164%. This is the big surprise. (Usually +15-30%) (Jan: +$54m, Feb: +$13m, Mar: +$129m) Big skew toward March. Great if it holds into the coming quarter, so it can impact interest revenue more, but I don't know if people will spend the money on shares or withdraw it to bring it down from the big peak.
FUA Per Active Trader: Fell from $85,000 to $60,000. That's because the market fell, and there were so many new sign-ups that didn't have time to grow a decent sized portfolio yet.
ARPU (Annualised): $307 (from $240 last quarter, $255 in Jan, and $240-319 for the 4 quarters). So it's a recovery in revenue per user. Probably from the higher cash balance.
Market Share: Up. I won't estimate how much though, since I don't know how much the market grew, exactly.
Cash Per Active Trader: Up from consistently $6500 usually to $7000 in Jan, $8300 in Feb, $11,100 in Mar. That's why client cash is up. I wonder how long it can stay elevated.
Trades Per Trader Per Month: Usually 1.2-1.3. Jan: 1.4, Feb: 1.63, Mar: 1.66. Since there were a lot of sign-ups lately, some people didn't get a chance to trade yet. This could stay stable or even rise a little.
Revenue Per Trade (combined revenue divided by total trades): Usually $15-17. Now $12.89. Moving in the wrong direction. Suggestive of an increase in the rate of free trades (from high sign-ups, which would be temporary free trades), or an impact from the RBA cuts.
Advisor Platform: +20% or so to the numbers. Good, but might not make a noticeable impact compared to the high growth in the retail platform. But still good, and some of them might go from 'just registered' last quarter to 'active users'.
Expenses: |
| Q320 | Q220 | Q120 | Q419 | Q319 |
|---|
| 1 | Fixed Costs as % of Revenue | 61% | 99% | 80% | 96% | 151% |
|---|
| 2 | POC as % of Revenue | 43% | 85% | 60% | 61% | 60% |
|---|
| 3 | POC per trade | 5.49 | 12.76 | 8.99 | 10.91 | 10.06 |
|---|
These metrics are looking great.
Fixed Costs (including employees) got down to 61% of revenue. Certainly better than 80%+ usually. Obviously because of the increase in revenue. The fixed costs did prove to be quite fixed.
POC As I had said, that this quarter's spike in trades will give us a clearer picture of the 'underlying' POC, the brokerage costs only, by diluting ETF, servers and 'other'. Came down a record 43% of revenue. So POC is not truly variable, and is not fixed at 60% of revenue. It is somewhat fixed too.
POC Per Trade Came down to a record $5.49. Suggesting that their brokerage paid to OM is <$5.49, since POC should include something else like servers too, but I'm not sure exactly what else.
Total Expenses Total expenses came in below Q2's total. Ha! That would mean that expenses rose because of higher trades/sign-ups/employees etc, but without the ETF annual fee this quarter, total expenses still managed to fall. It shows the impact of the ETF. If it stays at its low usage levels, then it could pay off to close it before the annual fees come due.
ASX's Average Trade Value: ASX reported trade volumes up a lot, but average trade value was in line with usual at $3900. If SWF is similar to the ASX average, then that would mean that SWF doesn't have to worry much about losing money on giant fixed-brokerage trades.
SWF vs ASX: ASX's trades were +75.4% in Mar vs Feb, SWF's were +102%. Suggesting continued growth in market share.
SWF as a proportion of all ASX trades (a different metric that retail brokerage market share):
Oct: 0.076%
Nov-Dec: 0.079%
Jan: 0.102%
Feb: 0.110%
Mar: 0.127%
Looks like continued increases in market share each month. Looks like >10% increase in March. Eg. 4.5% to 5.1%.
Cash Loss Per TradeI created this metric for a guy saying 'they lose money on brokerage'. 'POC Per Trade' above seems to illustrate that is not true, but the following shows the trend of the cash-burn. Q120 being the more recent 'regular' quarter to compare. $5.91 cash burn per trade down to $0.43. A little more improvement, and they hit profit. There might be a pull back from the Corona spike, so who knows if it'll be next quarter, but it's close.
Cash Loss Per TradeQ320 Q220 Q120 Q419 Q319$(0.43) $(12.58) $(5.91) $(10.28) $(18.68)I had said that they might announce 'first cashflow positive month'. They didn't, but I believe it happened in March.
