Quarterly report pursuant to Section 13 or 15(d)

SEGMENT REPORTING

v3.23.3
SEGMENT REPORTING
 3 Months Ended
Jun. 30, 2023
Segment Reporting [Abstract]  
SEGMENT REPORTING SEGMENT REPORTING
The Company historically organized its operations in a single operating segment. Following the divestiture of the Company's Russian subsidiaries and the related corporate restructuring, the Company elected to reorganize its operations geographically into regional segments. The Company currently organizes its operations into the following four regional segments: Central Asia and Eastern Europe, Europe Excluding Eastern Europe, the United States and Middle East/Caucasus. These operating segments are based on how the Company's CODM makes decisions about allocating resources and assessing performance.

The following tables summarize the Company's Statement of Operations by its geographic segments. There are no revenues from transactions between the segments and intercompany balances have been eliminated for separate disclosure:
Three months ended June 30, 2023
STATEMENTS OF OPERATIONS
Central Asia and Eastern Europe
Europe, excluding Eastern Europe
The United States
 Middle East/Caucasus Total
Fee and commission income (1)
$ 73,385  $ 19,166  $ 6,152  $ —  $ 98,703 
Net gain/(loss) on trading securities 31,594  214  (173) 181  31,816 
Interest income 142,038  5,914  1,387  10  149,349 
Insurance underwriting income 44,889  —  —  —  44,889 
Net gain/(loss) on foreign exchange operations 19,923  (320) (362) 60  19,301 
Net (loss)/gain on derivative (30,778) 173  —  —  (30,605)
Other income/(expense)
 1,732  217  838  (30) 2,757 
TOTAL REVENUE, NET 282,783  25,364  7,842  221  316,210 
Fee and commission expense 23,798  4,572  265  49  28,684 
Interest expense 86,664  6,812  1,570  —  95,046 
Insurance claims incurred, net of reinsurance 21,514  —  —  —  21,514 
Payroll and bonuses 24,167  4,754  2,293  416  31,630 
Professional services 562  2,738  3,280  45  6,625 
Stock compensation expense 829  91  313  —  1,233 
Advertising expense 3,731  4,026  95  248  8,100 
General and administrative expense 16,028  4,029  4,113  305  24,475 
Allowance for credit losses
 13,771  552  3  —  14,326 
TOTAL EXPENSE 191,064  27,574  11,932  1,063  231,633 
INCOME BEFORE INCOME TAX FROM CONTINUING OPERATIONS $ 91,719  $ (2,210) $ (4,090) $ (842) $ 84,577 
Income tax expense (27) (2,430) (14,199) —  (16,656)
INCOME FROM CONTINUING OPERATIONS $ 91,692  $ (4,640) $ (18,289) $ (842) $ 67,921 
Three months ended June 30, 2022
STATEMENTS OF OPERATIONS
Central Asia and Eastern Europe
Europe, excluding Eastern Europe
The United States
 Middle East/Caucasus Total
Fee and commission income (1)
$ 8,250  $ 80,062  $ 1,134  $ —  $ 89,446 
Net gain/(loss) on trading securities 21,589  (15,425) (1,731) —  4,433 
Interest income 39,852  4,269  4,442  —  48,563 
Insurance underwriting income 24,241  —  —  —  24,241 
Net gain/(loss) on foreign exchange operations 4,267  570  (234) (10) 4,593 
Net gain on derivative 1,266  —  —  —  1,266 
Other (expense)/income
 (93) (2) 6  57  (32)
TOTAL REVENUE, NET 99,372  69,474  3,617  47  172,510 
Fee and commission expense 10,714  12,427  153  21  23,315 
Interest expense 31,968  2,696  5,407  —  40,071 
Insurance claims incurred, net of reinsurance 16,692  —  —  —  16,692 
Payroll and bonuses 11,730  2,732  1,745  206  16,413 
Professional services 721  1,272  2,206  56  4,255 
Stock compensation expense 1,101  156  619  —  1,876 
Advertising expense 2,149  1,681  7  —  3,837 
General and administrative expense 5,066  5,724  690  138  11,618 
Allowance for credit losses/(recoveries)
 2,431  —  (3) —  2,428 
TOTAL EXPENSE 82,572  26,688  10,824  421  120,505 
INCOME BEFORE INCOME TAX FROM CONTINUING OPERATIONS $ 16,800  $ 42,786  $ (7,207) $ (374) $ 52,005 
Income tax (expense)/benefit
 (61) (7,223) (1,605) 10  (8,879)
INCOME FROM CONTINUING OPERATIONS $ 16,739  $ 35,563  $ (8,812) $ (364) $ 43,126 
(1) All trading of U.S. and European exchange traded and OTC securities by all Freedom securities brokerage firms, excluding PrimeEx, are routed to and executed through Freedom EU and all fee and commission income for those transactions is recognized at subsidiary received the initial order from external client.
The following tables summarize the Company's total assets and total liabilities by its geographic segments. Intercompany balances have been eliminated for separate disclosure:
June 30, 2023
Central Asia and Eastern Europe
Europe, excluding Eastern Europe
The United States
 Middle East/Caucasus Total
Total assets $ 5,674,747  $ 785,218  $ 75,453  $ 4,347  $ 6,539,765 
Total liabilities 5,202,661  480,761  24,372  6,235  5,714,029 
Net assets $ 472,086  $ 304,457  $ 51,081  $ (1,888) $ 825,736 

March 31, 2023
Central Asia and Eastern Europe
Europe, excluding Eastern Europe
The United States
 Middle East/Caucasus Total
Total assets $ 4,303,126  $ 677,425  $ 101,365  $ 2,642  $ 5,084,558 
Total liabilities 3,868,326  384,921  60,198  377  4,313,822 
Net assets $ 434,800  $ 292,504  $ 41,167  $ 2,265  $ 770,736 

Central Asia and Eastern Europe Segment
Operations in Kazakhstan, Kyrgyzstan, Uzbekistan, along with the Company's headquarters in Kazakhstan, form the Central Asia and Eastern Europe segment. Within this segment, the Group conducts business under different securities licenses as required by the respective jurisdictions in the Central Asia and Eastern Europe region.
Group companies in the Central Asia and Eastern Europe segment provide comprehensive financial solutions, including lending such as digital auto loans and digital mortgage loans, payments, asset management products, bank guarantees, on demand and time deposits, various types of insurance coverage to meet the needs of the Group's customers and small businesses. The Group's insurance offerings include life insurance, obligatory insurance, tourist medical health insurance and auto insurance. These insurance products are designed to offer comprehensive coverage and tailored solutions to protect individuals, property, auto and businesses in the event of unforeseen events or risks.
Europe Excluding Eastern Europe Segment    
Operations in Cyprus, United Kingdom and Germany. Companies in the Europe Excluding Eastern Europe segment offer a broad suite of market-making, prime brokerage, lending, and treasury and securities products and services to a global client base of corporations, investors, financial institutions, merchants, government and municipal entities.
Companies in this segment cater to clients from the European Union by offering comprehensive solutions to support their investment needs. The Group's services in this segment encompass direct access to the world's largest stock exchanges, providing its clients with a gateway to global investment opportunities. Additionally, the Group's offerings in this segment include professional securities analytics, empowering clients with valuable insights and market intelligence to make informed investment decisions. To ensure a seamless experience, it provides user-friendly trading applications that offer convenience and flexibility.
United States Segment
Companies in the United States segment offer a full array of investment banking and capital markets advisory services, including initial public offerings, mergers, and acquisitions, debt and equity financing, corporate banking, trading, hedging, and research, equity research, delivering in-depth analysis, insights into individual stocks and sectors. It provides macro-economic strategy research to help clients navigate the broader economic landscape and make informed investment decisions.

To ensure clients are well-informed, companies in this segment offer a daily morning note that covers key market updates, trends, and potential opportunities. It also provides technical research, focusing on chart patterns and technical indicators to assist clients in identifying potential entry and exit points in the market.

In addition, companies in the United States segment conduct research in specific sectors such as energy and consumer, offering valuable insights into industry trends and company analysis. It facilitates corporate access research, enabling clients to gain access to top management and industry experts for a deeper understanding of specific companies or sectors.

Middle East/Caucasus Segment

Companies in the Middle East/Caucasus segment offer securities broker-dealer services, financials educational center services, financial intermediary center services and financial consulting services. The segment is currently in the developmental stage and does not generate profit at the moment. As a developing segment, the focus is on establishing a strong presence, building strategic relationships, and expanding client base in the region.