Quarterly report pursuant to Section 13 or 15(d)

SEGMENT REPORTING

v3.23.3
SEGMENT REPORTING
 6 Months Ended
Sep. 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 September 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)
$ 84,227  $ 24,247  $ 2,116  $ 1,113  $ 111,703 
Net gain/(loss) on trading securities 51,078  221  (528) —  50,771 
Interest income 194,009  10,551  463  8,040  213,063 
Insurance underwriting income 57,976  —  —  —  57,976 
Net (loss)/gain on foreign exchange operations
 (3,990) 626  (410) 78  (3,696)
Net gain on derivative
 981  397  —  —  1,378 
Other income/(expense)
 2,918  1,487  (23) 4  4,386 
TOTAL REVENUE, NET 387,199  37,529  1,618  9,235  435,581 
Fee and commission expense 26,377  4,910  284  43  31,614 
Interest expense 131,868  7,346  149  18  139,381 
Insurance claims incurred, net of reinsurance 33,988  —  —  —  33,988 
Payroll and bonuses 30,221  4,345  4,746  686  39,998 
Professional services 588  1,597  9,687  79  11,951 
Stock compensation expense 700  82  249  —  1,031 
Advertising expense 3,888  4,402  179  170  8,639 
General and administrative expense 22,039  5,057  2,213  321  29,630 
Allowance for credit losses
 4,067  594  1  —  4,662 
TOTAL EXPENSE 253,736  28,333  17,508  1,317  300,894 
INCOME/(LOSS) BEFORE INCOME TAX FROM CONTINUING OPERATIONS
 $ 133,463  $ 9,196  $ (15,890) $ 7,918  $ 134,687 
Income tax expense (161) (7,295) (11,204) (548) (19,208)
INCOME/(LOSS) FROM CONTINUING OPERATIONS
 $ 133,302  $ 1,901  $ (27,094) $ 7,370  $ 115,479 
Six months ended September 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)
157,612  43,413  8,268  1,113  $ 210,406 
Net gain/(loss) on trading securities 82,672  435  (701) 181  82,587 
Interest income 336,046  16,465  1,851  8,050  362,412 
Insurance underwriting income 102,865  —  —  —  102,865 
Net gain/(loss) on foreign exchange operations 15,931  307  (772) 139  15,605 
Net (loss)/gain on derivative (29,797) 570  —  —  (29,227)
Other income/(expense)
 4,648  1,705  815  (25) 7,143 
TOTAL REVENUE, NET 669,977  62,895  9,461  9,458  751,791 
Fee and commission expense 50,175  9,483  548  92  60,298 
Interest expense 218,532  14,158  1,719  18  234,427 
Insurance claims incurred, net of reinsurance 55,502  —  —  —  55,502 
Payroll and bonuses 54,388  9,099  7,039  1,102  71,628 
Professional services 1,150  4,336  12,967  123  18,576 
Stock compensation expense 1,529  173  562  —  2,264 
Advertising expense 7,620  8,427  274  418  16,739 
General and administrative expense 38,066  9,086  6,327  626  54,105 
Allowance for credit losses
 17,837  1,147  4  —  18,988 
TOTAL EXPENSE 444,799  55,909  29,440  2,379  532,527 
INCOME/(LOSS) BEFORE INCOME TAX FROM CONTINUING OPERATIONS
 225,178  6,986  (19,979) 7,079  219,264 
Income tax expense (188) (9,724) (25,403) (549) (35,864)
INCOME/(LOSS) FROM CONTINUING OPERATIONS
 224,990  (2,738) (45,382) 6,530  183,400 
Three months ended September 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)
$ 19,067  $ 63,040  $ 1,050  $ —  $ 83,157 
Net gain/(loss) on trading securities 15,828  (7,210) 387  —  9,005 
Interest income 46,275  10,177  2,547  —  58,999 
Insurance underwriting income 26,200  —  —  —  26,200 
Net gain/(loss) on foreign exchange operations 7,601  (2,400) (665) 19  4,555 
Net loss on derivative
 (2,320) —  —  —  (2,320)
Other income/(expense)
 622  (101) 3  —  524 
TOTAL REVENUE, NET 113,273  63,506  3,322  19  180,120 
Fee and commission expense 11,812  6,474  144  9  18,439 
Interest expense 34,562  2,964  3,337  —  40,863 
Insurance claims incurred, net of reinsurance 17,475  —  —  —  17,475 
Payroll and bonuses 12,301  2,830  1,838  260  17,229 
Professional services 757  1,481  1,738  42  4,018 
Stock compensation expense 1,035  135  533  —  1,703 
Advertising expense 1,250  660  2  —  1,912 
General and administrative expense 6,372  5,428  982  116  12,898 
Allowance for credit losses/(recoveries)
 3,732  (1) (5) —  3,726 
TOTAL EXPENSE 89,296  19,971  8,569  427  118,263 
INCOME/(LOSS) BEFORE INCOME TAX FROM CONTINUING OPERATIONS
 $ 23,977  $ 43,535  $ (5,247) $ (408) $ 61,857 
Income tax (expense)/benefit
 (534) (6,623) (5,472) 10  (12,619)
INCOME/(LOSS) FROM CONTINUING OPERATIONS
 $ 23,443  $ 36,912  $ (10,719) $ (398) $ 49,238 
Six months ended September 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)
28,259  142,160  2,184  —  $ 172,603 
Net gain/(loss) on trading securities 37,417  (22,634) (1,344) —  13,439 
Interest income 85,185  15,388  6,989  —  107,562 
Insurance underwriting income 50,440  —  —  —  50,440 
Net gain/(loss) on foreign exchange operations 11,869  (1,830) (899) 8  9,148 
Net gain on derivative (1,054) —  —  —  (1,054)
Other (expense)/income
 530  (97) 8  50  491 
TOTAL REVENUE, NET 212,646  132,987  6,938  58  352,629 
Fee and commission expense 22,527  18,901  297  29  41,754 
Interest expense 66,530  5,660  8,744  —  80,934 
Insurance claims incurred, net of reinsurance 34,167  —  —  —  34,167 
Payroll and bonuses 24,031  5,562  3,583  466  33,642 
Professional services 1,478  2,753  3,944  98  8,273 
Stock compensation expense 2,136  291  1,152  —  3,579 
Advertising expense 3,399  2,341  9  —  5,749 
General and administrative expense 11,438  11,152  1,672  254  24,516 
Allowance for credit losses/(recoveries)
 6,164  (2) (8) —  6,154 
TOTAL EXPENSE 171,870  46,658  19,393  847  238,768 
INCOME/(LOSS) BEFORE INCOME TAX FROM CONTINUING OPERATIONS
 $ 40,776  $ 86,329  $ (12,455) $ (789) $ 113,861 
Income tax (expense)/benefit
 (596) (13,846) (7,077) 21  (21,498)
INCOME/(LOSS) FROM CONTINUING OPERATIONS
 40,180  72,483  (19,532) (768) 92,363 
(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:
September 30, 2023
Central Asia and Eastern Europe
Europe, excluding Eastern Europe
The United States
 Middle East/Caucasus Total
Total assets $ 5,878,010  $ 733,404  $ 86,732  $ 440,159  $ 7,138,305 
Total liabilities 5,690,420  491,016  31,298  11,140  6,223,874 
Net assets $ 187,590  $ 242,388  $ 55,434  $ 429,019  $ 914,431 

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.

As of September 30, 2023, the Group has provided its brokerage clients with margin lending in Middle East/Caucasus segment in the total amount of $433,368. This margin lending balance was financed through the Europe, excluding Eastern Europe segment of the Group, and upon collection of this receivable, funds will be transferred to the European segment.