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美國
證券交易委員會
華盛頓特區20549
表格 10-Q
x根據1934年證券交易法第13或15(d)節的季度報告
截至季度結束日期的財務報告2024年9月30日
或者
o根據1934年證券交易法第13或15(d)節的轉型報告書
 過渡期從______到________
委員會文件號 001-33034
FREEDOM控股公司。
(根據其章程規定的註冊人準確名稱)
內華達30-0233726
（國家或其他管轄區的
公司成立或組織）		（IRS僱主
唯一識別號碼）
40華爾街, 58樓
紐約, NY。
10005
，（主要行政辦公地址）(郵政編碼)
(212) 980 4400
（註冊人的電話號碼，包括區號）

哈薩克斯坦阿拉木圖市阿法拉比大道77/7號Esentai塔架，七樓。
(如果自上次報告以來地址已更改，請填寫之前的地址)
根據法案第12（b）條註冊的證券：
每一類的名稱交易標誌在其上註冊的交易所的名稱
納斯達克證券交易所FRHC)股票當日上漲0.09%，創下52周高點29.38美元。
The 納斯達克資本市場資本市場
請通過複選框指示，註冊者是否：(1) 在過去12個月內按照1934年證券交易所法第13或15(d)條的要求提交了所有要提交的報告（或對於註冊者需要提交此類報告的更短期間）；並且(2) 在過去90天內已經受到這些文件提交要求的約束。 Yes x 沒有 o
請在以下勾選方框表示註冊人是否已在Regulation S-T Rule 405規定的前12個月(或在註冊人需要提交此類文件的較短期間內)提交了每個互動數據文件。Yes x  否 o
請勾選相應的選項以表明註冊人是大型高速申報人、高速申報人、非高速申報人、較小的報告公司還是新興成長公司。 有關「大型加速申報人」、「加速申報人」、「較小的報告公司」和「新興成長公司」的定義，請參見交易所法案120億.2條。
大型加速報告人x加速報告人o
非加速文件提交人o小型報告公司o
新興成長公司 o
如果是新興成長型企業，請勾選複選標記，表明註冊者已選擇不使用延長過渡期來符合根據證券交易法第13(a)條規定提供的任何新財務會計準則。 o
請勾選說明註冊人是否爲殼公司（如《交易所法》第120億.2條所定義）。
是的 ☐  否 x
截至2024年11月7日，報名者 60,612,417 每股普通股，面值$0.001，已發行並流通。


FREEDOM控股公司。
10-Q表格
目錄
截至日期的簡明合併資產負債表 2024年9月30日和2024年3月31日
三個月的簡明綜合利潤表和其他全面收入表 截至2024年9月30日的六個月度簡明合併利潤表和其他全面收入表 年度綜合損益簡明合併財務報表3
的現金流簡明彙總表 截至2024年9月30日的六個月 和2023
截至2024年9月30日的簡明合併股東權益報表 和2024年9月30日止六個月的簡明合併股東權益報表 和2023
 


2
目錄

FREEDOM控股公司。

基本報表資產負債表（未經審計）
(除非另有說明，所有金額均以千美元計)
2024年9月30日
過渡報告根據《1934年證券交易法》第13或15(d)條款
資產
現金及現金等價物（含合營企業的現金1,915 和 $203 來自相關方)
$569,179 $545,084 
受限現金（包括$6,669 和 $— 與關聯方之間的資產）
895,651 462,637 
交易證券（包括$1,231 和 $1,326 與關聯方之間的資產）
3,601,118 3,688,620 
按公允價值計量的可供出售證券284,580 216,621 
按金貸款、券商及其他應收款淨額（包括$162,066 和 $22,039 關聯方應收款）
1,623,962 1,660,275 
發放的貸款（包括 $141,290 和 $147,440 給關聯方）
1,368,656 1,381,715 
固定資產淨額142,446 83,002 
無形資產, 淨額46,112 47,668 
商譽53,166 52,648 
租賃權資產37,028 36,324 
保險合同資產24,982 24,922 
其他資產淨額（包括 $14,914 和 $5,257 與關聯方之間的資產）
169,375 102,414 
資產總計$8,816,255 $8,301,930 
負債及股東權益
證券回購協議義務$2,584,131 $2,756,596 
客戶負債（包括 $191,607 和 $44,127 與關聯方之間的負債)
3,329,133 2,273,830 
按金貸款和交易應付款
303,411 867,880 
保險業務產生的責任
364,156 297,180 
流動所得稅負債27,844 32,996 
發行的債務證券267,341 267,251 
租賃負債37,664 35,794 
與持續參與有關的責任506,091 521,885 
其他負債（包括 $729 和 $9,854 與關聯方的交易)
133,248 81,560 
負債合計$7,553,019 $7,134,972 
承諾和或有負債（注23）— — 
股東權益
優先股票$0.001每股面值; 20,000,000 no已發行或流通的股票
— — 
普通股-美元0.001每股面值; 500,000,000 60,557,801 2024年9月30日，已發行並流通的股份。 60,321,813 截至2024年3月31日，已發行和流通的股份分別爲
61 60 
股票認購應收款項。209,249 183,788 
保留盈餘1,147,798 998,740 
累計其他綜合損失(96,869)(18,938)
TOTAL FRHC SHAREHOLDERS’ EQUITY$1,260,239 $1,163,650 
非控制權益2,997 3,308 
股東權益合計$1,263,236 $1,166,958 
負債和股東權益總計$8,816,255 $8,301,930 
附註是這些簡明合併財務報表的組成部分

3
目錄

FREEDOM控股公司。
綜合利潤及其他綜合收益簡明綜合利潤表和綜合收益表（未經審計）
（除非另有說明，所有金額均以千美元計）
截至9月30日的三個月截至9月30日的六個月
2024202320242023
營業收入：
手續費和佣金收入（截至本季度結束$837 和 $20,022，截至本半年結束$1,703 和 $35,917 來自關聯方）
$121,051 $111,703 $236,540 $210,406 
Net gain on trading securities68,317 50,771 16,215 82,587 
Interest income (including for the three months ended $375 和 $9,731, for the six months ended $644 和 $15,084 from related parties)
210,324 213,063 436,328 362,412 
Insurance underwriting income160,344 57,976 289,752 102,865 
Net gain/(loss) on foreign exchange operations6,479 (3,696)14,568 15,605 
衍生工具的淨收益/(損失)6,308 1,378 18,802 (29,227)
其他收入8,077 4,386 19,410 7,143 
營業總收入，淨額$580,900 $435,581 $1,031,615 $751,791 
支出：
手續費及佣金支出
$90,837 $31,614 $170,984 $60,298 
利息支出
124,665 139,381 270,383 234,427 
保險賠款支出，再保險淨額66,684 33,988 113,993 55,502 
工資和獎金66,210 39,998 123,734 71,628 
專業服務8,245 11,951 15,513 18,576 
股票報酬支出12,056 1,031 22,671 2,264 
廣告費用20,049 8,639 37,250 16,739 
一般和管理費用（包括截至三個月結束的$6,247 和 $5,229，截至六個月結束的$8,971 和 $7,561 與相關方交易）
53,240 29,630 98,345 54,105 
預計信用損失準備金撥備10,427 4,662 8,657 18,988 
總支出$452,413 $300,894 $861,530 $532,527 
稅前收入128,487 134,687 170,085 219,264 
所得稅費用(13,999)(19,208)(21,338)(35,864)
淨利潤$114,488 $115,479 $148,747 $183,400 
減：歸屬於子公司非控制權益的淨虧損(170)(368)(311)(549)
歸屬於普通股股東的淨收入$114,658 $115,847 $149,058 $183,949 
其他全面收益
可供出售金融資產未實現損益變動，稅後影響淨額4,306 2,168 7,680 4,407 
可供出售金融資產處置期間已實現（收益）/損失重新分類調整，稅後影響淨額
185 (306)167 (1,264)
外幣翻譯調整(19,967)(29,933)(85,778)(31,693)
其他綜合損失(15,476)(28,071)(77,931)(28,550)
非控制權益前綜合收益$99,012 $87,408 $70,816 $154,850 
4
目錄

FREEDOM控股公司。
綜合利潤及其他綜合收益簡明綜合利潤表和綜合收益表（未經審計）
（除非另有說明，所有金額均以千美元計）
減少：歸屬於子公司非控股權益的綜合損失(170)(368)(311)(549)
歸屬於普通股股東的綜合收益/(損失)$99,182 $87,776 $71,127 $155,399 
每股普通股收益（以美元計）：
基本每股收益1.93 1.97 2.51 3.13 
每股盈利-攤薄1.89 1.95 2.46 3.09 
加權平均股數（基本）59,363,122 58,581,332 59,310,891 58,546,963 
加權平均股數（攤薄）60,460,173 59,291,832 60,358,442 59,292,757 



隨附說明是這些簡明合併財務報表的一部分。


5
目錄

自由控股公司

簡化的現金流量表（未經審計）
（除非另有說明，所有金額均以千美元計）
截至9月30日的六個月內
20242023
經營活動現金流
淨利潤$148,747 $183,400 
用於調節營業活動中使用的淨利潤的調整:
折舊與攤銷8,065 6,611 
推遲收購成本攤銷107,266 12,161 
非現金租賃費用6,196 4,023 
遞延稅項變化(3,623)3,312 
股票報酬支出22,671 2,264 
交易證券的未實現收益(974)(30,664)
未實現的衍生品收益
(4,053)(434)
可供出售證券淨實現損益/(收益)167 (1,264)
應計利息的淨變動12,558 (68,173)
重新評估之前持有的Arbuz利益的購買價格
— (1,040)
ITS科技出售所得盈利
(4,201)— 
保險準備金變動93,241 38,032 
聯營企業投資重新估價(1,960)— 
未使用休假儲備金變動474 1,800 
預計信用損失準備金撥備8,657 18,988 
經營性資產和負債變動:
交易證券(187,941)(1,264,940)
按金借貸、券商和其他應收賬款（包括（$140,027和$294,985 與關聯方交易變動）
3,584 (656,755)
保險合同資產(6,085)3,412 
其他(160,073)(30,959)
券商客戶負債（包括來自關聯方的變動$(147,480) and $(130,210）來自按金融資和交易應付款$(
916,550 354,720 
流動所得稅負債(5,152)17,947 
（包括$)485) and $(3,239關聯方產生的變動)
(549,368)39,701 
租賃負債(5,227)(4,728)
保險業務產生的責任2,608 (262)
其他負債13,945 21,159 
經營活動現金流量淨額
416,072 (1,351,689)
投資活動中使用的現金
購買固定資產(33,641)(19,446)
向客戶發放貸款的淨變動(95,076)(443,901)
購買可供出售證券，按公允價值計量(144,767)(134,002)
可供出售證券出售收益，按公允價值計量69,849 174,277 
支付給Arbuz的代價
— (13,281)
支付給互聯網旅遊的代價
— (31)
支付給Aviata的代價
— (690)
支付給Ticketon的代價
— (3,003)
由於Freedom UA解consolidation而處置的現金、現金等價物和受限現金— (1,987)
從收購中收到的現金、現金等價物和受限現金— 2,461 
從出售ITS科技收到的現金
2,000 — 
對聯營企業投資的資本貢獻
(2,479)— 
從出售ITS科技處置的現金、現金等價物
(542)— 
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FREEDOM HOLDING CORP

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(All amounts in thousands of United States dollars, unless otherwise stated)
Consideration paid to SilkNetCom
(11,183)— 
Cash received at acquisition of SilkNetCom
54 — 
Prepayment on acquisitions(7,652)(10,550)
Net cash flows used in investing activities(223,437)(450,153)
Cash Flows From Financing Activities
Net proceeds from securities repurchase agreement obligations
30,269 1,367,948 
Proceeds from issuance of debt securities— 5,801 
Repurchase of mortgage loans under the State Program(26,771)(19,526)
Funds received under state program for financing of mortgage loans40,793 53,400 
Net change in bank customer deposits308,669 279,939 
Purchase of non-controlling interest in Arbuz
— (3,228)
Net proceeds from loans received
17,355 410 
Net cash flows from financing activities370,315 1,684,744 
Effect of changes in foreign exchange rates on cash and cash equivalents(106,027)(59,098)
Effect of expected credit losses on cash and cash equivalents and restricted cash186 — 
NET CHANGE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH457,109 (176,196)
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, BEGINNING OF PERIOD1,007,721 1,026,945 
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, END OF PERIOD$1,464,830 $850,749 

For The Six Months Ended September 30,
20242023
Supplemental disclosure of cash flow information:
Cash paid for interest$252,860 $220,299 
Income tax paid$30,312 $13,484 
Supplemental non-cash disclosures:
Operating lease right-of-use assets obtained/disposed of in exchange for operating lease obligations during the period, net$(218)$3,771 
The following table provides a reconciliation of cash and cash equivalents and restricted cash reported within the Condensed Consolidated Balance Sheets that sum to the total of the same such amounts shown in the Condensed Consolidated Statements of Cash Flows:
September 30, 2024
September 30, 2023
Cash and cash equivalents$569,179 $463,875 
Restricted cash895,651 386,874 
Total cash, cash equivalents and restricted cash shown as in the statement of cash flows$1,464,830 $850,749 
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FREEDOM HOLDING CORP

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(All amounts in thousands of United States dollars, unless otherwise stated)
The accompanying notes are an integral part of these condensed consolidated financial statements.
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FREEDOM HOLDING CORP.

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (Unaudited)
(All amounts in thousands of United States dollars, except share data, unless otherwise stated)

Common StockAdditional
paid
in capital		Retained
earnings		Accumulated
other
comprehensive
loss		Total equity attributable to the shareholders'
Non-
controlling
interest
Total
SharesAmount
At June 30, 2024
60,721,010 $60 $197,205 $1,033,140 $(81,393)$1,149,012 $3,167 $1,152,179 
Delivered stock based compensation from previous quarter
3,648 — 290 — — 290 — 290 
Forfeited stock based compensation
(310,700)— — — — — — — 
Undelivered stock based compensation
(12,816)— (302)— — (302)— (302)
Stock based compensation156,659 1 12,056 — — 12,057 — 12,057 
Foreign currency translation adjustments, net of tax effect— — — — (19,967)(19,967)— (19,967)
Other comprehensive income— — — — 4,491 4,491 — 4,491 
Net income/(loss)— — — 114,658 — 114,658 (170)114,488 
At September 30, 202460,557,801 $61 209,249 $1,147,798 (96,869)0$1,260,239 02,997 0$1,263,236 
At March 31, 202460,321,813 $60 $183,788 $998,740 $(18,938)$1,163,650 $3,308 $1,166,958 
Delivered stock based compensation from previous year
215,878 — 3,092 — — 3,092 — 3,092 
Forfeited stock based compensation
(310,700)— — — — — — — 
Undelivered stock based compensation
(12,816)— (302)— — (302)— (302)
Stock based compensation343,626 1 22,671 — — 22,672 — 22,672 
Foreign currency translation adjustments, net of tax effect— — — — (85,778)(85,778)— (85,778)
Other comprehensive income— — — — 7,847 7,847 — 7,847 
Net income/(loss)— — — 149,058 — 149,058 (311)148,747 
At September 30, 202460,557,801 $61 $209,249 $1,147,798 $(96,869)$1,260,239 $2,997 $1,263,236 
The accompanying notes are an integral part of these condensed consolidated financial statements.
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FREEDOM HOLDING CORP.

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (Unaudited)
(All amounts in thousands of United States dollars, except share data, unless otherwise stated)


Common StockAdditional
paid
in capital		Retained
earnings		Accumulated
other
comprehensive
loss		Total equity attributable to the shareholders'Non-
controlling
interest		Total
SharesAmount
At June 30, 202359,659,191 $59 $165,395 $691,302 $(34,479)$822,277 $3,459 $825,736 
Stock based compensation— — 1,031 — — 1,031 — 1,031 
Purchase of ReKassa shares— — — — — — 256 256 
Foreign currency translation adjustments, net of tax effect— — — — (29,933)(29,933)— (29,933)
Other comprehensive income— — — — 1,862 1,862 — 1,862 
Net income/(loss)— — — 115,847 — 115,847 (368)115,479 
At September 30, 202359,659,191 $59 $166,426 $807,149 $(62,550)0$911,084 0$3,347 0$914,431 
At March 31, 202359,659,191 $59 $164,162 $647,064 $(34,000)$777,285 $(6,549)$770,736 
Cumulative adjustment from adoption of ASC 326— — — (22,772)— (22,772)— (22,772)
Stock based compensation— — 2,264 — — 2,264 — 2,264 
Disposal of FF Ukraine— — — (6,549)— (6,549)6,549 — 
Purchase of Arbuz shares— — — 5,457 — 5,457 3,640 9,097 
Purchase of ReKassa shares— — — — — — 256 256 
Foreign currency translation adjustments, net of tax effect— — — — (31,693)(31,693)— (31,693)
Other comprehensive income— — — — 3,143 3,143 — 3,143 
Net income/(loss)— — — 183,949 — 183,949 (549)183,400 
At September 30, 202359,659,191 $59 $166,426 $807,149 $(62,550)$911,084 $3,347 $914,431 
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FREEDOM HOLDING CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(All amounts in thousands of United States dollars, except share data, unless otherwise stated)

NOTE 1 – DESCRIPTION OF BUSINESS
Overview
Freedom Holding Corp. (the "Company" or "FRHC" and, together with its subsidiaries, the "Group") is a corporation organized in the United States under the laws of the State of Nevada that through its operating subsidiaries provides securities brokerage, securities dealing for customers and for its own account, market making activities, investment research, investment counseling, investment banking services, retail and commercial banking, insurance products, payment services, and information processing services. The Company also owns several ancillary businesses which complement its core financial services businesses, including telecommunications and media businesses in Kazakhstan that are in a developmental stage. The Company is the holding company of subsidiaries incorporated in Kazakhstan, Cyprus, the United States, the United Kingdom, Armenia, the United Arab Emirates, Uzbekistan, Kyrgyzstan, Tajikistan, Azerbaijan, and Turkey, and the Group also has a presence in Austria, Belgium, Bulgaria, France, Germany, Greece, Italy, Lithuania, The Netherlands, Poland and Spain. The Company's subsidiaries in the United States include a broker-dealer that is registered with the United States Securities and Exchange Commission ("SEC") and the Financial Industry Regulatory Authority ("FINRA"). The Company's common stock trades on the Nasdaq Capital Market, the Kazakhstan Stock Exchange ("KASE"), and the Astana International Exchange ("AIX").
As of September 30, 2024, the Company owned, directly or indirectly, the following companies:
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FREEDOM HOLDING CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(All amounts in thousands of United States dollars, except share data, unless otherwise stated)
Name of subsidiaryJurisdiction of IncorporationNumber of subsidiariesBusiness Area
Brokerage Segment
Freedom Finance JSC ("Freedom KZ")
Kazakhstan3
Securities broker-dealer
Freedom Finance Global PLC ("Freedom Global")
Kazakhstan—
Securities broker-dealer
Freedom Finance Europe Limited ("Freedom EU")
Cyprus2
Securities broker-dealer
Freedom Finance Armenia LLC ("Freedom AR")
Armenia—
Securities broker-dealer
Prime Executions, Inc. ("PrimeEx")
USA—Securities broker-dealer
Foreign Enterprise LLC Freedom Finance
Uzbekistan—
Securities broker-dealer
Freedom Broker LLCKyrgyzstan—
Securities broker-dealer
Banking Segment
Freedom Bank Kazakhstan JSC ("Freedom Bank KZ")
Kazakhstan2Commercial bank
Insurance Segment
Freedom Finance Life JSC ("Freedom Life")
Kazakhstan—Life/health insurance
Freedom Finance Insurance JSC ("Freedom Insurance")
Kazakhstan—General insurance
Other Segment
Ticketon Events LLP ("Ticketon")
Kazakhstan3Online ticket sales
Freedom Finance Special Purpose Company LTD ("Freedom SPC")
Kazakhstan—Issuance of debt securities
Freedom Finance Commercial LLP
Kazakhstan—Sales consulting
Freedom Technologies LLP ("Paybox")
Kazakhstan5Payment services
Aviata LLP ("Aviata")
Kazakhstan—Online travel ticket aggregator
Internet-Tourism LLP ("Internet Tourism")
Kazakhstan—Online travel ticket aggregator
Arbuz Group LLP ("Arbuz")
Kazakhstan4Online retail trade and e-commerce
Comrun LLP ("ReKassa")
Kazakhstan—Mobile and web application
Freedom Telecom Holding Limited ("Freedom Telecom")
Kazakhstan4Telecommunications
Freedom Kazakhstan PC Ltd
Kazakhstan8Holding company
Freedom Advertising Ltd
Kazakhstan—Advertising
Freedom Shapagat Corporate Fund
Kazakhstan—Non-profit
FRHC Fractional SPC LTD
Kazakhstan—Issuance of debt securities
Freedom Holding Operations LLPKazakhstan—
Human resources
Freedom Horizons LLPKazakhstan—
Business consulting and services
Freedom Finance Azerbaijan LLC
Azerbaijan—Financial educational center
Freedom Finance FZE.
UAE—Consulting
Freedom Management Ltd.
UAE—Consulting
Freedom Finance Turkey LLC
Turkey—Financial consulting
Freedom Finance Technologies Ltd
Cyprus—IT development
Freedom Prime UK Limited ("Prime UK")
UK—Management consulting
Freedom Structured Products PLC
Cyprus—Financial services
FFIN Securities, Inc.
USA—Dormant
Freedom U.S. Market LLC
USA2Management company
LD Micro ("LD Micro")
USA—Event platform
Freedom US Technologies LLCUSA—
Technology services


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FREEDOM HOLDING CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(All amounts in thousands of United States dollars, except share data, unless otherwise stated)
Through its subsidiaries, the Company offers a diverse range of financial services, including banking, brokerage, and insurance, as well as lifestyle services such as online payments, travel, ticketing, e-commerce, and telecommunications and media businesses in Kazakhstan that are in a developmental stage. It operates as a professional participant in the financial markets, holding banking and insurance licenses, as well as licenses to provide various services across multiple stock exchanges, including the Kazakhstan Stock Exchange (KASE), the Astana International Exchange (AIX), the Republican Stock Exchange of Tashkent (UZSE), and the Uzbek Republican Currency Exchange (UZCE). Additionally, it is a member of the New York Stock Exchange (NYSE) and the Nasdaq Stock Exchange (Nasdaq). Freedom EU enhances the Company's offerings by providing clients with operational support and access to investment opportunities in the United States and European securities markets.
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Accounting principles
The Group's accounting policies and accompanying consolidated financial statements conform to accounting principles generally accepted in the United States of America (U.S. GAAP).
Basis of presentation and principles of consolidation

The consolidated financial statements present the consolidated accounts of FRHC and its consolidated subsidiaries. All inter-company balances and transactions have been eliminated from the consolidated financial statements.

These unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements, and related notes thereto, included in the Company’s 2024 Annual Report on Form 10-K. Note 2 to the consolidated financial statements in Company’s 2024 Annual Report on Form 10-K contains a summary of all of the Company’s significant accounting policies, except for the following amendments:
Non-Consolidation of Freedom Securities Trading Inc.

Freedom Securities Trading Inc. (formerly known as FFIN Brokerage Services, Inc.) ("FST Belize") is a company that is outside of the Group which has been solely owned by Mr. Turlov since July 2014. The Company does not consolidate FST Belize under either of the primary consolidation methods - the variable interest entity (“VIE”) accounting method and the voting interest method ("VOE") because (i) FST Belize is not a VIE due to the fact it has sufficient equity at risk to finance its activities without additional financial support and the control over its significant activities is held by its sole shareholder, Mr. Turlov, and (ii) Mr. Turlov has a controlling interest in FST Belize such that under the VOE model FRHC is not required to consolidate FST Belize. Other than Mr. Turlov, there are no other shareholders of FST Belize or parties with participating rights or the ability to remove Mr. Turlov from his ownership position in or to make all decisions in respect of FST Belize. While prior to the end of the Company's fiscal year ended March 31, 2024 we had an omnibus brokerage relationship with FST Belize, such relationship had been terminated as of March 31, 2024.

Deconsolidation of Freedom Finance Ukraine LLC

As at September 30, 2024, the Company owned a 9% interest in Freedom Finance Ukraine LLC ("Freedom UA"), a Kyiv, Ukraine-based broker-dealer. The remaining 91% interest in Freedom UA is controlled by Askar Tashtitov, the Company's president. The Company entered into a series of contractual arrangements with Freedom UA and Mr. Tashtitov, including a consulting services agreement, an operating agreement and an option agreement. Through March 31, 2023, the Company had consolidated Freedom UA into the financial statements of the Company. On October 19, 2022, Freedom UA was added to the Ukrainian government's sanctioned entities list, resulting in suspension of its brokerage license. Given the ongoing uncertainty surrounding the situation in Ukraine and based on the Company's management's belief that the Company does not maintain effective control over Freedom UA, the Company has accounted for the deconsolidation of Freedom UA since April 1, 2023 (the date of loss of control).

Concentrations of Revenue

Revenues from one customer of the Group’s Brokerage segment represented the following amount of the Group’s consolidated revenues:
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FREEDOM HOLDING CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(All amounts in thousands of United States dollars, except share data, unless otherwise stated)
Three Months Ended
September 30, 2024
Three Months Ended
September 30, 2023
Six Months Ended
September 30, 2024
Six Months Ended
September 30, 2023
Single non-related party
$79,011 $69,882 $163,284 $104,956 


Impairment of Goodwill
Goodwill is allocated to reporting units, which are identified as the operating segments or one level below operating segments that generate separate financial information, which is regularly reviewed by management. The assignment of goodwill to reporting units allows for the assessment of potential impairment at the appropriate level within the organization.
The Company has identified its reporting units based on its organizational and operational structure, as well as the level at which internal financial information is reviewed by management to make strategic decisions. In line with this, four major reporting units have been established: brokerage, banking. insurance and other. The management team responsible for each business reviews financial information related to this reporting unit, including revenue, expenses, and market trends.
Goodwill has been allocated to each reporting unit based on its relative fair value at the time of acquisition or significant triggering events. The fair value allocation of goodwill to reporting units is periodically reassessed to ensure alignment with the Group's evolving organizational structure and operational dynamics.

Further details regarding the measurement of goodwill impairment and the results of impairment tests for each reporting unit are provided below.

The Company discloses information about its reporting units, the carrying amounts of goodwill allocated to each reporting unit, and the impairment losses recognized. The allocation of goodwill to reporting units ensures a focused evaluation of each unit's financial performance and facilitates the identification of potential impairment, enhancing the transparency and reliability of the Company's financial reporting.

As of September 30, 2024 and March 31, 2024, goodwill recorded in the Company's Condensed Consolidated Balance Sheets totaled $53,166 and $52,648 respectively. The Company performs an impairment review at least annually unless indicators of impairment exist in interim periods. The entity compares the fair value of a reporting unit with its carrying amount. The goodwill impairment charge is recognized for the amount by which the reporting unit’s carrying amount exceeds its fair value, limited to the total amount of goodwill allocated to that reporting unit. If fair value exceeds the carrying amount, no impairment is recorded.

The amount of goodwill at September 30, 2024 increased compared to March 31, 2024, as a result of the acquisition of 100% SilkNetCom LLP by Freedom Telecom Holding, which occurred after March 31, 2024. See Note 22 Acquisitions of subsidiaries to the condensed consolidated financial statements included in this quarterly report on Form 10-Q.
The changes in the carrying amount of goodwill for three months ended September 30, 2024 and 2023, were as follows:
Brokerage
Bank
InsuranceOtherTotal
Goodwill, gross
Balance as of March 31, 2023$2,677 $2,652 $980 $8,715 $15,024 
Write-off due to deconsolidation of Freedom UA— — — (832)(832)
Foreign currency translation difference(50)93 — — 43 
Acquired— — — 37,320 37,320 
Balance as of September 30, 2023$2,627 $2,745 $980 $45,203 $51,555 
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FREEDOM HOLDING CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(All amounts in thousands of United States dollars, except share data, unless otherwise stated)
Balance as of March 31, 2024$2,688 $2,746 $1,040 $46,174 $52,648 
Forex(75)(6)(75)(2,703)(2,859)
Acquired— — — 3,377 3,377 
Balance as of September 30, 2024$2,613 $2,740 $965 $46,848 $53,166 
Accumulated impairment
Balance as of March 31, 2023$— $— $— $832 $832 
Impairment expense— — — — — 
Write-off due to deconsolidation of Freedom UA— — — (832)(832)
Balance as of September 30, 2023$— $— $— $— $— 
Balance as of March 31, 2024$— $— $— $— $— 
Impairment expense— — — — — 
Balance as of September 30, 2024$— $— $— $— $— 
Goodwill, net of impairment
Balance as of September 30, 2023$2,627 $2,745 $980 $45,203 $51,555 
Balance as of March 31, 2024$2,688 $2,746 $1,040 $46,174 $52,648 
Balance as of September 30, 2024$2,613 $2,740 $965 $46,848 $53,166 
Recent accounting pronouncements
In August 2018, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2018-12, Financial Services – Insurance (Topic 944): Targeted Improvements to the Accounting for Long-Duration Contracts, as clarified and amended by (i) ASU 2019-09, Financial Services - Insurance (Topic 944): Effective Date, and (ii) ASU 2020-11, Financial Services - Insurance (Topic 944): Effective Date and Early Application (collectively referred to herein as ASU 2018-12). ASU 2018-12 changed existing recognition, measurement, presentation, and disclosure requirements for long-duration contracts. ASU 2018-12 includes: (1) a requirement to review and, if there is a change, update cash flow assumptions used to measure the liability for future policy benefits (LFPB) at least annually, and to update the discount rate assumption quarterly, (2) a requirement to account for market risk benefits (MRBs) at fair value, (3) simplified amortization for deferred policy acquisition costs (DAC), and (4) enhanced financial statement presentation and disclosures. For the Company, the Update is effective for fiscal years beginning after December 15, 2024, or interim periods after December 15, 2025. The Company will adopt ASU 2018-12 effective April 1, 2025 using the modified retrospective transition method where permitted. ASU 2018-12 will impact the accounting and disclosure requirements for all long-duration contracts issued by the Company. The Company expects the standard to have an immaterial financial impact on its consolidated financial statements and related disclosures.
In March 2023, the FASB issued ASU 2023-02, “Investments-Equity method and Joint Ventures (Topic 323): Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method.” These amendments allow reporting entities to elect to account for qualifying tax equity investments using the proportional amortization method, regardless of the program giving rise to the related income tax credits. For all other entities, the amendments are effective for fiscal years beginning after December 15, 2024, including interim periods within those fiscal years and early adoption is permitted. The Company is currently evaluating the impact that ASU 2023-02 will have on its consolidated financial statements and related disclosures.
In August 2023, the Financial Accounting Standards Board issued ASU 2023-05, Business Combinations - Joint Venture Formations (Subtopic 805-60): Recognition and Initial Measurement, which clarifies the business combination accounting for joint venture formations. The amendments in ASU 2023-25 seek to reduce diversity in practice that has resulted from a lack of authoritative guidance regarding the accounting for the formation of joint ventures in separate financial statements. The amendments also seek to clarify the initial measurement of joint venture net assets, including businesses contributed to a joint venture. The guidance is applicable to all entities involved in the formation of a joint venture. The amendments are
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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(All amounts in thousands of United States dollars, except share data, unless otherwise stated)
effective for all joint venture formations with a formation date on or after January 1, 2025. Early adoption and retrospective application of the amendments are permitted. The Company is currently evaluating the impact ASU 2023-05 will have on its consolidated financial statements and related disclosures.

In October 2023, the FASB issued Accounting Standards Update No. 2023-06 (“ASU 2023-06”), Disclosure Improvements - Codification Amendment in Response to the SEC’s Disclosure Update and Simplification Initiative. ASU 2023-06 modified the disclosure and presentation requirements of a variety of codification topics by aligning them with the SEC’s regulations. The amendments to the various topics should be applied prospectively, and the effective date will be determined for each individual disclosure based on the effective date of the SEC’s removal of the related disclosure. If the SEC has not removed the applicable requirements from Regulation S-X or Regulation S-K by June 30, 2027, then ASU 2023-06 will not become effective. Early adoption is prohibited. While the Company is currently evaluating the effect that implementation of this update will have on its consolidated financial statements, no material impact is anticipated.

In November 2023, the FASB issued Accounting Standards Update 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which enhances reporting requirements under Topic 280. The enhanced disclosure requirements include title and position of the Chief Operating Decision Maker (CODM), significant segment expenses provided to the CODM, extending certain annual disclosures to interim periods, clarifying single reportable segment entities must apply ASC 280 in its entirety, and permitting more than one measure of segment profit or loss to be reported under certain circumstances. This change is effective for fiscal years beginning after December 15, 2023 and interim periods beginning after December 15, 2024. This change will apply retrospectively to all periods presented. The Company is currently evaluating the impact ASU No 2023-07 will have on its consolidated financial statements and related disclosures.

In December 2023, the FASB issued ASU No. 2023-08, Intangibles—Goodwill and Other—Crypto Assets (Subtopic 350-60): Accounting for and Disclosure of Crypto Assets. The amendments in ASU No. 2023-08 are intended to improve the accounting for certain crypto assets by requiring an entity to measure those crypto assets at fair value each reporting period with changes in fair value recognized in net income. The amendments also improve the information provided to investors about an entity’s crypto asset holdings by requiring disclosure about significant holdings, contractual sale restrictions, and changes during the reporting period. The amendments are effective for all entities for fiscal years beginning after December 15, 2024, including interim periods within those fiscal years. Early adoption is permitted for both interim and annual financial statements that have not yet been issued (or made available for issuance). If an entity adopts the amendments in an interim period, it must adopt them as of the beginning of the fiscal year that includes that interim period. ASU No. 2023-08 requires a cumulative-effect adjustment to the opening balance of retained earnings (or other appropriate components of equity or net assets) as of the beginning of the annual reporting period in which an entity adopts the amendments. The Company is currently evaluating the impact ASU No 2023-08 will have on its consolidated financial statements and related disclosures.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which would require additional transparency for income tax disclosures, including the income tax rate reconciliation table and cash taxes paid both in the United States and foreign jurisdictions. This standard is effective for annual periods beginning after December 15, 2024. The Company is currently evaluating the impact ASU No 2023-09 will have on its consolidated financial statements and related disclosures.

In March 2024, the FASB issued ASU 2024-01, Compensation - Stock Compensation (Topic 718), Scope Application of Profits Interest and Similar Awards. This standard provides clarity regarding whether profits interest and similar awards are within the scope of Topic 718 of the Accounting Standards Codification. This standard is effective for fiscal years beginning after December 15, 2024. Early adoption is permitted. The Company is currently evaluating the impact ASU No 2024-01 will have on its consolidated financial statements and related disclosures.

In March 2024, the FASB issued ASU No. 2024-02, “Codification Improvements - Amendments to Remove References to the Concepts Statements.” ASU 2024-02 removes references to various FASB Concepts Statements within the Codification. The guidance in ASU No. 2024-02 is effective for fiscal years beginning after December 15, 2024, including interim periods within those fiscal years, and can be applied either prospectively to all new transactions recognized on or after the date that the entity first applies the amendments or retrospectively to the beginning of the earliest comparative period presented in which the amendments were first applied. Early adoption is permitted. The Company is currently evaluating the impact ASU No 2024-02 will have on its consolidated financial statements and related disclosures.
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FREEDOM HOLDING CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(All amounts in thousands of United States dollars, except share data, unless otherwise stated)
NOTE 3 – CASH AND CASH EQUIVALENTS
As of September 30, 2024, and March 31, 2024, cash and cash equivalents consisted of the following:
 
September 30, 2024
March 31, 2024
 
Short term deposits in National Bank (Kazakhstan)$185,925 $196,942 
Short term deposits in commercial banks166,829 127,051 
Securities purchased under reverse repurchase agreements121,493 134,961 
Petty cash in bank vault and on hand43,375 22,613 
Overnight deposits28,295 3,557 
Short term deposits on brokerage accounts9,459 2,917 
Cash in transit8,574 9,633 
Short term deposits in stock exchanges5,071 47,830 
Short term deposits in the Central Depository (Kazakhstan)451 42 
Allowance for Cash and cash equivalents(293)(462)
Total cash and cash equivalents$569,179 $545,084 
As of September 30, 2024, and March 31, 2024, total cash and cash equivalents included short-term collateralized securities received under reverse repurchase agreements which the Group concludes mainly on KASE. KASE, in turn, guarantees payments to the counterparty. The terms of the short-term collateralized securities received under reverse repurchase agreements as of September 30, 2024, and March 31, 2024 are presented below:
September 30, 2024
Interest rates and remaining contractual maturity of the agreements
Average interest rate
Up to 30 daysTotal
Securities purchased under reverse repurchase agreements
 
Corporate equity12.96 %73,001 73,001 
Corporate debt11.28 %26,473 26,473 
Non-US sovereign debt5.86 %12,801 $12,801 
US sovereign debt8.88 %9,218 9,218 
Total$121,493 $121,493 
March 31, 2024
Interest rates and remaining contractual maturity of the agreements
Average interest rate
Up to 30 daysTotal
Securities purchased under reverse repurchase agreements
Corporate equity14.57 %$96,647 $96,647 
US sovereign debt4.77 %16,885 16,885 
Non-US sovereign debt4.45 %12,468 12,468 
Corporate debt5.31 %8,961 8,961 
Total$134,961 $134,961 
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FREEDOM HOLDING CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(All amounts in thousands of United States dollars, except share data, unless otherwise stated)
The securities received by the Group as collateral under reverse repurchase agreements are liquid trading securities with market quotes and significant trading volume. The fair value of collateral received by the Group under reverse repurchase agreements as of September 30, 2024 and March 31, 2024, was $122,375 and $133,380, respectively.
As of September 30, 2024 and March 31, 2024, securities purchased under reverse repurchase agreements included accrued interest in the amount of $88 and $106, with a weighted average maturity of 4 days and 3 days, respectively. All securities reverse repurchase agreements transactions were executed on KASE.
NOTE 4 – RESTRICTED CASH
As of September 30, 2024, and March 31, 2024, restricted cash consisted of the following:
 
September 30, 2024
March 31, 2024
 
Brokerage customers’ cash$804,567 $366,260 
Guaranty deposits91,744 97,052 
Restricted bank accounts8,380 8,079 
Due from banks6,071 6,374 
Deferred distribution payment23 23 
Allowance for restricted cash(15,134)(15,151)
Total restricted cash$895,651 $462,637 

As of September 30, 2024, and March 31, 2024, part of the Group’s restricted cash was segregated in a special custody account for the exclusive benefit of the relevant brokerage customers.
NOTE 5 – TRADING AND AVAILABLE-FOR-SALE SECURITIES AT FAIR VALUE
As of September 30, 2024, and March 31, 2024, trading and available-for-sale securities consisted of the following:
 September 30, 2024March 31, 2024
 
Non-U.S. sovereign debt$2,353,084 $2,409,126 
Corporate debt1,071,502 1,108,870 
Corporate equity128,434 126,103 
U.S. sovereign debt41,442 43,173 
Exchange traded notes6,656 1,348 
Total trading securities$3,601,118 $3,688,620 
September 30, 2024March 31, 2024
Corporate debt$184,556 $173,568 
Non-U.S. sovereign debt78,446 27,016 
U.S. sovereign debt21,578 16,037 
Total available-for-sale securities, at fair value$284,580 $216,621 

The following tables present maturity analysis for available-for-sale securities as of September 30, 2024, and March 31, 2024:

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FREEDOM HOLDING CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(All amounts in thousands of United States dollars, except share data, unless otherwise stated)
September 30, 2024
Remaining contractual maturity of the agreements
Up to 1 year1-5 years5-10 yearsMore than 10 yearsTotal
Corporate debt29,395 98,466 52,424 4,271 184,556 
Non-US sovereign debt17,764 17,675 36,100 6,907 78,446 
US sovereign debt— 11,946 8,357 1,275 21,578 
Total available-for-sale securities, at fair value$47,159 $128,087 $96,881 $12,453 $284,580 

March 31, 2024
Remaining contractual maturity of the agreements
Up to 1 year1-5 years5-10 yearsMore than 10 yearsTotal
Corporate debt65,415 44,374 59,553 4,226 173,568 
Non-US sovereign debt7,839 7,310 5,797 6,070 27,016 
US sovereign debt— 5,059 9,753 1,225 16,037 
Total available-for-sale securities, at fair value$73,254 $56,743 $75,103 $11,521 $216,621 

As of September 30, 2024, the Group held debt securities of two issuers each of which individually exceeded 10% of the Group’s total trading and available-for-sale securities – the Ministry of Finance of the Republic of Kazakhstan (Fitch: BBB credit rating) in the amount of $2,416,606 and the Kazakhstan Sustainability Fund JSC (Fitch: BBB credit rating) in the amount of $714,467. As of March 31, 2024, the Group held debt securities of two issuers each of which individually exceeded 10% of the Group’s total trading securities and available-for-sale securities - the Ministry of Finance of the Republic of Kazakhstan (Fitch: BBB credit rating) in the amount of $2,420,855 and the Kazakhstan Sustainability Fund JSC (Fitch: BBB credit rating) in the amount of $727,440. The debt securities issued by the Ministry of Finance of the Republic of Kazakhstan and the Kazakhstan Sustainability Fund JSC are categorized as non-US sovereign debt and corporate debt, respectively.
As of the September 30, 2024 and March 31, 2024, the Group had $361 and $413 that was recognized as other-than-temporary impairment in accumulated other comprehensive loss.
The fair value of securities is determined using observable market data based on recent trading activity. Where observable market data is unavailable due to a lack of trading activity, the Group utilizes internally developed models to estimate fair value and independent third parties to validate assumptions, when appropriate. Estimating fair value requires significant management judgment, including benchmarking to similar instruments with observable market data and applying appropriate discounts that reflect differences between the securities that the Group is valuing and the selected benchmark. Depending on the type of securities owned by the Group, other valuation methodologies may be required.
Measurement of fair value is classified within a hierarchy based upon the transparency of inputs used in the valuation of an asset or liability. Classification within the hierarchy is based upon the lowest level of input that is significant to the fair value measurement.
The valuation hierarchy contains three levels:
•Level 1 - Valuation inputs are unadjusted quoted market prices for identical assets or liabilities in active markets.
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FREEDOM HOLDING CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(All amounts in thousands of United States dollars, except share data, unless otherwise stated)
•Level 2 - Valuation inputs are quoted market prices for identical assets or liabilities in markets that are not active, quoted market prices for similar assets and liabilities in active markets, and other observable inputs directly or indirectly related to the asset or liability being measured.
•Level 3 - Valuation inputs are unobservable and significant to the fair value measurement.
The following tables present securities assets in the Сondensed Сonsolidated Balance Sheets or disclosed in the Notes to the condensed consolidated financial statements at fair value on a recurring basis as of September 30, 2024, and March 31, 2024:
Weighted Average
Interest Rate		Total
Fair Value Measurements as of September 30, 2024 using
Quoted Prices in
Active Markets
for Identical Assets		Significant
Other Observable
Inputs		Significant Unobservable
Units
(Level 1)(Level 2)(Level 3)
Non-U.S. sovereign debt12.05 %$2,353,084 $2,090,214 $262,870 $— 
Corporate debt13.96 %1,071,502 336,376 734,754 372 
Corporate equity128,434 106,526 3,513 18,395 
U.S. sovereign debt3.62 %41,442 41,442 — — 
Exchange traded notes6,656 6,132 524 — 
Total trading securities$3,601,118 $2,580,690 $1,001,661 $18,767 
Corporate debt14.23 %$184,556 $56,457 $128,099 $— 
Non-US sovereign debt11.31 %78,446 56,694 21,752 — 
US sovereign debt2.68 %21,578 21,578 — — 
Total available-for-sale securities, at fair value$284,580 $134,729 $149,851 $— 
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FREEDOM HOLDING CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(All amounts in thousands of United States dollars, except share data, unless otherwise stated)
Weighted Average
Interest Rate
Total
Fair Value Measurements as of March 31, 2024 using
Quoted Prices in Active Markets for Identical AssetsSignificant Other Observable InputsSignificant Unobservable Units
(Level 1)(Level 2)(Level 3)
Non-U.S. sovereign debt11.61 %$2,409,126 $1,592,380 $816,746 $— 
Corporate debt14.83 %1,108,870 171,218 937,360 292 
Corporate equity126,103 102,134 3,819 20,150 
U.S. sovereign debt4.98 %43,173 43,173 — — 
Exchange traded notes1,348 1,045 303 — 
Total trading securities$3,688,620 $1,909,950 $1,758,228 $20,442 
Corporate debt15.53 %$173,568 $47,135 $126,433 $— 
Non-U.S. sovereign debt10.48 %27,016 12,378 14,638 — 
U.S. sovereign debt3.54 %16,037 16,037 — — 
Total available-for-sale securities, at fair value$216,621 $75,550 $141,071 $— 
The tables below present the valuation techniques and significant Level 3 inputs used in the valuation as of September 30, 2024, and March 31, 2024. The tables are not intended to be all inclusive, but instead capture the significant unobservable inputs relevant to determination of fair value.
TypeValuation TechniqueFV as of September 30, 2024Significant Unobservable Inputs%
Corporate debtDCF372 Discount rate74.0%
Estimated number of years3 months
Corporate equityDCF18,262 Discount rate13.0%
Estimated number of years4 years, 3 months
Termination multiplier
26.8x
Corporate equityDCF133 Discount rate58.8%
Estimated number of years9 years
Total$18,767 

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FREEDOM HOLDING CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(All amounts in thousands of United States dollars, except share data, unless otherwise stated)
TypeValuation TechniqueFV as of March 31, 2024Significant Unobservable Inputs%
Corporate debtDCF$292 Discount rate74.0%
Estimated number of years3 months
Corporate equityDCF20,007 Discount rate13.0%
Estimated number of years4 years, 6 months
Termination multiplier
27x
Corporate equityDCF143 Discount rate58.8%
Estimated number of years9 years
Total$20,442 
The following table provides a reconciliation of the beginning and ending balances for investments that use Level 3 inputs for the six months ended September 30, 2024, and the year ended March 31, 2024:
Trading securities
Balance as of March 31, 2023$5,138 
Reclassification to Level 2$(32)
Deconsolidation of Freedom UA securities(3,927)
Sale of investments that use Level 3 inputs(15,856)
Purchase of investments that use Level 3 inputs35,807 
Revaluation of investments that use Level 3 inputs(132)
Reclassification to investment in associate(556)
Balance as of March 31, 2024$20,442 
Reclassification to Level 3
— 
Sale of investments that use Level 3 inputs — 
Purchase of investments that use Level 3 inputs— 
Revaluation of investments that use Level 3 inputs(1,675)
Balance as of September 30, 2024
$18,767 
The table below presents the amortized cost, unrealized gains and losses accumulated in other comprehensive income, and fair value of available-for-sale securities as of September 30, 2024, and March 31, 2024:
September 30, 2024
Assets measured at amortized cost
Accumulated impairment loss
Unrealized loss accumulated in other comprehensive
income/(loss)		Assets
measured at
fair value		Maturity Date
Corporate debt$182,778 $(47)$1,825 $184,556 2024-2039
Non-US sovereign debt78,083 (314)677 78,446 2025-indefinite
U.S. sovereign debt21,813 — (235)21,578 2027-2044
Total available-for-sale securities, at fair value$282,674 $(361)2,267 $284,580 
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FREEDOM HOLDING CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(All amounts in thousands of United States dollars, except share data, unless otherwise stated)
March 31, 2024
Assets measured at amortized cost
Accumulated impairment loss
Unrealized loss accumulated in other comprehensive
income/(loss)		Assets
measured at
fair value		Maturity Date
Corporate debt$172,689 $(61)$940 $173,568 2024-2039
Non-U.S. sovereign debt29,121 (352)(1,753)27,016 2024-indefinite
U.S. sovereign debt16,767 — (730)16,037 2027-2044
Total available-for-sale securities, at fair value$218,577 $(413)$(1,543)$216,621 
NOTE 6 – MARGIN LENDING, BROKERAGE AND OTHER RECEIVABLES, NET
Margin lending, brokerage and other receivables as of September 30, 2024, and March 31, 2024, consisted of:
September 30, 2024
March 31, 2024
Margin lending receivables$1,587,112 $1,635,377 
Bank commissions receivable11,891 11,574 
Bond coupon receivable and dividends accrued11,199 5,429 
Receivables from payment processing services4,631 5,351 
Receivables from brokerage clients2,748 2,603 
Other receivables20,450 11,931 
Allowance for receivables(14,069)(11,990)
Total margin lending, brokerage and other receivables, net$1,623,962 $1,660,275 

Margin lending receivables are amounts owed to the Group from customers as a result of borrowings by such customers against the value of qualifying securities, primarily for the purpose of purchasing additional securities. Amounts may fluctuate from date to date as overall client balances change as a result of market levels, client positioning and leverage. Credit exposures arising from margin lending activities are generally mitigated by their short-term nature, the value of collateral held and the Group's right to call for margin when collateral values decline.

The fair value of collateral held by the Group under margin loans as of September 30, 2024, and March 31, 2024 was $5,845,654 and $7,579,057, respectively. As of September 30, 2024, and March 31, 2024, collateral from single counterparty comprised $2,934,515 and $2,516,108, 50% and 33% of the total collateral value, respectively. At the same time margin lending receivable from single counterparty comprised $680,078 and $399,196, respectively.
For both individual and institutional brokerage clients, the Group may enter into arrangements for securities financing transactions in respect of financial instruments held by the Group on behalf of the client or may use such financial instruments for the Group's own account or the account of another client. The Group maintains omnibus brokerage accounts for certain institutional brokerage clients, in which transactions of the underlying clients of such institutional clients are combined in a single account with us. As noted above, the Group may use the assets within the omnibus accounts to finance, lend, provide credit or provide debt financing or otherwise use and direct the order or manner of assets for financing of other clients of the Group.
As of September 30, 2024, and March 31, 2024, using historical and statistical data, the Group had allowances for brokerage receivables in the amounts of $14,069 and $11,990, respectively.
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FREEDOM HOLDING CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(All amounts in thousands of United States dollars, except share data, unless otherwise stated)
NOTE 7 – LOANS ISSUED
Loans issued as of September 30, 2024, consisted of the following:
Amount OutstandingDue DatesAverage Interest Rate Fair Value of
Collateral		Loan Currency
 
Mortgage loans$766,949 October 2024 - September 204910.5%$766,949 KZT
Car loans201,429 October 2024 - April 203224.1%198,418 KZT
Uncollateralized bank customer loans231,863 October 2024 - September 204427.6%— KZT
Right of claim for purchased retail loans138,092 October 2024 - February 203015.0%138,092 KZT
Collateralized bank customer loans71,106 October 2024 - July 204316.9%66,603 KZT
Subordinated loan6,163 December 20253.0%— USD
Other1,744 October 2024 - September 2029
18.1%/4.5%
26 KZT/EUR
Allowance for loans issued(48,690)
Total loans issued$1,368,656 
The Group provides mortgage loans to borrowers on behalf of the JSC Kazakhstan Sustainability Fund (the "Program Operator") related to the state mortgage program "7-20-25" and transfers the rights to claim on the mortgage loans to the Program Operator. The proceeds received from these transfers are presented within funds received under state program for financing of mortgage loans in the Condensed Consolidated Statements of Cash Flows. Under this program, borrowers can receive a mortgage at an interest rate of 7% for 20 years, and the interest payments received by the Group are recognized as interest income in the Company’s Consolidated Statements of Operations and Statements of Other Comprehensive Income. In accordance with the program and trust management agreement for the program, the Group services the transferred loans and remits all repayments of principal it receives plus 4% of the 7% interest received to the Program Operator. The interest paid to the Program Operator is recognized as interest expense in the Condensed Consolidated Statements of Operations and Statements of Other Comprehensive Income. The remaining 3% of the 7% interest is retained by Group. Under the program and trust management agreement, the Group is required to repurchase the rights to make claims on the transferred loans when either loan principal repayments or interest payments are overdue 90 days or more. The repurchase of overdue loans is performed at the loans’ nominal value and is presented within repurchase of mortgage loans under the State Program in the Condensed Consolidated Statements of Cash Flows.

Since the Group transfers the rights to make claims on the loans with recourse for loans that are more than 90 days past due, retains part of the interest received on the loans and agrees to service the loans after the sale of the loans to the Program Operator, the Company has determined that the Group retains control over the loans transferred and continues recognizing the loans, which are accounted for as secured borrowings of the Group in accordance with ASC 860, Transfers and Servicing. As the Company continues to recognize the loans as assets, it also recognizes the associated liability equal to the proceeds received from the Program Operator, which is presented separately as liability arising from continuing involvement in the Condensed Consolidated Balance Sheets. This liability accrues 4% interest annually as described above. As of September 30, 2024 and March 31, 2024, the corresponding liability amounted to $506,091 and $521,885, respectively.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(All amounts in thousands of United States dollars, except share data, unless otherwise stated)
As of September 30, 2024 and March 31, 2024, mortgage loans include loans under the state mortgage program "7-20-25" with an aggregate principal amount of $519,763 and $532,389, respectively, were presented within loans issued in the Condensed Consolidated Balance Sheets.

The Group has an agreement with FFIN Credit, a company established and controlled by FRHC's controlling shareholder, chairman and chief executive officer, Timur Turlov, to purchase uncollateralized retail loans from FFIN Credit. FFIN Credit is a non-bank credit institution that issues loans in Kazakhstan under simplified lending procedures. FFIN Credit was created as a pilot project to test and improve the scoring models used for qualifying and issuing loans. The principal operation of FFIN Credit is to provide loans to customers online using biometric identification and its proprietary scoring process. After completion of the pilot project, it is anticipated that FFIN Credit will be sold by Mr. Turlov to the Company. Freedom Bank KZ has legal ownership over the loans purchased from FFIN Credit. However, in accordance with U.S. GAAP requirements, the Group does not recognize those loans, since effective control over the transferred loans are maintained by FFIN Credit. Instead, the Group recognizes the loans receivable from FFIN Credit as right of claim for purchased retail loans on the Consolidated Balance Sheets within loans issued. As of September 30, 2024 and March 31, 2024, right of claims for purchased retail loans amounted to $138,092 and $146,152, respectively.

The total accrued interest for loans issued amounted to $8,789 as of September 30, 2024 and $8,327 as of March 31, 2024.
Loans issued as of March 31, 2024, consisted of the following:
Amount OutstandingDue DatesAverage Interest Rate Fair Value of
Collateral		Loan Currency
 
Mortgage loans$741,312 April, 2024 - March, 204910.3%$740,462 KZT
Car loans262,708 April, 2024 - March, 203123.9%259,755 KZT
Uncollateralized bank customer loans245,188 April, 2024 - March, 204427.4%— KZT
Right of claim for purchased retail loans146,152 April, 2024 - March, 202915.0%146,152 KZT
Collateralized bank customer loans22,299 June, 2024 - July, 204319.1%22,270 KZT
Subordinated loan5,037 December, 20253.0%— USD
Other2,638 April, 2024 - January, 2029
18.6%/15.0%/2.5%
18 
KZT/USD/EUR
Allowance for loans issued(43,619)
Total loans issued$1,381,715 
Credit quality indicators

Freedom Bank KZ uses a loan portfolio quality classification system that indicates signs of a significant increase in credit risk and contractual impairment, depending on the analysis of reasonable and supportable information available at the reporting date. The loan portfolio is classified into “not credit impaired”, “with significant increase in credit risk” and “credit impaired” agreements.

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FREEDOM HOLDING CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(All amounts in thousands of United States dollars, except share data, unless otherwise stated)
Loans “not credit impaired” under the agreement are serviced as usual, there are no primary signs of an increase in credit risk. Agreements classified as “with significant increase in credit risk” represent loans for which there is an increase in the credit risk expected over the life of the agreement compared to the initial risk at the date of recognition of the loan. In practice, the presence of overdue debt on principal and interest for a period of more than 30 days or the absolute probability of default threshold PD exceeds 20%. Agreements classified as “credit impaired” represent loans for which at the reporting date there are signs of impairment, the borrower has been in default for 90 or more days for individuals and 60 or more days for legal entities, the borrower for the last 6 months for individuals and 12 months for legal entities restructured the contract due to the deterioration of the financial condition, the borrower is recognized as credit impaired, the presence of a sign of default, a sign of bankruptcy, the deterioration of the financial performance of the borrower, the presence of other information indicating the presence of a high credit risk.
The table below presents the Group's loan portfolio by credit quality classification and origination year as of September 30, 2024. Current vintage disclosure is the requirement due to first adoption of ASC 326.
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FREEDOM HOLDING CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(All amounts in thousands of United States dollars, except share data, unless otherwise stated)
Term Loans by Origination Fiscal Year
20252024202320222021PriorRevolving loansTotal
Mortgage loans$112,527 $211,478 $407,953 $34,991 $— $— $— $766,949 
that are not credit impaired112,527 209,358 404,368 34,418 — — — 760,671 
with significant increase in credit risk— 1,394 2,121 427 — — — 3,942 
that are credit impaired— 726 1,464 146 — — — 2,336 
Car loans1,772 150,666 48,991 — — — — 201,429 
that are not credit impaired1,772 145,830 37,587 — — — — 185,189 
with significant increase in credit risk— 1,574 1,422 — — — — 2,996 
that are credit impaired— 3,262 9,982 — — — — 13,244 
Uncollateralized bank customer loans39,831 164,352 27,673 7 — — — 231,863 
that are not credit impaired39,417 143,278 21,715 — — — — 204,410 
with significant increase in credit risk290 6,168 1,115 — — — — 7,573 
that are credit impaired124 14,906 4,843 7 — — — 19,880 
Right of claim for purchased retail loans73,288 59,489 5,264 51 — — — 138,092 
that are not credit impaired73,288 59,489 5,264 51 138,092 
with significant increase in credit risk— — — — — — — — 
that are credit impaired— — — — — — — — 
Collateralized bank customer loans55,810 15,105 191 — — — — 71,106 
that are not credit impaired55,810 14,978 191 — — — — 70,979 
with significant increase in credit risk— 32 — — — — — 32 
that are credit impaired— 95 — — — — — 95 
Subordinated loan— — 6,163 — — — — 6,163 
that are not credit impaired— — 6,163 — — — — 6,163 
with significant increase in credit risk— — — — — — — — 
that are credit impaired— — — — — — — — 
Other225 1,309 150 60 — — — 1,744 
that are not credit impaired225 1,301 150 60 — — — 1,736 
with significant increase in credit risk— — — — — — — — 
that are credit impaired— 8 — — — — — 8 
Total$283,453 $602,399 $496,385 $35,109 $— $— $— $1,417,346 
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FREEDOM HOLDING CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(All amounts in thousands of United States dollars, except share data, unless otherwise stated)
The table below presents the Group's loan portfolio by credit quality classification as of March 31, 2024.
Term Loans by Origination Fiscal Year
20242023202220212020PriorRevolving loansTotal
Mortgage loans$241,848 $458,401 $41,063 $— $— $— $— $741,312 
that are not credit impaired240,974 454,933 40,784 — — — — 736,691 
with significant increase in credit risk676 2,415 111 — — — — 3,202 
that are credit impaired198 1,053 168 — — — — 1,419 
Car loans196,305 66,403 — — — — — 262,708 
that are not credit impaired193,302 55,427 — — — — — 248,729 
with significant increase in credit risk1,590 2,232 — — — — — 3,822 
that are credit impaired1,413 8,744 — — — — — 10,157 
Uncollateralized bank customer loans210,612 34,568 8 — — — — 245,188 
that are not credit impaired200,211 30,337 — — — — — 230,548 
with significant increase in credit risk4,715 1,072 — — — — — 5,787 
that are credit impaired5,686 3,159 8 — — — — 8,853 
Right of claim for purchased retail loans130,291 15,694 167 — — — — 146,152 
that are not credit impaired130,291 15,694 167 — — — — 146,152 
with significant increase in credit risk— — — — — — — — 
that are credit impaired— — — — — — — — 
Collateralized bank customer loans21,972 327 — — — — — 22,299 
that are not credit impaired21,796 327 — — — — — 22,123 
with significant increase in credit risk89 — — — — — — 89 
that are credit impaired87 — — — — — — 87 
Subordinated loan— 5,037 — — — — — 5,037 
that are not credit impaired— 5,037 — — — — — 5,037 
with significant increase in credit risk— — — — — — — — 
that are credit impaired— — — — — — — — 
Other2,404 165 69 — — — — 2,638 
that are not credit impaired2,395 165 69 — — — — 2,629 
with significant increase in credit risk— — — — — — — — 
that are credit impaired9 — — — — — — 9 
Total$803,432 $580,595 $41,307 $— $— $— $— $1,425,334 
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FREEDOM HOLDING CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(All amounts in thousands of United States dollars, except share data, unless otherwise stated)
Aging analysis of past due loans as of September 30, 2024 and March 31, 2024, is as follows:
September 30, 2024
Loans 30-59 Days past due Loans 60-89 days past due Loans 90 days or more past due and still accruingCurrent loansTotal
Mortgage loans$2,602 $1,340 $2,336 $760,671 $766,949 
Car loans2,088 908 13,244 185,189 201,429 
Uncollateralized bank customer loans4,397 3,176 19,880 204,410 231,863 
Right of claim for purchased retail loans— — — 138,092 138,092 
Collateralized bank customer loans— 32 95 70,979 71,106 
Subordinated loan— — — 6,163 6,163 
Other— — 8 1,736 1,744 
Total$9,087 $5,456 $35,563 $1,367,240 $1,417,346 
March 31, 2024
Loans 30-59 Days past due Loans 60-89 days past due Loans 90 days or more past due and still accruingCurrent loansTotal
Mortgage loans$2,133 $1,069 $1,419 $736,691 $741,312 
Car loans2,167 1,655 10,157 248,729 262,708 
Uncollateralized bank customer loans3,576 2,211 8,853 230,548 245,188 
Right of claim for purchased retail loans— — — 146,152 146,152 
Collateralized bank customer loans— 89 87 22,123 22,299 
Subordinated loan— — — 5,037 5,037 
Other— — 9 2,629 2,638 
Total$7,876 $5,024 $20,525 $1,391,909 $1,425,334 

The activity in the allowance for credit losses for the three months ended September 30, 2024 and 2023 is summarized in the following tables.
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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(All amounts in thousands of United States dollars, except share data, unless otherwise stated)
Allowance for credit losses
Mortgage loanUncollateralized bank customer loansCollateralized bank customer loansCar loansRight of claim for purchased retail loansOtherTotal
March 31, 2024
$(3,033)$(19,636)$(80)$(14,262)$(6,577)$(31)$(43,619)
Charges(1,927)(14,416)(383)(2,699)(4,387)(27)(23,839)
Recoveries775 4,653 28 5,278 4,610 — 15,344 
Write off— 42 4 258 — 30 334 
Forex252 1,635 14 844 345 — 3,090 
September 30, 2024
$(3,933)$(27,722)$(417)$(10,581)$(6,009)$(28)$(48,690)
Allowance for credit losses
Mortgage loanUncollateralized bank customer loansCollateralized bank customer loansCar loansRight of claim for purchased retail loansOtherTotal
March 31, 2023
$(554)$(233)$— $(758)$(1,247)$— $(2,792)
Adjustment to allowance for adoption of ASU 2016-13(2,216)(7,436)(35)(6,462)(9,046)— (25,195)
Charges(665)(13,482)(71)(8,851)(11,073)(3,283)(37,425)
Recoveries1,599 6,384 36 2,558 7,746 — 18,323 
Forex91 739 4 637 657 — 2,128 
September 30, 2023
$(1,745)$(14,028)$(66)$(12,876)$(12,963)$(3,283)$(44,961)



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FREEDOM HOLDING CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(All amounts in thousands of United States dollars, except share data, unless otherwise stated)
NOTE 8 – PROVISION FOR INCOME TAXES
The Group is subject to taxation in Kazakhstan, Kyrgyzstan, Cyprus, Uzbekistan, Germany and the United States of America.
The tax rates used for deferred tax assets and liabilities as of September 30, 2024, and March 31, 2024, were 21% for the United States, 20% for Kazakhstan and Azerbaijan, 10% for Kyrgyzstan, 15% for Germany, 12.5% for Cyprus, 25% for United Kingdom, 18% for Armenia and 15% for Uzbekistan.
During the six months ended September 30, 2024, and 2023, the effective tax rate was equal to 12.5% and 16.4%, respectively.
NOTE 9 – SECURITIES REPURCHASE AGREEMENT OBLIGATIONS
As of September 30, 2024, and March 31, 2024, trading securities included collateralized securities subject to repurchase agreements as described in the following table:
September 30, 2024
Interest rates and remaining contractual maturity of the agreements
Average interest rate
Up to 30 days30-90 daysTotal
Securities sold under repurchase agreements
   
Non-US sovereign debt13.41 %$1,711,209 $83,726 $1,794,935 
Corporate debt13.38 %730,278 56,496 786,774 
US sovereign debt3.00 %2,400 — 2,400 
Corporate equity1.00 %22 — 22 
Total securities sold under repurchase agreements$2,443,909 $140,222 $2,584,131 
 
March 31, 2024
 Interest rate and remaining contractual maturity of the agreements
 
Average interest rate
Up to 30 days30-90 daysTotal
Securities sold under repurchase agreements
Non-US sovereign debt13.78 %$1,545,080 $259,948 $1,805,028 
Corporate debt13.84 %923,752 14,644 938,396 
US sovereign debt3.06 %13,172 — 13,172 
Total securities sold under repurchase agreements$2,482,004 $274,592 $2,756,596 
The fair value of collateral pledged under repurchase agreements as of September 30, 2024, and March 31, 2024, was $2,613,957 and $2,753,601, respectively.
Securities pledged as collateral by the Group under repurchase agreements are liquid trading securities with market quotes and significant trading volume.
As of September 30, 2024 and March 31, 2024, securities repurchase agreement obligations included accrued interest in the amount of $6,187 and $11,684, with a weighted average maturity of 10 days and 12 days, respectively. All securities repurchase agreements transactions were executed through the KASE.


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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(All amounts in thousands of United States dollars, except share data, unless otherwise stated)
NOTE 10 – CUSTOMER LIABILITIES
The Group recognizes customer liabilities associated with deposit funds of its brokerage and bank customers. As of September 30, 2024, and March 31, 2024, customer liabilities consisted of:
September 30, 2024
March 31, 2024
AmountInterestAmountInterest
Interest bearing deposits:
Term deposits$1,363,492 
0.05% - 17.7%
$1,221,072 
0.04% - 17.3%
Total Interest bearing deposits$1,363,492 $1,221,072 
Non-interest-bearing deposits:
Brokerage customers$1,617,887 $742,902 
Current customer accounts347,754 309,856 
Total non-interest-bearing accounts$1,965,641 $1,052,758 
Total customer liabilities$3,329,133 $2,273,830 
In accordance with Kazakhstan law requirements, commercial banks conclude agreements with JSC Kazakhstan Deposit Insurance Fund ("KDIF"), under which banks are required to pay commissions to KDIF on a recurring basis, the amount of which depends on the term deposits and demand deposits received by banks from their customers. Under the agreement, KDIF insures the term deposits and demand deposits up to $42 for each customer. As at September 30, 2024, and March 31, 2024, respectively, the Group had total amounts in excess of insured bank term deposits of $614,918 and $600,972 for all customers.
NOTE 11 – MARGIN LENDING AND TRADE PAYABLES
As of September 30, 2024, and March 31, 2024, margin lending and trade payables of the Group were comprised of the following:
September 30, 2024
March 31, 2024
Margin lending payables
$253,974 $839,454 
Payables to suppliers of goods and services12,927 10,525 
Payables to merchants5,544 13,475 
Trade payable for securities purchased457 485 
Other30,509 3,941 
Total margin lending and trade payables$303,411 $867,880 
The fair value of collateral held by the Group under margin loans as of September 30, 2024, and March 31, 2024 was $1,290,534 and $2,400,361, respectively.
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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(All amounts in thousands of United States dollars, except share data, unless otherwise stated)
NOTE 12 – DEBT SECURITIES ISSUED
As of September 30, 2024, and March 31, 2024, outstanding debt securities issued by the Group included the following:
Debt securities issued by:
September 30, 2024
March 31, 2024
Interest rateIssue dateMaturity date
Freedom SPC bonds due 2028$200,346 $200,386 
1-2 years: 12%
3-5 years: EFFR + 6.5%
December, 2023December, 2028
Freedom SPC bonds due 202664,674 64,546 
5.5%
October, 2021October, 2026
Accrued interest2,321 2,319 
Total debt securities issued$267,341 $267,251 
As of September 30, 2024 the carrying value of the Group’s debt securities issued was $64,674 of Freedom SPC bonds due 2026 and $200,346 of Freedom SPC bonds due 2028. The Freedom SPC bonds are denominated in U.S. dollars and were issued under Astana International Financial Centre ("AIFC") law and trade on the AIX. The Company is a guarantor of the Freedom SPC bonds.
The Freedom SPC bonds due 2026 bear interest at an annual rate of 5.5% and mature in October 2026. Interest is paid semi-annually in April and October. The proceeds from the issuance of such bonds were loaned to the Company pursuant to a loan agreement dated November 22, 2021. The loan has the same interest rate and maturity date as the bonds.
For the first two years of Freedom SPC bonds due 2028, the annual interest rate is 12% and for subsequent years the interest rate will be fixed and set as the sum of Effective Federal Funds Rate (EFFR) as of December 10, 2025 and a margin of 6.5%. Interest is paid on a monthly basis. The bondholders have a right of early redemption after two years at nominal value plus accrued interest. After two years, the issuer has the option to redeem the bonds in full or in part at nominal value plus accrued interest.
Debt securities issued are initially recognized at the fair value of the consideration received, less directly attributable transaction costs.
The Group has no covenants to comply with in its debt securities.
NOTE 13 – INSURANCE CONTRACTS ASSETS AND LIABILITIES FROM INSURANCE ACTIVITIES
As of September 30, 2024, and March 31, 2024, assets from insurance activity of the Group were comprised the following:
September 30, 2024
March 31, 2024
Assets:
Amounts due from policyholders$14,783 $10,260 
Amounts due from reinsured4,080 2,274 
Claims receivable from reinsurance2,004 1,400 
Advances received from agent710 3,231 
Allowance for estimated uncollectible reinsurance(755)(1,045)
Insurance and reinsurance receivables20,822 16,120 
Unearned premium reserve, reinsurers’ share1,993 4,770 
Reserves for claims and claims’ adjustment expenses, reinsurers’ share2,167 4,032 
Total assets from insurance activity
$24,982 $24,922 
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FREEDOM HOLDING CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(All amounts in thousands of United States dollars, except share data, unless otherwise stated)
As of September 30, 2024, and March 31, 2024, liabilities from insurance activity of the Group were comprised the following:
September 30, 2024
March 31, 2024
Liabilities:
Amounts payable to agents and brokers$9,875 $6,334 
Amounts payable to insurers
3,935 4,294 
Amounts payable to reinsured
1,140 2,771 
Insurance and reinsurance payables:14,950 13,399 
Unearned premium reserve74,063 60,088 
Reserves for claims and claims’ adjustment expenses275,143 223,693 
Total liabilities from insurance activity
$364,156 $297,180 

As of September 30, 2024, and March 31, 2024, liabilities from insurance activity increased mainly due to the increase of reserves for claims and claim's adjustment expenses, unearned premium reserve as a result of the expansion of operations.
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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(All amounts in thousands of United States dollars, except share data, unless otherwise stated)
NOTE 14 – FEE AND COMMISSION INCOME
Fee and commission income is recognized when, or as, the Group satisfies its performance obligations by transferring the promised services to the customers. A service is transferred to a customer when, or as, the customer obtains control of that service. A performance obligation may be satisfied at a point in time or over time. Revenue from a performance obligation satisfied at a point in time is recognized at the point in time that the Group determines the customer obtains control over the promised service. Revenue from a performance obligation satisfied over time is recognized by measuring the Group’s progress in satisfying the performance obligation in a manner that depicts the transfer of the services to the customer. The amount of revenue recognized reflects the consideration the Group expects to receive in exchange for those promised services (i.e., the “transaction price”). In determining the transaction price, the Group considers multiple factors, including the effects of variable consideration, if any.

The Group’s revenues from contracts with customers are recognized when the Group's performance obligations are satisfied at an amount that reflects the consideration expected to be received in exchange for such services. The majority of the Group’s performance obligations are satisfied at a point in time and are typically collected from customers by debiting their brokerage account with the Group.
Brokerage Services
The Group earns commission revenue by executing, settling and clearing transactions with clients primarily in exchange-traded and over-the-counter financial instruments related to corporate equity and debt securities, money market instruments and exchange-traded options and futures contracts. Trade execution and clearing services, when provided together, represent a single performance obligation, as the services are not separately identifiable in the context of the contract. Commission revenue associated with combined trade execution and clearing services, as well as trade execution services on a standalone basis, are recognized at a point in time on trade date when the performance obligation is satisfied.
Banking Services
The Group earns revenue from two primary streams related to commissions from bank services:

•The Group earns banking commissions by executing client orders for money transfer, purchase and sale of foreign currency, and other banking services. A substantial portion of the Group's revenue is derived from commissions from private clients through accounts with transaction-based pricing. Commission revenue is collected and recognized by the Company at a point in time at the execution of the order.
•Interchange — The Group acts as an agent between customers and international payment systems, such as VISA and MasterCard. When using third-party payment platforms or networks, the Group is an agent for the payment processing services to retail customers and, therefore, revenue is recognized on a net basis, as the Group is not primarily responsible for fulfilling the payment processing on third parties' payment platforms/networks and has no discretion in establishing the selling price of the payment processing service to the retail customer on third party payment platforms/networks. Fees from customers using third-party payment platform are earned for processing debit card transactions.

Payment Processing
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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(All amounts in thousands of United States dollars, except share data, unless otherwise stated)
The Group earns revenue from two primary streams related to payment processing:
•Commissions from payment processing services, which include activities such as authorization, clearing, and settlement of electronic payments. The Company recognizes revenue at the time when the payment card transaction is completed. Commission rates are based on the amounts of transactions. Fees are typically billed and paid monthly.
•Provision of IT infrastructure to merchants to facilitate payments. The Company recognizes revenue at the time when the performance obligation is satisfied which is as soon as payments are facilitated. These services are typically provided under a commission rate from amounts of facilitated payments. Fees are typically billed and paid monthly.
Underwriting and Market-Making Services

The Group earns underwriting revenues by providing capital raising solutions for corporate clients through initial public offerings, follow-on offerings, equity-linked offerings, private investments in public entities, and private placements. Underwriting revenues are recognized at a point in time on the relevant placement date, as the client obtains the control and benefit of the capital markets offering at that point. These revenues are generally received within 90 days after the placement date. Transaction-related expenses, primarily consisting of legal, travel and other costs directly associated with the transaction, are included in underwriting revenues. These costs are deferred and recognized in the same period as the related investment banking transaction revenue. However, if the transaction is abandoned and does not close, the accounting treatment for the transaction-related costs may differ. In such cases, the accounting principles typically require the immediate recognition of the transaction-related expenses as an expense in the period in which the decision to abandon the transaction is made. This ensures that the costs associated with the abandoned transaction are recognized and reflected accurately in the financial statements of the entity.
Receivables and Contract Balances
Receivables arise when the Group has an unconditional right to receive payment under a contract with a customer and are derecognized when the payment is received. Margin lending, brokerage and other receivables are disclosed in Note 6 in the notes to condensed consolidated financial statements.

Contract assets arise when the revenue associated with the contract is recognized before the Group’s unconditional right to receive payment under a contract with a customer (i.e., unbilled receivable) and are derecognized when either it becomes a receivable or the cash is received. As of September 30, 2024 and March 31, 2024, the Group's contract asset balances were not material.

Contract liabilities arise when customers remit contractual cash payments in advance of the Group satisfying its performance obligations under the contract and are derecognized when the revenue associated with the contract is recognized either when a milestone is met triggering the contractual right to bill the customer or when the performance obligation is satisfied. As of September 30, 2024 and March 31, 2024, contract liability balances were not material.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(All amounts in thousands of United States dollars, except share data, unless otherwise stated)
During the three months and the six months ended September 30, 2024, and September 30, 2023, fee and commission income comprised:
Three months ended September 30, 2024
Brokerage
Banking
InsuranceOtherTotal
Brokerage services$107,378 $— $— $— $107,378 
Commission income from payment processing — — — 5,970 5,970 
Bank services— 1,872 — — 1,872 
Underwriting and market-making services1,214 — — — 1,214 
Other fee and commission income48 326 32 4,211 4,617 
Total fee and commission income$108,640 $2,198 $32 $10,181 $121,051 

Three months ended September 30, 2023
Brokerage
Banking
InsuranceOtherTotal
Brokerage service $84,713 $— $— $— $84,713 
Commission income from payment processing— — — 10,299 10,299 
Bank services— 9,308 — — 9,308 
Underwriting and market-making services2,910 — — — 2,910 
Other fee and commission income51 218 2 4,202 4,473 
Total fee and commission income$87,674 $9,526 $2 $14,501 $111,703 

Six months ended September 30, 2024
Brokerage
Banking
InsuranceOtherTotal
Brokerage services$200,545 $— $— $— $200,545 
Commission income from payment processing — — — 14,533 14,533 
Underwriting and market-making services5,916 — — — 5,916 
Bank services— 4,388 — — 4,388 
Other fee and commission income122 606 147 10,283 11,158 
Total fee and commission income$206,583 $4,994 $147 $24,816 $236,540 
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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(All amounts in thousands of United States dollars, except share data, unless otherwise stated)

Six months ended September 30, 2023
Brokerage
Banking
InsuranceOtherTotal
Brokerage services$139,795 $— $— $— $139,795 
Commission income from payment processing — — — 28,341 28,341 
Bank services— 22,149 — — 22,149 
Underwriting and market-making services11,741 — — — 11,741 
Other fee and commission income110 543 44 7,683 8,380 
Total fee and commission income$151,646 $22,692 $44 $36,024 $210,406 


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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(All amounts in thousands of United States dollars, except share data, unless otherwise stated)
NOTE 15 – NET GAIN ON TRADING SECURITIES
During the three months and the six months ended September 30, 2024, and September 30, 2023, net gain on trading securities was comprised of:
Three Months Ended
September 30, 2024
Three Months Ended
September 30, 2023
Net unrealized gain recognized during the reporting period on trading securities still held at the reporting date$65,917 $9,713 
Net gain recognized during the period on trading securities sold during the period2,400 41,058 
Net gain recognized during the period on trading securities$68,317 $50,771 

Six Months Ended
September 30, 2024
Six Months Ended
September 30, 2023
Net unrealized gain recognized during the reporting period on trading securities still held at the reporting date$974 $30,664 
Net gain recognized during the period on trading securities sold during the period$15,241 $51,923 
Net gain recognized during the period on trading securities$16,215 $82,587 
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FREEDOM HOLDING CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(All amounts in thousands of United States dollars, except share data, unless otherwise stated)
NOTE 16 - NET INTEREST INCOME/EXPENSE

Net interest income/expense for the three months ended September 30, 2024, and September 30, 2023 included the following:

Three months ended September 30, 2024
Three months ended September 30, 2023
Interest income:
Interest income on trading securities104,992 $114,039 
Interest income on loans to customers49,393 42,868 
Interest income on margin loans to customers40,917 42,573 
Interest income on securities available-for-sale9,003 9,653 
Interest income on reverse repurchase agreements and amounts due from banks6,019 3,930 
Total interest income$210,324 $213,063 
Interest expense:
Interest expense on securities repurchase agreement obligations$86,116 $117,009 
Interest expense on customer accounts and deposits23,696 17,864 
Interest expense on margin lending payable7,416 3,467 
Interest expense on debt securities issued6,969 961 
Interest expense on loans received468 26 
Other interest expense— 54 
Total interest expense$124,665 $139,381 
Net interest income$85,659 $73,682 

Net interest income/expense for the six months ended September 30, 2024, and September 30, 2023 includes:
Six months ended September 30, 2024Six months ended September 30, 2023
Interest income:
Interest income on trading securities$212,120 $200,880 
Interest income on loans to customers101,760 74,201 
Interest income on margin loans to customers91,984 59,753 
Interest income on securities available-for-sale17,403 17,997 
Interest income on reverse repurchase agreements and amounts due from banks13,061 6,987 
Other interest income— 2,594 
Total interest income$436,328 $362,412 
Interest expense:
Interest expense on securities repurchase agreement obligations$178,523 $192,464 
Interest expense on customer accounts and deposits46,823 33,467 
Interest expense on margin lending payable30,539 6,460 
Interest expense on debt securities issued13,938 1,896 
Interest expense on loans received512 53 
Other interest expense48 87 
Total interest expense$270,383 $234,427 
Net interest income$165,945 $127,985 
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FREEDOM HOLDING CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(All amounts in thousands of United States dollars, except share data, unless otherwise stated)




NOTE 17 - NET GAIN/(LOSS) ON DERIVATIVES
Three months ended September 30, 2024
Three months ended September 30, 2023
Net realized gain/(loss) on derivatives$10,405 $(2,168)
Net unrealized (loss)/gain on derivatives
(4,097)3,546 
Total net gain on derivatives
$6,308 $1,378 
Six months ended September 30, 2024
Six months ended September 30, 2023
Net realized gain/(loss) on derivatives$14,749 $(29,661)
Net unrealized gain on derivatives4,053 434 
Total net gain/(loss) on derivatives$18,802 $(29,227)
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FREEDOM HOLDING CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(All amounts in thousands of United States dollars, except share data, unless otherwise stated)
NOTE 18 – RELATED PARTY TRANSACTIONS
September 30, 2024March 31, 2024
Related party balancesTotal category as per financial statements captionsRelated party balancesTotal category as per financial statements captions
ASSETS
Cash and cash equivalents$1,915 $569,179 $203 $545,084 
Companies controlled by management
1,915 203 
Restricted cash$6,669 $895,651 $— $462,637 
Management1,404 — 
Companies controlled by management
5,085 — 
Other
180 — 
Trading securities$1,231 $3,601,118 $1,326 $3,688,620 
Companies controlled by management
1,231 1,326 
Margin lending, brokerage and other receivables, net
$162,066 $1,623,962 $22,039 $1,660,275 
Management9,378 8,849 
Companies controlled by management
152,688 13,190 
Loans issued$141,290 $1,368,656 $147,440 $1,381,715 
Management604 117 
Companies controlled by management
140,686 147,323 
Other assets, net$14,914 $169,375 $5,257 $102,414 
Companies controlled by management
14,914 5,257 
LIABILITIES
Customer liabilities$191,607 $3,329,133 $44,127 $2,273,830 
Management9,918 12,604 
Companies controlled by management
180,557 31,253 
Other
1,132 270 
Other liabilities$729 $133,248 $9,854 $81,560 
Management284 7,947 
Companies controlled by management
445 1,907 

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FREEDOM HOLDING CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(All amounts in thousands of United States dollars, except share data, unless otherwise stated)
Three Months Ended September 30, 2024Three Months Ended September 30, 2023
Related party amountsTotal category as per financial statements captionsRelated party amountsTotal category as per financial statements captions
Revenue:
Fee and commission income$837 $121,051 $20,022 $111,703 
Management290 183 
Companies controlled by management
543 19,839 
Other
4 — 
Interest income$375 $210,324 $9,731 $213,063 
Management215 232 
Companies controlled by management
160 9,499 
Expense:
General and administrative expenses$6,247 $53,240 $5,229 $29,630 
Management44 8 
Companies controlled by management
6,203 5,219 
Other— 2 
Six Months Ended September 30, 2024
Six Months Ended September 30, 2023
Related party amountsTotal category as per financial statements captionsRelated party amountsTotal category as per financial statements captions
Revenue:
Fee and commission income1,703 236,540 35,917 210,406 
Management509 465 
Companies controlled by management
1,188 35,451 
Other
6 1 
Interest income644 436,328 15,084 362,412 
Management419 305 
Companies controlled by management
225 14,779 
Expense:
General and administrative expenses8,971 98,345 7,561 54,105 
Management277 171 
Companies controlled by management
8,694 7,388 
Other— 2 
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FREEDOM HOLDING CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(All amounts in thousands of United States dollars, except share data, unless otherwise stated)
During the three and six months ended September 30, 2023, the Group engaged in various related party transactions, a substantial amount of which were conducted with FST Belize, a Belize company which is wholly owned personally by the Company’s chief executive officer, chairman and majority shareholder, Timur Turlov, and is not part of the Group. During such periods FST Belize had its own brokerage customers, which included individuals and a market-maker institution and conducted business with the Group through a client omnibus account at Freedom EU. The Group terminated these arrangements with FST Belize before the end of fiscal 2024, leading to a decrease in related party transactions during three and six months ended September 30, 2024 as compared to the corresponding periods in 2023.
As of September 30, 2024 and March 31, 2024, the Group's margin lending receivables from Fresh Start Trading Ltd amounted to $151,592 and $12,890. Fresh Start Trading Ltd is a Cyprus-based company that is controlled by a single individual who is a member of Freedom EU's management. Fresh Start Trading Ltd is mainly involved in foreign currency trading activity. Margin lending receivables from Fresh Start Trading Ltd are mainly denominated in Euros, and they are fully collateralized by cash denominated in U.S. dollars.
During the three and six months ended September 30, 2024, the Group incurred general and administrative expenses from Kazakhstan Chess Federation in the amount of $4,308 and $6,353 respectively. Kazakhstan Chess Federation is a Kazakhstan-based company in which Timur Turlov holds a management position. The Group continues to support the development of chess as a sport in Kazakhstan. During the three and six months ended September 30, 2024, the Group has made financial contributions to the Kazakhstan Chess Federation to support the preparation and holding of championships, tournaments, training camps and other events.
As of September 30, 2024 and March 31, 2024, 76% and 24%, respectively, of the Group's customer liabilities were deposits from Fresh Start Trading Ltd held by Freedom EU related to brokerage services provided by Freedom EU to Fresh Start Trading Ltd.
As of September 30, 2024, and March 31, 2024 the Group had loans issued which included uncollateralized bank customer loans purchased from FFIN Credit, a company outside of the Group which is controlled by Timur Turlov.
NOTE 19 – STOCKHOLDERS’ EQUITY
During the three months ended September 30, 2024 the Company awarded stock grants totaling 156,659 shares, 22,798 of which were vested on the date of the award.
The table below presents Stock Incentive Plan awards granted on the dates indicated.
Stock awards granted on:
Units
July 1, 202434,250
July 1, 2024 immediate stock awards4,300
July 12, 202412,816
August 5, 202410,000
August 5, 2024 immediate stock awards5,000
August 13, 202476,795
August 13, 2024 immediate stock awards13,498
NOTE 20 – STOCK BASED COMPENSATION

The compensation expense related to restricted and non-restricted stock grants was $12,056 during the three months ended September 30, 2024, and $1,031 during the three months ended September 30, 2023. As of September 30, 2024 there was $49,271 of total unrecognized compensation cost related to non-vested shares of common stock granted. The cost is expected to be recognized over a weighted average period of 4.32 years. The compensation expense related to stock awards, which vested on the date of the award was $1,887 and $0 during the three months ended September 30, 2024 and September 30, 2023.
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FREEDOM HOLDING CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(All amounts in thousands of United States dollars, except share data, unless otherwise stated)
The Company has determined the fair value of shares awarded during the three months ended September 30, 2024, using the Monte Carlo valuation model based on the following key assumptions:
Stock awards granted Term (years)VolatilityRisk-free rate
July 1, 20244.5736.98 %4.47 %
July 12, 20241.5437.30 %4.64 %
August 5, 20244.4837.51 %3.64 %
August 13, 20244.4537.69 %3.70 %
The table below summarizes the activity for the Company's stock awards during the six months ended September 30, 2024:
SharesWeighted
Average
Fair Value
Outstanding, at March 31, 2024
983,205 57,598 
Granted343,626 25,039 
Vested(191,595)(9,934)
Forfeited/cancelled/expired— — 
Outstanding, at September 30, 2024
1,135,236 72,703 
NOTE 21 – LEASES
At September 30, 2024, the Group was obligated under a number of noncancellable leases, predominantly operating leases of office space, which expire at various dates through 2033. The Group's primary involvement with leases is in the capacity as a lessee where a Group company leases premises to support the Group's business.
The Group determines whether a contract is or contains a lease at inception of the contract and whether that lease meets the classification criteria of a finance or operating lease. Operating lease liabilities and right-of-use (ROU) assets are recognized at the lease commencement date based on the present value of the future minimum lease payments over the lease term. The future lease payments are discounted at a rate that estimates the Company’s collateralized borrowing rate for financing instruments of a similar term and are included in accounts payable and other liabilities. The operating lease ROU asset, included in premises and equipment, also includes any lease prepayments made, plus initial direct costs incurred, less any lease incentives received. The Company recognizes fixed lease costs on a straight-line basis throughout the lease term in the Consolidated Statement of Income. Certain of these leases also have extension or termination options,
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FREEDOM HOLDING CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(All amounts in thousands of United States dollars, except share data, unless otherwise stated)
and the Company assess the likelihood of exercising such options. If it is reasonably certain that the Group will exercise the options to extend, then we include the impact in the measurement of our ROU assets and lease liabilities.
When readily determinable, the Company uses the rate implicit in the lease to discount lease payments to present value; however, the rate implicit on most of the Group's leases are not readily determinable. Therefore, the Company must discount lease payments based on an estimate of its incremental borrowing rate.
The table below presents the lease related assets and liabilities recorded on the Company's Condensed Consolidated Balance Sheets as of September 30, 2024:
Classification on Balance Sheet
September 30, 2024
March 31, 2024
Assets
Operating lease assetsRight-of-use asset$37,028 $36,324 
Total lease assets$37,028 $36,324 
Liabilities
Operating lease liabilityLease liability$37,664 $35,794 
Total lease liability$37,664 $35,794 
The following table presents as of September 30, 2024, the maturities of the lease liabilities:
Leases maturing during the period ending March 31,
 
2025$5,971
202612,089 
202712,474 
20288,307 
20294,189 
Thereafter3,290 
Total payments46,320 
Less: amounts representing interest(8,656)
Lease liability, net$37,664 
Weighted average remaining lease term (in months)31
Weighted average discount rate14 %
Lease commitments for short-term operating leases as of September 30, 2024 and September 30, 2023 was approximately $1,368 and $222, respectively. The Group's rent expense for office space was $2,339 and $4,493 for the three and six months ended September 30, 2024 and $759 and $1,619 for the three and six months ended September 30, 2023, respectively.
The Group has leases that involve variable payments tied to an index, which are considered in the measurement of operating lease ROU assets and operating lease liabilities.
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FREEDOM HOLDING CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(All amounts in thousands of United States dollars, except share data, unless otherwise stated)



NOTE 22 – ACQUISITIONS OF SUBSIDIARIES
Acquisition of SilkNetCom
SilkNetCom LLP specializes in the field of provider services, IT and construction of telecommunications networks in private and public sectors.
On September 17, 2024, the Company completed the acquisition of SilkNetCom by purchasing 100% of its outstanding shares. The purpose and reason for the acquisition of SilkNetCom was to use the acquired assets and licenses to develop its telecommunications business.
At the reporting date, September 30, 2024, final valuation of SilkNetCom was not completed. According to the preliminary results, as of September 17, 2024, the date of the acquisition of SilkNetCom, the fair value of net assets of SilkNetCom was $20,552. The total purchase price was allocated as follows:
As of September 17, 2024
ASSETS
Cash and cash equivalents54 
Margin lending, brokerage and other receivables, net44 
Fixed assets, net37,878 
Other assets, net7,634 
TOTAL ASSETS45,610 
LIABILITIES
Margin lending and trade payables219 
Current income tax liability5 
Other liabilities24,834 
TOTAL LIABILITIES 25,058 
Net assets acquired20,552 
Goodwill 3,328 
Total purchase price23,880 
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FREEDOM HOLDING CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(All amounts in thousands of United States dollars, except share data, unless otherwise stated)
NOTE 23 – COMMITMENTS AND CONTINGENCIES
Legal, regulatory and governmental matters
The Group is involved in various claims and legal proceedings that arise in the normal course of business. The Company recognizes a liability when a loss is considered probable and the amount can be reasonably estimated. If a material loss contingency is reasonably possible but not probable, the Company does not record a liability but discloses the nature and amount of the claim, as well as an estimate of the potential loss, if such an estimate can be determined. Legal fees are recorded as expenses when incurred. While the Company does not anticipate that the resolution of any current claims or proceedings (except for the specific matters if detailed below, if resolved unfavorably) will significantly impact its financial position, an adverse outcome in some or all of these cases could materially affect the Company's results of operations or cash flows for specific periods. This assessment is based on the Company's current understanding of relevant facts and circumstances, and the Company's perspective on these matters may evolve with future developments.
The Company accounts for potential losses related to litigation in accordance with FASB ASC Topic 450, “Contingencies.” As of September 30, 2024 and March 31, 2024, accruals for potential losses related to legal, regulatory and governmental actions and proceedings were not material.
Off-balance sheet financial instruments
Freedom Bank KZ is a party to certain off-balance sheet financial instruments. These financial instruments include guarantees and unused commitments under existing lines of credit. These commitments expose the Company to varying degrees of credit and market risk which are essentially the same as those involved in extending loans to customers, and are subject to the same credit policies used in underwriting loans. Collateral may be obtained based on Freedom Bank KZ's credit evaluation of the counterparty. The Company's maximum exposure to credit loss is represented by the contractual amount of these commitments.
Unused commitments under lines of credit
Unused commitments under lines of credit include commercial, commercial real estate, home equity and consumer lines of credit to existing customers. These commitments may mature without being fully funded.
Unused commitments under guarantees
Unused commitments under guarantees are conditional commitments issued by Freedom Bank KZ to provide bank guarantees to customers. These commitments may mature without being fully funded.
Bank guarantees
Bank guarantees are conditional commitments issued by Freedom Bank KZ to guarantee the performance of a customer to a third party. These guarantees are primarily issued to support trade transactions or guarantee arrangements. The credit risk involved in issuing guarantees is essentially the same as that involved in extending loan facilities to customers. A significant portion of the issued guarantees are collateralized. Total lending related commitments outstanding as of September 30, 2024, and March 31, 2024, were as follows:
As of September 30, 2024
As of March 31, 2024
Unused commitments under lines of credits and guarantees$108,058 $207,519 
Bank guarantees11,524 9,012 
Total$119,582 $216,531 
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FREEDOM HOLDING CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(All amounts in thousands of United States dollars, except share data, unless otherwise stated)
NOTE 24 – SEGMENT REPORTING
The following tables summarize the Company's Statement of Operations by its reportable segments for the periods presented. There are no revenues from transactions between the segments and intercompany balances have been eliminated in disclosures.
Three months ended September 30, 2024
STATEMENT OF OPERATIONS
BrokerageBankingInsuranceOtherTotal
Fee and commission income
$108,640 $2,198 $32 $10,181 $121,051 
Net gain on trading securities10,095 52,850 3,595 1,777 68,317 
Interest income52,848 141,986 14,265 1,225 210,324 
Insurance underwriting income— — 160,344 — 160,344 
Net gain/(loss) on foreign exchange operations2,386 (1,566)275 5,384 6,479 
Net gain on derivative455 5,853 — — 6,308 
Other income/(expense), net373 188 (336)7,852 8,077 
TOTAL REVENUE, NET174,797 201,509 178,175 26,419 580,900 
Fee and commission expense7,964 3,325 74,161 5,387 90,837 
Interest expense18,672 96,454 1,950 7,589 124,665 
Insurance claims incurred, net of reinsurance— — 66,684 — 66,684 
Payroll and bonuses15,915 23,724 7,755 18,816 66,210 
Professional services1,867 68 430 5,880 8,245 
Stock compensation expense6,282 2,175 1,929 1,670 12,056 
Advertising expense14,702 829 114 4,404 20,049 
General and administrative expense8,695 12,479 7,581 24,485 53,240 
Provision for allowance/(recovery of) expected credit losses422 10,142 72 (209)10,427 
TOTAL EXPENSE74,519 149,196 160,676 68,022 452,413 
INCOME BEFORE INCOME TAX$100,278 $52,313 $17,499 $(41,603)$128,487 
Income tax (expense)/benefit
(14,631)(6,643)(2,709)9,984 (13,999)
NET INCOME
$85,647 $45,670 $14,790 $(31,619)$114,488 

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FREEDOM HOLDING CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(All amounts in thousands of United States dollars, except share data, unless otherwise stated)
Six months ended September 30, 2024
STATEMENT OF OPERATIONS
BrokerageBankingInsuranceOtherTotal
Fee and commission income
$206,583 $4,994 $147 $24,816 $236,540 
Net gain/(loss) on trading securities10,969 2,843 3,734 (1,331)16,215 
Interest income115,637 288,049 29,964 2,678 436,328 
Insurance underwriting income— — 289,752 — 289,752 
Net gain/(loss) on foreign exchange operations12,343 (21,261)1,395 22,091 14,568 
Net gain on derivative1,331 17,471 — — 18,802 
Other income, net
2,850 615 446 15,499 19,410 
TOTAL REVENUE, NET349,713 292,711 325,438 63,753 1,031,615 
Fee and commission expense13,641 5,851 139,048 12,444 170,984 
Interest expense53,293 196,341 5,833 14,916 270,383 
Insurance claims incurred, net of reinsurance— — 113,993 — 113,993 
Payroll and bonuses41,166 29,841 14,616 38,111 123,734 
Professional services4,256 164 707 10,386 15,513 
Stock compensation expense11,597 4,131 2,804 4,139 22,671 
Advertising expense26,646 1,893 464 8,247 37,250 
General and administrative expense18,908 24,864 12,799 41,774 98,345 
Provision for allowance/(recovery of) expected credit losses93 9,021 397 (854)8,657 
TOTAL EXPENSE169,600 272,106 290,661 129,163 861,530 
INCOME BEFORE INCOME TAX$180,113 $20,605 $34,777 $(65,410)$170,085 
Income tax (expense)/benefit(24,835)(3,418)(6,184)13,099 (21,338)
NET INCOME
$155,278 $17,187 $28,593 $(52,311)$148,747 
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FREEDOM HOLDING CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(All amounts in thousands of United States dollars, except share data, unless otherwise stated)
Three months ended September 30, 2023
STATEMENTS OF OPERATIONS
BrokerageBankingInsuranceOtherTotal
Fee and commission income
$87,674 $9,526 $2 $14,501 $111,703 
Net gain/(loss) on trading securities17,110 30,470 3,713 (522)50,771 
Interest income59,906 133,300 18,691 1,166 213,063 
Insurance underwriting income— — 57,976 — 57,976 
Net gain/(loss) on foreign exchange operations5,009 (7,390)(239)(1,076)(3,696)
Net gain on derivative302 679 — 397 1,378 
Other income, net1,248 164 452 2,522 4,386 
TOTAL REVENUE, NET171,249 166,749 80,595 16,988 435,581 
Fee and commission expense6,442 5,138 18,430 1,604 31,614 
Interest expense28,315 99,711 10,042 1,313 139,381 
Insurance claims incurred, net of reinsurance— — 33,988 — 33,988 
Payroll and bonuses13,691 13,003 3,569 9,735 39,998 
Professional services1,625 210 48 10,068 11,951 
Stock compensation expense659 52 31 289 1,031 
Advertising expense6,068 720 236 1,615 8,639 
General and administrative expense13,269 6,775 1,323 8,263 29,630 
(Recovery of)/provision for allowance for expected credit losses(872)5,469 90 (25)4,662 
TOTAL EXPENSE69,197 131,078 67,757 32,862 300,894 
INCOME BEFORE INCOME TAX$102,052 $35,671 $12,838 $(15,874)$134,687 
Income tax expense(7,792)— (7)(11,409)(19,208)
NET INCOME
$94,260 $35,671 $12,831 $(27,283)$115,479 

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FREEDOM HOLDING CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(All amounts in thousands of United States dollars, except share data, unless otherwise stated)
Six months ended September 30, 2023
STATEMENTS OF OPERATIONS
BrokerageBankingInsuranceOtherTotal
Fee and commission income
$151,646 $22,692 $44 $36,024 $210,406 
Net gain/(loss) on trading securities26,277 44,990 12,817 (1,497)82,587 
Interest income92,115 232,394 34,699 3,204 362,412 
Insurance underwriting income— — 102,865 — 102,865 
Net gain/(loss) on foreign exchange operations5,120 12,450 (668)(1,297)15,605 
Net gain/(loss) on derivative297 (30,095)— 571 (29,227)
Other income/(expense), net1,864 (28)1,215 4,092 7,143 
TOTAL REVENUE, NET277,319 282,403 150,972 41,097 751,791 
Fee and commission expense12,300 9,121 35,854 3,023 60,298 
Interest expense49,553 162,410 18,461 4,003 234,427 
Insurance claims incurred, net of reinsurance— — 55,502 — 55,502 
Payroll and bonuses26,190 22,515 6,895 16,028 71,628 
Professional services3,952 290 174 14,160 18,576 
Stock compensation expense1,448 114 68 634 2,264 
Advertising expense10,856 2,756 381 2,746 16,739 
General and administrative expense21,726 13,173 2,572 16,634 54,105 
(Recovery of)/provision for allowance for expected credit losses(632)16,753 1,312 1,555 18,988 
TOTAL EXPENSE125,393 227,132 121,219 58,783 532,527 
INCOME BEFORE INCOME TAX$151,926 $55,271 $29,753 $(17,686)$219,264 
Income tax (expense)/benefit(10,471)— 30 (25,423)(35,864)
NET INCOME
$141,455 $55,271 $29,783 $(43,109)$183,400 

The following tables summarize the Company's total assets and total liabilities by its business segments as of the dates presented. Intercompany balances have been eliminated for separate disclosure.
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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(All amounts in thousands of United States dollars, except share data, unless otherwise stated)
September 30, 2024
BrokerageBankingInsuranceOtherTotal
Total assets$2,934,402 $4,961,573 $564,499 $355,781 $8,816,255 
Total liabilities2,248,040 4,519,951 405,239 379,789 7,553,019 
Net assets$686,362 $441,622 $159,260 $(24,008)$1,263,236 
March 31, 2024
BrokerageBankingInsuranceOtherTotal
Total assets$2,586,803 $4,939,626 $529,517 $245,984 $8,301,930 
Total liabilities1,973,887 4,389,745 402,865 368,475 7,134,972 
Net assets$612,916 $549,881 $126,652 $(122,491)$1,166,958 

FRHC’s chief operating decision maker (CODM) are Chief Executive Officer, Chief Financial Officer and President, collectively acting manages the Company, including allocating resources and measuring performance. Company’s CODM uses both GAAP total revenue and net income in assessing each segment’s performance and determining how to allocate resources among segments.
Brokerage
Companies in the Brokerage segment offer securities brokerage, securities dealing for customers and for the Group's own account, market making activities, investment research, investment counseling, underwriting and market-making services to a global client base of retail investors, corporations, financial institutions, merchants and government and municipal entities. Companies in the Brokerage segment also conduct proprietary securities trading.
The Group's services in this segment include providing clients with access to the world's largest stock exchanges and 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, the Group provides user-friendly trading applications that offer convenience and flexibility.
Banking
Companies in the Banking segment generate banking service fees and interest income by providing services that include lending, deposit services, payment card services, money transfers, correspondent accounts, supporting both individual and corporate clients with innovative digital financial solutions. To ensure a seamless experience, the Banking segment it provides user-friendly trading applications that offer convenience and flexibility. Companies in the Banking segment also conduct proprietary securities trading activities.
Insurance
Companies in the Insurance segment offer products including 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. Companies in the Insurance segment also conduct proprietary securities trading activities.
Other

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FREEDOM HOLDING CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(All amounts in thousands of United States dollars, except share data, unless otherwise stated)
Activities of companies in the Other segment include provision of payment processing services, financial educational center services, financial intermediary center services, financial consulting services, administrative management services, telecommunication services information processing services, entertainment ticketing sales, online air and railway ticket purchase aggregation and an online retail trade and e-commerce application. The Other segment also includes transactions conducted by the Company in connection with repurchase agreements.
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FREEDOM HOLDING CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(All amounts in thousands of United States dollars, except share data, unless otherwise stated)




NOTE 25 - STATUTORY CAPITAL REQUIREMENTS
The Company has two insurance subsidiaries operating in Kazakhstan: Freedom Life (a regulated life insurer) and Freedom Insurance (a regulated property and casualty insurance entity). The Law of the Republic of Kazakhstan No. 126-II "On Insurance Activities" (the "Insurance Law") is the main law regulating the insurance sector in Kazakhstan. It establishes a framework for insurance activities, registration and licensing of insurance companies and regulation of insurance activities by the Agency of the Republic of Kazakhstan for Regulation and Development of Financial Market (“ARDFM”).
Freedom Life and Freedom Insurance are required to notify and coordinate with the ARDFM any proposals to declare or pay a dividend on their share capital. The amount of dividends these subsidiaries are permitted to declare is limited to the relevant subsidiary’s realized retained earnings and dividends can only be paid to the extent they will not cause a breach to the minimum solvency and capital requirements of the relevant subsidiary. As of September 30, 2024 and March 31, 2024, Freedom Life and Freedom Insurance were in compliance with the ARDFM dividend, minimum solvency and minimum capital requirements. Freedom KZ in its capacity of an insurance holding is also limited in declaration and payment of dividends if such payment leads to breach of capital ratios applicable to insurance companies Freedom Life and Freedom Insurance.
There are no significant differences between the statutory accounting practices and statements prepared in accordance with U.S. GAAP for the insurance subsidiaries.
In addition, the Company's subsidiaries operate under various securities brokerage, banking and financial services regulations and must maintain such licenses in order to conduct their operations. As of September 30, 2024 and March 31, 2024, the Company, through its subsidiaries, held: (a) brokerage licenses (i) in Kazakhstan issued by ARDFM and the Astana Financial Services Authority (the "AFSA"), (ii) in Cyprus issued by the Cyprus Securities and Exchange Commission ("CySEC"), (iii) in the United States issued by FINRA, (iv) in Armenia issued by the Central Bank of Armenia, and (v) in Uzbekistan issued by the Ministry of Finance of the Republic of Uzbekistan; (b) a banking license for foreign currency operations license in Kazakhstan issued by the ARDFM; (c) a banking license for corporate and retail banking services in Kazakhstan issued by the ARDFM (including for currency exchange operations); and (d) special registration as a payment service provider in Kazakhstan with the National Bank of the Republic of Kazakhstan, and licenses in Uzbekistan and Kyrgyzstan for payments services from the National Bank of the Kyrgyz Republic and the Central Bank of Uzbekistan, respectively.
The table below presents net capital/eligible equity, required minimum capital, excess regulatory capital and retained earnings as of September 30, 2024 for each of the regulated entities that is material for our condensed consolidated financial statements.
(amounts in thousands)Regulated activitiesNet Capital/Eligible EquityRequired Minimum capital/solvencyExcess regulatory capitalRetained earnings
Freedom Bank KZ
Banking
$328,142 $174,887 $153,255 $235,976 
Freedom EUBrokerage269,027 10,971 258,056 367,702 
Freedom KZBrokerage103,039 384 102,655 138,805 
Freedom GlobalBrokerage67,277 22,325 44,952 143,695 
Freedom LifeLife Insurance44,614 11,509 33,105 75,193 
Freedom InsuranceProperty and Casual Insurance44,451 11,509 32,942 39,278 
Freedom Armenia ("Freedom AR")Brokerage22,927 781 22,146 22,015 
Other regulated operating subsidiariesOther11,034 15910,875 (18,426)
$890,511 $232,525 $657,986 $1,004,238 
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FREEDOM HOLDING CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(All amounts in thousands of United States dollars, except share data, unless otherwise stated)


According to the requirements of National Bank of the Republic of Kazakhstan, the regulator of Freedom KZ and Freedom Life, capital is adjusted through subtraction of non-liquid assets. Consequently, it may result that net capital for regulatory purposes may be lower than retained earnings balances. As per capital requirements applicable to Freedom EU regulated by The Cyprus Securities and Exchange Commission and Freedom Global regulated by Astana Financial Services Authority, current year profit is not included within net capital for regulatory purposes, as profits can only be included in net capital after a statutory audit is completed.
The table below presents net capital/eligible equity, required minimum capital, excess regulatory capital and retained earnings as of March 31, 2024 for each of the regulated entities that is material for our condensed consolidated financial statements.
(amounts in thousands)Regulated activitiesNet Capital/Eligible EquityRequired Minimum capital/solvencyExcess regulatory capitalRetained earnings
Freedom Bank KZ
Banking
$329,738 $196,594 $133,144 $193,376 
Freedom EUBrokerage269,424 10,868 258,556 319,484 
Freedom KZBrokerage107,064 413 106,651 122,416 
Freedom LifeLife Insurance50,757 12,395 38,362 57,085 
Freedom InsuranceProperty and Casual Insurance30,011 12,395 17,616 19,773 
Freedom GlobalBrokerage16,428 12,352 4,076 117,468 
Freedom Armenia ("Freedom AR")Brokerage7,317 763 6,554 6,447 
Other regulated operating subsidiariesOther8,533 1558,378 (11,665)
$819,272 $245,935 $573,337 $824,384 
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FREEDOM HOLDING CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(All amounts in thousands of United States dollars, except share data, unless otherwise stated)
NOTE 26 – SUBSEQUENT EVENTS
The Company has performed an evaluation of subsequent events through the time of filing this quarterly report on Form 10-Q with the SEC. Other than as disclosed below, during this period the Company did not have any additional material recognizable subsequent events.
On November 4, 2024, Freedom SPC placed $110,000 in bonds maturing on September 16, 2026, with an annual interest rate of 10% and quarterly interest payments.


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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis presents management’s perspective on the financial condition and results of operations of Freedom Holding Corp. ("FRHC") and its consolidated subsidiaries. Except where the context otherwise requires or where otherwise indicated, references herein to the "Company," "Freedom," "we," "our," and "us" mean Freedom Holding Corp. together with its consolidated subsidiaries. References to a "fiscal year(s)" mean the 12-month periods ended March 31 for the referenced year. The following discussion and analysis is intended to highlight and supplement data and information presented elsewhere in this quarterly report on Form 10-Q, and it should be read in conjunction with our unaudited condensed consolidated financial statements and the accompanying notes included in this quarterly report on Form 10-Q and the discussion under the heading “Management's Discussion and Analysis of Financial Condition and Results of Operations” included in our annual report on Form 10-K for the fiscal year ended March 31, 2024, filed with the Securities Exchange Commission ("SEC") on June 14, 2024 (the “2024 Form 10-K”).
Special Note About Forward-Looking Information
All statements other than statements of historical fact included herein and in the documents incorporated by reference in this quarterly report on Form 10-Q, if any, including without limitation, statements regarding our future financial position, business strategy, potential acquisitions or divestitures, budgets, projected costs, and plans and objectives of management for future operations, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. In some cases, forward-looking statements can be identified by terminology such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “forecast,” “future,” “intend,” “likely,” “may,” “might,” “plan,” “potential,” “predict,” “project,” “should,” “strategy,” “will,” “ would,” and other similar expressions and their negatives.
Forward-looking statements are not guarantees of future performance and involve known and unknown risks and uncertainties, many of which may be beyond our control. Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date hereof, and actual results could differ materially as a result of various factors. The following include some but not all of the factors that could cause actual results or events to differ materially from anticipated results or events:
•economic and political conditions in the regions where we operate or in which we have customers;
•current and future conditions in the global financial markets, including fluctuations in interest rates and foreign currency exchange rates;
•the direct and indirect effects on our business stemming from Russia's large-scale military action against Ukraine;
•economic sanctions and countersanctions that limit movement of funds, restrict access to capital markets or curtail our ability to service existing or potential new customers;
•the impact of legal and regulatory actions, investigations and disputes;
•the policies and actions of regulatory authorities in the jurisdictions in which we have operations, as well as the degree and pace of regulatory changes and new government initiatives generally;
•our ability to manage our growth effectively;
•our ability to complete planned acquisitions or successfully integrate businesses we acquire;
•our ability to successfully execute our strategy for entry into new business areas, including among others the telecommunications and media sectors in Kazakhstan;
•the availability of funds, or funds at reasonable rates, for use in our businesses, including for executing our growth strategy;
•the impact of competition, including downward pressures on fees and commissions;
•our ability to meet regulatory capital adequacy or liquidity requirements, or prudential norms;
•our ability to protect or enforce our intellectual property rights in our brands or proprietary technology;
•our ability to retain key executives and recruit and retain personnel;
•the impact of rapid technological change;
•information technology, trading platform and other system failures, cybersecurity threats and other disruptions;
•market risks affecting the value of our proprietary investments;
•risks of non-performance by third parties with whom we have business relationships;
•the creditworthiness of our trading counterparties, and banking and brokerage customers;
•the impact of tax laws and regulations, and their changes, in any of the jurisdictions in which we operate;
•compliance with laws and regulations in each of the jurisdictions in which we operate, particularly those relating to the brokerage, banking and insurance industries;
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•the impact of armed conflict in Israel and Gaza and any possible escalation of such conflict or contagion to neighboring countries or regions;
•unforeseen or catastrophic events, including the emergence of pandemics, terrorist attacks, extreme weather events or other natural disasters, political discord or armed conflict; and
•other factors discussed in this quarterly report, as well as in the 2024 Form 10-K, including those listed under Part I, Item 1A. “Risk Factors” of the 2024 Form 10-K.
Moreover, we operate in a very competitive and rapidly changing environment. New risk factors emerge from time to time and it is not possible for our management to predict all risk factors, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.

You should not place undue reliance on forward-looking statements. Forward-looking statements are based on the beliefs of management as well as assumptions made by and information currently available to management and apply only as of the date of this quarterly report or the respective dates of the documents from which they incorporate by reference. Neither we nor any other person assumes any responsibility for the accuracy or completeness of forward-looking statements. Further, except to the extent required by law, we undertake no obligations to update or revise any forward-looking statements, whether as a result of new information, future events, a change in events, conditions, circumstances or assumptions underlying such statements, or otherwise. We may also make additional forward-looking statements from time to time. All such subsequent forward-looking statements, whether written or oral, made by us or on our behalf, are also expressly qualified by these cautionary statements.
OVERVIEW

Our Business

Freedom Holding Corp. ("FRHC") is organized under the laws of the State of Nevada and acts as a holding company for all of our operating subsidiaries. Our subsidiaries engage in a broad range of activities including securities brokerage, securities dealing for customers and for our own account, market making activities, investment research, investment counseling, investment banking services, retail and commercial banking, insurance products, payment services, and information processing services. We also own several ancillary businesses which complement our core financial services businesses, including telecommunications and media businesses in Kazakhstan that are in a developmental stage.

Our business was founded in order to provide access to the international capital markets for retail brokerage clients. Our business has grown rapidly in recent years. We are pursuing a strategy to become a leader in the financial services industry, serving individuals and institutions desiring enhanced market access to international capital markets using state of the art technology platforms for their brokerage and banking needs. We are committed to further developing our digital fintech ecosystem by integrating our core financial services businesses with our ancillary business offerings. Our strategic objective is to provide customers with a comprehensive and user-centric digital experience, offering them convenient access to a wide array of products and services through a single platform. By leveraging cutting-edge technology and fostering continuous innovation, we strive to enhance our digital offering and meet the evolving needs of our diverse customer base.

The main market of our operations is Kazakhstan. Our operating subsidiaries are located in Kazakhstan, Cyprus, the United States, the United Kingdom, Armenia, the United Arab Emirates, Uzbekistan, Kyrgyzstan, Tajikistan, Azerbaijan, and Turkey and we also have a presence in Austria, Belgium, Bulgaria, France, Germany, Greece, Italy, Lithuania, The Netherlands, Poland and Spain. We divested our Russian subsidiaries in February 2023. Our subsidiaries in the United States include an SEC- and FINRA-registered broker dealer. As of September 30, 2024, we had 7,146 employees and 189 offices (of which 42 offered brokerage services, 56 offered insurance services, 26 offered banking services and 65 offered other financial and non-financial services).


Products and Services

Our business is organized into four segments: Brokerage, Banking, Insurance, and Other. Additional information regarding our segments can be found in the narrative and tabular descriptions of segments and operating results under this Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations of this quarterly report; and Note 24 "Segment Reporting" of the notes to our condensed consolidated financial statements included in Item 1 of this quarterly report.
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Our Brokerage segment primarily focuses on retail brokerage and investment banking. Our Banking segment encompasses lending, deposit services, payment card services, money transfers, and correspondent accounts, supporting both individual and corporate clients with innovative digital financial solutions. Our Insurance segment offers life and general insurance services. Our Other segment includes payment processing services, online ticket sales, and new business areas including telecommunications and media services. We also engage in proprietary securities trading activities through each of our four segments.
The expansion of our retail clients’ activity has been a major driver of our growth, particularly in Kazakhstan, Europe and other Central Asian jurisdictions. Over recent years, we have observed a significant increase in retail clients’ activity across these key markets, which has been instrumental in scaling our business. Below is the table with number of our customer for our key segments:


Number of clients as of September 30, 2024
Number of clients as of March 31, 2024
Banking1,202,000 904,000 
Insurance
846,000 534,000 
Brokerage555,000 530,000 
Other
449,000 320,000 
Brokerage Segment
As of September 30, 2024, in our Brokerage business segment we had 42 offices that provided brokerage and financial services, investment consulting and education, including offices in Kazakhstan, Cyprus, Armenia, United States, Uzbekistan and Kyrgyzstan and representative offices in a number of other European countries. We provide a comprehensive range of securities brokerage services to individuals, businesses and financial institutions. Depending on the region, our brokerage services may include securities trading and margin lending. Our investment banking business consists of investment banking professionals in Kazakhstan, Uzbekistan and the United States who provide strategic advisory services and capital markets products.
Freedom KZ and Freedom Global are professional participants on the KASE and the AIX. Foreign Enterprise LLC Freedom Finance ("Freedom UZ") is a professional participant on the Republican Stock Exchange of Tashkent ("UZSE") and the Uzbek Republican Currency Exchange ("UZCE").
Freedom EU oversees our European region operations (including Austria, Belgium, Bulgaria, Cyprus, France, Germany, Greece, Italy, Netherlands, Poland, Lithuania, Spain and the United Kingdom). In Cyprus, it is licensed to receive, transmit and execute customer orders, establish custodial accounts, engage in foreign currency exchange services and margin lending, and trade our own investment portfolio. Freedom EU serves as a hub for the Group's brokerage operations, providing transaction processing and intermediary services to our regional customers and to institutional customers that may seek access to the securities markets in the United States and Europe.
PrimeEx is a New York corporation that is a registered agency-only execution broker-dealer on the floor of the New York Stock Exchange ("NYSE"). PrimeEx is a member of the NYSE, Nasdaq, FINRA and the Securities Investor Protection Corp ("SIPC"). PrimeEx conducts investment banking and equity capital markets business under the name Freedom Capital Markets ("FCM").
As of September 30, 2024, we had 1,658 employees in our Brokerage segment, including 1,378 full-time employees and 280 part-time employees.
Banking Segment
Our Banking segment consists of the operations of Freedom Bank KZ, which is a pioneer in digital retail and commercial banking services in Kazakhstan, offering a large variety of deposit, debit and credit cards allowing its customers to make purchases around the world in multiple different currencies, pay in installments or on credit, save their funds, manage their investment accounts, or get an increased cashback that is transferred to the International Fund for the Salvation of the Aral Sea. Freedom Bank KZ provides digital mortgages, digital car loans, digital business loans, and payment acquiring services for individual entrepreneurs. On October 15, 2024 we obtained a banking license in Tajikistan.
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As of September 30, 2024, Freedom Bank KZ's assets increased by 1%, its loan portfolio decreased by 1%, its deposit portfolio increased by 12% and its trading portfolio decreased by 2%, in each case in comparison with March 31, 2024. During the three months ended September 30, 2024, the banking segment continued to exhibit growth. In particular, interest income increased in comparison to the three months ended September 30, 2023.
We have 26 office locations in Kazakhstan that provide banking services to our customers. As of September 30, 2024, we had 2,571 employees in our Banking segment, all of which were full-time employees.
Insurance Segment
We have two insurance companies in Kazakhstan, a life insurance company, Freedom Life, and a direct insurance carrier, excluding life, health and medical, Freedom Insurance.
Freedom Life provides a range of health and life insurance products to individuals and businesses, including life insurance, health insurance, annuity insurance, accident insurance, obligatory worker emergency insurance, travel insurance and reinsurance. As of September 30, 2024, Freedom Life had 1,072,794 active contracts, as compared to 616,301 active contracts as of March 31, 2024. As of September 30, 2024, Freedom Life had total assets of approximately $407.5 million and total liabilities of approximately $311.5 million, as compared to total assets of approximately $371.5 million and total liabilities of approximately $290.0 million as of March 31, 2024.
Freedom Insurance operates in the "general insurance" industry and is the leader in online insurance in Kazakhstan and offers various general insurance products in property (including automobile), casualty, civil liability, personal insurance and reinsurance. As of September 30, 2024, Freedom Insurance had 408,807 active contracts, as compared to 190,872 active contracts as of March 31, 2024. As of September 30, 2024, Freedom Insurance had total assets of approximately $157.0 million and total liabilities of approximately $93.7 million, as compared to total assets of approximately $158.0 million and total liabilities of approximately $112.8 million as of March 31, 2024.
As of September 30, 2024, we had 56 offices and 959 employees, including 924 full-time employees and 35 part-time employees, providing consumer life and general insurance services in Kazakhstan.
Other Segment
As of September 30, 2024, in our Other segment we had 65 offices and 2,396 employees, including 2,273 full-time employees and 123 part-time employees, providing a range of services including payment processing, entertainment ticketing sales, online air and railway ticket purchase aggregation and an online retail trade and e-commerce services. In addition, we have recently established subsidiaries in Kazakhstan to operate a telecommunications business and a media business, respectively, each of which is in the developmental stage. The revenue of this segment is currently mainly derived from provision of payment processing services, retail online ticket sales and online aggregation of purchasing air and railway tickets.
Digital Fintech Ecosystem and Product Expansion
Operating under the "Freedom" brand, our comprehensive suite of digital products and services enables our customers to engage in electronic trading and to monitor their accounts. Our flagship online trading platform Tradernet is designed for a wide range of investors featuring a comprehensive and user-friendly interface and secure infrastructure. The platform allows users to trade a diverse array of financial instruments, including stocks, options, and ETFs from major global exchanges such as KASE, AIX, NYSE, Nasdaq, ATHEX, the London Stock Exchange, the Chicago Mercantile Exchange, the Hong Kong Stock Exchange and Deutsche Börse.

In addition to trading capabilities, we have expanded our digital solutions to include mortgages, auto loans, and insurance products. We also operate Ticketon Events LLP ("Ticketon"), the largest online ticket sales company in Kazakhstan and Paybox platform, the digital payment aggregator which enables our customers to accept payments from buyers using a wide range of payment methods, including bank cards, online banking, electronic money, and more.

In April 2024, Freedom Bank KZ launched its mobile application, SuperApp, marking a significant milestone in the Kazakhstan financial technology sector. This innovative app consolidates all essential financial services into one platform, offering clients a seamless and convenient way to manage their finances. With SuperApp, clients can easily check their account balances, review transaction histories, make transfers and payments, open and manage deposits, and obtain and repay loans. The app also provides real-time portfolio monitoring, along with access to analytical reports and recommendations, empowering users to make well-informed investment decisions. SuperApp's payment services enable users to pay utility and internet bills, mobile phone charges, and other expenses effortlessly. SuperApp not only enhances
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the user experience but also aligns with our strategic goals. Customer satisfaction is improved through easy access to all banking and investment services in a single app, coupled with an intuitive interface and personalized recommendations.

Going forward, we are prioritizing the further development of our digital fintech ecosystem by integrating our online and mobile brokerage services, banking offerings, insurance products, payment processing systems, and online commercial ticketing services. Our strategic objective is to provide customers with a comprehensive and user-centric digital experience, offering them convenient access to a wide array of financial products and services through a single platform. When achieving our strategic objectives, we rely heavily on information technology and its continuous development and innovation to offer our users a seamless customer interaction, meet their diverse needs, and ensure stringent adherence to regulatory requirements and information security standards.
In alignment with our digital fintech ecosystem strategy, we are expanding our business by entering the telecommunications market in Kazakhstan and regional media industry in Central Asia. We are seeking to establish a new independent telecommunications operator in Kazakhstan to provide a diverse range of telecommunications and telecommunications-related services to customers which may include, among others, high-quality internet connectivity, mobile virtual network operator (MVNO) services, WiFi access, over-the-top (OTT) streaming, internet protocol television (IPTV), traffic transit for operators and cloud solutions, subject to obtaining applicable licenses, acquisitions of telecom assets or entering into partnerships where required. Our new telecommunications business is operated by Freedom Telecom, a wholly-owned subsidiary of Freedom Holding Corp. incorporated under the laws of the AIFC. Pursuing further development of our telecom business, on September 17, 2024 we completed the acquisition of a 100% interest in SilkNetCom LLP for a purchase price of approximately $23.9 million. SilkNetCom LLP is a company specializing in provider services, IT and construction of telecommunications networks in private and public sectors. See Note 22 Acquisitions of subsidiaries to the condensed consolidated financial statements included in this quarterly report on Form 10-Q. Our strategy and budget for Freedom Telecom are currently being reassessed and are subject to revisions, which may be material. During fiscal 2024, we established Freedom Media LLP ("Freedom Media") as a subsidiary of Freedom Telecom that is intended to become a national media platform in Kazakhstan offering tailored streaming services to the Kazakhstan and broader Central Asia markets. This platform is expected to provide unlimited access to a diverse collection of TV shows, movies, documentaries, and exclusive content across multiple genres.
Credit Ratings
On June 28, 2024, S&P Global Ratings affirmed the long-term credit rating of Freedom Holding Corp. at the "B-" level and long-term and short-term credit ratings of Freedom KZ, Freedom EU, Freedom Global and Freedom Bank KZ at the "B/B" level. The ratings of Freedom KZ and Freedom Bank KZ on the national scale were increased from "kzBB+" to "kzBBВ-", and S&P Global Ratings revised the outlook on Freedom Holding Corp. from negative to stable and the outlook on its core subsidiaries from negative to positive. The positive outlooks on the Freedom Holding Corp.'s subsidiaries reflect S&P's view that easing financial system risk in Kazakhstan and a further strengthening of the Group's risk management and capitalization could support its franchise over the next 12 months. The stable outlook on Freedom Holding Corp. reflects S&P's expectation that an upgrade on the holding company is unlikely even if it views the Group's creditworthiness overall as having strengthened.

On July 2, 2024, S&P Global Ratings revised its ratings outlook on Freedom Life to stable from negative. At the same time, S&P Global Ratings affirmed their 'BB' long-term issuer credit and financial strength ratings on Freedom Life. S&P Global Ratings also raised the Kazakhstan national scale rating on Freedom Life to 'kzAA-' from 'kzA+'. S&P Global Ratings consider that Freedom Life remains a strategically important subsidiary of the Group. This is based on Freedom Life's increasing importance to the Group's operations and track record of collaboration with other Group members. S&P Global Ratings continue to view Freedom Life as an insulated entity due to strong regulatory oversight and its operational independence from the parent.
Key Factors Affecting Our Results of Operations
Our operations have been, and may continue to be, affected by certain key factors as well as certain historical events. For additional information on these factors and other risks that may affect our financial condition and results of operations, see “Management's Discussion and Analysis of Financial Condition and Results of Operations” in Part II Item 7 of the 2024 Form 10-K and “Risk Factors” in Part I, Item 1A, of the 2024 Form 10-K.
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FINANCIAL HIGHLIGHTS

The highlights of our consolidated results for the three months ended September 30, 2024 are as follows:

We had total revenues, net of $580.9 million for the three months ended September 30, 2024, as compared to $435.6 million for the three months ended September 30, 2023. The increase between the two quarters was primarily attributable to the following:

•Our insurance underwriting income for the three months ended September 30, 2024 was $160.3 million, an increase of $102.4 million or 177%, compared to the three months ended September 30, 2023. The increase was driven by the expansion of our insurance operations such as in the pension annuity and accident insurance between the two quarters.

•We had a net gain on trading securities of $68.3 million for the three months ended September 30, 2024, as compared to a net gain on trading securities of $50.8 million for the three months ended September 30, 2023. The majority of the net gain for the three months ended September 30, 2024 was attributable to the increase in the market prices of Kazakhstan sovereign bonds held in our proprietary portfolio during the quarter.

•Our fee and commission income for the three months ended September 30, 2024 was $121.1 million, an increase of $9.3 million, or 8%, compared to the three months ended September 30, 2023. The increase was mainly attributable to an increase in fee and commission income from brokerage services, which increase was offset in part by decreases in fee and commission income from bank services, payment processing, underwriting and market-making services and other fee and commission income.

•We had a net gain on derivatives for the three months ended September 30, 2024 in the amount of $6.3 million, an increase of $4.9 million, or 358%, compared to the three months ended September 30, 2023. The gain for the three months ended June 30, 2024 was due to revaluation of currency swaps.

The foregoing increases in revenues were offset in part by a decrease in our interest income to $210.3 million for the three months ended September 30, 2024, from $213.1 million for the three months ended September 30, 2023. The decrease was primarily attributable to decrease in interest income on trading securities.

We had total expense of $452.4 million, for the three months ended September 30,2024, as compared to $300.9 million for the three months ended September 30,2023. The increase was mainly attributable to increases in fee and commission expense, insurance claims incurred (net of reinsurance), payroll and bonuses, general and administrative expense and advertising expense.

We had net income of $114.7 million for the three months ended September 30, 2024, as compared to $115.8 million for the three months ended September 30, 2023. Our Brokerage, Banking, Insurance and Other segments contributed $85.6 million, $45.7 million, $14.8 million of net income and a net loss of $31.6 million, respectively, to our total net income for the three months ended September 30, 2024.

Our total assets increased to $8.8 billion as of September 30, 2024 from $8.3 billion as of March 31, 2024.

We had approximately 555,000 total retail brokerage customers as of September 30, 2024 as compared to approximately 530,000 as of March 31, 2024. We had approximately 1,202,000 banking customers at our Freedom Bank KZ subsidiary as of September 30, 2024 as compared to approximately 904,000 as of March 31, 2024.

The operating results for any period are not necessarily indicative of the results that may be expected for any future period.



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RESULTS OF OPERATIONS
Comparison of the Three-month Periods Ended September 30, 2024 and 2023
The following comparison of our financial results for the three-month periods ended September 30, 2024 and 2023 is not necessarily indicative of future results.
Revenue
The following table sets out information on our total revenue, net for the periods presented.
Three months ended September 30, 2024
Three months ended September 30, 2023
Change
(amounts in thousands)
Amount%*Amount%*Amount%
Fee and commission income$121,051 20.8 %$111,703 25.6 %$9,348 8 %
Net gain on trading securities68,317 11.8 %50,771 11.7 %17,546 35 %
Interest income210,324 36.2 %213,063 48.9 %(2,739)(1)%
Insurance underwriting income160,344 27.6 %57,976 13.3 %102,368 177 %
Net gain/(loss) on foreign exchange operations6,479 1.1 %(3,696)(0.8)%10,175 (275)%
Net gain on derivatives
6,308 1.1 %1,378 0.3 %4,930 358 %
Other income
8,077 1.4 %4,386 1.0 %3,691 84 %
Total revenue, net$580,900 100 %$435,581 100 %$145,319 33 %
* Percentage of total revenue, net.


Fee and commission income
The following table sets forth information regarding our fee and commission income for the periods presented.
Three months ended September 30,
(amounts in thousands)
20242023Amount Change% Change
Brokerage services$107,378 $84,713 $22,665 27 %
Commission income from payment processing
5,970 10,299 (4,329)(42)%
Banking services
1,872 9,308 (7,436)(80)%
Underwriting and market-making services 1,214 2,910 (1,696)(58)%
Other fee and commission income4,617 4,473 144 3 %
Total fee and commission income$121,051 $111,703 $9,348 8 %
The following table sets out the components of our fee and commission income as a percentage of total fee and commission income, net for the periods presented.
Three months ended September 30,
20242023
(as a % of total fee and commission income)
Brokerage services89 %76 %
Commission income from payment processing
5 %9 %
Banking services
2 %8 %
Underwriting and market-making services1 %3 %
Other fee and commission income3 %4 %
Total fee and commission income
100 %100 %
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For the three months ended September 30,2024, total fee and commission income was $121.1 million, an increase of $9.3 million, or 8%, as compared to fee and commission income of $111.7 million for the three months ended September 30, 2023.
Fee and commission income from brokerage services for the three months ended September 30, 2024 was $107.4 million, representing a 27% increase as compared to $84.7 million for the three months ended September 30, 2023. This increase was primarily due to an increase in the number of retail brokerage customers from 434,000 as of September 30, 2023 to 555,000 as of September 30, 2024. The increase in the number of customers was attributable in part to the migration of customers from our affiliate FST Belize to brokerage companies within our Group between the two quarters. The increase was offset in part by a decrease in fee and commission income from brokerage services generated from FST Belize between the two quarters, as our omnibus brokerage account arrangement with FST Belize was wound down and customers of FST Belize closed their accounts at FST Belize and opened accounts with brokerage companies within our Group. During the three months ended September 30, 2024, we earned fee and commission income from a market maker customer at our Freedom Global subsidiary in an amount of $71.4 million, representing 59% of our total fee and commission income for that quarter.

Fee and commission income from payment processing decreased to $6.0 million for the three months ended September 30, 2024 from $10.3 million for the three months ended September 30, 2023. The $4.3 million decrease is attributable to a decrease in transaction volumes between the two quarters, which was in turn due to the cessation of operations of one of our counterparties, which previously contributed a substantial transaction volume.

Fee and commission income from banking services decreased to $1.9 million in the three months ended September 30, 2024 from $9.3 million in the three months ended September 30, 2023, a decrease of $7.4 million or 80%. The decrease in fee and commission income from banking services was primarily due to a $5.4 million decrease in commissions generated on transfer and payment processing, which was a result of a decrease in the volume of transfer and payment processing transactions between the two quarters.

Fee and commission income from underwriting and market-making activities decreased by 58% to $1.2 million for the three months ended September 30, 2024 from $2.9 million for the three months ended September 30, 2023, driven by a lower volume of underwriting transactions for the three months ended September 30, 2024 as compared to the three months ended September 30, 2023.

Other fee and commission income decreased by 3% to $4.6 million for the three months ended September 30, 2024 from $4.5 million for the three months ended September 30, 2023, due to a decrease in agency fees generated by our online travel ticket aggregator subsidiary.
Net gain on trading securities
We had a net gain on trading securities of $68.3 million for the three months ended September 30, 2024, an increase of $17.5 million as compared to a net gain of $50.8 million or the three months ended September 30, 2023. The following table sets forth information regarding our net gains on trading activities during the three months ended September 30,2024 and 2023:
(amounts in thousands)
Realized Net GainUnrealized Net GainNet Gain
Three months ended September 30, 2024
$2,400 $65,917 $68,317 
Three months ended September 30, 2023
$41,058 $9,713 $50,771 
During the three months ended September 30,2024, we had a realized gain on trading securities of $2.4 million, which is attributable to Kazakhstan sovereign bonds sold during the three months ended September 30,2024. Also, we recognized an unrealized net gain of $65.9 million during the same period due to an increase in the value of securities positions we held as of September 30, 2024. The majority of the unrealized net gain is attributable to Kazakhstan sovereign bonds.
During the three months ended September 30,2023, we had a realized gain on trading securities of $41.1 million, which is attributable to Kazakhstan sovereign bonds sold during three months ended September 30, 2023. We had an unrealized net gain in the three months ended September 30, 2023, due to securities positions we continued to hold at September 30, 2023, having appreciated by $9.7 million. The majority of the unrealized net gain comes from the appreciated shares of KazMunayGaz and Kazakhstan sovereign bonds. During the three months ended September 30, 2023, KazMunayGas shares increased in value due to an increase in oil prices during such quarter. The sharp decline in the
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National Bank of the Republic of Kazakhstan's base interest rate was the key factor causing the appreciation of the Kazakhstan sovereign bonds during the three months ended September 30, 2023.


Interest income
The following tables set forth information regarding our revenue from interest income for the periods presented.

Three months ended September 30,
(amounts in thousands)
20242023Amount Change%
Change
Interest income on trading securities$104,992 $114,039 $(9,047)(8)%
Interest income on loans to customers49,393 42,868 6,525 15 %
Interest income on margin loans to customers40,917 42,573 (1,656)(4)%
Interest income on securities available-for-sale9,003 9,653 (650)(7)%
Interest income on reverse repurchase agreements and amounts due from banks6,019 3,930 2,089 53 %
Total interest income$210,324 $213,063 $(2,739)(1)%

Three months ended September 30,
20242023
(as a % of total interest income)
Interest income on trading securities50 %54 %
Interest income on loans to customers23 %20 %
Interest income on margin loans to customers19 %20 %
Interest income on securities available-for-sale4 %4 %
Interest income on reverse repurchase agreements and amounts due from banks3 %2 %
Total interest income 100 %100 %

For the three months ended September 30, 2024, we had interest income of $210.3 million, representing a decrease of $2.7 million, or 1%, compared to the three months ended September 30, 2023. The decrease in interest income was primarily attributable to decrease in interest income on trading securities. Interest income on trading securities decreased by $9.0 million, or 8%, as a result of a decrease in the total size of our trading portfolio and an decrease in the amount of bonds we held as a percentage of our total trading portfolio between the two periods. Interest income on loans to customers increased by $6.5 million, or 15%, compared to the three months ending September 30, 2023 due to the growth of Freedom Bank KZ's customer loan portfolio between the two quarters. Interest income on margin loans to customers decreased by $1.7 million, or 4%, compared to the three months ended September 30, 2023, due to a decrease in the usage of margin loans for trades by our clients between the two quarters. For the three months ended September 30, 2024, we earned interest income
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from margin lending from a market maker customer at our Freedom Global subsidiary in an amount of approximately $7.6 million, representing 4% of our total interest income from margin lending for that quarter.


The following table provides a summary of the monthly average balances and average interest rates for the major categories of our interest-earning assets for the three months ended September 30, 2024 and 2023.

Three months ended September 30,
20242023
(amounts in thousands)Average balance
Interest-earning assets
Trading securities $3,293,124 $2,559,061
Loans issued1,328,651 1,188,888
Margin lending, brokerage and other receivables, net 1,598,152 1,024,350
Available for sale securities, at fair value285,749 226,405
Average yields
Trading securities 13.4 %19.1 %
Loans issued15.7 %15.2 %
Margin lending, brokerage and other receivables, net8.7 %8.2 %
Available- for- sale securities, at fair value13.2 %18.2 %
Interest income
Interest income on trading securities $104,992$114,039
Interest income on loans to customers49,39342,868
Interest income on margin loans to customers33,86720,503
Interest income on available- for- sale securities9,0039,653
Other interest income6,0193,930
Total interest income$203,274$190,993

Interest income on margin loans to customers includes income accrued on off-balance sheet arrangements, the monthly average balance of which is not included in the table above. These off-balance sheet arrangements mainly included repurchase agreements of our brokerage clients. As of September 30, 2024 and 2023, the monthly average balance of off-balance sheet arrangements were $507.2 million and $788.2 million, respectively, and the weighted average interest rate was 5.7%, and 11.7%, respectively.

The following table sets forth the effects of changing rates and volumes on interest income. The rate column shows the effects attributable to changes in rate (changes in rate multiplied by prior volume). The volume column shows the effects attributable to changes in volume (changes in volume multiplied by prior rate), The net column represents the sum of the prior columns. Changes attributable to changes in both rate and volume that cannot be segregated have been allocated proportionally based on changes due to rate and the changes due to volume.
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Three months ended September 30,
2024 vs 2023
Increase/ (decrease) due to change in
(amounts in thousands)RateVolumeNet
Interest income
Interest income on trading securities$(242,885)$233,838 $(9,047)
Interest income on loans to customers1,4215,104 6,525 
Interest income on margin loans to customers1,304 12,059 13,364 
Interest income on available-for-sale securities(16,038)15,388 (650)
Other interest income— — 2,089 
Total interest income$(256,198)$266,390 $12,281 
Net gain on foreign exchange operations
For the three months ended September 30,2024, we realized a net gain on foreign exchange operations of $6.5 million compared to a net loss of $3.7 million for the three months ended September 30,2023. The net gain for the three months ended September 30, 2024 is mainly attributable to a $16.9 million gain on sale and purchases of foreign currency for the three months ended September 30, 2024, which was partially offset by a translation loss of $10.4 million for that quarter. This increase between the two quarters is not only due to there having been more trading gain transactions than loss transactions during the three months ended September 30, 2024 but also due to a 78% increase in Freedom Bank's overall transaction volume with foreign currency between the two quarters.
Net gain on derivatives    
For the three months ended September 30,2024, we had net gain on derivatives of $6.3 million compared to a net gain of $1.4 million for the three months ended September 30,2023. The increase in the amount of net gain was primarily attributable to our subsidiary, Freedom Bank KZ, which had a realized net gain of $9.9 million for the three months ended September 30,2024, as compared to an unrealized net gain of $3.1 million for the three months ended September 30,2023 due to a positive revaluation of currency swaps. Freedom Bank KZ engages in currency swaps to diversify its funding sources.
Insurance underwriting income
For the three months ended September 30, 2024, we had insurance underwriting income of $160.3 million, an increase of $102.4 million, or 177%, as compared to the three months ended September 30, 2023. The increase was primarily attributable to a $109.8 million, or 183%, increase in insurance underwriting income from written insurance premiums for the three months ended September 30, 2024, as compared to the three months ended September 30, 2023, due to the expansion of our insurance operations such as in the pension annuity and accident insurance between the two quarters. This increase in income from written insurance premiums was partially offset by a $1.2 million increase in reinsurance premiums ceded for the three months ended September 30, 2024, as compared to the three months ended September 30, 2023. The following table sets out information on our insurance underwriting income for the periods presented.
Three months ended September 30,
(amounts in thousands)20242023Amount Change%
Change
Written insurance premiums$169,893 $60,110 $109,783 183 %
Reinsurance premiums ceded(1,690)(452)(1,238)274 %
Change in unearned premium reserve, net(7,859)(1,682)(6,177)367 %
Insurance underwriting income$160,344 $57,976 $102,368 177 %


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Expense

The following table sets out information on our total expense for the periods presented.
Three months ended September 30, 2024
Three months ended September 30, 2023
Change
(amounts in thousands)
Amount%*AmountAmount%
Fee and commission expense$90,837 20 %$31,614 11 %$59,223 187 %
Interest expense124,665 28 %139,381 46 %(14,716)(11)%
Insurance claims incurred, net of reinsurance66,684 15 %33,988 11 %32,696 96 %
Payroll and bonuses66,210 15 %39,998 13 %26,212 66 %
Professional services8,245 2 %11,951 4 %(3,706)(31)%
Stock compensation expense12,056 3 %1,031 — %11,025 1069 %
Advertising expense20,049 4 %8,639 3 %11,410 132 %
General and administrative expense53,240 12 %29,630 10 %23,610 80 %
Provision for allowance for expected credit losses10,427 2 %4,662 2 %5,765 124 %
Total expense$452,413 100 %$300,894 100 %$151,519 50 %
______________
*    Percentage of total expense.

Fee and commission expense

The following table sets forth information regarding our fee and commission expense for the periods presented.
Three months ended September 30,
(amounts in thousands)
2024
2023
Amount Change%
Change
Agency fees expense$74,030 $20,144 $53,886 268 %
Brokerage services6,198 4,3841,814 41 %
Banking services
4,480 4,932(452)(9)%
Exchange services466 897(431)(48)%
Central depository services
135 11817 14 %
Other commission expenses 5,528 1,1394,389 385 %
Total fee and commission expense$90,837 $31,614 $59,223 187 %
The following table sets out the components of our fee and commission expense as a percentage of total fee and commission expense, net for the periods presented.
Three months ended September 30,
20242023
(as a % of total fee and commission expense)
Agency fees expense81 %64 %
Brokerage services7 %14 %
Banking services
5 %15 %
Exchange services1 %3 %
Central depository services
— %— %
Other commission expenses6 %4 %
Total fee and commission expense100 %100 %

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Fee and commission expense increased by $59.2 million or 187% in the three months ended September 30, 2024, as compared to the three months ended September 30, 2023. The increase is mainly attributable to an increase of agency fees expense of $53.9 million or 268% compared to the three months ended September 30, 2023. The increase in agency fees expenses was due to an increase in insurance products sales by Freedom Life, which are outsourced to outside agents.
Interest expense
During the three months ended September 30,2024, we had a $14.7 million, or 11%, decrease in interest expense as compared to the three months ended September 30,2023. The decrease in interest expense was primarily attributable to a $30.9 million, or 26%, decrease in interest expense on short-term financing through securities repurchase agreements due to a decrease in the volume of such financing. This was partially offset by 6.0 million increase in interest expense on debt securities issued and $5.8 million increase in interest expense on customer deposits. Compared to the three months ended September 30,2023, we decreased our volume of short-term financing through securities repurchase agreements primarily in order to fund our investment portfolio. The increase in interest on customer deposits was a result of growth of our banking client base due to the expansion of the operations of Freedom Bank KZ between the two periods.
The following table provides a summary of the monthly average balances and average interest rates for the major categories of interest-bearing liabilities for the three months ended September 30,2024 and 2023.
Three months ended September 30,
20242023
(amounts in thousands)Average balance
Interest-bearing liabilities
Securities repurchase agreement obligations$2,587,058$2,821,371
Customer liabilities (1)
1,062,7031,018,213
Debt securities issued178,62364,396
Average rates
Securities repurchase agreement obligations14.0 %17.6 %
Customer liabilities (1)
9.2 %7.2 %
Debt securities issued16.5 %6.1 %
Interest expense
Interest expense on securities repurchase agreement obligations$86,116$117,009
Interest expense on customer accounts and deposits23,69617,864
Interest expense on debt securities issued6,969961
Other interest expense7,8843,547
Total interest expense$124,665$139,381
(1) Average balance, average rates, and interest expense relates to interest-bearing deposits.
The following table sets forth the effects of changing rates and volumes on interest. The rate column shows the effects attributable to changes in rate (changes in rate multiplied by prior volume). The volume column shows the effects attributable to changes in volume (changes in volume multiplied by prior rate). The net column represents the sum of the prior columns. Changes attributable to changes in both rate and volume that cannot be segregated have been allocated proportionally based on changes due to rate and the changes due to volume.
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Three months ended September 30,
2024 vs 2023
(Decrease)/increase due to change in
(amounts in thousands)RateVolumeNet
Interest expense
Interest expense on securities repurchase agreement obligations$(22,050)$(8,843)$(30,893)
Interest expense on customer accounts and deposits5,045 787 5,832 
Interest expense on debt securities issued2,949 3,059 6,008 
Other interest expense— — 4,337 
Total$(14,057)$(4,996)$(14,716)
Insurance claims incurred, net of reinsurance
For the three months ended September 30, 2024, we had a $32.7 million, or 96%, increase in insurance claims incurred, net of reinsurance, as compared to the three months ended September 30, 2023. The increase was primarily attributable to the general expansion of our insurance operations between the two quarters.
Payroll and bonuses

For the three months ended September 30, 2024, we had payroll and bonuses expense of $66.2 million, representing an increase of $26.2 million or 66% compared to payroll and bonuses expense of $40.0 million for the three months ended September 30, 2023. The increase in payroll and bonus expenses is primarily attributable to increased salary and bonus amounts between the two quarters. The increase was also due to the expansion of our workforce through acquisitions, establishment of new subsidiaries and hiring.

Professional services

For the three months ended September 30, 2024, our professional services expense was $8.2 million, representing a decrease by $3.7 million or 31% compared to $12.0 million for the three months ended September 30, 2023. The decrease was primarily attributable to a decrease in expenses for auditing services rendered by our external auditors due to timing differences in the provision of such services. The decrease was partially offset by increases in certain professional services expenses, including consulting and legal fees, attributable to the overall growth of our company organically and through acquisitions between the two periods.

Stock compensation expense

For the three months ended September 30, 2024, our stock compensation expense was $12.1 million, representing an increase of $11.0 million or 1069% compared to stock compensation expense of $1.0 million for the three months ended September 30, 2023. The increase is attributable to new stock grants the majority of which vested on the date of issuance during the three months ended September 30, 2024 and the partial amortization of stock grants which were granted in March, April and June 2024.

Advertising expense

Advertising expense for the three months ended September 30, 2024, was $20.0 million, representing an increase of $11.4 million or 132% compared to $8.6 million for the three months ended September 30, 2023. The increase is primarily attributable to an increase in advertising expenses by Freedom Europe of $9.0 million attributable to marketing campaigns that were initiated during fiscal 2024 and continued in the three months ended September 30, 2024. This increase consisted of an increase of approximately $4.6 million on advertising and an increase of $3.3 million on influencer and affiliates advertising. There was also an increase of $1.3 million attributable to Freedom Advertising, an advertising company, out of which $1.0 million was paid to advertising contractors and the remainder paid to Yandex Kazakhstan for advertisement placement. There was also an increase of $1.2 million of advertising expenses attributable to FRHC due to its focus on brand visibility and enhanced marketing efforts.

General and administrative expense

General and administrative expense for the three months ended September 30, 2024, was $53.2 million, representing an increase of $23.6 million or 80% compared to general and administrative expense of $29.6 million for the three months
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ended September 30, 2023. The increase is attributable to the general expansion and development of our business between the two quarters. The main factors contributing to the increase were increases in charity and sponsorship, other operating expenses, rent expenses, lease depreciation and software support. Our charity and sponsorship expense increased by $13.8 million due to several charitable contributions through our subsidiaries during the three months ended September 30, 2024. The most significant contributions were made to the Kazakhstan Chess Federation, Sport Programming Federation and construction work in Konayev city. Other operating expenses increased by $2.8 million mainly due to an increase of other operating expenses at Freedom Bank KZ from banking and other overhead costs. The increase of $1.6 million in rent expense was driven by the addition of new subsidiaries between the two quarters and the overall growth of our operations. Lease depreciation expenses increased by $1.2 million, attributable to our overall growth and the need for more office space. The expansion of our workforce and the establishment of new offices required additional leasing, leading to higher depreciation costs. Software support expenses increased by $0.9 million mainly due to the support of licensed software fee and other software systems.
Provision for allowance for expected credit losses

We recognized provision for allowance for credit losses in the amount of $10.4 million for the three months ended September 30, 2024, as compared to provision for allowance for credit losses of $4.7 million for the three months ended September 30, 2023. As of September 30, 2024, the allowance for credit losses was $48.7 million, compared to $43.6 million as of March 31, 2024. The increase between the two periods is attributable to provisions for uncollateralized bank customer loans. The increase in provisions is primarily attributable to the deterioration of the quality of the portfolio for the digital loans for individual entrepreneurs. The effect of the increase in provisions is partially offset by the revision of the approach to calculating reserve rates for collective loans.
Income tax expense
We had income before income tax of $128.5 million and $134.7 million for the three months ended September 30,2024, and September 30, 2023, respectively. Income tax expense for the three months ended September 30,2024, and September 30, 2023 was $14.0 million and $19.2 million, respectively. The decrease was primarily due to a decrease in our income before income tax between the two quarters. In addition, our effective tax rate during the three months ended September 30,2024, decreased to 10.9%, from 14.3% during the three months ended September 30,2023, as a result of changes in the composition of the revenues we realized from our operating activities, the tax treatment of those revenues in the various jurisdictions where our subsidiaries operate, and the incremental U.S. GILTI tax.
Net income
As a result of the foregoing factors, for the three months ended September 30, 2024, we had net income of $114.5 million compared to $115.5 million for the three months ended September 30, 2023, a decrease of 1%. Our Brokerage, Banking, Insurance and Other segments contributed $85.6 million, $45.7 million, $14.8 million net income and $31.6 million net loss, respectively, to our total net income for the three months ended September 30, 2024.

Non-controlling interest
As of September 30, 2024, FRHC held a 94.84% ownership interest in Arbuz and a 90.0% ownership interest in ReKassa. The remaining 5.19% of the ownership interest in Arbuz and 10.0% of the ownership interest in ReKassa are recognized as non-controlling interests in our Condensed Consolidated Balance Sheets, Condensed Consolidated Statements of Operations and Statements of Other Comprehensive Income, Condensed Consolidated Statements of Shareholders’ Equity and Condensed Consolidated Statements of Cash Flows.
Net loss attributable to non-controlling interest was $0.2 million and $0.4 million for the three months ended September 30, 2024 and September 30, 2023, respectively.
Foreign currency translation adjustments, net of tax
Due to a 2.1% depreciation of the Kazakhstan tenge against the U.S. dollar during the three months ended September 30,2024, we realized a foreign currency translation loss of $20.0 million for the three months ended September 30,
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2024 since most of our companies use the Kazakhstan tenge as their functional currency, as compared to a foreign currency translation loss of $29.9 million for the three months ended September 30, 2023.

Comparison of the Six-month Periods Ended September 30, 2024 and 2023
Revenue
The following table sets out information or our total revenue, net for the periods presented.
Six months ended September 30, 2024
Six months ended September 30, 2023
Change
(amounts in thousands)Amount%*Amount%*Amount%
Fee and commission income$236,540 23 %$210,406 28 %$26,134 12 %
Net gain on trading securities16,215 2 %82,587 11 %(66,372)(80)%
Interest income436,328 42 %362,412 48 %73,916 20 %
Insurance underwriting income289,752 28 %102,865 14 %186,887 182 %
Net gain on foreign exchange operations14,568 1 %15,605 2 %(1,037)(7)%
Net gain/(loss) on derivatives
18,802 2 %(29,227)(4)%48,029 (164)%
Other income19,410 2 %7,143 1 %12,267 172 %
Total revenue, net$1,031,615 100 %$751,791 100 %$279,824 37 %
* Percentage of total revenue, net.


Fee and commission income
The following table sets forth information regarding our fee and commission income for the periods presented.
Six months ended September 30,
(amounts in thousands)20242023Amount Change% Change
Brokerage services$200,545 $139,795 $60,750 43 %
Commission income from payment processing14,533 28,341 (13,808)(49)%
Underwriting and market-making services 5,916 11,741 (5,825)(50)%
Banking services
4,388 22,149 (17,761)(80)%
Other fee and commission income11,158 8,380 2,778 33 %
Total fee and commission income$236,540 $210,406 $26,134 12 %
The following table sets out the components of our fee and commission income as a percentage of total fee and commission income, net for the periods presented.
Six months ended September 30,
20242023
(as a % of total fee and commission income)
Brokerage services85 %66 %
Commission income from payment processing6 %13 %
Banking services
2 %11 %
Underwriting and market-making services2 %6 %
Other fee and commission income5 %4 %
Total fee and commission income100 %100 %
For the six months ended September 30, 2024, total fee and commission income was $236.5 million, an increase of $26.1 million, or 12%, as compared to fee and commission income of $210.4 million for the six months ended September 30, 2023.
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Fee and commission income from brokerage services for the six months ended September 30, 2024 was $200.5 million, representing a 43% increase as compared to $139.8 million for the six months ended September 30, 2023. This increase was primarily due to an increase in the number of retail brokerage customers from 434,000 as of September 30, 2023 to 555,000 as of September 30, 2024. The increase in the number of customers was attributable in part to the migration of customers from FST Belize to brokerage companies within our Group between the two periods. The increase was offset in part by a decrease in fee and commission income from brokerage services generated from FST Belize between the two periods, as our omnibus brokerage arrangement with FST Belize was wound down and customers of FST Belize closed their accounts at FST Belize and opened accounts with brokerage companies within our Group. During the six months ended September 30, 2024, we earned fee and commission income from a market maker customer at our Freedom Global subsidiary in an amount of $136.3 million, representing 58% of our total fee and commission income for that period.

Fee and commission income from payment processing decreased to $14.5 million for the six months ended September 30, 2024 from $28.3 million for the six months ended September 30, 2023. The $13.8 million decrease is attributable to a significant reduction in transaction volumes between the two periods, which was in turn due to the cessation of operations of one of our counterparties, which previously contributed a substantial transaction volume.

Fee and commission income from banking services decreased by $17.8 million or 80% to $4.4 million in the six months ended September 30, 2024. The decrease in fee and commission income from banking services was primarily due to a $15 million decrease in commissions generated on transfer and payment processing, which was a result of a lower volume of transfer and payment processing transactions between the two periods.

Fee and commission income from underwriting and market-making activities decreased by $5.8 million in the six months ended September 30, 2023 or 50% to $5.9 million, driven by a lower volume of underwriting transactions for the six months ended September 30, 2024 as compared to the six months ended September 30, 2023.

Other fee and commission income increased by 33% to $11.2 million for the six months ended September 30, 2024 as compared to $8.4 million for the six months ended September 30, 2023, due to an increase in agency fees generated by our online travel ticket aggregator subsidiary between the two periods, which was in turn due to an increase in usage and demand of such services.
Net gain on trading securities
We had a net gain on trading securities of $16.2 million for the six months ended September 30, 2024, a decrease of $66.4 million as compared to a net gain of $82.6 million or the six months ended September 30, 2023. The following table sets forth information regarding our net gains and losses on trading activities during the six months ended September 30,2024 and 2023:
(amounts in thousands)Realized Net GainUnrealized Net GainNet Gain
Six months ended September 30, 2024
$15,241 $974 $16,215 
Six months ended September 30, 2023
$51,923 $30,664 $82,587 
During the six months ended September 30, 2024, we had a realized gain on trading securities of $15.2 million, which is attributable to Kazakhstan sovereign bonds sold during the six months ended September 30, 2024. Also, we recognized an unrealized net gain of $1.0 million during the same period due to the increase in the value of securities positions we held as of September 30, 2024. The majority of the unrealized net gain is attributable to Kazakhstan sovereign bonds, as a consequence of market price increase.
During the six months ended September 30, 2023, we had a realized gain on trading securities of $51.9 million, which is attributable to debt securities of the Ministry of Finance of the Republic of Kazakhstan sold during the six months ended September 30, 2023. We had an unrealized net gain in the six months ended September 30, 2023, due to securities positions we continued to hold at September 30, 2023, having appreciated by $30.7 million. The majority of the unrealized net gain was attributable to appreciated debt securities of the Ministry of Finance of the Republic of Kazakhstan, which appreciation was primarily due to a decline in the National Bank of the Republic of Kazakhstan's base interest rate during the six months ended September 30, 2023.

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Interest income
The following tables set forth information regarding our revenue from interest income for the periods presented.

Six months ended September 30,
(amounts in thousands)20242023Amount Change%
Change
Interest income on trading securities$212,120 $200,880 $11,240 6 %
Interest income on loans to customers101,760 74,201 27,559 37 %
Interest income on margin loans to customers91,984 59,753 32,231 54 %
Interest income on securities available-for-sale17,403 17,997 (594)(3)%
Interest income on reverse repurchase agreements and amounts due from banks13,061 6,987 6,074 87 %
Total interest income$436,328 $362,412 $73,916 20 %

Six months ended September 30,
20242023
(as a % of total interest income)
Interest income on trading securities49 %55 %
Interest income on loans to customers23 %20 %
Interest income on margin loans to customers21 %16 %
Interest income on securities available-for-sale4 %4 %
Interest income on reverse repurchase agreements and amounts due from banks3 %2 %
Total interest income 100 %100 %

For the six months ended September 30, 2024, we had interest income of $436.3 million, representing an increase of $73.9 million, or 20%, compared to the six months ended September 30, 2023. The increase in interest income was primarily attributable to increases in interest income on margin loans to customers, loans to customers and trading securities. Interest income on trading securities increased by $11.2 million, or 6%, as a result of an increase in the total size of our trading portfolio and a increase in the amount of bonds we held as a percentage of our total trading portfolio between the two periods. Interest income on loans to customers increased by $27.6 million, or 37%, compared to the six months ending September 30, 2023 due to the growth of Freedom Bank KZ's customer loan portfolio between the two periods. Interest income on margin loans to customers increased by $32.2 million, or 54%, compared to the six months ended September 30, 2023, due to an increase in the usage of margin loans for trades by our clients between the two periods. For the six months ended September 30, 2024, we earned interest income from margin lending from a market maker customer at our Freedom Global
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subsidiary in an amount of approximately $27.0 million, representing 6% of our total interest income from margin lending for that period.


The following table provides a summary of the monthly average balances and average interest rates for the major categories of our interest-earning assets for the six months ended September 30, 2024 and 2023.

Six months ended September 30,
20242023
(amounts in thousands)Average balance
Interest-earning assets
Trading securities $3,298,981 $2,659,517 
Loans issued1,359,448 1,083,102 
Margin lending, brokerage and other receivables, net 1,542,131 728,282 
Available for sale securities, at fair value268,713 228,926 
Average yields
Trading securities 13.3 %15.7 %
Loans issued15.5 %14.2 %
Margin lending, brokerage and other receivables, net8.8 %7.6 %
Available- for- sale securities, at fair value13.4 %16.3 %
Interest income
Interest income on trading securities $212,120 $200,880 
Interest income on loans to customers101,760 74,201 
Interest income on margin loans to customers66,087 27,319 
Interest income on available- for- sale securities17,403 17,997 
Other interest income13,061 9,581 
Total interest income$410,431 $329,978 

Interest income on margin loans to customers includes income accrued on off-balance sheet arrangements, the monthly average balance of which is not included in the table above. These off-balance sheet arrangements mainly included repurchase agreements of our brokerage clients. As of September 30, 2024 and 2023, the monthly average balance of off-balance sheet arrangements were $688.8 million and $569.0 million, respectively, and the weighted average interest rate was 8%, and 12%, respectively.

The following table sets forth the effects of changing rates and volumes on interest income. The rate column shows the effects attributable to changes in rate (changes in rate multiplied by prior volume). The volume column shows the effects attributable to changes in volume (changes in volume multiplied by prior rate), The net column represents the sum of the prior columns. Changes attributable to changes in both rate and volume that cannot be segregated have been allocated proportionally based on changes due to rate and the changes due to volume.
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Six months ended September 30,
2024 vs 2023
(Decrease)/increase due to change in
(amounts in thousands)RateVolumeNet
Interest income
Interest income on trading securities(19,786)31,026 11,240 
Interest income on loans to customers7,53420,025 27,559 
Interest income on margin loans to customers4,46434,304 38,767 
Interest income on available-for-sale securities(13,704)13,110 (594)
Other interest income— — 3,480 
Total interest income$(21,493)$98,465 $80,452 
Net gain on foreign exchange operations
For the six months ended September 30, 2024 , we realized a net gain on foreign exchange operations of $14.6 million compared to a net gain of $15.6 million for the six months ended September 30, 2023. The increase in net gain can be attributed to a gain of $29.6 million on purchases and sale of foreign currency that was partially offset by a translation loss of $15.0 million, mainly due to the 95% increase of Freedom Bank's volume of currency transactions compared to the six months ended September 30, 2023.
Net gain on derivatives
For the six months ended September 30, 2024, we had net gain on derivatives of $18.8 million compared to a net loss of $29.2 million for the six months ended September 30, 2024. The change was primarily attributable to our subsidiary, Freedom Bank KZ, which had an unrealized net gain of $4.0 million for the six months ended September 30, 2024 due to a positive revaluation of currency swaps, as compared to a realized net loss of $30.1 million for the six months ended September 30, 2023 due to a negative revaluation of currency swaps. Freedom Bank KZ engages in currency swaps to diversify its funding sources.
Insurance underwriting income
For the six months ended September 30, 2024, we had insurance underwriting income of $289.8 million, an increase of $186.9 million, or 182%, as compared to the six months ended September 30, 2023. The increase was primarily attributable to a $203.6 million, or 179%, increase in insurance underwriting income from written insurance premiums for the six months ended September 30, 2024, as compared to the six months ended September 30, 2023, due to the expansion of our insurance operations such as pension annuity and accident insurance classes between the two periods. This increase in income from written insurance premiums was partially offset by a $2.3 million increase in reinsurance premiums ceded for the six months ended September 30, 2024, as compared to the six months ended September 30, 2023. The following table sets out information on our insurance underwriting income for the periods presented.
Six months ended September 30,
(amounts in thousands)20242023Amount Change%
Change
Written insurance premiums317,337 113,758 203,579 179 %
Reinsurance premiums ceded(5,870)(3,607)(2,263)63 %
Change in unearned premium reserve, net(21,715)(7,286)(14,429)198 %
Insurance underwriting income$289,752 $102,865 $186,887 182 %


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Expense

The following table sets out information on our total expense for the periods presented.
Six months ended September 30, 2024
Six months ended September 30, 2023
Change
(amounts in thousands)Amount%*AmountAmount%
Fee and commission expense$170,984 20 %$60,298 11 %$110,686 184 %
Interest expense270,383 31 %234,427 44 %35,956 15 %
Insurance claims incurred, net of reinsurance113,993 13 %55,502 10 %58,491 105 %
Payroll and bonuses123,734 14 %71,628 13 %52,106 73 %
Professional services15,513 2 %18,576 3 %(3,063)(16)%
Stock compensation expense22,671 3 %2,264 — %20,407 901 %
Advertising expense37,250 4 %16,739 3 %20,511 123 %
General and administrative expense98,345 11 %54,105 10 %44,240 82 %
Provision for allowance for expected credit losses8,657 1 %18,988 4 %(10,331)(54)%
Total expense$861,530 100 %$532,527 100 %$329,003 62 %
______________
*    Percentage of total expense.

Fee and commission expense
The following table sets forth information regarding our fee and commission expense for the periods presented.
Six months ended September 30,
(amounts in thousands)
2024
2023
Amount Change%
Change
Agency fees expense$138,846 $38,533 100,313 260 %
Brokerage services9,5028,3941,108 13 %
Bank services8,1239,681(1,558)(16)%
Exchange services1,0071,781(774)(43)%
Central Depository services343220123 56 %
Other commission expenses 13,1631,68911,474 679 %
Total fee and commission expense$170,984 $60,298 $110,686 184 %
The following table sets out the components of our fee and commission expense as a percentage of total fee and commission expense, net for the periods presented.
Six months ended September 30,
20242023
(as a % of total fee and commission expense)
Agency fees expense81 %64 %
Brokerage services6 %14 %
Bank services4 %16 %
Exchange services1 %3 %
Central Depository services— %— %
Other commission expenses8 %3 %
Total fee and commission expense100 %100 %
Fee and commission expense increased by $110.7 million or 184% in the six months ended September 30, 2024, as compared to the six months ended September 30, 2023. The increase is mainly attributable to an increase of agency fees
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expense of $100.3 million or 260% compared to the six months ended September 30, 2023 and other commission expenses of $11.5 million, compared to the six months ended September 30, 2023. The increase in agency fees expenses was due to an increase in insurance products sales by Freedom Life, which are outsourced to outside agents. The increase in other commission expenses is attributable to increased commissions paid associated with Paybox consistent with the growth of its business activities between the two periods, following our acquisition of it in the fourth periods of fiscal 2023.
Interest expense
During the six months ended September 30, 2024, we had a $36.0 million, or 15%, increase in interest expense as compared to the six months ended September 30, 2023. The increase in interest expense was primarily attributable to a $24.1 million, or 373%, increase in interest expense on margin lending payable due to an increase in the volume of such financing, and a $13.4 million, or 40%, increase in interest expense on customer deposits. Compared to the six months ended September 30, 2023. The increase in interest on customer deposits was a result of growth of our banking client base due to the expansion of the operations of Freedom Bank KZ between the two periods.
The following table provides a summary of the monthly average balances and average interest rates for the major categories of interest-bearing liabilities for the six months ended September 30, 2024 and 2023.
Six months ended September 30,
20242023
(amounts in thousands)Average balance
Interest-bearing liabilities
Securities repurchase agreement obligations$2,601,581 $2,460,962 
Customer liabilities (1)
875,660 974,429 
Debt securities issued177,592 64,004 
Average rates
Securities repurchase agreement obligations30.4 %35.1 %
Customer liabilities (1)
23.2 %14.5 %
Debt securities issued35.3 %12.4 %
Interest expense
Interest expense on securities repurchase agreement obligations$178,523 $192,464 
Interest expense on customer accounts and deposits46,823 33,467 
Interest expense on debt securities issued13,938 1,896 
Other interest expense31,099 6,600 
Total interest expense$270,383 $234,427 
(1) Average balance, average rates, and interest expense relates to interest-bearing deposits.
The following table sets forth the effects of changing rates and volumes on interest. The rate column shows the effects attributable to changes in rate (changes in rate multiplied by prior volume). The volume column shows the effects attributable to changes in volume (changes in volume multiplied by prior rate). The net column represents the sum of the prior columns. Changes attributable to changes in both rate and volume that cannot be segregated have been allocated proportionally based on changes due to rate and the changes due to volume.
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Six months ended September 30,
2024 vs 2023
 (Decrease)/increase due to change in
(amounts in thousands)RateVolumeNet
Interest expense
Interest expense on securities repurchase agreement obligations$(24,181)$10,240 $(13,941)
Interest expense on customer accounts and deposits16,061 (2,705)13,356 
Interest expense on debt securities issued6,144 5,898 12,042 
Other interest expense— — 24,499 
Total$(1,976)$13,433 $35,956 
Insurance claims incurred, net of reinsurance
For the six months ended September 30, 2024, we had a $58.5 million, or 105%, increase in insurance claims incurred, net of reinsurance, as compared to the six months ended September 30, 2023. The increase was primarily attributable to the general expansion of our insurance operations between the two periods.
Payroll and bonuses

For the six months ended September 30, 2024, we had payroll and bonuses expense of $123.7 million, representing an increase of $52.1 million or 73% compared to payroll and bonuses expense of $71.6 million for the six months ended September 30, 2023. The increase in payroll and bonus expenses is primarily attributable to increased salary and bonus amounts between the two periods. The increase was also due to the expansion of our workforce through acquisitions, establishment of new subsidiaries and hiring.

Professional services

For the six months ended September 30, 2024, our professional services expense was $15.5 million, representing a decrease by $3.1 million or 16% compared to $18.6 million for the six months ended September 30, 2023. The decrease was primarily attributable to a decrease in expenses for auditing services rendered by our external auditors due to timing differences in the provision of such services. The decrease was partially offset by increases in certain professional services expenses, including consulting and legal fees, attributable to the overall growth of our company organically and through acquisitions between the two periods.

Stock compensation expense

For the six months ended September 30, 2024, our stock compensation expense $22.7 million, representing a increase of $20.4 million or 901% compared to stock compensation expense of $2.3 million for the six months ended September 30, 2023. The increase is attributable to new stock grants the majority of which vested on the date of issuance during the six months ended September 30, 2024 and the partial amortization of stock grants which were granted in March., April and June 2024.

Advertising expense

Advertising expense for the six months ended September 30, 2024, was $37.3 million, representing an increase of $20.5 million or 123% compared to $16.7 million for the six months ended September 30, 2023. The increase is primarily attributable to an increase in advertising expenses by Freedom Europe of $15.4 million attributable to marketing campaigns that were initiated during fiscal 2024 and continued in the six months ended September 30, 2024. This increase consisted of an increase of advertising expense, influencer and affiliates advertising expense, marketing and sponsorship expense. There was also an increase of $2.3 million attributable to Freedom Advertising, an advertising company, due to marketing expenditures to third party contractors. There was also an increase of $1.7 million from FRHC due to the company's focus on the brand visibility and enhanced marketing efforts.

General and administrative expense

General and administrative expense for the six months ended September 30, 2024, was $98.6 million, representing an increase of $44.5 million or 42% compared to general and administrative expense of $54.1 million for the six months ended September 30, 2023. This increase is attributable to the general expansion and development of our business between
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the two periods. The main factors contributing to the increase were increases in other operating expenses, charity and sponsorship, software support, depreciation and amortization expense and lease depreciation. Other operating expenses increased by $8.1 million mainly due to an increase of other operating expenses at Freedom Bank KZ from banking and other overhead costs. Our charity and sponsorship expense increased by $18.1 million due to several charitable contributions through our subsidiaries during the six months ended September 30, 2024. The most significant contributions were made to the Kazakhstan Chess Federation, Sport Programming Federation and construction work in Konayev city. Taxes, other than income tax, increased by $1.5 million mainly due to the general growth of the Group, including the addition of new subsidiaries. The expansion of our business operations resulted in higher tax liabilities, reflecting our broader market presence and increased operational scale. Software support expenses increased by $3.5 million mainly due to the support of licensed software fee and other software systems. The increases of $1.4 million in depreciation and amortization expense and $2.9 million in rent expense were driven by the addition of new subsidiaries between the two periods and the overall growth of our operations. The integration of new subsidiaries required substantial investments in new technology and infrastructure, leading to higher depreciation and amortization costs. Lease depreciation expenses increased by $2.2 million, attributable to our overall growth and the need for more office space.
Provision for allowance for expected credit losses
We recognized allowance for credit losses in the amount of $8.7 million for the six months ended September 30, 2024, as compared to allowance for credit losses of $19.0 million for the six months ended September 30, 2023. The decrease is attributable to provisions for car loans. The decrease in provisions for car loans is primarily attributable to a change in estimates related to input data obtained from the National Bank of the Republic of Kazakhstan.
Income tax expense
We had income before income tax of $170.1 million and $219.3 million for the six months ended September 30, 2024, and September 30, 2023, respectively. Income tax expense for the six months ended September 30, 2024, and September 30, 2023 was $21.3 million and $35.9 million, respectively. The decrease was primarily due to a decrease in our income before income tax between the two periods. In addition, our effective tax rate during the six months ended September 30, 2024, decreased to 13%, from 16% during the six months September 30, 2023, as a result of changes in the composition of the revenues we realized from our operating activities, the tax treatment of those revenues in the various jurisdictions where our subsidiaries operate, and the incremental U.S. GILTI tax.
Net income
As a result of the foregoing factors, for the six months ended September 30, 2024, we had net income of $148.7 million compared to $183.4 million for the six months ended September 30, 2023, a decrease of 19%. Our Brokerage, Banking, Insurance and Other segments contributed $155.3 million, $17.2 million, $28.6 million net income and $52.3 million net loss, respectively, to our total net income for the six months ended September 30, 2024.

Non-controlling interest
As of September 30, 2024, FRHC held a 94.84% ownership interest in Arbuz and a 90.0% ownership interest in ReKassa. The remaining 5.19% of the ownership interest in Arbuz and 10.0% of the ownership interest in ReKassa are recognized as non-controlling interests in our Condensed Consolidated Balance Sheets, Condensed Consolidated Statements of Operations and Statements of Other Comprehensive Income, Condensed Consolidated Statements of Shareholders’ Equity and Condensed Consolidated Statements of Cash Flows.
Net loss attributable to non-controlling interest was $0.3 million and $0.5 million for the six months ended September 30, 2024 and September 30, 2023, respectively.
Foreign currency translation adjustments, net of tax
Due to a 8% depreciation of the Kazakhstan tenge against the U.S. dollar during the six months ended September 30, 2024, we realized a foreign currency translation loss of $85.8 million for the six months ended September 30, 2024 since most of our Group's companies use the Kazakhstan tenge as their functional currency, as compared to a foreign currency translation loss of $31.7 million for the six months ended September 30, 2023.
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Segment Results of Operations

Business Segment Operations

We report our results of operations through the following four business segments: Brokerage, Banking, Insurance, and Other. These operating segments are based on how our CODM makes decisions about allocating resources and assessing performance.
Comparison of the Three-month Periods Ended September 30, 2024 and 2023

Total revenue, net associated with our segments is summarized in the following table:

Three months ended September 30,
(amounts in thousands)
2024
2023
Amount Change%
Change
Brokerage
$174,797 $171,249 $3,548 2 %
Banking
201,509 166,749 34,760 21 %
Insurance
178,175 80,595 97,580 121 %
Other
26,419 16,988 9,431 56 %
Total revenue, net$580,900 $435,581 $145,319 33 %

For the three months ended September 30, 2024, total revenue, net increased in the Brokerage, Insurance and Other segments but decreased in the Banking segment, in each case compared to the three months ended September 30, 2023.

Brokerage Segment

In the three months ended September 30, 2024, in our Brokerage segment we had an increase in total revenue, net, primarily driven by an increase in fee and commission income. Fee and commission income in this segment increased, primarily due to a general increase in brokerage activity between the two quarters. The revenue increase were partially offset by a decrease in net gain on trading securities, interest income and net gain on foreign currency exchange.

Banking Segment

In the three months ended September 30, 2024, total revenue, net in the Banking segment increased as compared to the three months ended September 30, 2023, mainly attributable to net gain on trading securities, net gain on derivatives and decrease in net loss on foreign exchange operations in this segment in the three months ended September 30, 2024. These increases were partially offset by the decrease of fee and commission income in this segment in the three months ended September 30, 2024.

Insurance Segment

In the three months ended September 30, 2024, total revenue, net in the Insurance segment increased mainly due to an increase in insurance underwriting income, reflecting the overall growth of our insurance operations between the two quarters.

Other Segment

In the three months ended September 30, 2024, total revenue, net in the Other segment increased mostly due to an increase of $8.6 million in net gain on foreign exchange operations mainly from FRHC, which was attributable to an appreciation of the U.S. dollar against the Kazakhstan tenge between the two quarters. There was also an increase in the other income of $5.1 million, as well as an increase in $2.3 million from net gain on trading securities. The overall increase was offset by a decrease of $6.5 million in fee and commission income.

Total expenses associated with our segments are summarized in the following table:
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Three months ended September 30,
(amounts in thousands)
2024
2023
Amount Change%
Change
Brokerage
$74,519 $69,197 $5,322 8 %
Banking
149,196 131,078 18,118 14 %
Insurance
160,676 67,757 92,919 137 %
Other
68,022 32,862 35,160 107 %
Total expense, net$452,413 $300,894 $151,519 50 %

For the three months ended September 30, 2024, total expenses, net increased across each of our business segments compared to the three months ended September 30, 2023.

Brokerage Segment

In the three months ended September 30, 2024, total expenses, net in our Brokerage segment increased due to an increase in fee and commission expense, which was in turn mainly due to brokerage services expense. Additionally, there was an increase in payroll and bonuses, reflecting our efforts to attract and retain top talent. Advertising expenses in this segment also increased as we intensified our marketing efforts to expand our client base. Furthermore, stock compensation expenses increased, attributable to new stock grants and partial amortization of old stock grants. These increases were partially offset by decreases in interest expense on securities repurchase agreement obligations and a decrease in general and administrative expenses.

Banking Segment

In the three months ended September 30, 2024, total expenses, net in our Banking segment increased primarily due to a $10.7 million increase in payroll and bonuses expense and a $5.7 million increase in general and administrative expenses, reflecting the general growth of Freedom Bank KZ's operations between the two quarters.

Insurance Segment

In the three months ended September 30, 2024, total expenses, net in our insurance segment increased mainly due to an increase in fee and commission expense from agency fees and insurance claims incurred, net of reinsurance, attributable to the overall growth of our insurance operations between the two quarters.

Other Segment

In the three months ended September 30, 2024, total expenses, net in our Other segment increase was driven by increases of $16.2 million in general and administrative expense, mainly due to the charity and sponsorship expense by Freedom Shapagat, a non-profit corporate fund. There was also an increase of $9.1 million in payroll and bonuses, due to the overall growth of the company. There was also an increase of $6.3 million in interest expense from Freedom SPC debt securities issued. We have also seen an increase of $3.7 million in fee and commission expense mainly from Paybox and its payment processing activity. There was also an increase of $2.8 million, mostly from the activity of Freedom Advertising and FRHC. The overall increase was offset by a $4.2 million decrease in professional services.
Comparison of the Six-month Periods Ended September 30, 2024 and 2023

The following table presents total revenue, net by segment for the six month periods presented:
Six months ended September 30,
(amounts in thousands)
2024
2023
Amount Change%
Change
Brokerage
$349,713 $277,319 $72,394 26 %
Banking
292,711 282,403 10,308 4 %
Insurance
325,438 150,972 174,466 116 %
Other
63,753 41,097 22,656 55 %
Total revenue, net$1,031,615 $751,791 $279,824 37 %

For the six months ended September 30, 2024, total revenue, net increased in the Brokerage, Insurance, Banking and Other segments compared to the six months ended September 30, 2023.

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Brokerage Segment

In the six months ended September 30, 2024, in our Brokerage segment we had a significant increase in total revenue, net, primarily driven by an increase in interest income. This was largely due to increases in interest accrued on securities held in our trading portfolio and in interest accrued on margin loans to customers within this segment. Fee and commission income in this segment also increased, primarily due to a general increase in brokerage activity between the two periods. Additionally, there was an increase in net gain on foreign exchange operations and other income. These revenue increases were partially offset by a decrease in net gain on trading securities.

Banking Segment

In the six months ended September 30, 2024, total revenue, net in the Banking segment increased as compared to the six months ended September 30, 2023, mainly attributable to increase in interest income and net gain on derivatives in this segment in the six months ended September 30, 2024. These increases were partially offset by the effects of net loss on foreign exchange operations, and net gain on trading securities in this segment in the six months ended September 30, 2024.

Insurance Segment

In the six months ended September 30, 2024, total revenue, net in the Insurance segment increased mainly due to an increase in insurance underwriting income, reflecting the overall growth of our insurance operations between the two periods. However, these increases were partially offset by the effects of decrease of net gain on trading securities and interest income.

Other Segment

In the six months ended September 30, 2024, total revenue, net in the Other segment increased mostly due to an increase of $25.6 million in net gain on foreign exchange operations mainly from FRHC, which was attributable to an appreciation of the U.S. dollar against the Kazakhstan tenge between the two periods. There was also an increase of $11.2 million due to the increase in other income. These increases were partially offset by a $13.4 million decrease in fee and commission income attributable to a decrease in Paybox's transaction volumes due to the cessation of operation of a counterparty that contributed significantly to its transaction volume. There was also a decrease in interest income of $0.5 million and a net loss on derivative of $0.5 million.

Total expenses associated with our segments are summarized in the following table:
Six months ended September 30,
(amounts in thousands)
2024
2023
Amount Change%
Change
Brokerage
$169,600 $125,393 $44,207 35 %
Banking
272,106 227,132 44,974 20 %
Insurance
290,661 121,219 169,442 140 %
Other
129,163 58,783 70,380 120 %
Total expense, net$861,530 $532,527 $329,003 62 %

For the six months ended September 30, 2024, total expenses, net increased across each of our business segments compared to the six months ended September 30, 2023.

Brokerage Segment

In the six months ended September 30, 2024, total expenses, net in our Brokerage segment increased primarily due to an increase in interest expense, which was in turn due to interest paid on securities repurchase agreements and fee and commission expense, which was in turn mainly due to agency fees expense. Additionally, there was an increase in payroll and bonuses, reflecting our efforts to attract and retain top talent. Advertising expenses in this segment also increased as we intensified our marketing efforts to expand our client base. Furthermore, stock compensation expenses increased, attributable to new stock grants and partial amortization of old stock grants. These increases were partially offset by a decrease in general and administrative expenses.

Banking Segment

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In the six months ended September 30, 2024, total expenses, net in our Banking segment increased primarily due to increase in interest expense on securities repurchase agreements within this segment, increase in general and administrative expense, increase in payroll and bonuses expense and stock compensation expense, reflecting the general growth of Freedom Bank KZ's operations between the two periods. These increases were partially offset by decrease in fee and commission expense and allowance for credit losses.

Insurance Segment

In the six months ended September 30, 2024, total expenses, net in our Insurance segment increased mainly due to increase in fee and commission expense from agency fees, insurance claims incurred, net of reinsurance, general and administrative expense, payroll and bonuses and stock compensation expense. These increases are attributable to the overall growth of our insurance operations between the two periods. However, these increases were partially offset by the effects of decrease in interest expense.

Other Segment

In the six months ended September 30, 2024, total expenses, net in our Other segment increase was driven by increases in payroll and bonuses, general and administrative expenses, interest expense and fee and commission expense. There was a $22.1 million increase in payroll and bonuses in the Other segment which is mostly attributable to the overall growth of our operations as well as the addition of new subsidiaries. The increase of $25.1 million in general and administrative expense in the Other segment was also mainly attributable to our overall growth and the addition of new subsidiaries. In particular, $12.3 million was attributable to our Shapagat subsidiary due to it charity and sponsorship expenses. Interest expense in the Other segment increased by $10.9 million, mainly attributable to an increase in interest expense on loans received by FRHC. There was an increase of $9.4 million in fee and commission expense in the Other segment, which is mostly attributable to increased bank commission expense for payment services due to an increase of payment processing operations at certain Paybox subsidiaries There was also an increase of $5.5 million from advertising expense, mainly from the activity of Freedom Advertising and FRHC. The increase was partially offset by a decrease of $3.8 million in professional services from FRHC.
Liquidity and Capital Resources
Liquidity is a measurement of our ability to meet our potential cash requirements for general business purposes. During the periods covered in this quarterly report our operations were primarily funded through a combination of existing cash on hand, cash generated from operations, returns generated from our proprietary trading and proceeds from the sale of bonds and other borrowings.
We regularly monitor and manage our leverage and liquidity risk through various committees and processes we have established to maintain compliance with net capital and capital adequacy requirements imposed on securities brokerages and banks in jurisdictions where we do business. We assess our leverage and liquidity risk based on considerations and assumptions of market factors, as well as other factors, including the amount of available liquid capital (i.e., the amount of cash and cash equivalents not invested in our operating business). While we are confident in the risk management monitoring and processes we have in place, a significant portion of our trading securities and cash and cash equivalents are subject to collateralization agreements. This significantly enhances our risk of loss in the event financial markets move against our positions. When this occurs our liquidity, capitalization and business can be negatively impacted. Certain market conditions can impact the liquidity of our assets, potentially requiring us to hold positions longer than anticipated. Our liquidity, capitalization, projected return on investment and results of operations can be significantly impacted by market events over which we have no control, and which can result in disruptions to our investment strategy for our assets.
We maintain a majority of our tangible assets in cash and securities that are readily convertible to cash, including governmental and quasi-governmental debt and highly liquid corporate equities and debt. Our financial instruments and other asset positions are stated at fair value and should generally be readily marketable in most market conditions. The following table sets out certain information regarding our assets as of the dates presented:
September 30, 2024March 31, 2024
(amounts in thousands)
Cash and cash equivalents(1)
$569,179 $545,084 
Restricted cash(2)
$895,651 $462,637 
Trading securities$3,601,118 $3,688,620 
Total assets$8,816,255 $8,301,930 
Net liquid assets(3)
$3,210,128 $3,137,383 

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(1)Of the $569.2 million in cash and cash equivalents we held at September 30, 2024, $121.5 million, or approximately 21%, was subject to reverse repurchase agreements. By comparison, at March 31, 2024, we had cash and cash equivalents of $545.1 million, of which $135.0 million, or approximately 25%, was subject to reverse repurchase agreements. The amount of cash and cash equivalents we hold is subject to minimum levels set by regulatory bodies to comply with required rules and regulations, including adequate capital and liquidity levels for each entity.
(2)     Principally consists of cash of our brokerage customers which are segregated in a special custody
accounts for the exclusive benefit of our brokerage customers.
(3)     Consists of cash and cash equivalents, trading securities, and margin lending, brokerage and other
receivables, net of securities repurchase agreement obligations. It includes liquid assets possessed after deducting securities repurchase agreement obligations.
As of September 30, 2024, and March 31, 2024, we had total liabilities of $7.6 billion and $7.1 billion, respectively, including customer liabilities of $3.3 billion and $2.3 billion, respectively.
We finance our assets primarily from revenue-generating activities and short-term and long-term financing arrangements.
CASH FLOWS
The following table presents information from our statement of cash flows for the periods indicated. Our cash and cash equivalents include restricted cash, which principally consists of cash of our brokerage customers which are segregated in a special custody accounts for the exclusive benefit of our brokerage customers.
Six Months Ended
September 30, 2024		Six Months Ended
September 30, 2023
(amounts in thousands)
Net cash flows from/(used in) operating activities$416,072 $(1,351,689)
Net cash flows used in investing activities(223,437)(450,153)
Net cash flows from financing activities370,315 1,684,744 
Effect of changes in foreign exchange rates on cash and cash equivalents(106,027)(59,098)
Effect of expected credit losses on cash and cash equivalents and restricted cash186 — 
NET CHANGE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH$457,109 $(176,196)
Net Cash Flows From Operating Activities
Net cash flow from operating activities during the six months ended September 30, 2024, was comprised of net change in operating assets and liabilities and net income adjusted for non-cash movements (changes in deferred taxes, unrealized gain on trading securities, net change in accrued interest, change in insurance reserves, and allowance for receivables). Net cash from operating activities resulted primarily from changes in operating assets and liabilities. Such changes included those set out in the following table.
Six Months Ended
September 30, 2024
Six Months Ended
September 30, 2023
(amounts in thousands)
Increases in trading securities (1)
$(187,941)

$(1,264,940)
Increases in brokerage customer liabilities (2)
$916,550 

$354,720 
Decrease/(increases) in margin lending, brokerage and other receivables
$3,584 
(3)
$(656,755)
(Decrease)/increases in margin lending and trade payables (4)
$(549,368)

$39,701 
______________
(1)Resulted from increased purchases of securities held in our proprietary account.
(2)Resulted from increased funds in brokerage accounts from new and existing customers.
(3)Resulted primarily from decreased volume of margin lending receivables.
(4)Resulted primarily from decreased volume of margin lending payables.
Net cash flows from operating activities in the six months ended September 30, 2024, were primarily attributable to net cash inflows attributable increase in customer liabilities over that period, which resulted from the increase of
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customer accounts in our Freedom Global subsidiary and decrease in margin lending, brokerage and other receivables, which changes were offset in part by an decrease in margin lending and trade payables and increases in trading securities.

Net Cash Flows Used In Investing Activities
During the six months ended September 30, 2024, net cash used in investing activities was $223.4 million compared to net cash used in investing activities of $450.2 million during the six months ended September 30, 2023. During the six months ended September 30, 2024, cash used in investing activities was used for the issuance of loans, net of repayment by customers, in the amount of $95.1 million, the purchase of fixed assets in the amount of $33.6 million, and purchase of available-for-sale securities, net of proceeds, in the amount of $74.9 million. During the six months ended September 30, 2024 cash used for the issuance of loans, net of repayment decreased by $348.8 million compared to the six months September 30, 2023, due to the decline in the volume of loans issued during the six months ended September 30, 2024, compared to the six months ended September 30, 2023. This shift is attributed to substantial growth in the Freedom Bank KZ's loan portfolio over the six months ended September 30, 2023, driven by new banking products, partnership agreements, and effective advertising campaigns.
Net Cash Flows From Financing Activities

Net cash flows from financing activities for the six months ended September 30, 2024 was $370.3 million compared to net cash flow from financing activities in amount of $1.7 billion during the six months ended September 30, 2023. Cash Flow from financing activities during the six months ended September 30, 2024 consisted principally of bank customer deposits received in the amount of $308.7 million, net proceeds from obligations under securities repurchase agreements in amount of $30.3 million, net proceeds from loans received in amount of $17.4 million and mortgage loans sold to JSC Kazakhstan Sustainability Fund as the Program Operator, net of repurchase, under the state mortgage program "7-20-25" in the amount of $14.0 million. During the six months ended September 30, 2024 cash flow from financing activities decreased by $1.3 billion compared to the six months ended September 30, 2023. This decrease was primarily attributable to a $1.3 billion change in net proceeds from securities repurchase agreement obligations due to significant growth of the Company's trading portfolio during the six months ended September 30, 2023, which is mainly financed through the securities repurchase agreements.
CAPITAL EXPENDITURES
On May 10, 2023, our subsidiary Freedom EU signed a contract for the construction of Elysium Tower, a building in Limassol, Cyprus. The building is planned to be a new office building for our Freedom EU subsidiary. The contract implies approximate capital expenditures in the amount of $7.5 million, of which approximately $1.7 million was incurred in fiscal 2024 and of which approximately $2.8 million was incurred in the first six months of fiscal 2025. The remaining $3.4 million is planned to be incurred in during the 2025 calendar year. We are financing this construction project primarily using our own funds.

On November 27, 2023, our Board of Directors approved a strategic plan to expand our business by entering the telecommunications market in Kazakhstan through our Freedom Telecom subsidiary. Execution of the new plan is expected to require significant capital expenditure, the specific amount of which is currently uncertain. Total capital expenditures for the development of this business area are currently expected to be required for, among other things, construction of network infrastructure, including a backbone network, obtaining frequency licenses or other rights to provide services where required and acquisitions of smaller companies in the sector. Our strategy and budget for Freedom Telecom are currently being reassessed and are subject to revisions, which may be material. We currently plan to finance our capital expenditures for this business area with a combination of own funds and borrowings, including vendor financing and utilizing the proceeds of a $200 million U.S. dollar domestic bond placement on the AIX that we completed on December 19, 2023. For further information, see "Indebtedness – Long-term" below.

As a further step in implementing our strategy to build a digital fintech ecosystem, on January 25, 2024, Freedom Telecom established a subsidiary, Freedom Media, in Kazakhstan for the purposes of providing media content to customers in Kazakhstan and Central Asia. Total capital expenditures required in connection with Freedom Media over the next five years are currently estimated to be approximately $54 million. We will finance our capital expenditures related to Freedom Media primarily using our own funds.
DIVIDENDS
Any payment of cash dividends on our common stock in the future will be at the discretion of our Board of Directors and will depend upon our results of operations, earnings, capital requirements, financial condition, future
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prospects, contractual and legal restrictions and other factors deemed relevant by our Board of Directors. We currently intend to retain any future earnings to fund the operation, development and expansion of our business, and therefore we do not anticipate paying any cash dividends on our common stock in the foreseeable future.
We did not declare or pay a cash dividend on our common stock during the three months ended September 30, 2024. Any payment of cash dividends on stock in the future will be at the discretion of our Board of Directors and will depend upon our results of operations, earnings, capital requirements, financial condition, future prospects, contractual and legal restrictions and other factors deemed relevant by our Board of Directors. We currently intend to retain any future earnings to fund the operation, development and expansion of our business, and therefore we do not anticipate paying any cash dividends on common stock in the foreseeable future.
INDEBTEDNESS
Short-term
Our short-term financing is primarily obtained through securities repurchase arrangements conducted through stock exchanges. We use repurchase arrangements, among other things, to finance our liquidity positions. As of September 30, 2024, $2.6 billion, or 73% of the trading securities held in our proprietary trading account were subject to securities repurchase obligations compared to $2.8 billion, or 75% as of March 31, 2024. The securities we pledge as collateral under repurchase agreements are liquid trading securities with market quotes and significant trading volume. For additional information regarding our securities repurchase agreement obligations see Note 9 Securities Repurchase Agreement Obligations to the condensed consolidated financial statements included in this quarterly report on Form 10-Q.
Long-term
On October 21, 2021, our subsidiary Freedom SPC issued U.S. dollar-denominated bonds due 2026, in an aggregate principal amount up to $66 million, which are listed on the AIX. The annual interest rate for such bonds is 5.5%. The bonds are guaranteed by FRHC. As of September 30, 2024, there was $64.7 million of such bonds outstanding.
In December 2023, Freedom SPC established a $1,000,000,000 bond program. Bonds, following issuance under the program, are listed on the AIX and guaranteed by FRHC. On December 19, 2023, Freedom SPC issued U.S. dollar-denominated bonds due 2028 under the program in an aggregate principal amount of $200 million. For the first and second years, the annual interest rate for such bonds is 12%, and for subsequent years the interest rate will be fixed and set as the sum of the effective federal funds rate as of December 10, 2025 and a margin of 6.5%. On September 16, 2024, Freedom SPC issued a series of $200 million bonds due 16 September 2026 under the program, with a 10.5% annual interest rate payable quarterly, of which $100 million bonds were placed on November 4, 2024.
The aggregate accrued interest as of September 30, 2024 on the Freedom SPC bonds due 2026 and the Freedom SPC bonds due 2028 combined was $2.3 million.
NET CAPITAL AND CAPITAL ADEQUACY
A number of our subsidiaries are required to satisfy minimum net capital and capital adequacy requirements to conduct their brokerage, banking and insurance operations in the jurisdictions in which they operate. This is partially maintained by retaining cash and cash equivalent investments in those subsidiaries or jurisdictions. As a result, such subsidiaries may be restricted in their ability to transfer cash between different jurisdictions and to FRHC. Additionally, transfers of cash between international jurisdictions may have adverse tax consequences that could discourage such transfers.
At September 30, 2024, these minimum net capital and capital adequacy requirements ranged from approximately $0.2 million to $174.9 million and fluctuate depending on various factors. At September 30, 2024, the aggregate net capital and capital adequacy requirements of our subsidiaries was approximately $232.5 million. Each of our subsidiaries that are subject to net capital or capital adequacy requirements exceeded the minimum required amount at September 30, 2024.
Although we operate with levels of net capital and capital adequacy substantially greater than the minimum established thresholds, in the event we fail to maintain minimum net capital or capital adequacy, we may be subject to fines and penalties, suspension of operations, revocation of licensure and disqualification of our management from working in the industry. Our subsidiaries are also subject to various other rules and regulations, including liquidity and capital
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adequacy ratios. Our operations that require the intensive use of capital are limited to the extent necessary to meet our regulatory requirements.
Over the past several years, we have pursued an aggressive growth strategy both through acquisitions and organic growth efforts. While our active growth strategy has led to revenue growth it also results in increased expenses and greater need for capital resources. Additional growth and expansion may require greater capital resources than we currently possess, which could require us to pursue additional equity or debt financing from outside sources. We cannot assure that such financing will be available to us on acceptable terms, or at all, at the time it is needed.
We believe that our current cash and cash equivalents, cash expected to be generated from operating activities, and forecasted returns from our proprietary trading, combined with our ability to raise additional capital will be sufficient to meet our present and anticipated financing needs.
Critical Accounting Policies and Estimates
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. The following are the accounting policies that reflect our more significant estimates, judgments and assumptions and which we believe are the most critical to aid in fully understanding and evaluating our reported financial results.
Allowance for credit losses
The Company has recently adopted a new accounting standard, ASC 326 - Current Expected Credit Losses (CECL), effective April 1, 2023. This standard has introduced significant changes to how we estimate and recognize credit losses for our financial assets. Management estimates and recognizes the CECL as an allowance for lifetime expected credit losses for loans issued. This is different compared to the previous practice of recognizing allowances based on probable incurred losses.
Under CECL, the allowance for credit losses (ACL) primarily consists of two components:
Collective CECL Component: This component is used for estimating expected credit losses for pools of loans that share common risk characteristics.
Individual CECL Component: This component is applied to loans that do not share common risk characteristics and require individual assessment.
The ACL is a valuation account that is subtracted from the amortized cost of total loans and available-for-sale securities to reflect the net amount expected to be collected. Our methodology for establishing the allowance for loan losses is based on a comprehensive assessment that considers relevant and available information from internal and external sources. This assessment takes into account past events, including historical trends in loan delinquencies and charge-offs, current economic conditions, and reasonable and supportable forecasts.
Goodwill
We have accounted for our acquisitions using the acquisition method of accounting. The acquisition method requires us to make significant estimates and assumptions, especially at the acquisition date as we allocate the purchase price to the estimated fair values of acquired tangible and intangible assets and the liabilities assumed. We also use our best estimates to determine the useful lives of the tangible and definite-lived intangible assets, which impact the periods over which depreciation and amortization of those assets are recognized. These best estimates and assumptions are inherently uncertain as they pertain to forward looking views of our businesses, customer behavior, and market conditions. In our acquisitions, we have also recognized goodwill at the amount by which the purchase price paid exceeds the fair value of the net assets acquired.
Our ongoing accounting for goodwill and the tangible and intangible assets acquired requires us to make significant estimates and assumptions as we exercise judgement to evaluate these assets for impairment. Our processes and accounting policies for evaluating impairments are further described in Note 2 Summary of Significant Accounting Policies to the condensed consolidated financial statements included in this quarterly report on Form 10-Q . As of September 30, 2024, we had goodwill of $53.2 million.
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Income taxes
We are subject to income taxes in both the United States and numerous foreign jurisdictions. These tax laws are complex and subject to different interpretations by the taxpayer and the relevant governmental taxing authorities. Significant judgement is required in determining the provision for income tax. There are many transactions and calculations for which the ultimate tax determination is uncertain. As a result, actual future tax consequences relating to uncertain tax positions may be materially different than our determinations or estimates.
We recognize deferred tax liabilities and assets based on the difference between the Condensed Consolidated Balance Sheet and tax basis of assets and liabilities using the enacted tax rates in effect for the year in which the differences are expected to reverse. The measurement of deferred tax assets is reduced, if necessary, by the amount of any tax benefits that, based on available evidence, are not expected to be realized.
Income taxes are determined in accordance with the laws of the relevant taxing authorities. As part of the process of preparing financial statements, we are required to estimate our income taxes in each of the jurisdictions in which we operate. We account for income taxes using the asset and liability approach. Under this method, deferred income taxes are recognized for tax consequences in future years based on differences between the tax bases of assets and liabilities and their reported amounts in the financial statements at each year-end and tax loss carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates applicable to the differences that are expected to affect taxable income.
We periodically evaluate and establish the likelihood of tax assessments based on current and prior years' examinations, and unrecognized tax benefits related to potential losses that may arise from tax audits in accordance with the relevant accounting guidance. Once established, unrecognized tax benefits are adjusted when there is more information available or when an event occurs requiring a change.
Legal contingencies
We review outstanding legal matters at each reporting date, in order to assess the need for provisions and disclosures in our financial statements. Among the factors considered in making decisions on provisions are the nature of the matter, the legal process and potential legal exposure in the relevant jurisdiction, the progress of the matter (including the progress after the date of the financial statements but before those statements are issued), the opinions or views of our legal advisers, experiences on similar cases and any decision of our management as to how we will respond to the matter.
Non-consolidation of FST Belize
Based on our assessment, we do not consolidate our affiliate FST Belize. See "Non-Consolidation of Freedom Securities Trading Inc." in Note 2 "Summary of Significant Accounting Policies" in the notes to our condensed consolidated financial statements included in this quarterly report on Form 10-Q.
RECENT ACCOUNTING PRONOUNCEMENTS
For details of applicable new accounting standards, see "Recent accounting pronouncements" in Note 2 "Summary of Significant Accounting Policies" in the notes to our condensed consolidated financial statements included in this quarterly report on Form 10-Q.
Item 3. Qualitative and Quantitative Disclosures about Market Risk
Market Risk
The following information, together with information included in "Overview" in "Management's Discussion and Analysis of Financial Condition and Results of Operations" in Part I Item 2, describes our primary market risk exposures. Market risk is the risk of economic loss arising from the adverse impact of market changes to the market value of our trading and investment positions. We are exposed to a variety of market risks, including interest rate risk, foreign currency exchange risk and equity price risk.
Interest Rate Risk
Our exposure to changes in interest rates relates primarily to our investment portfolio and outstanding debt. While we are exposed to global interest rate fluctuations, we are most sensitive to fluctuations in Kazakhstan interest rates. Changes in Kazakhstan interest rates may have significant effect on the fair value of our securities.
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Our investment policies and strategies are focused on preservation of capital and supporting our liquidity requirements. We typically invest in highly rated securities, with the primary objective of minimizing the potential risk of principal loss. Our investment policies generally require securities to be investment grade and limit the amount of credit exposure to any one issuer (other than government and quasi-government securities). To provide a meaningful assessment of the interest rate risk associated with our investment portfolio, we performed a sensitivity analysis to determine the impact a change in interest rates would have on the value of the investment portfolio assuming a 100 basis point parallel shift in the yield curve. Based on investment positions as of September 30, 2024, and March 31, 2024 (not including assets held for sale), a hypothetical 100 basis point increase in interest rates across all maturities would have resulted in $131.9 million and $128.9 million incremental decline in the fair market value of the portfolio, respectively. Such losses would only be realized if we sold the investments prior to maturity. A hypothetical 100 basis point decrease in interest rates across all maturities would have resulted in a $141.6 million and $138.3 million incremental rise in the fair market value of the portfolio (not including assets held for sale), respectively.
Foreign Currency Exchange Risk
We have a presence in Armenia, Austria, Azerbaijan, Belgium, Bulgaria, Cyprus, France, Germany, Greece, Italy, Kazakhstan, Kyrgyzstan, Lithuania, Netherlands, Poland, Spain, Tajikistan, Turkey, the United Arab Emirates, the United Kingdom, the United States and Uzbekistan. The activities and accumulated earnings in our non-U.S. subsidiaries are exposed to fluctuations in foreign exchange rate between our functional currencies and our reporting currency, which is the U.S. dollar.
In accordance with our risk management policies, we manage foreign currency exchange risk on financial assets by holding or creating financial liabilities in the same currency, maturity and interest rate profile. This foreign exchange risk is calculated on a net foreign exchange basis for individual currencies. We may also enter into foreign currency forward, swap and option contracts with financial institutions to mitigate foreign currency exposures associated with certain existing assets and liabilities, firmly committed transactions and forecasted future cash flows.
The main market of our operations is Kazakhstan. Because Kazakhstan's economy is highly dependent on oil exports, any significant decrease in oil prices lead to a devaluation of local currency, which can lose up to 17% quarterly (during COVID-19 outbreak) of its value relative to the U.S. dollar.
An analysis of our September 30, 2024, and March 31, 2024 (not including assets held for sale), balance sheets estimates the net impact of a 10% adverse change in the value of the U.S. dollar relative to all other currencies, would have resulted in a decrease of income before income tax in the amount of $5.7 million and $121.5 million, respectively.
Equity Price Risk
Our equity investments are susceptible to market price risk arising from uncertainties about future values of such investment securities. Equity price risk results from fluctuations in price and level of the equity securities or instruments we hold. We also have equity investments in entities where the investment is denominated in a foreign currency, or where the investment is denominated in U.S. dollars but the investee primarily makes investments in foreign currencies. The fair values of these investments are subject to change at the spot foreign exchange rate between these currencies and our functional currency fluctuates. We attempt to manage the risk of loss inherent in our equity securities portfolio through diversification and by placing limits on individual and total equity instruments we hold. Reports on our equity portfolio are submitted to our management on a regular basis.
As of September 30, 2024, and March 31, 2024, our exposure to equity investments at fair value was $128.4 million and $126.1 million, respectively. Based on an analysis of the September 30, 2024, and March 31, 2024 (not including assets held for sale), balance sheets, we estimate that a decrease of 10% in the equity price would have reduced the value of the equity securities or instruments we held by approximately $12.8 million and $12.6 million, respectively.
Credit Risk
Credit risk refers to the risk of loss arising when a borrower or counterparty does not meet its financial obligations to us. We are primarily exposed to credit risk from institutions and individuals through the brokerage and banking services we offer. We incur credit risk in a number of areas, including margin lending and loans issued.
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Margin lending receivables risk
We extend margin loans to our customers. Margin lending is subject to various regulatory requirements of MiFID and of the AFSA and the National Bank of the Republic of Kazakhstan. Margin loans are collateralized by cash and securities in the customers' accounts. The risks associated with margin lending increase during periods of fast market movements, or in cases where collateral is concentrated and market movements occur. During such times, customers who utilize margin loans and who have collateralized their obligations with securities may find that the securities have a rapidly depreciating value and may not be sufficient to cover their obligations in the event of a liquidation. We are also exposed to credit risk when our customers execute transactions, such as short sales of options and equities that can expose them to risk beyond their invested capital.
We expect this kind of exposure to increase with the growth of our overall business. Because we indemnify and hold harmless our clearing houses and counterparties from certain liabilities or claims, the use of margin loans and short sales may expose us to significant off-balance-sheet risk in the event that collateral requirements are not sufficient to fully cover losses that customers may incur and those customers fail to satisfy their obligations. As of September 30, 2024, we had $1.6 billion in margin lending receivables from our customers, $680.1 million of which was attributable to a single counterparty. The amount of risk to which we are exposed from the margin lending we extend to our customers and from short sale transactions by our customers is unlimited and not quantifiable as the risk is dependent upon analysis of a potential significant and undeterminable rise or fall in stock prices. As a matter of practice, we enforce real-time margin compliance monitoring and liquidate customers' positions if their equity falls below required margin requirements.
We have a comprehensive policy implemented in accordance with regulatory standards to assess and monitor the suitability of investors to engage in various trading activities. To mitigate our risk, we also continuously monitor customer accounts to detect excessive concentration, large orders or positions, patterns of day trading and other activities that indicate increased risk to us.
Our credit exposure is to a great extent mitigated by our policy of automatically evaluating each account throughout the trading day and closing out positions automatically for accounts that are found to be under-margined. While this methodology is effective in most situations, it may not be effective in situations where no liquid market exists for the relevant securities or commodities or where, for any reason, automatic liquidation for certain accounts has been disabled. We continually monitor and evaluate our risk management policies, including the implementation of policies and procedures to enhance the detection and prevention of potential events to mitigate margin loan losses.
Risk related to banking loans recoverability
Our loan portfolio may be impacted by global, regional and local macroeconomic and market dynamics, including prolonged weakness in GDP, reductions in consumer spending, decreases in property values or market corrections, growing levels of consumer debt, rising or high unemployment rates, changes in foreign exchange or interest rates, widespread health crises or pandemics, severe weather conditions, and the effects of climate change. Economic or market stresses generally have negative effect on the business landscape and financial markets. Decreases in property values or market adjustments may increase the likelihood of borrowers or counterparties failing to meet their obligations to us, potentially leading to an increase in credit losses.

The main share of our customer loan portfolio is represented by digital mortgage loans issued within the framework of state support programs, funded from the funds of quasi state organizations. We participate in the government mortgage program in which the Kazakhstan government provides funding in the amount of approved mortgages and buys out the mortgages after disbursement with a recourse to the bank in case of default by a borrower. We mitigate our credit risk exposure in this case by our security interest in the financed real estate property. As such, significant rate of mortgage defaults in Kazakhstan could adversely affect our banking operations and the ultimate success of our digital mortgage product.

We reserve for potential credit losses in the future by recording a provision for credit losses through our earnings. This includes the allowance for credit losses based on management’s estimates of current expected credit losses over the life of the respective credit exposures. These estimates are based on a review of past events, current conditions, and reasonable forecasts of future economic situations that might influence the recoverability of our loans. Our approach to determining these allowances involves both quantitative methods and a qualitative framework. Within this framework, management uses its judgment to evaluate internal and external risk factors. However, such judgments are inherently subject to the risk of misjudging these factors or misestimating their effects. We cannot guarantee that charge-offs related to our credit exposures will not happen in the future. Market and economic changes could lead to higher default and delinquency rates, adversely affecting our loan portfolio's quality and potentially resulting in higher charge-offs. While our
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estimates account for current conditions and anticipated changes during the portfolio's lifetime, actual outcomes could be worse than expected, significantly impacting our financial results, condition and cash flows.

For description of credit quality of the loans and other details please see "Note 7 - Loans Issued" in the notes to the condensed consolidated financial statements.

Operational Risk
Operational risk generally refers to the risk of loss, or damage to our reputation, resulting from inadequate or failed operations or external events, including, but not limited to, business disruptions, improper or unauthorized execution and processing of transactions, deficiencies in our technology or financial operating systems and inadequacies or breaches in our control processes including cyber security incidents.
For a description of related risks, see the information under the heading "Risks Related to Information Technology and Cybersecurity" in "Risk Factors" in Part I Item 1A of the 2024 Form 10-K.
To mitigate and control operational risk, we have developed and continue to enhance policies and procedures that are designed to identify and manage operational risk at appropriate levels throughout the organization and within such departments. We also have business continuity plans in place that we believe will cover critical processes on a company-wide basis, and redundancies are built into our systems as we have deemed appropriate. These control mechanisms attempt to ensure that operational policies and procedures are being followed and that our various businesses are operating within established corporate policies and limits.
Legal and Compliance Risk
We operate in a number of jurisdictions, each with its own legal and regulatory structure that is unique and different from the other. Legal and regulatory risk includes the risk of non-compliance with applicable legal and regulatory requirements and damage to our reputation as a result of failure to comply with laws, regulations, rules, related self-regulatory organization standards and codes of conduct applicable to our business activities. Such non-compliance could result in the imposition of legal or regulatory sanctions, material financial loss, including fines, penalties, judgments, damages and/or settlements, or loss to reputation that we may suffer as a result of compliance failures. These risks include contractual and commercial risk, such as the risk that a counterparty's performance obligations will be unenforceable. It also includes compliance with AML, terrorist financing, anti-corruption and sanctions rules and regulations.
We have established and continue to enhance procedures designed to ensure compliance with applicable statutory and regulatory requirements, such as public company reporting obligations, regulatory net capital and capital adequacy requirements, sales and trading practices, potential conflicts of interest, anti-money laundering, privacy, sanctions and recordkeeping. The legal and regulatory focus on the financial services industry presents a continuing business challenge for us.
Our business also subjects us to the complex income tax laws of the jurisdictions in which we operate, and these tax laws may be subject to different interpretations by the taxpayer and the relevant governmental taxing authorities. We must make judgments and interpretations about the application of these inherently complex tax laws when determining the provision for income taxes.
Geopolitical Risk
The Russia-Ukraine conflict has led to disruptions in financial markets that has negatively impacted the global economy and created significant uncertainty. The Russia-Ukraine conflict has resulted in the imposition by many countries of economic sanctions and export controls against certain Russian industries, companies and individuals. In response, Russia has implemented its own countermeasures against countries, businesses and investors deemed "unfriendly." Partly as a result of the effects of the Russia-Ukraine conflict, businesses worldwide have experienced shortages in materials and increased costs for transportation, energy and raw materials. The continuation or escalation of the Russia-Ukraine conflict or other hostilities presents heightened risks relating to cyberattacks, supply chain disruptions, higher interest rates and greater frequency and volume of failures to settle securities transactions, as well as increase financial market volatility. The extent and duration of the war, sanctions and resulting market disruptions, as well as the potential adverse consequences for our business, liquidity and results of operations, are difficult to predict.
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Effects of Inflation
Because our assets are primarily short-term and liquid in nature, they are generally not significantly impacted by inflation. The rate of inflation does, however, affect our expenses, including employee compensation, communications and information processing and office leasing costs, which may not be readily recoverable from our customers. To the extent inflation results in rising interest rates and has adverse impacts upon securities markets, it may adversely affect our results of operations and financial condition.
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Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
As of the end of the period covered by this quarterly report on Form 10-Q, our management, under the supervision and with the participation of our principal executive officer and principal financial officer, evaluated the effectiveness of our disclosure controls and procedures. Disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) are designed to provide reasonable assurance that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the U.S. Securities and Exchange Commission’s rules and forms and that such information is accumulated and communicated to the company’s management, including its principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure. Based upon that evaluation, our principal executive officer and principal financial officer concluded that, as of September 30, 2024 our disclosure controls and procedures were effective.

Changes in Internal Control over Financial Reporting

During the three months ended on September 30, 2024, there was no change in internal control over financial reporting (as defined in Rule 13a-15(f) or Rule 15d-15(f) under the Exchange Act) that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
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PART II - OTHER INFORMATION
Item 1. Legal Proceedings
The information required to be set forth under this heading is incorporated by reference from Note 23, Commitments and Contingencies, to the interim Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.
Item 1A. Risk Factors

As of September 30, 2024, there have been no material changes from the risk factors previously disclosed in response to Item 1A to Part I of our 2024 Form 10-K.

Item 5. Other Information

During the period covered by this quarterly report, none of the Company’s directors or executive officers has adopted or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement (each as defined in Item 408 of Regulation S-K under the Securities Exchange Act of 1934).
Item 6. Exhibits
The following exhibits are filed or furnished, as applicable:
Exhibit No.Exhibit Description
4.01
4.02
4.03
4.04
4.05
10.01
10.02
10.03
31.01
31.02
32.01
101
The following Freedom Holding Corp. financial information for the periods ended September 30, 2024, formatted in inline XBRL (eXtensive Business Reporting Language): (i) the Cover Page; (ii) the Condensed Consolidated Balance Sheets, (iii) the Condensed Consolidated Statements of Operations and Statements of Other Comprehensive Income, (iv) the Condensed Consolidated Statements of Stockholders’ Equity, (v) the Condensed Consolidated Statements of Cash Flows, and (vi) the Notes to the Condensed Consolidated Financial Statements.*
104Cover page formatted in inline XBRL (included in Exhibit 101). *
*Filed herewith.
† Certain portions of these documents have been redacted or omitted in accordance with Item 601(a)(5) and Item 601(a)(6) of Regulation S-K.


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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
FREEDOM HOLDING CORP.
 
Date: November 8, 2024
/s/ Timur Turlov
Timur Turlov
Chief Executive Officer
 
Date: November 8, 2024
/s/ Evgeniy Ler
Evgeniy Ler
Chief Financial Officer
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