Executive Summary
Freedom Holding Corp delivered a solid QQ1 2026 revenue base with meaningful top-line growth and an exceptionally strong cash-flow profile, underscoring the company’s robust liquidity position and operating resilience. Revenue came in at $524.9 million for the quarter, up 7.14% year-over-year, while gross profit reached $252.7 million (gross margin ~48.1%). Operating income was $145.4 million with an operating margin of approximately 27.7%, and net income was $30.4 million (net margin ~5.8%), translating to diluted earnings per share of $0.50-$0.51. However, net income declined sharply versus year-ago levels (YoY down ~68%) and QoQ by ~61%, driven largely by a substantial negative swing in total other income/expenses (net -$104.8 million) and ongoing interest costs (interest expense of $113.4 million). This highlights the profitability sensitivity to non-operating items and interest burden within a capital-intensive, multi-jurisdictional business model.
From a cash-flow perspective, Freedom generated operating cash flow of $480.8 million and free cash flow of $450.0 million, with a notable working-capital contribution (change in working capital +$304.4 million; accounts receivable +$456.2 million; accounts payable and other current liabilities offsetting some of that, net effect +$? in the data). Cash and short-term investments totaled about $2.71 billion at quarter-end, against total debt of $1.78 billion and net debt of roughly $1.21 billion, implying a comfortable liquidity cushion to fund growth opportunities, weather volatility, and potential deleveraging if desired.
The balance sheet shows total assets of $9.69 billion and total liabilities of $8.46 billion, with stockholders’ equity of $1.23 billion. Current assets and liabilities sit at roughly $8.48 billion and $6.67 billion, respectively, yielding a current ratio near 1.27x. Deferred revenue sits at a sizable level (~$4.55 billion), consistent with a broker-dealer/capital-markets business that collects client obligations and prepayments downstream of revenue recognition. Overall, the company demonstrates a solid liquidity position and strong operating cash generation, but profitability remains susceptible to non-operating items and financing costs. As a result, investors should weigh the stability of cash flows and balance-sheet strength against the variability of non-operating income and regulatory/commercial headwinds in cross-border markets.
Key Performance Indicators
QoQ: -60.77% | YoY:-23.71%
QoQ: -74.53% | YoY:-30.25%
QoQ: -61.17% | YoY:-68.08%
QoQ: -61.36% | YoY:-67.72%
Key Insights
Revenue: $524.862 million in QQ1 2026. YoY change +7.14%; QoQ change -19.89%.
Gross Profit: $252.702 million; gross margin 48.15%. YoY gross profit change -23.71%; QoQ -60.77%.
Operating Income: $145.364 million; operating margin 27.70%. YoY change -30.25%; QoQ change -74.53%.
Net Income: $30.396 million; net margin 5.79%. YoY change -68.08%; QoQ change -61.17%.
EPS (diluted): $0.50; basic $0.51. YoY EPS change -67.72%; QoQ change -61.36%.
EBITDA: $160.039 million; EBITDA margin ~30.49%.
Interes...
Financial Highlights
Revenue: $524.862 million in QQ1 2026. YoY change +7.14%; QoQ change -19.89%.
Gross Profit: $252.702 million; gross margin 48.15%. YoY gross profit change -23.71%; QoQ -60.77%.
Operating Income: $145.364 million; operating margin 27.70%. YoY change -30.25%; QoQ change -74.53%.
Net Income: $30.396 million; net margin 5.79%. YoY change -68.08%; QoQ change -61.17%.
EPS (diluted): $0.50; basic $0.51. YoY EPS change -67.72%; QoQ change -61.36%.
EBITDA: $160.039 million; EBITDA margin ~30.49%.
Interest Expense: $113.410 million; Interest burden remains a meaningful cost of capital.
Other Income/Expenses: Net -$104.849 million, a material drag on pre-tax income and net income in QQ1 2026.
Tax Expense: $10.119 million; effective tax rate implied by pre-tax income of $40.515 million and tax expense is consistent with a modest tax rate for the quarter.
Cash Flow: Net cash provided by operating activities $480.831 million; capital expenditures $-30.788 million; Free cash flow $450.044 million.
Balance Sheet (selected): Total assets $9.689B; total liabilities $8.461B; total stockholders' equity $1.230B; cash and cash equivalents $0.568B; short-term investments $2.143B; total cash/short-term investments $2.711B; net debt ~$1.214B; current ratio ~1.27x; deferred revenue $4.549B (current liabilities).
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
524.86M |
7.14% |
-19.89% |
| Gross Profit |
252.70M |
-23.71% |
-60.77% |
| Operating Income |
145.36M |
-30.25% |
-74.53% |
| Net Income |
30.40M |
-68.08% |
-61.17% |
| EPS |
0.51 |
-67.72% |
-61.36% |
Management Commentary
Note: The provided dataset does not include an earnings-call transcript. As such, there are no management quotes or themes to extract for transcriptHighlights. If you supply the transcript, I will produce a thematically organized synthesis with direct quotes and context by topic (strategy, operations, market conditions, etc.).
Forward Guidance
There is no explicit forward guidance in the provided data for QQ1 2026. In formulating outlook, the following considerations are relevant:
- Revenue mix and profitability appear solid on an operating basis, but bottom-line profitability was significantly affected by large non-operating items, suggesting sensitivity to discrete items beyond core operations.
- The substantial deferred revenue balance points to a large client-funded obligation base; sustained revenue realization will depend on the timing of client activity and service delivery that affects future topline and non-interest-related income.
- Balance sheet shows substantial liquidity with $2.71B of readily available cash/near-cash assets and modest leverage (net debt ~$1.21B; debt/asset and interest coverage should be monitored in rising interest-rate environments).
- Potential catalysts for 2026 include: expansion of retail brokerage and cross-border capital markets activities, monetization of Tradernet and related platforms, ongoing debt-capital markets issuance in the regions Freedom operates, and potential expansion into new jurisdictions.
- Risks to monitor: macro volatility in key operating regions (Central Asia, Europe, US), regulatory changes affecting broker-dealer operations, shifts in trading volumes impacting revenue from market-making and brokerage activities, and currency/exposure risk given multi-jurisdiction exposure.
Overall, the thesis hinges on Freedom leveraging its liquidity position to scale core franchise value (retail brokerage, asset-light services, and capital markets solutions) while managing non-operating income variability and financing costs. Investors should monitor quarterly cadence of operating cash flow, changes in deferred revenue balances, and any management updates on capital deployment plans.