In a significant turn of events, British stock trading app Freetrade achieved breakeven earlier this year. This milestone marks the company’s first foray into profitability after facing losses in the previous year. Freetrade reported adjusted earnings before interest, tax, depreciation, and amortization (EBITDA) of £100,000 in the first quarter of 2024, according to unaudited financial statements. Additionally, preliminary revenue for the quarter reached £6.7 million.
Despite incurring a loss of £8.3 million in 2023, a significant improvement from the £28.8 million loss the year before, Freetrade managed to increase its revenues to £21.6 million in the same year. Adam Dodds, the CEO and founder of Freetrade, expressed satisfaction with the company’s performance, stating, “We defied difficult market conditions and delivered healthy growth in 2023 while dramatically reducing losses from the previous year.”
The news of Freetrade’s move towards profitability is likely to boost the confidence of its crowdfunding investors who have been eagerly awaiting updates on the company’s financial health. Despite a decrease in valuation to £225 million from £650 million in 2023, Freetrade’s latest equity crowdfunding round on Crowdcube attracted net inflows of £130 million in the first quarter. The company’s assets under administration also reached a substantial £1.8 billion.
The financial success of Freetrade comes at a time when equity markets experienced significant fluctuations due to macroeconomic uncertainty and geopolitical tensions. The company’s competitor, Robinhood, recently relaunched in the U.K., marking its third attempt to establish a presence in the European market. However, Dodds remains undeterred by this development, emphasizing the positive impact of increased choice and competition for retail customers.
Looking ahead to the rest of 2024, Freetrade is focusing on major product developments to support its next phase of growth. The company is in the process of rolling out its web platform, which is expected to enhance user experience and attract a broader customer base. Freetrade’s first-quarter performance was driven by higher trading volumes and increased foreign exchange income, indicating positive momentum in the retail investor market.
Since October 2023, Freetrade has witnessed a surge in retail investor participation, particularly in speculation surrounding potential rate cuts by central banks. The rally in cryptocurrency prices has also had a positive impact on Freetrade’s performance in the first quarter. While the platform does not offer crypto trading, retail investors have shown interest in crypto-correlated stocks such as Coinbase, MicroStrategy, and Marathon Digital.
Freetrade’s move into profitability is a significant achievement that underscores the company’s resilience and strategic approach to financial sustainability. With a clear path towards breakeven and ongoing product developments, Freetrade is poised for continued growth and success in the competitive stock trading market.
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