Plus500 Ltd.: Q226: revs beat but margins compress; we cut margins but remain above consensus

Research evidence excerpt

Plus500 Ltd.: Q226: revs beat but margins compress; we cut margins but remain above consensus

iQprofile SM Plus500 Ltd.

Key Income Statement Data (Dec) 2024A 2025A 2026E 2027E 2028E Company Sector

(US$ Millions) Financial Services-Consumer/Commercial

Sales 768 792 849 874 949

EBITDA Adjusted 342 348 369 410 467

Depreciation & Amortization (6.20) (5.50) (7.64) (7.84) (8.21) Company Description EBIT Adjusted 336 343 362 402 459

Net Interest & Other Income 1.10 (3.70) 0 0 0 Plus500 operates proprietary trading platforms, servicing

Tax Expense / Benefit (64.1) (57.6) (83.2) (92.4) (106) both retail and institutional customers. The company

Net Income (Adjusted) 273 281 279 309 354 primarily offers Contracts for Difference (CFDs), as well as

Average Fully Diluted Shares Outstanding 79.2 74.3 71.3 68.8 66.0 share dealing and futures trading. Plus500 has entered

Key Cash Flow Statement Data Prediction Markets through its role as the exclusive clearing

Net Income (Reported) 273 281 279 309 354 partner for FanDuel Predicts and by offering Kalshi event

Depreciation & Amortization 6.20 5.50 7.64 7.84 8.21 contracts on its own US Futures platform.

Change in Working Capital (10.6) (21.5) 23.2 0 0

Deferred Taxation Charge 0 0 0 0 0

Other CFO 72.8 19.4 (40.5) 3.03 9.00

Cash Flow from Operations 342 285 269 320 371 Investment Rationale

Capital Expenditure (4.80) (4.60) (7.64) (7.84) (8.21) We have a Buy rating on Plus500. High return on invested

(Acquisition) / Disposal of Investments 0 0 (20.0) 0 0 capital (ROIC) and free cash flow conversion over 2026-28E

Other CFI 0 0 0 0 0 underpin our expectations for c$1.0bn of capital returns by

Cash Flow from Investing (4.80) (4.60) (27.6) (7.84) (8.21)

2028E. We note the company has consistently faced

Share Issue / (Repurchase) 0 0 0 0 0