Freetrade, a British stock trading app, achieved breakeven earlier this year, a significant milestone for the company. The move into profitability comes after incurring full-year losses in 2023. Adjusted earnings before interest, tax, depreciation, and amortization (EBITDA) reached £100,000 ($124,863) in the first quarter of 2024, as per unaudited financial statements shared with CNBC. Despite this positive development, Freetrade reported a loss of £8.3 million in 2023, a significant improvement from the £28.8 million loss in the previous year.
In the first quarter of 2024, Freetrade’s preliminary revenue stood at £6.7 million, showcasing the company’s continued growth trajectory. Revenues for the previous year climbed to £21.6 million, marking a 45% increase from 2022. CEO and founder of Freetrade, Adam Dodds, emphasized the resilience of the company in defying challenging market conditions to achieve healthy growth in 2023. The reduction in losses and the focus on profitability will be reassuring for Freetrade’s crowdfunding investors who have been eagerly awaiting updates on the company’s financial performance.
Freetrade’s valuation experienced a notable decline, dropping by 65% to £225 million ($280.3 million) from £650 million in 2023 during its latest equity crowdfunding round on Crowdcube. The company attributed this decrease to a “different market environment” characterized by higher interest rates and inflation. Despite this setback, Freetrade saw net inflows totaling £130 million in the first quarter, reflecting increasing retail investor activity. Assets under administration reached £1.8 billion, indicating the growing popularity of the platform among investors.
The stock trading industry remains competitive, with players like Freetrade vying for market share against established platforms such as Robinhood. Robinhood recently relaunched in the U.K. in a bid to expand its presence in the European market. Dodds, however, remains optimistic about Freetrade’s prospects, emphasizing the importance of choice and competition to benefit retail customers. He outlined Freetrade’s commitment to delivering a comprehensive range of tax-wrappers and features expected by local retail investors.
Looking ahead to the rest of 2024, Freetrade has ambitious plans for major product developments to support its next phase of growth. The company is preparing to roll out its web platform, a move aimed at enhancing user experience and expanding its customer base. Freetrade’s performance in the first quarter was driven by higher trading volumes and increased foreign exchange income. The surge in retail investor participation, fueled by speculation around central bank rates and a rally in crypto prices, has further boosted Freetrade’s growth trajectory.
Freetrade’s journey towards profitability has been marked by resilience, strategic decision-making, and a focus on customer-centric growth. Despite facing challenges in the market environment, the company has successfully navigated towards breakeven and is poised for continued expansion in the coming months. With a commitment to innovation and customer satisfaction, Freetrade is well-positioned to capitalize on the opportunities presented by the evolving financial landscape.