Company: FRHC
Filing Date: 2025-02-07
Form Type: 10-Q
Source: 0000924805-25-000002
Chunk: 150

Company: Freedom Holding Corp.
Filing Date: 2025-02-07
Form: 10-Q
Item: Part I, Item 1
Chunk 150
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, 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. The increases of $1.6 million in depreciation and amortization expense and $4.5 million in rent expense were driven by the addition of new subsidiaries between the two periods and the overall growth of our operations.

Provision for allowance for expected credit losses

We recognized allowance for credit losses in the amount of  $39.3 million for the nine months ended December 31, 2024, as compared to allowance for credit losses of  $15.5 million for the nine months ended December 31, 2023. The increase between the two periods is primarily attributable to increased provisions for uncollateralized bank customer loans and right of claim for purchased retail loans, driven by a change of estimate for forward-looking information as a result of currency depreciation occurred prior reporting date.

Income tax expense

We had income before income tax of $268.4 million and $330.9 million for the nine months ended December 31, 2024, and December 31, 2023, respectively. Income tax expense for the nine months ended December 31, 2024, and December 31, 2023 was $41.5 million and $51.4 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 nine months ended December 31, 2024, was 15.5%, the same as during the nine months December 31, 2023. Although our effective tax rate did not change, there were 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 nine months ended December 31, 2024, we had net income of $226.9 million compared to $279.5 million for the nine months ended December 31, 2023, a decrease of 19%. Our Brokerage, Banking, Insurance and Other segments contributed net income of $257.6 million, net income of $51.6 million, net income of $23.4 million and net loss of $105.7 million to our total net income for the nine months ended December 31, 2024, respectively. 

Non-cont