Company: FRHC
Filing Date: 2025-08-08
Form Type: 10-Q
Source: 0000924805-25-000031
Chunk: 24

Company: Freedom Holding Corp.
Filing Date: 2025-08-08
Form: 10-Q
Item: Part I, Item 2
Chunk 24
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 factors impacting the estimated probability of default in our loan portfolio, and the incorporation of revised forward-looking information.

Income tax expense

We had income before income tax of $40.5 million and $41.6 million for the three months ended June 30, 2025, and June 30, 2024, respectively. Income tax expense for  the three months ended June 30, 2025, and June 30, 2024 was $10.1 million and $7.3 million, respectively. While there have been a decrease in our income before income tax between the two quarters, the increase in the income tax expense was primarily due to the change in our effective tax rate. Such rate during the three months ended June 30, 2025, increased to 25.0%, from 17.6% during the three months ended June 30, 2024, as a result of changes in the composition of the revenues we realized from our operating activities, the tax treatment of those revenues in 

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the various jurisdictions where our subsidiaries operate, and the incremental U.S. GILTI tax. In addition, during the three months ended June 30, 2025, we had accrued additional top-up tax resulted from Global Anti-Base Erosion Model Rules (Pillar Two), which have been enacted in certain jurisdictions where our subsidiaries operate.

Net income

As a result of the foregoing factors, for the three months ended June 30, 2025, we had net income of $30.4 million compared to $34.3 million for the three months ended June 30, 2024, a decrease of 11%. 

Foreign currency translation adjustments, net of tax 

Due to a 3.3% depreciation of the Kazakhstan tenge against the U.S. dollar during the three months ended June 30, 2025, we realized a foreign currency translation loss of $41.8 million for the three months ended June 30, 2025 since most of our companies use the Kazakhstan tenge as their functional currency, as compared to a foreign currency translation loss of $65.8 million for the three months ended June 30, 2024. 

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BUSINESS SEGMENT OPERATIONS

We report our results of operations through the following four business segments: Brokerage, Banking, Insurance, and Other. These operating segments are based on how our CODM makes decisions about allocating resources and assessing performance.

Comparison of the Three-month Periods