Company: FRHC
Filing Date: 2025-07-29
Form Type: ARS
Source: 0000924805-25-000027
Chunk: 127

Company: Freedom Holding Corp.
Filing Date: 2025-07-29
Form: ARS
Chunk 127
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 our expansion into the telecommunications sector through the acquisition of SilkNetCom and increased customer activity and order volume at Arbuz. These increases were partially offset by a $12.8 million decrease in fee and commission income attributable to a decrease in Paybox's transaction volumes due to the cessation of operation of a counterparty that contributed significantly in the past to its transaction volume. The total expenses associated with our segments are summarized in the following table: Table of Contents 79

Year ended March 31, 2025 2024 Amount Change % Change Brokerage $ 340,721 $ 273,040 $ 67,681 25 % Insurance 660,914 302,128 358,786 119 % Banking 600,892 489,140 111,752 23 % Other 335,054 166,673 168,381 101 % Total expense, net $ 1,937,581 $ 1,230,981 $ 706,600 57 % For fiscal 2025, total expenses, net increased across each of our business segments compared to fiscal 2024. Below is a discussion of changes in expenses for each of our segments in fiscal 2025 versus 2024: Brokerage Segment • In fiscal 2025, the total expenses, net, increased in our Brokerage segment, primarily driven by higher payroll and bonus expenses, which increased by $27.3 million, reflecting our continued efforts to attract and retain top talent. Advertising and sponsorship expenses also increased by $25.6 million, as we intensified marketing activities to expand our customer base. Additionally, stock-based compensation increased by $16.2 million, which was driven by a higher volume of equity awards granted to employees and management, and fee and commission expenses increased by $4.5 million, due to higher customer activity during the period, further contributing to the overall increase. These rises in expenses were partially offset by a decrease in interest expense, mainly related to lower interest paid on securities repurchase agreements, as well as a reduction in general and administrative expenses. Insurance Segment • In fiscal 2025, total expenses, net in our Insurance segment increased mainly due to a $181.2 million increase in fee and commission expense from agency fee, $158.5 million increase in insurance claims incurred, net of reinsurance due to the increase in insurance portfolio of compulsory motor third-party liability (MTPL) class, $13.6 million increase in payroll and bonuses expense due to the increase in headcount and bonuses