Company: FRHC
Filing Date: 2025-08-08
Form Type: 10-Q
Source: 0000924805-25-000031
Chunk: 248

Company: Freedom Holding Corp.
Filing Date: 2025-08-08
Form: 10-Q
Item: Part I, Item 8
Chunk 248
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 support of socially significant initiatives. This increase was partially offset by a $3.3 million decrease in advertising expenditures by Freedom EU, primarily due to the seasonal nature and timing of marketing campaigns. The overall growth in advertising and sponsorship expenses is consistent with the Company’s broader strategy to strengthen brand recognition, expand market presence, and support impactful community-oriented projects.

General and administrative expense

General and administrative expense for the three months ended June 30, 2025, was $42.0 million, representing an increase of $1.6 million or 4% compared to general and administrative expense of $40.4 million for the three months ended June 30, 2024. The main factors contributing to the increase were increases in business trip expenses, driven by higher travel activity in connection with expanded operational and strategic initiatives across several regions.

Provision for allowance for expected credit losses

We recognized provision for allowance for credit losses in the amount of $4.8 million for the three months ended June 30, 2025, as compared to recovery of provision for allowance for credit losses of $1.8 million for the three months ended June 30, 2024. The increase between the two periods is primarily attributable to increased provisions for right of claim for purchased loans, uncollateralized bank customer loans, mortgage loans, collateralized bank customer loans and other loans. The increase in the provision during the period was primarily attributable to a deterioration in macroeconomic conditions and other 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