Company: FRHC
Filing Date: 2025-08-08
Form Type: 10-Q
Source: 0000924805-25-000031
Chunk: 253

Company: Freedom Holding Corp.
Filing Date: 2025-08-08
Form: 10-Q
Item: Part I, Item 8
Chunk 253
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 in headcount, a $1.1 million increase in fee and commission expense due to commission paid to insurance agents. These increases were partially offset by the effects of a $3.1 million decrease in general and administrative expense due to decreased expenses for charity, a $1.3 million decrease in interest expense due to repurchase agreement obligations as a result of changes in securities portfolio, and a $0.1 million decrease in this segment's advertising and sponsorship expense.

Other Segment

•In the three months ended June 30, 2025, the increase in our Other segment's total expenses, net was driven by an increase in payroll and bonuses, cost of sales, interest expense, advertising and sponsorship expense, professional services and general and administrative expense. There was a $12.2 million increase in payroll and bonuses and $4.2 million in general and administrative expense in our Other segment which was mostly attributable to the overall growth of our operations as well as the addition of new subsidiaries. Cost of sales increased by $9.6 million due to a higher sales volume, which reflects our expansion into the telecommunications sector as well as increased customer activity and order volume at Arbuz. Interest expense increased by $8.1 million, mainly attributable to an increase in interest expense from the debt securities issued by Freedom SPC. Additionally, our advertising and sponsorship expense increased by $6.5 million due to expanded marketing expenditures to third party contractors at Freedom Advertising and Aviata and several sponsorship contributions made through our subsidiaries. The most significant sponsorships during the period were directed to the State Fund "Astana-20" in the amount of $3.4 million and the Junior Football League of Kazakhstan in the amount of $2.5 million, reflecting the Company’s continued support of socially significant initiatives.

LIQUIDITY AND CAPITAL RESOURCES

During the periods covered in this quarterly report, our operations were primarily funded through a combination of existing cash on hand, cash generated from operations, returns generated from our proprietary trading and proceeds from the sale of bonds and other borrowings.

We regularly monitor and manage our leverage and liquidity risk through various committees and processes we have established to maintain compliance with net capital and capital adequacy requirements imposed on securities brokerages, insurance companies and banks in jurisdictions where we do business. We assess our leverage and liquidity risk based on considerations and assumptions of market factors, as well as other factors, including the amount of available liquid capital (i.e., the amount of cash and cash equivalents not invested in our operating business). While we