Company: FRHC
Filing Date: 2025-11-07
Form Type: 10-Q
Source: 0000924805-25-000041
Chunk: 37

Company: Freedom Holding Corp.
Filing Date: 2025-11-07
Form: 10-Q
Item: Part I, Item 2
Chunk 37
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 million and $170.1 million for the six months ended September 30, 2025 , and September 30, 2024, respectively. Income tax expense for the six months ended September 30, 2025, and September 30, 2024  was $31.9 million and $21.3 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. Our effective tax rate during the six months ended September 30, 2025, increased to 31.6%, from  12.5% during the six months ended September 30, 2024. The main factor of an increase was the change in Kazakhstani tax legislation. The change has been enacted during July 2025 with the retrospective effect from calendar 2025. The key change affecting the Company’s tax position is the introduction of a 10% income tax on interest income and realized capital gains from Kazakhstani sovereign securities, which are now subject to taxation within a separate income category. Another reason of the increase in effective tax rate was, that increase occurred as a result of 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. In addition, during the six months ended September 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 six months ended September 30, 2025, we had net income of $69.1 million compared to $148.7 million for the six months ended September 30, 2024, a decrease of 54%. 

Foreign currency translation adjustments, net of tax 

Due to a 9% depreciation of the Kazakhstan tenge against the U.S. dollar during the six months ended  September 30, 2025, we realized a foreign currency translation loss of $107.3 million for the six months ended September 30, 2025 since most of our Group's companies use the Kazakhstan tenge as their functional currency, as compared to a foreign currency translation loss of $85.8 million for the six months ended September 30,