British stock trading app Freetrade made a significant milestone earlier this year by achieving breakeven for the first time in its history. This accomplishment comes after the company experienced full-year losses in 2023. According to unaudited financial statements shared with CNBC, Freetrade reported adjusted earnings before interest, tax, depreciation, and amortization (EBITDA) of £100,000 ($124,863) in the first quarter of 2024. Additionally, the company’s preliminary revenue for the quarter reached £6.7 million. This positive financial performance is a stark contrast to the £8.3 million loss incurred in 2023, which was significantly lower than the £28.8 million loss reported the previous year. In 2023, Freetrade’s revenues soared to £21.6 million, marking a 45% increase from 2022.
Adam Dodds, the CEO, and founder of Freetrade, expressed satisfaction with the company’s performance, stating, “We defied difficult market conditions and delivered healthy growth in 2023 while dramatically reducing losses from 2022.” The news of Freetrade reaching breakeven is likely to be well-received by the company’s crowdfunding investors, who have been eagerly awaiting updates on the company’s profitability. Freetrade recently experienced a significant drop in valuation by 65% to £225 million ($280.3 million) from £650 million in 2023 during its latest equity crowdfunding round on Crowdcube. The company attributed this decline to a challenging market environment characterized by higher interest rates and inflation. Despite these challenges, Freetrade saw net inflows totaling £130 million in the first quarter, driven by the increased activity of retail investors in response to resurgent markets. The company also reported assets under administration reaching £1.8 billion.
Looking ahead to the rest of 2024, Freetrade has outlined major product developments aimed at supporting its next phase of growth. Plans are underway to launch a web platform, which is expected to enhance the overall user experience and attract new customers. Dodds emphasized that the company’s focus remains on achieving sustained profitability and providing a diverse range of offerings to meet the needs of retail investors. Despite facing intense competition in the U.K. market, especially with the re-entry of Robinhood, a major U.S.-based stock trading platform, Freetrade remains optimistic about its prospects. Dodds indicated that the presence of multiple players in the market benefits retail customers by offering a variety of tax-wrappers and features that cater to their preferences.
Freetrade attributed its strong performance in the first quarter to higher trading volumes and increased foreign exchange income. The company noted a surge in retail investor participation since October 2023, driven by speculation surrounding potential rate cuts by the U.S. Federal Reserve and other central banks. Additionally, a rally in crypto prices provided a boost to Freetrade’s performance, despite the platform not offering crypto trading. Retail investors showed increased interest in crypto-related stocks such as Coinbase, MicroStrategy, and Marathon Digital, contributing to Freetrade’s overall growth.
Freetrade’s achievement of breakeven and positive financial performance in the first quarter of 2024 marks a significant milestone for the company. With a clear roadmap for future growth and product development, Freetrade is well-positioned to capitalize on emerging market opportunities and deliver value to its investors and customers.