Good numbers, increase in guidance, modest management…

Swissquote released this morning its numbers for H1 21. These are in line with Swissquote’s profit positive warning announced in mid-June. Revenues and pre-tax profit are well above the H1 20 level. These are in line with our expectations and we will adjust (upwards) our EPS for FY2021 in line with Swissquote’s new guidance. Guidance is rather conservative on the back of the uncertainty in revenues from crypto-currencies but management expects a susbtantial contribution from this asset class going into 2022 and later.

Revenues at CHF266m were 65% higher yoy and pre-tax profit at CHF130m was 130% higher vs H1 20. As we suspected at the time of the June positive profit warning, crypto trading revenues were the biggest contributor to that beat with revenues of CHF63m vs CHF5m in H1 20. Swissquote has also seen a sharp increase in accounts opening (about 49,500 new accounts in H1 21) leading to net new money of CHF4.9bn for H1 21.

Swissquote has simply reached its target for 2024 three years in advance. As a reminder, the Swiss fintech’s targets for 2024 were CHF500m in revenues, CHF200m pre-tax profit and CHF55bn assets under custody with CHF5bn net new money per year (90bp margin on assets therefore). The sustainability of these numbers going into 2022 and later will therefore be key to the company’s performance.

The numbers published this morning were expected following the June positive profit warning. The main expectation was about the FY2021 guidance. Management expects for FY2021 CHF465m in revenues (vs CHF365m previously) and a pre-tax profit of CHF210m (vs CHF130m previously).

This represents revenues of CHF200m for H2 21 and a pre-tax profit of CHF75m below H1 21 numbers. From our understanding (from the call with analysts), this is rather conservative and the actual numbers should be higher in the end. The guidance looks to be taking into account quite a low level of revenues from crypto trading (July saw revenues of only CHF3m for instance).

Management was a bit more evasive regarding the new 2024 guidance. A new guidance for 2025 will be posted during the next annual results but management is confident Swissquote will post growth for 2022 despite the very strong numbers in 2021. There is indeed still an important backlog of account opening requests and the trading of cryptos should on average increase in the mid-long term.
On top of this, the traditional engines of growth, which are B2B growth and international growth, will add more revenues to the top line.
The pre-tax margin is expected in the long run at about 40% (the 50% level for H1 21 was an exceptional one).

We will increase our numbers for FY2021 in line with guidance. We are also confident in increasing our numbers for FY2022 and FY2023 in line with management’s cautious but optimistic tone for now.

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