Swissquote shares up on strong H1 results

Investing.com — Swissquote (SIX:) stock rose on Tuesday following its H1 2024 results.

Swissquote rose 2.6% to CHF 289.20 at 5:34 AM (0934 GMT).

The online financial and trading services reported an operating profit of CHF 170 million, reflecting a substantial increase of 30% compared to H2 2023 and 36% year-over-year (YoY). 

This exceeded consensus estimates by 4%, primarily due to lower-than-expected costs, while net revenues aligned with market expectations.

Swissquote’s operating income reached CHF 317 million, marking a 19% increase both half-on-half (HoH) and YoY, in line with consensus expectations. 

The company recorded a 7% beat in net fee and commission income, reporting CHF 122 million versus a consensus estimate of CHF 114 million. 

However, these gains “was offset by misses in net interest income (6% miss vs. cons) and net trading income (2% miss vs. cons),” as per analysts at UBS Global Research. 

“Operating expenses of CHF147m were 11% HoH, 6% YoY and 4% below consensus on lower-than-expected payroll expense, marketing expense and other operating expenses,” the analysts said. 

As a result, Swissquote’s operating profit margin improved significantly, reaching 53.5%, up 650 basis points YoY and 210 basis points above consensus estimates.

Swissquote’s client assets in H1 2024 stood at CHF 68.0 billion, exceeding consensus estimates by 6% (CHF 64.1 billion). 

The majority of this beat (90%) was driven by positive market impacts. Additionally, net new money inflows of CHF 3.8 billion surpassed expectations (CHF 3.5 billion), further boosting client assets.

However, net interest income was a weak spot in the report, coming in 6% below consensus expectations. This shortfall was attributed to lower-than-anticipated client cash deposits, which amounted to CHF 9.8 billion.

Despite this, customer accounts grew by 36,000 in H1 2024, closing at 611,000, slightly above the consensus estimate of 607,000. Swissquote also saw an increase in total headcount, which reached 1,177, up from 1,134 at the end of December 2023.

Additionally, Swissquote raised its guidance for FY2024, initially set out in March 2023. The company now anticipates net revenue of approximately CHF 615 million, up from the previous guidance of CHF 595 million. 

Pre-tax profit is also expected to increase to around CHF 320 million, compared to the prior guidance of CHF 300 million. Despite these upgrades, the new guidance is still 1% below consensus estimates.

The company did not provide any updates to its FY2025 guidance, which remains at less than CHF 700 million in revenue, less than CHF 350 million in costs, and less than CHF 350 million in pre-tax profit.