Freedom Holding Corp.

Company Overview

Business Model: Freedom Holding Corp. operates as a diversified financial services holding company, providing securities brokerage, securities dealing, market making, investment research, investment counseling, retail and commercial banking, and insurance products. The Company's core mission is to democratize access to financial markets for global customers, primarily through a world-class digital infrastructure. This includes an integrated financial technology ecosystem, anchored by the Freedom SuperApp for everyday finance and Tradernet for multi-venue trading, which aims to offer seamless services across various countries. Complementary ancillary businesses include payment and information processing, entertainment and travel ticketing, e-commerce, and developing telecommunications and media businesses in Kazakhstan.

Market Position: The Company's main market of operations is Kazakhstan, where its Freedom Bank Kazakhstan JSC subsidiary is ranked among the top eight institutions by total assets as of April 1, 2025, serving over 2.5 million customers. Freedom Life JSC holds a 25% market share in the Kazakhstan life insurance market and approximately 74% in the voluntary life-related accident insurance market based on gross written premiums. Freedom Insurance JSC holds approximately 6% of the total Kazakhstan general insurance market by total assets and approximately 7% of the car owners liability insurance market by insurance premiums received. The Company differentiates itself through its digital-first approach, integrated ecosystem, and access to international capital markets, including U.S. and European exchanges.

Recent Strategic Developments:

• Digital Fintech Ecosystem Expansion: Launched the Freedom SuperApp in April 2024, an all-in-one financial platform integrating banking, payments, and investment services.
• Telecommunications and Media Entry: Initiated expansion into the Kazakhstan telecommunications market in 2024 through its subsidiary, Freedom Telecom, involving acquisitions of local telecommunications companies. Established Freedom Media LLP to build a regional streaming platform for Kazakhstan and Central Asia.
• Acquisitions: Acquired SilkNetCom LLP in September 2024 and Elitecom in October 2024, both telecommunications companies, to support the telecommunications business expansion.
• Divestiture: Completed the divestiture of its Russian business units in February 2023.
• Index Inclusion: Selected for inclusion in the Russell 3000® Index, effective June 27, 2025, which management believes may enhance visibility and trading liquidity.

Geographic Footprint: The Company's operating subsidiaries are located in Kazakhstan, Cyprus, the United States, the United Kingdom, Armenia, the United Arab Emirates, Uzbekistan, Kyrgyzstan, Tajikistan, Azerbaijan, and Turkey. It also maintains representative offices in Austria, Belgium, Bulgaria, France, Germany, Greece, Italy, Lithuania, the Netherlands, Poland, and Spain. Kazakhstan represents the primary market, contributing approximately 85% of total revenue and most of the total net income for fiscal 2025, and approximately 63% of total assets as of March 31, 2025.

Financial Performance

Revenue Analysis

Profitability Metrics:

• Operating Margin (Income Before Income Tax / Total Revenue, Net): 5.5% (FY2025) vs. 26.1% (FY2024)
• Net Margin (Net Income / Total Revenue, Net): 4.1% (FY2025) vs. 22.5% (FY2024)

Investment in Growth:

• R&D Expenditure: Not explicitly detailed as a separate line item in the financial statements.
• Capital Expenditures: $95,328 thousand (FY2025) vs. $43,751 thousand (FY2024) for fixed and intangible assets.
• Strategic Investments:
  • Acquisition of SilkNetCom LLP for $23,880 thousand (FY2025).
  • Acquisition of Elitecom for $2,811 thousand (FY2025).
  • Construction of Elysium Tower in Limassol, Cyprus, with $2,400 thousand incurred in FY2025 (total remaining balance of $3,800 thousand expected in calendar 2025).
  • Capital expenditures for telecommunications network infrastructure (Freedom Telecom) of $37,700 thousand (FY2025).
  • Capital expenditures for Freedom Media LLP of $9,200 thousand (FY2025).

Business Segment Analysis

Brokerage

Financial Performance:

• Revenue: $717,349 thousand (+15% YoY)
• Income Before Income Tax: $376,628 thousand
• Operating Margin (Income Before Income Tax / Revenue): 52.5%
• Key Growth Drivers: Increase in retail brokerage customers from 530,000 in FY2024 to 683,000 in FY2025, leading to higher fee and commission income. Increased usage of margin loans by customers. Product Portfolio:
• Securities brokerage services (exchange-traded and over-the-counter corporate equity and debt securities, money market instruments, derivatives, government bonds, mutual funds).
• Margin lending.
• Investment banking (underwriting, market making, M&A, capital markets advisory).
• Investment consulting and education. Market Dynamics:
• Operates in Kazakhstan, Europe, Armenia, United States, Uzbekistan, UAE, and Kyrgyzstan.
• Key competitors in Kazakhstan: Halyk Finance, BCC Invest, First Heartland Securities.
• Key competitors in Europe: eToro, Interactive Brokers.
• Key competitors in the United States: Needham & Company, Craig-Hallum Capital Group, Oppenheimer & Co.
• Differentiates through global capital markets access, digital infrastructure, curated research, access to U.S. pre-IPO markets, and cross-border capital raising capabilities.

Banking

Financial Performance:

• Revenue: $506,148 thousand (-18% YoY)
• Loss Before Income Tax: $(94,744) thousand
• Operating Margin (Loss Before Income Tax / Revenue): -18.7%
• Key Growth Drivers: Growth of Freedom Bank Kazakhstan JSC's customer loan portfolio. Significant increase in bank customers from 904,000 in FY2024 to 2,515,000 in FY2025.
• Key Performance Challenges: Decrease in net gain on trading securities due to temporary price decreases in governmental securities. Decrease in net gain on foreign exchange operations due to Kazakhstan tenge depreciation. Decrease in fee and commission income due to cashback-based loyalty program. Product Portfolio:
• Deposits, multi-currency payment cards, consumer and SME loans, payment and acquiring solutions.
• Digital mortgage, digital auto loan, SME digital loan.
• SuperCard (flagship multi-currency debit), Freepay Card (revolving and installment credit), Invest Card (brokerage-linked), Power Card (parental-control prepaid), Premium Deposit Card (launch Q2 2025). Market Dynamics:
• Operates in Kazakhstan and Tajikistan.
• Freedom Bank Kazakhstan JSC is among the top eight institutions in Kazakhstan by total assets.
• Key competitors: Halyk Bank, Kaspi Bank, Bank CenterCredit.
• Differentiates through investment-driven banking model, digital-first service delivery, and synergy with brokerage operations.

Insurance

Financial Performance:

• Revenue: $683,026 thousand (+98% YoY)
• Income Before Income Tax: $22,112 thousand
• Operating Margin (Income Before Income Tax / Revenue): 3.2%
• Key Growth Drivers: Significant increase in insurance underwriting income (+134% YoY) driven by expansion in pension annuity and accident insurance classes. Increase in customers from 534,000 in FY2024 to 1,170,000 in FY2025. Product Portfolio:
• Freedom Life JSC: Life insurance, health insurance, annuity insurance, accident insurance, obligatory worker emergency insurance, travel insurance, and reinsurance.
• Freedom Insurance JSC: General insurance products in property (including automobile), casualty, civil liability, personal insurance, and reinsurance. Market Dynamics:
• Operates in Kazakhstan.
• Freedom Life JSC holds 25% market share in Kazakhstan life insurance and 74% in voluntary life-related accident insurance.
• Freedom Insurance JSC holds 6% of total Kazakhstan general insurance market by total assets and 7% of car owners liability insurance market by premiums.
• Key life insurance competitors: Halyk-Life, Nomad Life, European Insurance Company (EIC).
• Key non-life insurance competitors: Eurasia Insurance Company, Kommesk-Omir, Victoria Insurance Company.
• Differentiates through digital-first distribution, investment-linked insurance products, and integration with banking and brokerage platforms.

Other

Financial Performance:

• Revenue: $144,004 thousand (+72% YoY)
• Loss Before Income Tax: $(191,050) thousand
• Operating Margin (Loss Before Income Tax / Revenue): -132.7%
• Key Growth Drivers: Increase in net gain on foreign exchange operations, other income, and sales of goods and services, reflecting expansion into telecommunications (SilkNetCom acquisition) and increased customer activity at Arbuz.
• Key Performance Challenges: Decrease in fee and commission income due to reduced transaction volumes from a counterparty cessation. Anticipated losses in new telecommunications and media businesses during developmental stages. Product Portfolio:
• Payment processing services (Freedom Pay).
• Entertainment and travel ticketing services (Ticketon, Aviata, Internet-Tourism).
• Online retail trade and e-commerce (Arbuz).
• Telecommunications services (Freedom Telecom, SilkNetCom, Elitecom).
• Media and entertainment services (Freedom Media LLP). Market Dynamics:
• Operates primarily in Kazakhstan.
• New telecommunications and media businesses are in developmental stages and are expected to incur losses initially.
• Telecommunications competitors: Kazakhtelecom, Tele2/Altel, Beeline Kazakhstan.
• Media competitors: Domestic and international media content providers.

Capital Allocation Strategy

Shareholder Returns:

• Share Repurchases: No equity securities repurchased during the fourth quarter of fiscal 2025.
• Dividend Payments: No cash dividends declared or paid on common stock during fiscal 2025 or fiscal 2024. The Company intends to retain future earnings for debt repayment, business development, working capital, and general corporate purposes.
• Dividend Yield: Not applicable due to no dividend payments.
• Future Capital Return Commitments: No specific future capital return commitments disclosed.

Balance Sheet Position:

• Cash and Equivalents: $837,302 thousand (as of March 31, 2025)
• Total Debt: $469,551 thousand (Debt securities issued as of March 31, 2025)
• Net Cash Position: $(38,249) thousand (Cash and cash equivalents minus Debt securities issued)
• Credit Rating:
  • Freedom KZ, Freedom Europe, Freedom Global, Freedom Bank Kazakhstan JSC: Long-term issuer credit rating of "B+" and short-term issuer credit rating of "B" from S&P Global Ratings.
  • Freedom KZ, Freedom Bank Kazakhstan JSC: "kzBBB" on the Kazakhstan national scale.
  • Freedom Holding Corp.: "B-" long-term issuer credit rating.
  • Freedom Life JSC: "BB" long-term issuer credit and financial strength ratings (international scale) with a "Positive" outlook, and "kzAA-" long-term issuer credit rating (Kazakhstan national scale) from S&P Global Ratings.
  • Freedom Insurance JSC: "BB-" international scale rating and "kzA-" Kazakhstan national scale rating from S&P Global Ratings with a "Stable" outlook.
• Debt Maturity Profile:
  • Freedom SPC bonds due 2026: $64,801 thousand principal, 5.5% annual interest, mature October 2026.
  • Freedom SPC bonds due 2028: $200,305 thousand principal, 12% annual interest for first two years, then EFFR + 6.5%, mature December 2028.
  • Freedom SPC bonds due 2026 (additional issuance): $201,311 thousand principal, 10.5% annual interest, mature September 2026.
  • SilkNetCom loan: $13,815 thousand outstanding, 10.0% fixed annual interest until April 2027, then 15.71%, matures June 2031.
  • JSC "Agrarian Credit Corporation" loan: $10,903 thousand outstanding, 1.50% annual interest, matures March 2026.

Cash Flow Generation:

• Operating Cash Flow: $1,681,058 thousand (FY2025) vs. $(1,064,362) thousand (FY2024).
• Free Cash Flow: Not explicitly detailed in the filing.
• Cash Conversion Metrics: Not explicitly detailed in the filing.

Operational Excellence

Production & Service Model: The Company's operational philosophy is centered on a proprietary cloud stack, integrating all services (payments, banking, insurance, lifestyle commerce, and connectivity) as usable modules within a unified architecture. This approach aims to enlarge the network of services, deepen customer engagement through richer data insights, and unify the customer experience across geographies. The Company leverages big data analytics and predictive AI to understand customer behavior, tailor products, and enhance satisfaction and retention. Key processes like onboarding, credit decisioning, and account servicing run on cloud infrastructure with biometric ID and links to government and credit-bureau databases.

Supply Chain Architecture: Key Suppliers & Partners:

• Identity Verification Service Provider: A leading third-party provider for KYC/AML compliance suite, integrated with globally recognized databases for sanctions and high-risk individuals/entities (Dow Jones, World-Check, national registries). Used by Freedom EU, Freedom AR, Freedom KZ, Freedom Global, and Freedom Bank Kazakhstan JSC.
• Payment Systems: Visa and Mastercard for card and wallet transactions.
• Government Services: Integration with state registries for property details, income records, and tax data to streamline digital mortgage and SME loan applications.
• Dealerships: Over 300 partner dealerships for digital auto loans.
• Third-Party Broker-Dealers and Clearing Firms: Used for executing U.S. market trades, as Prime Executions, Inc. is not a licensed clearing firm. Facility Network:
• Manufacturing: Not applicable (financial services).
• Research & Development: Technology Leadership Centre, experts from which periodically review cybersecurity risk management processes. AI labs and fintech research centers at SDU University in Almaty (supported by Freedom Holding Corp.).
• Distribution: 202 offices globally (49 brokerage, 56 insurance, 30 banking, 67 other financial/non-financial services). 29 service centers across Kazakhstan (plus a branch in Tajikistan) for banking, with the majority of new business originating through mobile and web channels.
• Data Centers: Centralized data centers and cloud services for IT infrastructure and applications.

Operational Metrics:

• Monthly Active Users (MAU) for Freedom SuperApp: 1.02 million (March 2025), up 12% YoY.
• Daily Active Users (DAU) for Freedom SuperApp: Averaged 183,000 (March 2025).
• Average time from application to disbursement for digital mortgage: Under 24 hours (vs. several weeks for legacy process).
• Manual compliance processing times reduced from up to two days to approximately eight minutes using big-data platform.

Market Access & Customer Relationships

Go-to-Market Strategy: Distribution Channels:

• Direct Sales: Retail brokerage services offered through online tools and at retail locations. Enterprise sales force for institutional accounts.
• Channel Partners: Brokerage services marketed through telemarketing, training seminars, investment conferences, print and online advertising (social media, mobile app, search engine optimization).
• Digital Platforms: Freedom SuperApp (banking, payments, investment, lifestyle commerce), Tradernet (online trading platform). Customer Portfolio:
• Total Retail Brokerage Customer Accounts: 683,000 (as of March 31, 2025), with approximately 151,000 active accounts.
• Total Bank Customers: 2,515,000 (as of March 31, 2025).
• Total Insurance Customers: 1,170,000 (as of March 31, 2025).
• Enterprise Customers: Institutional accounts for research sales and trading, investment banking services (M&A, underwriting, capital markets advisory).
• Strategic Partnerships: Collaborations with over 300 partner dealerships for digital auto loans.
• Customer Concentration: A significant portion of fee and commission income (56% in FY2025) and interest income from margin loans (15% in FY2025) is derived from one institutional market maker customer of Freedom Global. Aggregate revenue from major customers amounted to 15% of total revenue in FY2025. Geographic Revenue Distribution:
• Kazakhstan: 85% of total revenue (FY2025).
• Armenia: $181,698 thousand (FY2025).
• Cyprus: $69,490 thousand (FY2025).
• United States: $43,951 thousand (FY2025).
• Growth Markets: Central Asia, the Caucasus, and other countries across Europe, Asia, and North America.

Competitive Intelligence

Market Structure & Dynamics

Industry Characteristics: The financial services and brokerage industries are highly competitive, characterized by rapid technological advancements, evolving regulatory frameworks, and increasing customer demand for integrated digital solutions and global market access. The Kazakhstan market, in particular, has seen growing interest in investment banking services due to commercial banks focusing on large or state-owned enterprises and restrictive commercial lending structures. Competitive Positioning Matrix:

Direct Competitors

Primary Competitors:

• Brokerage (Kazakhstan): Halyk Finance, BCC Invest, First Heartland Securities.
• Brokerage (Europe): eToro, Interactive Brokers.
• Brokerage (United States): Needham & Company, Craig-Hallum Capital Group, Oppenheimer & Co.
• Banking (Kazakhstan): Halyk Bank, Kaspi Bank, Bank CenterCredit.
• Life Insurance (Kazakhstan): Halyk-Life, Nomad Life, European Insurance Company (EIC).
• General Insurance (Kazakhstan): Eurasia Insurance Company, Kommesk-Omir, Victoria Insurance Company.
• Telecommunications (Kazakhstan): Kazakhtelecom, Tele2/Altel, Beeline Kazakhstan. Emerging Competitive Threats: New entrants, disruptive technologies, and alternative solutions in rapidly evolving digital and financial landscapes. Competitive Response Strategy: The Company focuses on continuous product development, leveraging customer feedback and market trends. It pursues selective acquisitions to enhance its platform and expand service offerings. The digital fintech ecosystem strategy aims to deepen presence in each market and increase overall value for customers.

Risk Assessment Framework

Strategic & Market Risks

Market Dynamics:

• Economic and Political Conditions: Operations are sensitive to conditions in regions where the Company operates (e.g., Kazakhstan, Europe, Asia, North America), including interest rates, foreign currency exchange rates, and global financial market fluctuations.
• Technology Disruption: Rapid technological change, evolving trading systems, and the need to continuously enhance products and platforms (e.g., Tradernet) to remain competitive.
• Customer Concentration: Significant portion of fee and commission income and interest income from margin loans derived from one institutional market maker customer, and aggregate revenue from major customers (15% of total revenue in FY2025).
• New Business Area Losses: Expected initial losses in new telecommunications and media businesses.
• Credit Exposure: Significant losses possible from credit exposure in loans, margin lending, derivatives, debt securities, and reverse repurchase agreements, exacerbated by macroeconomic conditions and property value changes.
• Investment Losses: Significant risk of capital loss from proprietary investments, particularly concentrated in Kazakhstan sovereign and quasi-sovereign debt, and reliance on leverage.
• Interest Rate Volatility: Fluctuations in interest rates, especially in Kazakhstan, can impact earnings, asset values, and borrowing costs.
• Foreign Currency Fluctuation: Exposure to movements in foreign currency exchange rates due to multi-country operations, particularly the Kazakhstan tenge against the U.S. dollar.
• Reputational Damage: Failure to address issues related to legal/regulatory compliance, money laundering, terrorist financing, sanctions, or related party transactions could harm reputation.

Operational & Execution Risks

Supply Chain Vulnerabilities:

• Third-Party Dependency: Reliance on third-party U.S.-registered securities broker-dealers and clearing firms for U.S. market access, and on third-party systems/service providers (e.g., internet service, co-location facilities).
• Geographic Concentration: Operations are highly concentrated in Kazakhstan, making the Company vulnerable to local political and social unrest (e.g., internet shutdowns in January 2022).
• Capacity Constraints: Inability of systems to accommodate increasing transaction volumes could constrain business expansion.
• IT System Failures: High dependence on information technology systems (e.g., Tradernet) and infrastructure; errors, failures, or disruptions could lead to financial loss, business disruption, and reputational damage.
• Cybersecurity Threats: Exposure to data breaches, cyber-attacks, viruses, and malicious code due to handling large volumes of sensitive data. Increased risks from widespread remote work.
• AI Technology Risks: Business, compliance, and reputational risks from incorporating AI, including potential for new vulnerabilities, regulatory oversight, litigation, and intellectual property disputes.
• Centralized Infrastructure Reliance: Consolidation of IT infrastructure into centralized data centers and cloud services increases exposure to larger-scale service disruptions and cyber-attacks.

Financial & Regulatory Risks

Market & Financial Risks:

• Liquidity Risk: Inability to meet obligations due to over-reliance on specific funding sources, credit rating changes, or market dislocations.
• Capital Raising: Need for additional capital for growth and acquisitions, with no assurance of availability on attractive terms.
• Credit Rating Reductions: Could adversely affect business, liquidity, and cost of funding.
• KASE Requirements Changes: Significant losses possible from changes in Kazakhstan Stock Exchange (KASE) requirements for discount coefficients on securities in repurchase transactions. Regulatory & Compliance Risks:
• Extensive Regulation: Subject to extensive government regulation, licensing, and oversight in multiple jurisdictions (securities, banking, insurance, payment services, telecom).
• Increased Regulatory Scrutiny: Financial services firms face increased scrutiny, leading to higher risk of financial liability and reputational harm.
• U.S. Public Company Obligations: Substantial regulatory reporting obligations as a U.S. public company listed on Nasdaq.
• Anti-Corruption Laws: Subject to U.S. Foreign Corrupt Practices Act (FCPA) and similar non-U.S. laws, with risks of penalties for non-compliance.
• Capital Adequacy & Liquidity: Failure to meet minimum capital and liquidity requirements could result in fines, operational suspension, or license revocation.
• Changing Regulatory Regimes: Differing and conflicting regulatory regimes in emerging markets, with potential for unpredictable changes and inconsistent enforcement.
• Anti-Money Laundering & Terrorist Financing: Risk of being used for illicit activities despite compliance measures, with potential for penalties and reputational damage.
• Securities Law Violations: Exposure to substantial potential liability under securities laws in underwriting business, particularly for smaller companies.
• Legal Proceedings: Subject to various claims and legal proceedings in the normal course of business, with potential for significant costs and reputational damage.

Geopolitical & External Risks

Geopolitical Exposure:

• Russia-Ukraine Conflict: Continued exposure to Russia through non-sanctioned Russian persons, risk of secondary sanctions on Kazakhstan's financial sector, and potential expansion of sanctions.
• Geographic Dependencies: Vulnerability to external shocks and fluctuations in the global economy, particularly in Kazakhstan due to its reliance on oil and gas and trade ties with Russia.
• Trade Relations: Changes in U.S. or other countries' trade policies (e.g., tariffs) could negatively impact financial markets, currency exchange rates, and economic conditions.
• Extraordinary Events: Business disruptions from pandemics, civil unrest, terrorist attacks, natural disasters, or infrastructure failures.

Innovation & Technology Leadership

Research & Development Focus: Core Technology Areas:

• Digital Fintech Ecosystem: Continuous development of an integrated ecosystem delivering multicurrency banking, payments, credit, brokerage, insurance, merchant acquiring, and selected lifestyle services through a single login and interface.
• Cloud Infrastructure: All key processes (onboarding, credit decisioning, account servicing) run on cloud infrastructure.
• Predictive AI and Big Data Analytics: Core to strategy for understanding customer behavior, tailoring products, adjusting credit limits, ranking cross-sell offers, and screening payments for fraud/sanctions.
• Open APIs: Freedom SuperApp modules built on a micro-services architecture with open APIs to over thirty government and commercial data sources.
• Telecommunications and Media: Developing new independent telecommunications operator (Freedom Telecom) and regional streaming platform (Freedom Media LLP) in Kazakhstan. Innovation Pipeline:
• Freedom SuperApp: Ongoing roll-out of high-impact digital products like the seven-currency SuperCard, one-tap digital mortgage, and Invest Card.
• Tradernet Platform: Advanced order routing system, robust data platform for real-time market data and analytics, back-office solutions for automated administrative processes.
• AI Integration: Evaluating and experimenting with machine learning and AI technologies to enhance products and processes, such as improving compliance checks. Intellectual Property Portfolio:
• Patent Strategy: Not explicitly detailed, but relies on trademark, copyright, related rights, and trade secret laws.
• Trademark Holdings: Approximately 14 registered trademarks in Armenia, 13 in Cyprus and its European subsidiaries, 12 in Kazakhstan, 10 in the United Kingdom, 7 in Turkey, 2 in Azerbaijan, and 1 in Kyrgyzstan.
• Licensing Programs: Not explicitly detailed.
• IP Litigation: Potential for third parties to allege infringement or challenge validity of IP rights.

Technology Partnerships:

• Government Services: Integration with government services to enrich datasets and streamline processes (e.g., pre-filled loan forms, collateral ownership confirmation).
• Academic Partnerships: Financial support for SDU University in Almaty to build a new center for advanced technologies, development, and research, featuring AI labs and fintech research centers.

Leadership & Governance

Executive Leadership Team

Leadership Continuity: The Company is dependent on its executive management team, particularly Timur Turlov, and its ability to hire and retain skilled personnel. No specific succession planning details are provided in this filing.

Board Composition: The Board of Directors has adopted insider trading policies and procedures. The Company qualifies as a "controlled company" under Nasdaq rules due to Timur Turlov's majority voting power, allowing it to elect not to comply with certain corporate governance standards (e.g., majority independent directors, independent nominating/compensation committees). The Company currently has a majority of independent directors on its board. Timur Turlov is prohibited from membership on the audit committee.

Human Capital Strategy

Workforce Composition:

• Total Employees: 8,764 (8,691 full-time, 73 part-time) as of March 31, 2025.
• Geographic Distribution: Central Asia - 8,166; Europe - 285; Middle East - 262; USA - 51.
• Skill Mix: Workforce is naturally ethnically diverse due to integrated multi-ethnic cultures in operating countries. Focus on attracting well-educated and experienced employees.

Talent Management: Acquisition & Retention:

• Hiring Strategy: Seeks talent through careful recruitment, using qualification requirements and skills maps, focusing on motivation, professionalism, and experience.
• Retention Metrics: Not explicitly detailed.
• Employee Value Proposition: Competitive pay, bonuses, paid time off, benefits (corporate communication, gym subsidies, banking/insurance product benefits), performance-based incentives, and recognition. Diversity & Development:
• Diversity Metrics: Workforce composition as of March 31, 2025: 4,212 women and 4,479 men.
• Development Programs: Employee development programs facilitating vertical and horizontal movement, cross-departmental projects, internal mentoring, and training programs. Regular core educational opportunities and advanced trainings.
• Culture & Engagement: Fosters a safe and positive work environment, healthy work-life balance through corporate events, holidays, team-building, and sports tournaments. Adheres to a Code of Ethics and Business Conduct.

Environmental & Social Impact

Environmental Commitments: Climate Strategy:

• Emissions Targets: Conducted an inventory of greenhouse gas emission sources (direct and indirect energy-related) for environmentally material subsidiaries in January 2025. Completed inventory of financed emissions under Greenhouse Gas Protocol guidelines in March 2025.
• Carbon Neutrality: No specific carbon neutrality or net-zero commitments disclosed in this filing.
• Renewable Energy: No specific renewable energy adoption or sourcing strategies disclosed in this filing. Supply Chain Sustainability:
• Supplier Engagement: No specific supplier engagement or diversity programs disclosed in this filing.
• Responsible Sourcing: No specific responsible sourcing or conflict minerals compliance disclosed in this filing.

Social Impact Initiatives:

• Community Investment: Established Freedom Shapagat Corporate Fund (non-profit subsidiary) in August 2023, funded by voluntary contributions, supporting social, charitable, cultural, educational, environmental protection, and sports development goals.
• External Social Projects (FY2025):
  • Continued support for chess development in Kazakhstan (Kazakhstan Chess Federation).
  • Supported the International Biology Olympiad (IBO) by financing ceremonies.
  • Acted as General Partner for Kazakhstan Collegiate Programming Federation for ICPC World Finals 2024.
  • Provided financial support for construction of a new center for advanced technologies, development, and research at SDU University in Almaty (opened March 2025, featuring AI labs, fintech research centers, financial literacy zones).
  • Continued support for various sports in Kazakhstan (football, tennis, cycling).
  • Continued support for "Teach for Qazaqstan" initiative (operational costs, educational events).
• Product Impact: Freedom Academy provides online and in-person financial literacy training courses and webinars to the public.

Business Cyclicality & Seasonality

Demand Patterns:

• Seasonal Trends: Not explicitly detailed in the filing.
• Economic Sensitivity: Performance in the financial services industry is heavily influenced by overall economic conditions and financial market activity. Vulnerable to external shocks and fluctuations in the global economy, particularly in Kazakhstan due to its reliance on oil and gas and trade ties with Russia.
• Industry Cycles: The Company's operational life has coincided with a period of general growth in U.S. equity markets and the financial services/technology industries, indicating sensitivity to market cycles. Planning & Forecasting: The Company uses modeling and forecasts to estimate exposures, loss trends, and other risks, and to assist in decision-making related to underwriting, pricing, and capital allocation.

Regulatory Environment & Compliance

Regulatory Framework: Industry-Specific Regulations:

• Securities Brokerage: Regulated by ARDFM and AFSA (Kazakhstan), CySEC (Cyprus), FINRA (U.S.), Central Bank of Armenia (Armenia), Ministry of Finance (Uzbekistan).
• Banking: Regulated by ARDFM (Kazakhstan) and National Bank of Tajikistan (Tajikistan).
• Insurance: Regulated by ARDFM (Kazakhstan).
• Payment Services: Registered with National Bank of the Republic of Kazakhstan, National Bank of the Kyrgyz Republic, and Central Bank of Uzbekistan.
• Telecommunications & Media: Kazakhstan subsidiaries hold licenses for local telephone services, internet access, TV/radio broadcasting, and network design/construction, subject to certification, qualification, technical standards, media content, and data protection requirements.
• International Compliance: Subject to overlapping schemes of regulation, including minimum net capital/capital adequacy, customer funds safeguarding, recordkeeping, AML/CTF, sanctions (OFAC), FATCA, CRS, and data privacy (GDPR, U.S. state laws, SEC cybersecurity disclosure rules). Trade & Export Controls:
• Export Restrictions: Compliance with U.S., EU, UK, and other sanctions programs, including those related to the Russia-Ukraine conflict.
• Sanctions Compliance: Prohibitions on transactions involving Specially Designated Nationals (SDNs) and sanctioned countries/regions. Non-U.S. subsidiaries may be subject to secondary sanctions risks. The Company uses third-party identity verification services and databases (Dow Jones, World-Check) for KYC/AML and sanctions screening. Legal Proceedings: The Company is involved in various claims and legal proceedings in the normal course of business. As of March 31, 2025, accruals for potential losses related to legal, regulatory, and governmental actions were not material. An arbitration claim was filed by Einride AB in January 2025 against the Company for alleged failure to pay a $10,000 thousand convertible debenture subscription. The Company contests the claim.

Tax Strategy & Considerations

Tax Profile:

• Effective Tax Rate: 25.2% (FY2025) vs. 13.9% (FY2024). The increase is due to changes in revenue composition and tax treatment in various jurisdictions, along with incremental U.S. tax on GILTI.
• Geographic Tax Planning: Subject to income taxes in the U.S. and numerous foreign jurisdictions (Kazakhstan, Kyrgyzstan, Cyprus, Uzbekistan, Germany, Tajikistan, Turkey, UAE, UK, Armenia). Tax laws are complex and subject to varying interpretations.
• Tax Reform Impact:
  • OECD's Inclusive Framework (Pillar Two): Agreement on a Two-Pillar Solution (IIR, UTPR, QDMTT) to address global tax challenges, ensuring a minimum global effective tax rate of 15% for MNEs with annual consolidated revenues of EUR 750 million or more. Pillar 2 rules are legislated in Germany, UK, Turkey, Cyprus, and UAE (QDMTT only). Kazakhstan, Uzbekistan, Azerbaijan, and Armenia have not yet enacted Pillar 2 legislation, but low-taxed entities in these jurisdictions may be subject to top-up tax through UTPR allocations by other jurisdictions.
  • Transfer Pricing: Subject to transfer pricing legislation in Kazakhstan, Armenia, UAE, Cyprus, and the U.S., requiring market pricing and specific documentation. Potential for additional tax liabilities from audits.
  • Kazakhstan Tax Regime: Subject to ongoing changes and uncertainties, including the preferential tax regime within the Astana International Financial Center (AIFC) and rules regarding "corporate tax residency" and "beneficial owner" determination.
• Undistributed Foreign Earnings: As of March 31, 2025, $887,924 thousand of undistributed foreign earnings are intended to be reinvested indefinitely in non-U.S. operations.

Insurance & Risk Transfer

Risk Management Framework:

• Insurance Coverage: The Company does not maintain insurance policies to mitigate cybersecurity risks or risks from infrastructure disruptions, as such insurance may not be available or cost-effective. Any purchased insurance may not cover all losses.
• Risk Transfer Mechanisms: In its insurance business, the Company may obtain reinsurance to manage exposure. However, availability and cost of reinsurance are subject to market conditions. Reinsurance programs carry counterparty risk regarding collectability of claims.
• Off-Balance Sheet Financial Instruments: Freedom Bank Kazakhstan JSC is party to guarantees and unused commitments under existing lines of credit, exposing the Company to credit and market risk. These are subject to the same credit policies as loans and may be collateralized by cash.

Business Cyclicality & Seasonality

Demand Patterns:

• Seasonal Trends: Not explicitly detailed in the filing.
• Economic Sensitivity: The financial services industry is highly sensitive to overall economic conditions, including GDP levels, interest and inflation rates, employment, commodity prices, and consumer confidence. Prolonged downturns or volatility in securities markets, or increasing interest rates, could significantly impact revenues and profitability. Kazakhstan's economy is particularly vulnerable to external shocks due to its reliance on oil exports and economic ties with Russia.
• Industry Cycles: The Company's rapid growth has coincided with a period of general market growth, and it has not experienced a prolonged downturn, making its future response to such conditions uncertain. Planning & Forecasting: The Company uses modeling and forecasts to estimate exposures, loss trends, and other risks, and to assist in decision-making related to underwriting, pricing, and capital allocation. These models are subject to assumptions, uncertainties, and limitations.