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British stock trading app Freetrade hit eked out breakeven earlier this year, the company told CNBC, marking its first-ever move into the black after incurring full-year losses in 2023.
Freetrade reported adjusted earnings before interest, tax, depreciation, and amortization (EBITDA) of £100,000 ($124,863) in the first quarter of 2024, according to unaudited financial statements shared with CNBC.
Preliminary revenue hit £6.7 million in the quarter.
Freetrade still generated a loss of £8.3 million in 2023, down from the £28.8 million loss it racked up the year before. Revenues climbed to £21.6 million last year, up 45% from 2022.
“We defied difficult market conditions and delivered healthy growth in 2023 while dramatically reducing losses” in 2022, said Adam Dodds, CEO and founder of Freetrade.
Equity crowdfunders rejoice
The development will be welcome news for Freetrade’s crowdfunding investors, who’ve been looking for an update on the company’s move toward profitability after a tough financial period.
Freetrade saw its valuation reduced by 65% to £225 million ($280.3 million) from £650 million in 2023 in its latest equity crowdfunding round on Crowdcube, with the company blaming a “different market environment” plagued by higher interest rates and inflation.
Net inflows totalled £130 million in the first quarter, too, as retail investor activity grew in response to resurgent markets last year. Assets under administration also reached £1.8 billion.
“Importantly for our crowdfunding investors, we laid out a clear path towards breakeven during our last fundraise,” Dodds said.
“As we look ahead to the rest of 2024, we’ve got major product developments that are going to support our next phase of growth with preparations being made to roll out our web platform.”
Equity markets saw serious drops in 2022 as a result of macroeconomic uncertainty and higher interest rates stoked by Russia’s full-fledged invasion of Ukraine, which triggered a risk-off trade around the world.
Britain’s answer to Robinhood
Freetrade is a competitor to Robinhood, the U.S. stock trading platform. Robinhood recently relaunched in the U.K. in March, in its third attempt to crack the European market.
Freetrade’s Dodds said he’s undeterred by Robinhood’s move back into the U.K., telling CNBC via email that “more choice and competition are good for retail customers.”
“Ultimately, there will be multiple winners in the UK market, offering the full range of tax-wrappers and features that the local retail investor expects,” he added.
Freetrade said its first-quarter performance was driven by higher trading volumes as well as higher foreign exchange income.
Since October 2023, Freetrade said it has seen a marked increase in retail investor participation amid speculation over when and how often the U.S. Federal Reserve and other central banks will cut rates this year.
A rally in crypto prices also helped Freetrade in the first quarter. Though the platform doesn’t offer crypto trading, Freetrade experienced increased retail investor activity in crypto-correlated stocks like Coinbase, MicroStrategy, and Marathon Digital.
Check out the companies making headlines before the bell. Cisco Systems — The networking technology stock added nearly 2% on the heels of a Citi upgrade to buy from neutral. Citi said artificial intelligence can become a bigger part of the business over time. Novocure — Shares soared roughly 22% after the U.S. Food and Drug Administration approved Novocure’s Optune Lua wearable treatment for metastatic non-small cell lung cancer. Morgan Stanley — Shares gained more than 3% after the bank reported quarterly results before the bell that beat Wall Street’s forecasts, helped by higher-than-expected revenue from its wealth management, trading and investment banking operations. The firm’s earnings came in at $1.88 per share, versus the $1.58 expected by a LSEG analyst poll. Revenue was $15.38 billion versus the $14.41 billion consensus estimate. United Airlines — Shares rose about 1% after the airline beat earnings and revenue expectations for the third quarter. United also announced a $1.5 billion share buyback, its first since before the pandemic. ASML — Shares of the Dutch chip equipment firm slid 4% before the bell, adding to Tuesday’s losses after it accidently released its third-quarter results a day early . The report was disappointing as ASML cut its 2025 sales forecast, suggesting weakness in markets other than those that serve AI applications. J.B Hunt Transport Services — Shares jumped more than 7% after the company’s third-quarter results topped expectations. J.B. Hunt posted $1.49 earnings per share on $3.07 billion of revenue. Analysts polled by LSEG had forecast earnings of $1.41 per share on $3.02 billion of revenue. The company said demand for its intermodal service rose throughout the quarter. — CNBC’s Sean Conlon, Alex Harring, Sarah Min, Michelle Fox and Hakyung Kim contributed reporting.
Ted Pick, CEO Morgan Stanley, speaking on CNBC’s Squawk Box at the World Economic Forum Annual Meeting in Davos, Switzerland on Jan. 18th, 2024.
Adam Galici | CNBC
Morgan Stanley topped analysts’ estimates for third quarter profit as its wealth management, trading and investment banking operations generated more revenue than expected.
Here’s what the company reported:
Earnings:$1.88 a share vs $1.58 LSEG estimate
Revenue: $15.38 billion vs. $14.41 billion estimate
Morgan Stanley had several tailwinds in its favor. The bank’s massive wealth management business was helped by high stock market values in the quarter, which inflates the management fees the bank collects.
Investment banking has rebounded after a dismal 2023, a trend that may continue as easing rates will encourage more financing and merger activity.
Finally, its Wall Street rivals have posted better-than-expected trading results, making it unlikely that the firm missed out on elevated activity.
Chinese e-commerce company Alibaba has invested heavily in its fast-growing international business as growth slows for its China-focused Taobao and Tmall business.
Nurphoto | Nurphoto | Getty Images
BEIJING — Chinese e-commerce giant Alibaba‘s international arm on Wednesday launched an updated version of its artificial intelligence-powered translation tool that, it says, is better than products offered by Google, DeepL and ChatGPT.
Alibaba’s fast-growing international unit released the AI translation product as an update to one unveiled about a year ago, which it says already has 500,000 merchant users. Sellers based in one country can use the translation tool to create product pages in the language of the target market.
The new version is based only on large language models, allowing it to draw on contextual clues such as culture or industry-specific terms, Kaifu Zhang, vice president of Alibaba International Digital Commerce Group and head of the business’ artificial intelligence initiative, told CNBC in an interview Tuesday.
“The idea is that we want this AI tool to help the bottom line of the merchants, because if the merchants are doing well, the platform will be doing well,” he said.
Large language models power artificial intelligence applications such as OpenAI’s ChatGPT, which can also translate text. The models, trained on massive amounts of data, can generate humanlike responses to user prompts.
Alibaba’s translation tool is based on its own model called Qwen. The product supports 15 languages: Arabic, Chinese, Dutch, English, French, German, Italian, Japanese, Korean, Polish, Portuguese, Russian, Spanish, Turkish and Ukrainian.
Zhang said he expects “substantial demand” for the tool from Europe and the Americas. He also expects emerging markets to be a significant area of use.
When users of Alibaba.com — a site for suppliers to sell to businesses — are categorized by country, developing countries account for about half of the top 20 active AI tool users, Zhang said.
Chinese companies have increasingly looked abroad for growth opportunities, especially e-commerce merchants. PDD Holdings‘ Temu, fast fashion seller Shein and ByteDance’s TikTok are among the recent global market entrants. Many China-based merchants also sell on Amazon.com.
Zhang declined to share how much the updated version would cost. He said it was included in some service bundles for merchants wanting simple exposure to overseas users.
His thinking is that contextual translation makes it much more likely that consumers decide to buy. He shared an example in which a colloquial Chinese description for a slipper would have turned off English-speaking consumers if it was only translated literally, without getting at the implied meaning.
“The updated translation engine is going to make Double 11 a better experience for consumers because of more authentic expression,” Zhang said, in reference to the Alibaba-led shopping festival that centers on Nov. 11 each year.
Alibaba’s international business includes platforms such as AliExpress and Lazada, which primarily targets Southeast Asia. The international unit reported sales growth of 32% to $4.03 billion in the quarter ended June from a year ago.
That’s in contrast to a 1% year-on-year drop in sales to $15.6 billion for Alibaba’s main Taobao and Tmall e-commerce business, which has focused on China.
Nomura analysts expect that Alibaba’s international revenue slowed slightly to 29% year-on-year growth in the quarter ended September, while operating losses narrowed, according to an Oct. 10 report. Alibaba has yet to announce when it will release quarterly earnings.