Plus500’s US Bet Pays Off: Aims to Expand with “Bolt-on Acquisition”

Plus500 (LON: PLUS) entered the United States futures market in 2021, which has now become “strategically important” for it and “represents a multi-year growth opportunity.” The Israeli broker also sees “a sizeable earnings opportunity [in the US] in the medium to long-term for both the B2B and B2C businesses.”

US Client Deposits Took Off

Indeed, the latest figures from Plus500 also support its optimism for the US. At the end of 2024, the broker’s futures business held about $350 million in customer funds, a 20 per cent jump year over year. Further, the figure jumped by about 600 per cent in the last three years.

The broker further highlighted that the figure continued to grow after the accounting period and jumped by another 50 per cent today (Monday) since the end of 2024. According to the broker, the increase in deposits shows the onboarding of new customers and a jump in trading activity from existing customers.

Plus500 entered the US by acquiring two entities of the same group: Cunningham Commodities and Cunningham Trading Systems. The deal was closed for $30 million, which the Israeli broker paid from its mounting cash reserves.

Interestingly, Plus500’s entry into the US market followed IG Group’s acquisition of tastytrade, a $1 billion deal. The acquisitions allowed both London-listed brokers to offer futures to US customers, although tastytrade has much broader offerings, including stocks, options, and cryptocurrencies.

“Plus500's performance in the US futures market during FY 2024 stemmed from its proprietary technology, innovative approach, and substantial financial resources,” Plus500 noted in its latest financial filings. “Its strong operating results illustrate just how successful the business has been in establishing itself in this market.”

“A Record Number of New Customers”

As Finance Magnates already reported, Plus500 closed 2024 with revenue of $768.3 million and EBITDA of $342.3 million. The company's basic earnings per share also improved by 13 per cent to $3.57.

However, the highlight of the result was the customer metrics, as it added 118,010 new customers last year, a gain of 30 per cent. The number of active customers on the platform also jumped by 9 per cent to 254,138, while the average deposit per active customer increased by 17 per cent to about $12,000.

Plus500 made its name offering forex and contracts for differences (CFDs) trading, which are over-the-counter (OTC) instruments. However, in 2024, the non-OTC side of its business, which is its futures offering in the US, generated about 10 per cent of total revenue and brought in approximately 15 per cent of new customers.

“The US business onboarded a record number of new customers, processed significantly higher volumes of trades compared to the previous year, and further established the Group's position in this growing market,” the broker added.

Plus500’s focus in the US is on both institutional and retail customers. However, being a retail-centric platform, its plans for the retail side grab more attention.

“Since its launch in H2 2023, it has quickly established itself and gained good traction with customers,” the broker noted. “During FY 2025, the businesses will continue to further establish their growing positions, and new products and services will be introduced for customers.”

Expanding Futures Business

The growing success of the Israeli broker's non-OTC business is now making it think about its strategies in this direction. Revealing the non-OTC numbers, the broker highlighted that this would be its “future direction.”

Further, the broker plans to assess opportunities to expand into new international markets with its futures products.

Plus500 has already been expanding its arsenal of licences. After securing its second UAE licence this year, it has 14 regulatory authorisations globally. Its ambitions for expansion also became prominent as it launched a localised trading platform for the Japanese retail markets.

“In FY 2025, the Group will continue to assess opportunities to grow its portfolio of regulatory licences and clearing memberships, focusing on North America and Asia, both organically and through bolt-on acquisitions,” the broker added.