Earnings call transcript: Flatex DEGIRO Q3 2025 revenue misses forecasts

Flatex DEGIRO reported its Q3 2025 earnings, revealing a revenue shortfall compared to forecasts. The company recorded a revenue of €112.2 million, falling short of the €121.6 million forecast, marking a surprise of -7.73%. Despite this, the stock saw a modest increase of 1.12% in early trading, reflecting investor confidence in the company’s strategic initiatives and growth prospects.

Key Takeaways

• Revenue for Q3 2025 grew 18% year-on-year, despite missing forecasts.
• Net income surged 57% to €39 million, with a net income margin of 30%.
• Assets under custody reached a record €92 billion, up 42% year-on-year.
• Full-year revenue guidance set at €530-550 million, indicating 15% growth.

Company Performance

Flatex DEGIRO demonstrated strong performance in Q3 2025, with significant year-on-year growth in key financial metrics. The company reported a robust 18% increase in revenue compared to the same period last year. Net income rose by 57% to €39 million, reflecting improved operational efficiencies and a stronger net income margin of 30%. The company’s assets under custody hit a new high of €92 billion, representing a 42% increase year-on-year, driven by substantial net cash inflows of €7.2 billion.

Financial Highlights

• Revenue: €112.2 million, up 18% year-on-year
• Net Income: €39 million, up 57% year-on-year
• Net Income Margin: 30%
• Assets under Custody: €92 billion, up 42% year-on-year
• Net Cash Inflows: €7.2 billion, up 44% year-on-year

Earnings vs. Forecast

Flatex DEGIRO’s Q3 2025 revenue of €112.2 million fell short of the €121.6 million forecast, resulting in a negative surprise of 7.73%. This miss contrasts with the company’s historical trend of meeting or exceeding expectations, highlighting potential challenges in the current market environment.

Market Reaction

Despite the revenue miss, Flatex DEGIRO’s stock rose by 1.12% in early trading, closing at €32.4. This movement reflects a positive investor sentiment, possibly driven by the company’s strategic initiatives and growth in net income. The stock remains below its 52-week high of €34.5, indicating room for further recovery.

Outlook & Guidance

The company maintains a positive outlook, with full-year revenue guidance set between €530-550 million, representing a 15% growth. Flatex DEGIRO plans to expand its product offerings, including potential new white-label banking partnerships and further international expansion of its crypto trading services.

Executive Commentary

CEO Oliver Behrens highlighted the company’s growth drivers, stating, "Growing commissions and a stable interest income have led to further growth of our top line." CFO Dr. Ben Onianos emphasized the scalability of the business model, noting, "The scalability of our business model enables us to increase profitability while expanding our product offerings."

Risks and Challenges

• Revenue Miss: The revenue shortfall could indicate potential market challenges.
• Market Saturation: Increased competition in the European trading market.
• Regulatory Changes: Potential impacts from evolving financial regulations.
• Economic Uncertainty: Macroeconomic factors could affect future performance.
• Crypto Volatility: Fluctuations in crypto markets may impact trading volumes.

Q&A

During the earnings call, analysts inquired about the performance of the company’s crypto trading segment, which exceeded initial expectations. There were also questions regarding the minor cost savings anticipated from the transition to a European SE vehicle structure and the exploration of additional financial products.

Full transcript - flatexDEGIRO AG (FTK) Q3 2025:

Conference Operator: Hello and welcome to the Flatex De Giro Q3 twenty twenty five Analyst Conference Call. For the first part of the conference call, the participants will be in listen only mode. During the questions and answer session, participants are able to ask questions by dialing 5 on the telephone keypad. Now I will hand the conference over to Achim Schreck, Head of Investor Relations. Please go ahead.

Achim Schreck, Head of Investor Relations, Flatex De Giro: Thank you, and good morning, everyone. Many thanks for dialing in, and a warm welcome to our analyst call relating our Q3 twenty twenty five results, which we published yesterday evening post market close. My name is Achim Schreck, and I’m heading the Investor Relations team here at FlatHex de Giro. With me today are our CEO, Oliver Behrens as well as our CFO, Doctor. Ben Onianos, who will lead us through today’s presentation.

We also have with us Doctor. Thomas Lindner, our Global Head of Finance as well as my IR colleague, Laura Hecker. As usual, we would like to provide a short run through the presentation before we open up for your questions. And without any further ado, I’m very pleased to hand over to you now, Oliver. Please go ahead.

The floor is yours.

Oliver Behrens, CEO, Flatex De Giro: Good morning, everyone, and welcome to the analyst call for our Q3 and nine month results. Benon will run you through the details of our performance in the third quarter in a moment. I would just like to highlight a few key points. Last week, we already preannounced our revenue and net income for the third quarter, combined with a substantial raise in our full year guidance. Growing commissions and a stable interest income have led to further growth of our top line.

At the same time, we kept personnel expenses and marketing flat year over year and significantly reduced our administrative expenses. The combination of both, growing our top line while staying cost focused, enables us to further scale our operations and continue to increase our profitability. The clear reduction of our admin expenses over the last twelve months was important. We promised it exactly one year ago. And when we published our numbers for Q3 twenty twenty four, and we delivered.

While there are always certain elements to improve, our cost base in general is clean and sustainable now. To meaningfully increase our profits, the focus thus is on further expanding our top line, building new products, rolling out new services and driving customer growth. Crypto Trading and Securities Lending are the two new products we have already introduced over the last twelve months. Let me give you a brief overview of where we stand with each of them. With crypto trading, we went live in December 2024, limited to flat ex in Germany at first.

We further extended it to de zero in Germany during the 2025. However, we really only get started now in Q3 when we began with the international rollout. With product launches in Austria, The Netherlands, France and Spain, we today give approximately 2,000,000 customers access to crypto trading. And shortly, Italy, Portugal, Greece and Ireland will follow. As you can see on the chart, this international rollout has been a step change when it comes to traded crypto volumes on our platform.

More than 30,000 customers have traded crypto with us so far. Adoption rates are rising, and we have also seen a pretty strong start into the fourth quarter. However, the crypto market is impacted by significant volatility and external impulses. In addition, we have only started our offering. So take these steps with a grain of salt.

Nevertheless, the direction of travel is very clear. When it comes to the monetization of our crypto businesses, the average ticket size in the first nine months as well as in the third quarter has been around 2,300 As you know, we are charging a low commission of 50 basis points in all countries, but The Netherlands, where it is 29 basis points. The blended rate for the first nine months was 47 basis points at a rate that over time will most likely develop towards 40 basis points with a rising share of trades in The Netherlands. Benon will later on also detail how the crypto businesses has supported the growth of our average commission for trades in the third quarter. But before I hand over to Benon, let me briefly comment on two other strategic initiatives we have started now.

On the product side, we have started our securities lending program in October in The Netherlands and Spain, our two largest De Giro markets. We are thus enabling our Dutch and Spanish customers to now earn additional passive income on parts of the €20,000,000,000 of assets they hold on our platform. Of course, not all of these assets will be in constant demand for securities lending desks. We continue to expect that some 20% to 30% thereof are really relevant for lending purposes. As we only got started this month, I hope you understand that it is too early to give any indications on adoption pricing and actual volumes.

We will now focus on rolling out the product to more De Giro customers and markets and increasing marketing and customer communication to drive adoption. Last, but not least, our treasury enhancements. Our customers today entrust us with cash deposits totaling over €5,600,000,000 We used close to €1,300,000,000 thereof to provide margin loans to our customers at an average margin interest rate in Q3 of around 5.9%. On the remaining over €4,000,000,000 we have so far been rather passive. We are using a small part as collateral in our operating business in form of bonds, but we are keeping the vast majority of cash at the German Federal Bank with overnight availability.

In order to monetize this asset better, while staying very risk averse, we will implement a full treasury system in Q1 twenty twenty six. We are progressing well here and will start with internal testing already at the final stage of Q4 this year. The new treasury system will allow us a more active steering with our investments and a broader variety of instruments. In anticipation of this new system, we have already initiated an increased focus on investment in high quality investment grade bonds, predominantly with a AAA rating and a focus on Germany. First improvements are already reflected in our interest income in Q3.

To summarize, in a positive market environment, we continue to do our homework on cost reduction, product rollouts and internal process enhancements. We are well on track to achieving our financial goals and the implementation of our most important strategic milestones. All of this is, at least to some extent, already visible in our Q3 numbers, for which I’ll now hand over to Benon to guide you through the details. Thank you. And over to you, Benon.

Dr. Ben Onianos, CFO, Flatex De Giro: Thank you very much, Oliver, and good morning to everyone from my side as well. I trust you have already seen our pre release and the updated guidance we published last week. I’m very excited to now walk you through our financial performance for the third quarter and the first nine months of the year and share a bit more details over the next minutes. Now let me quickly take a moment to remind everyone on our commercial performance in the third quarter, which we have already shared through our monthly KPIs. Gross customer additions amounted to approximately 100,000, an increase of 9% year on year.

As we typically see, the first quarter tends to be the strongest in terms of customer additions due to seasonal patterns. This year, it stood out even more, thanks to elevated market volatility. This is also true for trading, as one can see on the right hand side in regards to settled transactions. In the third quarter, we settled 17,700,000 transactions for our customer base. This accounts for a strong 20% increase compared to last year, but naturally less than what we did in the first quarter.

However, I believe what really stands out is the fact that we have actually been able to repeat the strong Q2 numbers on both KPIs, which at the time benefited from additional tailwinds from market turbulences around the so called Liberation Day in early April. October also got off to a strong start, continuing the positive momentum we saw over the summer. We will publish our monthly statistics for October and November sorry, for October on November 5 and share more details then. Assets under custody reached a new all time high, coming in just shy of €92,000,000,000 We crossed the €90,000,000,000 mark for the first time. Year on year, that translates to a strong 42 percent increase.

And even quarter on quarter, we experienced growth of 10%. Splitting the assets under custody into securities and cash, you can see a relative uniform development. Securities under custody grew 42% year on year and 10% quarter over quarter to now 86,300,000,000 At the same time, cash under custody grew strongly by 49% year on year and also 9% quarter on quarter, respectively. To some extent, cash under custody benefits from overall asset growth with a relatively stable ratio of 6% of assets being held in cash. This also means that we have seen a pretty stable trend of growing cash per customer over the last quarter, rising from around $12.50 euros on average at the September 2024 to now around $16.50 euros on average.

Our customers are simply becoming more wealthy. To put it differently, when we apply just the current ECB rate of 2% as our interest income on these cash holdings, we are talking about an interest related average revenue per customer of €33 At close to 3,500,000 customers, this basically equates to approximately €115,000,000 annually of recurring revenues. The increase in cash level is fueled by strong net cash inflows onto our platform, which, as you can see here, has continued in the first quarter, albeit at a more normal rate after the exceptionally high inflows of Q1 and Q2. In total, we recorded net cash inflows of a record €7,200,000,000 in the first nine months of the year. This represents an increase of 44% on a year over year basis.

Moreover, the net cash inflows we have seen in the first nine months of twenty twenty five are already exceeding the full year 2024 levels of €6,600,000,000 It is worth noting that in the first nine months of twenty twenty five, in quotation marks, only around 85% of these net cash inflows were reinvested compared to historical average of approximately 95%. Now as usual, we portray our revenue split in the past quarter on Slide 13. In the third quarter, revenues grew with 18% year on year. Commission income especially increased strongly by 34 year on year, which is mostly attributable to a continuously growing customer base, an increase in trading activity and a higher commission per transaction. I’ll turn to that in a second.

Despite a significantly lower interest rate environment, interest income remained broadly stable. Interest income only declined by five percent year on year and just 2% sequentially. This was less than what we previously anticipated. Higher amounts of cash under custody and a growing average margin loan book compensated, to a large extent, for lower interest rate levels from the European Central Bank. Moreover, we also benefited from a more active treasury strategy.

Oliver mentioned this in his opening remarks already. Let me add some more details and briefly walk you through our updated treasury strategy and how we are managing our customer cash under custody. We have now initiated more active treasury activities while still maintaining our risk averse foundation. This means we are selectively deploying cash to more interest bearing investments where appropriate. As shown on the slide, we currently manage around €5,600,000,000 in customer cash under custody.

Thereof, we use some part as funding for our margin loan business with a current margin loan book volume of €1,200,000,000 A quick reminder, margin loan rates were reduced by around 50 basis points as of the 07/01/2025 with headline rates of around 5.5% to 5.75% currently. As Oliver mentioned earlier, the average margin interest rate in the third quarter amounted to around 5.9%. This is driven by product mix, I. E, allocated versus unallocated margin loans as well as margin loans in different currencies, for example, U. S.

Dollars, which have higher average margin rates. Moreover, our bond investments are now close to €800,000,000 As explained earlier, we have slowly started to deploy a more active treasury strategy. To enhance yields while staying conservative, we have increased our exposure to high quality investment grade bonds. The majority of these bonds are AAA rated. This approach allows us to improve returns while preserving flexibility and security.

This is a strategy we believe is well suited to the current market environment. These investments have already contributed positively to our interest income line in the 2025. Last but not least, over €3,500,000,000 of our cash under custody are still placed overnight with the Bundesbank, where we receive the current market interest rate. Once we have fully established the new treasury system in 2026, this should provide some more opportunities going forward. Turning to the next slide and the monetization of our trade.

You can see that we were able to generate an average commission of €4.83 per transaction in the 2025. This implies a 12% year over year increase from 4.32 in the 2024. For the last few quarters now, we have seen a heightened volume in U. S. Trade from which we benefit additionally due to the FX conversion fee of 25 basis points.

The uplift from higher U. S. Volumes is around $0.20 on the average commissions per trade. While U. S.

Volumes came back slightly in Q2, they have picked up again in the third quarter, even slightly surpassing the previous highs of Q4 of last year and Q1 of this year. Additionally, crypto trading contributed positively to commission per trade with a positive impact of €04 This is up from €02 in the previous quarter as we expanded crypto trading to more markets during Q3. And as Oliver has already shown in the beginning, trading volumes have significantly increased accordingly. Moving to Slide 16. We have portrayed our different cost items and their development over the past quarter.

Let me dive a bit deeper into the different drivers for each cost item. We have demonstrated strong cost control, and all cost items are coming in significantly lower compared to the previous quarter. One, personnel expenses. Personal expenses on a year on year comparison stayed broadly stable with €26,300,000 in 2025 compared to €26,100,000 in 2024. Sequentially, personnel expenses declined by 15%, driven by a clear reduction of current personnel expenses as well as lower expenses for long term variable compensation.

Second, on marketing. Marketing expenses amounted to €6,000,000 in Q3, which is broadly in line to the €6,200,000 reported in 2024. On a quarter on quarter comparison, marketing expenses declined by 14%. Marketing expenses are seasonally front loaded with Q1 typically seeing the highest spend, followed by much lower numbers in Q2 and Q3 before picking up a bit again in Q4. Our average customer acquisition costs in 2025 amounted to €60 down 10% year on year from €67 in 2024.

And thirdly and lastly, other administrative expenses amounted to just €10,900,000 decreasing strongly by 38% year on year and 15% quarter on quarter. This decline is primarily driven by lower legal and consulting expenses as well as a positive one off reduction in bank specific contributions of around €2,000,000 in Q3. As previously communicated, we remain well on track to achieve our full year target for administrative expenses, aiming at a level of around €15,000,000 for the full year. These €10,900,000 in Q3 also include one particular item. More than four years ago, back in 2021, we conducted a marketing campaign promoting zero cost trading that the German regulator, Baven, did not appreciate and is currently evaluating.

This might also lead to a potential fine at some point in time. For this event, we have already built provisions in 2025 of approximately €500,000 Moving on to our profitability development on Slide 17. Given the highest scalability of Fladex de Giro’s business model, we have seen a strong increase in net income driven by higher revenues and lower costs. With revenues increasing 18% year on year and continued cost discipline, we have managed to achieve a strong increase in net income, which rose by 57% to €39,000,000 Our net income margin improved by seven percentage points, reaching 30% in Q3. Let’s now have a quick look at how the quarterly performance adds to our results for the first nine months of the year.

Our revenue line increased by 16% year over year, while net income grew over proportionally by 41% year on year given the scalability of our business, high cost control. Things have progressed much better this year than initially anticipated. These strong results as well as the initial potential emerging from the ongoing international rollout of crypto trading and the launch of our securities lending program also contributed to the second upgrade of our revenue and net income guidance for fiscal year 2025, which we communicated on October 15 already. As you can see on Slide 21, revenue growth is now expected to come in between 1015% versus 2024, which already was a record year for us. The revenue range we are aiming for is thus between $530,000,000 to €550,000,000 This is a significant upgrade to the guidance we have first issued in February 2025.

On the bottom line, we have even more significantly upgraded our expectations for net income. We are now anticipating a net income between €150,000,000 and €160,000,000 resulting in growth rates of 34 to 43% year over year. This compares to our previous range of plus 15% to plus 25% we gave out in July. Turning to absolute numbers. If we compare the midpoint of our upgraded guidance, this translates to an increase of around 60,000,000 on the revenue side and €40,000,000 on the net income side compared to the initial guidance we gave out with our strategy update in February 2025.

To achieve €40,000,000 of additional net income based on a revenue uplift of €60,000,000 once more shows the operating leverage we can achieve in scaling up our business. We remain confident in our ability to deliver on these targets as we move through the last month of 2025. October has obviously been off to a pretty good start. However, we are not applying a direct extrapolation of October’s initial momentum across the remainder of the quarter. At the same time, when we gave the guidance last week, we have also been mindful of the fact that expenses for long term variable compensation are likely to increase again in Q4 given the strong share price performance recently.

The guidance also reflects an overall cautious valuation approach and some potential housekeeping items in the process of preparing our annual financial statement. So I would like to emphasize that these are realistic targets, and we are confident to achieve results within this new guidance range. With that, I would like to conclude our presentation. But before I hand back to Achim for the question and answer session, I would like to finish with one quick remark. Black XP Hero is constantly evolving, not just in regards to our operational growth and the implementation of strategic measures.

At the September, we have successfully relaunched our corporate website with the aim of delivering an improved user experience that enables faster and more intuitive access to content for our key stakeholders and most importantly, our analysts and investors. The Investor Relations section has been comprehensively revamped and now offers much clearer and more direct access to quarterly reports, presentations, company compiled consensus data and KPIs. We hope you like the new website. If you have any feedback or suggestions for improvement, please don’t hesitate to let us know in the Investor Relations department. Now Achim, over to you.

Achim Schreck, Head of Investor Relations, Flatex De Giro: Thank you, Benon, and thank you, Oliver, also for your introductory remarks. We are now very happy to take your questions on our Q3 financials.

Conference Operator: The first question comes from Andrew Love from Citi. Your line is open. Please go ahead.

Andrew Love, Analyst, Citi: Hi, thanks for taking the question. I’ve got one on crypto and the commission per trade and then the second is on your securities lending business. On the first one, you reported €270,000,000 of crypto volume in Q3, 47 basis points of fees. That implies €1,300,000 of revenues, which is a €07 contribution in the quarter. Can I just clarify that your €04 figure that you mentioned, Benon, is a nine month figure?

And do you agree with the €07 in Q3 alone? And then what are your sort of expectation for Q4 and beyond? Is it reasonable to assume that we get to say billion dollars of crypto trading volumes for 2025, which would imply a €0.13 contribution in Q4? And then how do you expect the commission per trade to evolve when you exclude the crypto contribution? Does this increase as trade size increases and clients get more wealthy?

That would be really helpful. The second question, as I said, is on the securities lending. You’re currently only able to offer this on your Dejiro platform, which is 40% of your securities portfolio. Do you expect policy changes that may allow implementation in Germany and Austria? It seems to me that this is in clients’ best interest.

So I’d be interested if you’ve had any feedback from policymakers so far on this.

Dr. Ben Onianos, CFO, Flatex De Giro: Thank you very much, Henrik. I will start with the crypto question. I will then hand over to Oliver for the securities lending question. At the same time, the team is computing the $04 $0.07 question. But on your other comments on the crypto side.

So I made a comment a while back that it’s very realistic to achieve €1,000,000,000 in crypto trading this year. Given what we have seen in the third quarter and the back loaded third quarter, in addition to the launch of the upcoming crypto activities in other European countries, we certainly would think that the €1,000,000,000 total volume traded stands and is a realistic option for this year. I will comment on this, of course, explicitly when we portray our full year numbers. And maybe now quickly to the segmenting question.

Oliver Behrens, CEO, Flatex De Giro: Yes. Thank you, Andrew. It’s a very interesting question. Obviously, Europe is not like The United States Of America. It’s a sometimes I say a set of independent franchise takers under one currency.

And that’s why regulatory interpretation of what is allowed and what is beneficial for customers might differ from country to country. On this happy note, we are discussing with the regulators a different interpretation of MiFID regulation and the impact on securities lending and so on to get to a more common view. But unfortunately, we are not yet there. Nevertheless, there are enhancements in Germany. There was also a change in recent legislation, which makes it a little bit easier but not at the same level of what is available in the Dutch market.

So it is not a half empty glass or it’s rather half full glass. We think we can do more, but not overnight. We might go live with the Giro in Germany for SEK lending next year. But that is a constant dialogue we’re having. So we will keep you posted latest in the update coming for 2026 outlook, which will happen somewhere in February 2026.

I think we will be clearer by then on the rollouts of further markets, especially on the Flatex side. We totally agree with you that this would be very beneficial for clients as this is a setup of a very institutionalized product with an auction process for the assets, for the securities lending. And it is, from our perspective, very attractive to participate in this program, and it should be as easy as the clients approach it. But we are not yet there. So we keep you posted.

Thanks for your question.

Dr. Ben Onianos, CFO, Flatex De Giro: And to finish off, our first initial check indicates that we arrive at the €04 commission increase per quarter. And I would suggest that the Investor Relations team, aka Achim Schweck, will reach out to you after today’s call to clarify that.

Conference Operator: The next questions come from Amit Jagadish from UBS AG. Your line is open.

Amit Jagadish, Analyst, UBS AG: Hello. Thank you for taking my questions. I just have a couple. So on marketing, could you share some color on how we should think about this next year, whether there will be or you’re currently assuming some growth in marketing expenses, say, for example, to help with pushing the new product initiatives? And then I guess just a question on capital allocation.

Could you share your latest thoughts here? Are you looking at any forms of capital return? Any plans for new buyback programs, things like that? And then lastly, could you expand on the special effects that led to the increased tax rate this quarter? Is this a one off or yes?

Oliver Behrens, CEO, Flatex De Giro: Okay. Do you want to start with the tax rate or the other way around?

Dr. Ben Onianos, CFO, Flatex De Giro: We can start with the two financial questions and then we can hand over to Oliver for the marketing question. So I’ll start from the back. It is a one off effect. It’s related to business activities we have terminated almost ten years ago. And it’s a long standing dispute on a tax situation we have with the local tax authority in Germany, which amounts to approximately €1,400,000 We have agreed to take a charge for that just in case we continue to find arguments in order not to have this tax levied on us.

But to be prudent, we put it into this past quarter, and it’s indeed a one off effect. With respect to capital allocation, I will repeat what I have been saying constantly over the past couple of quarters. We plan to issue a statement on that when we publish our full year numbers. So today, we will not make a comment on that other than saying that we grew really strongly this year, and we have seen how positive a cash position is to simply fuel and finance the requirements for regulatory capital from existing funds. We mentioned before, we did not expect that much of balance sheet growth this year, and it’s always good to have cash at hand for that.

But more details on capital allocation most likely in February next year.

Oliver Behrens, CEO, Flatex De Giro: Yes. I can only echo what Bjorn said. Maybe to add to that, as some of you probably know, payment for order flow will be banned in Germany from next year. That could have impact on some of our competitors’ business models. And it’s always good, as Bill on set, to have some cash at hand if others might run into trouble that we can look out for opportunities.

You also asked on marketing. I think what we can see in this year, 2025, is that we are definitely back to business with new products, new launches and growth. Nevertheless, we put marketing expenses this year at the similar level of last year. But at the same time, we need to see on which areas we want to grow next year faster. We’re preparing for some new marketing approach on our core markets, I would say, so far, so good.

More to come towards the year end, but I think we will definitely not reduce all marketing expenses. We will be slightly up for the next year. But we are going through our planning as we speak. We will discuss this with our committees, our Supervisory Board, our stakeholders. And once we are in sync, we will return to the market and give you guidance that would hopefully be helpful.

In a growing business like ours, it would not be prudent to reduce marketing expenses we believe opportunities are there make those investments in a successful way for our shareholders. Hopefully, that satisfies your question.

Conference Operator: The next question comes from the line of Meng Shansen from Deutsche Bank. Your line is open.

Meng Shansen, Analyst, Deutsche Bank: Thank you very much for taking my questions. So three questions from my side. The first one is on the net interest income. Just try to understand the NII dynamic here better. You said Q3 was helped by the higher yields from the bond investment.

In the treasury book, what are actually the incremental NII from the treasury enhancements in Q3 in euro million amount? And I assume the rest is coming from the margin loan growth and the customer deposit growth. And the second question is on the other operating expense. Thank you very much for explaining us the details for Q3. But if I add the €2,000,000 banking levies on top, we are probably and if I keep the €50,000,000 guidance for the full year basis, we’re probably still going to see another €3,000,000 increase in Q4.

Any specific reason for that? And the last question is on the white label banking. I remember you were commenting on the two new potential partnership on the deposit as a service side in last quarter. Could you please provide any updates on these partnerships? Yes.

Dr. Ben Onianos, CFO, Flatex De Giro: Would you like to start white label banking?

Oliver Behrens, CEO, Flatex De Giro: Yes. So on the white label banking, deposit as a service is one part. I think there will be good news. We will go live around Christmas with one new partner. And so the there’s one other bank that will basically raise deposits, and they will go live in December for Family and Friends and then Life to the Market in January.

And we have built a good pipeline of those names. Thank you for really going into all these details. We expect, hopefully, another two new partners for 2026, but it’s too early to tell. And with the other two questions, I would suggest I hand over to Ben the interest side and so on. Thank you.

Dr. Ben Onianos, CFO, Flatex De Giro: So on the other operating expenses, the €50,000,000 is the number I have first mentioned pretty much a year ago on the call, so we simply stick to a clean headline number. Yes, there might be some room, but we still have two months to go, and there is no point in adjusting an expectation for our cost base. So let’s see what the fourth quarter will bring. I think what’s almost more important is that we have shown that we have successfully turned around the cost discipline. We are now on track for a clean number, which depending on how the fourth quarter develops, we may even undershoot a little bit.

So I’m glad that we are on the lower side of the 50,000,000 and not on the upper side. And on the net interest income line, we just started the activities of expanding our treasury activities. The vast majority of our investments are in AAA investment grade sorry, AAA rating category with also a strong skew to Germany. So the uplift you get on these is not gigantic. It’s a modest benign uptick compared to what you would get if you simply parked your money with the Bundesbank.

And we will probably do a more proper review of that when we present the full year numbers. But as a very rough estimate, a couple of 100,000, give or take, something like that. It’s not in the millions.

Oliver Behrens, CEO, Flatex De Giro: I think what is important to add to what Binnon rightfully said is the interest curve was not an ordinary upward sloped curve for many, many years now. We had an inverted curve with the highest point almost at the short end of the curve. And given the fact that we have now a flattish curve or slightly upward sloping curve, it is more beneficial to use additional instruments, swaps, repos and other money market instruments. And that is mixed basically with short term bonds. For that, we are introducing the treasury systems and will enable us to better manage both sides of the balance sheet in terms of LLALM matching.

That would reduce the volatility of our earnings because when you look at it, the cash and interest from cash relative to the overall earnings momentum created some volatility on the quarterly earnings, higher volatility than the trading activity of our clients. And that is not something which is perfect, and that’s why we are introducing the treasury system out of various reasons. One of them is this, what I just explained. Hopefully, that helps you. And of course, you can get an enhancement.

I think we said it already in the three year planning at the beginning of this year that we expect somewhere between fifteen and twenty basis points enhancements on the cash. Once the treasury system is fully rolled out and we cannot invest every money because we need to stay liquid and flexible. And you also know that SEPA Instant Payment was introduced, and we need to still see what the patterns of the clients will have an impact on daily liquidity. But directionally, I think that is still intact what we mentioned in the guidance at the 2025 for the future once the system is fully up and running. The

Conference Operator: next questions come from Zach Wirth from Autonomous Research. Line is open.

Zach Wirth, Analyst, Autonomous Research: Hi, good morning. Thanks for taking my questions. I’ve got three of them. Firstly, the release said that the updated guidance does not assume that operational growth in the October continue with the same intensity through the year end. Can you just give a little more color around what your assumptions are here or help us frame the guidance a little better?

Second is on crypto. How does uptake of the offering thus far compare to your expectations in terms of number of trades and average ticket size. Has uptake in any of these markets been particularly better or worse than you were expecting? And then the last one is on the transition to a European SE vehicle structure. Is that still expected to take place during the fourth quarter?

And my understanding is that you should see some minor operational cost savings as a result of this move. What do you expect the nature and magnitude of those savings to be, please? Thanks.

Dr. Ben Onianos, CFO, Flatex De Giro: Maybe we’ll start with the last question. So indeed, the transition from a German AG to an SE is still on track. We have received regulatory approval for the capital and the new legal entity. So we are in the final stages of sorting the time frame to execute that. And as of today, we expect that process to be done by year end.

In terms of cost savings, they are minor. We don’t expect anything gigantic from this one. Any cost savings are probably more linked to what we have issued earlier in combining our stock listed entities and our bank unit into one, which is something we are slowly but steadily preparing for, as communicated already to the market. On the first question, on the guidance. Look, we are this is a quarterly call, and we took the freedom to take the knowledge of a pretty good start into October.

And we thought it’s okay to take what we have seen but not to extrapolate on until the rest of the year. So the rest of this year is basically our normal planning that we had, which implies a modest growth compared to last year, but less than what we have seen in the October until today. That’s the most fair statement I can say mathematically. And on the crypto trading side, Oliver, would you like to take over?

Oliver Behrens, CEO, Flatex De Giro: Well, I think it’s like in most of the other trades as well. Germany has the slightly higher average trade size than the other countries. But it’s also fair to say we have not fully rolled out to every country. So the numbers, especially for the four countries we rolled out in October or September, have not a full year. So it’s too early to tell whether these numbers are stable or not.

We still see the uptake rates going up, which means we have not it’s not in a BAU steady state situation with crypto trading. That I think we will have a better statistics somewhere in the summer or so of next year when we have a more relevant time frame to look at.

Zach Wirth, Analyst, Autonomous Research: Okay. Thanks.

Conference Operator: Next questions come from Jan White from Autonomous Research. Your line is open.

Jan White, Analyst, Autonomous Research: Hi there. Thanks for taking my questions. Just a few follow ups from my side, please. First up, on the treasury investments, can you just clarify, are you adding interest rate risk with the increased flexibility there? And could there be any impact on Pillar two capital requirements from that?

And maybe just you can also just clarify how the so how you’re thinking about the increased flexibility for product rollouts on the liability side? Should we expect to see term deposit products, for example, in the near future, now that you have this flexibility on the asset side? That’s question one. Secondly, can you just clarify for us how much of your revenue margin is linked to the size of the actual trade? I have in mind, it’s basically just FX and crypto, but are there other pricing structures where you basically earn higher RPC when the actual value traded tends to be larger?

That’s question two. And just finally, can you say a little bit more about the scope of the, Vascon investigation that you mentioned. I’m assuming this refers to the De Jiro Go Zero campaign back in 4Q twenty twenty one. What’s the kind of worst case outcome there is what I’m thinking of? Can you just say a little more about that, please?

Yes.

Oliver Behrens, CEO, Flatex De Giro: Maybe I start with the interest rate risk. So as put this way, of course, we will add a little bit of interest rate risk, but it’s so minor that it’s not really material. To give you an example, if we have every money on the overnight deposit with a Bundesbank, then of course, if we add for a small proportion short term bonds, it is an extended duration beyond the overnight risk. But at the same time, we are buying only bonds that we can put into repo. We are buying short dated bonds, three months, six months, that give us an enhancement at and over and above of the overnight rate with the Bundesbank.

At the moment, still, the Bundesbank rate, the ECB overnight rate is 2%. And you’ll find some bonds in a high quality AAA related area with I think we have 90 whatever percent of the, what, euros 700,000,000 or so we have in bonds in Germany. And the maximum duration we bought for maybe €100,000,000 of that is three years. So you can see from that calculation, of course, the duration is longer than overnight, but it’s probably, on average, I don’t know what, maybe four or five months. We haven’t done the arithmetic, to give you an example.

So we expect, again, the pickup to be 15 to 25 basis points. And with the new system, we can engage better in additional money market instruments to diversify the risk with repos, reverse repos, securities lending and so on. That would give us a little bit more flexibility. But you can be assured, we have a risk averse approach for our clients’ money not to have any hiccups here. In terms of hopefully, that answers first part of your question one.

The question towards additional products is clearly, yes, we are looking at, and we said this already at the beginning of this year, at further product enhancements. And we are currently, again, going through the planning. We believe for generations of European savers, deposits is an area which we might consider. But obviously, as we are going through the planning and we are discussing these topics with our Supervisory Board and stakeholders and have to prioritize what we can do on the platform and how quickly this would be available. We will say more to these changes at the Capital Markets outlook in February and come back on the situation.

And maybe if I may, I also say something on this Waffen situation. We are in first of all, it’s a topic from the past. It’s not an actual issue. It’s a topic exactly, as you said, from 2021, when previous management was a little bit, let’s say, maybe an ignorance in the discussions with the regulators. We have a very good relationship with the regulators.

We have an open dialogue, but we still have to deal with some issues from the past, and that is 2021 is almost five years ago. The impact, as Bjorn mentioned, has already been mostly provisioned. And if there is an additional payment once we are in agreement, it will probably be not able for you to see that. So the impact will be is already in the numbers, let’s put it this way, okay?

Dr. Ben Onianos, CFO, Flatex De Giro: Iain, I would like to finish off with your second question. This was the question relating to products where we actually benefit from the size of the trade. You mentioned in your calculation two examples. I think I would add a third one, which is exchange traded products without specifying the details because they are very individual, but those are also trade category where size matters.

Jan White, Analyst, Autonomous Research: The

Conference Operator: next question comes from the line of Christoph Grulisch from Berenberg. Your line is open.

Christoph Grulisch, Analyst, Berenberg: Good morning and thank you for taking my question. It’s three from my side, please. The first one would be another free follow-up on the new treasury system. So if I look at your slide where you break down, yes, how the cash deposits are being used, looks like about 20% of the cash, which is not used for the lending book, is currently invested in bonds. But what is kind of the final targets here in terms of the liquidity portfolio?

How much of that would sit in bonds? And how much would, yes, remain parked at the Bundesbank? That would be the first one. Then secondly, on the cost side, you mentioned that you’ve reached now a clean, sustainable level. So I’m just wondering what type of normal cost inflation we should expect from here on in the OpEx line.

And then lastly, a follow-up on your comments regarding the average commission per trade. So if I look at the year over year comparison in Q3, it looks like that the average number has gone up by $0.50 in total. You mentioned about $0.20 yes, was coming from the higher share of U. S. Trades, €4 some crypto.

So I mean, so there is still, yes, half of that kind of uptick, yes, contributed by other factors. Is that mainly the mix shift between the Flatheads and the Dejero brands? Or what other factors should we take into consideration here?

Oliver Behrens, CEO, Flatex De Giro: Okay. Thanks, Christophe. Shall I start with the treasury system? Maybe. I would say we have not fixed a clear mix of product.

But one thing is clear, we need to stay very liquid for our clients, money movements and so on. At the same time, credit spreads are at all time low. So we will remain flexible when it comes to instruments. But obviously, because the money is very sticky, we can add a little bit of duration. But it is important for us that the bonds are available for repo, that we can always fulfill all our and stay liquid for any money movement that happens.

We will tap slowly into new areas like, as I mentioned, swaps, repos and sec lending. And the expectation is to create this 15 to 25 basis point enhancement. I would a ballpark number is, at the moment, we think about, whatever, 20%, 25% in bonds at the moment. And when we look at additional instruments once the system is running, I would say it’s little bit too early to tell what we will exactly do in terms of asset allocation because we don’t know what the spreads look like once the system is running. And if the spreads are not attractive or the yield curve will go inverted again, we will stay at the short end of the curve because it will be most beneficial.

Dr. Ben Onianos, CFO, Flatex De Giro: Maybe on the two other questions, your last question on the commission rate. Really, it’s simply the product mix that benefited quite a bit to the numbers. So we simply had more revenue generating trades and higher revenue generating trades compared to other traits. And we mentioned a few minutes sort of which traits those are in general. So it’s been a positive trend for us.

And on the cost side, we haven’t finished the modeling for 2026. Oliver alluded already to the fact that we are preparing currently all the documents to get approval from the committees and supervisory board and so on. But clearly, it’s not going to be 60. We don’t expect any big changes next year. We expect normal inflation patterns.

And whether it’s going to be a number of slightly above or slightly below 50, we simply don’t know yet.

Oliver Behrens, CEO, Flatex De Giro: But it’s very clear, we will stay disciplined on cost. Great. Yes. That’s very helpful.

Conference Operator: The next question comes from Andrew Love from Citi. Your line is open.

Andrew Love, Analyst, Citi: Hi guys. I’ve got a quick follow-up. Could you possibly disclose the share of customers that placed at least one trade during Q3? I think the last time it was disclosed was Q1 when it was 33%. So if you’re able to share what that figure is for Q2 and Q3, that would be really helpful.

Dr. Ben Onianos, CFO, Flatex De Giro: So yes, we are happy to disclose that. For Q3, it’s 30%, three-zero. And if we look at the second quarter, it’s also 30%. So we qualitatively always tend to say that about onethree of our client base is active in a given quarter. But the Q2 and the Q3 numbers were three-zero, 30%.

Andrew Love, Analyst, Citi: Can I just ask a quick follow-up? So that seems to be slightly below the figures from Q4 last year and Q1. Is there sort of any particular reason for that? And is 30% the right number going forward?

Dr. Ben Onianos, CFO, Flatex De Giro: Look, it’s hard to comment. Increased market volatility tends to benefit trade from existing clients, particularly from clients who trade with us frequently. So you don’t have an even distribution of client behavior when you look at cohorts. People who trade or clients who trade tend to trade more on average than the average client when market volatility picks up, and that might lead to some of those effects. But the effects are not in a range that where we start looking at them with any special care or caution.

Andrew Love, Analyst, Citi: Great. Thanks very much.

Conference Operator: There are no further questions at this time. So I hand the conference back to the speakers for any closing comments.

Achim Schreck, Head of Investor Relations, Flatex De Giro: Thank you very much all for your participation today in our Q3 call. As already mentioned, obviously, if you have any further questions, any follow ups, Laura and myself are more than happy to take your calls and e mails individually now after the call. And again, thanks for the good questions today during the call. Thank you very much, and have a great day. Goodbye.

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