ISX Financial: Profit surge and a healthy EPITDA

Nicosia-based ISX Financial has reported a profit after tax of €3.6m for the full year 2022, which it said has resulted in a healthy EBITDA margin of 25%.

The results were presented at the company’s AGM on 26 September by Nikogiannis Karantzis, the company’s Managing Director, and Ajay Treon, Chief Financial Officer.

Beyond its significant profit, the company has reported robust revenue growth for 2022, which was 21% compared to the previous year, as well as a cash increase of €1m y-o-y.

“In the full year 2022, the Group reported a profit after tax of €3.6 million, marking a remarkable 171% increase compared to the prior year,” said Karantzis. “This resulted in a healthy EBITDA margin of 25%. This remarkable upswing can be attributed to solid revenue growth and a significantly smaller impairment charge from our investment in NSX, amounting to €0.6 million in 2022 compared to €1.5 million in 2021. When we exclude impairments, the Group reported a profit of €4.3 million, reflecting a substantial 52% increase versus the prior year. “

ISX Financial’s revenue growth in 2022 was 21% compared to the prior year, fuelled by the successful launch of new products, increased revenue from existing clients, and the addition of new client revenues. “A particular highlight was the exceptional performance of our Open Banking segment, which experienced a remarkable 90% increase in revenue in the fourth quarter, surpassing the third quarter's results.”

The report also showed the company’s balanced expense management: “In our commitment to sustained growth, we made strategic investments throughout the year, leading to a 12% increase in expenses, particularly driven by higher employee costs and expanded investments in technology. Despite this, operating costs, which include variable payment scheme costs, remained largely stable. Our focus on cost-effective payment schemes and a shift away from card acquiring contributed to this stability.”

As of 31 December, 2022, the company’s cash and cash equivalents amounted to €6.0 million, representing a €1 million increase compared to the previous year-end. Operating activities generated €6.6 million in cash flows, partly offset by investments in intangible assets totalling €2.9 million. Additionally, it invested €1.1 million in NSX and made repayments of borrowings amounting to €1.5 million.

As regards 2023, in H1, Karantzis said the company intentionally shifted its focus away from rapid expansion to concentrate on upgrading its technology infrastructure. This strategic move sets the stage for even more significant growth in H2 and beyond, he said.

As for the company’s revenues, they saw substantial growth, marking an 8% increase.

Looking ahead, the company said it is on track to hit its revenue target of €30 million by the end of the year. This represents a year-on-year increase of approximately 10%.

Finally, ISX Financial’s Open Banking proposition has emerged as its highest-margin product. In 2023, Open Banking has become a major profit driver, contributing 53% to its overall profits. This is a substantial increase from 2022, where it accounted for 17.3% of profits.