Plus500 (PLUS.L): $779m of net cash and 50% ROE, but EBITDA margin has fallen from 62% to 40.5% as the business diversifies

*Researched and valued as of 13 July 2026. If you're reading this a few days later, treat the price/multiples below as a snapshot from that date, not today's numbers.*

Plus500 is a CFD and options broker that's spent the last few years building a second business alongside its core OTC trading platform: US futures clearing, institutional B2B clearing, and prediction markets. The stock rallied 93% off its November low to a June high, then fell 24% over the following weeks as an H1 update showed margins compressing faster than the market wanted. That non-OTC arm has grown from nothing to about 15% of group revenue in five years, but it carries much lower margins than the OTC core, and group EBITDA margin has fallen from roughly 62% in FY2020 to 40.5% in H1 2026 as a direct result. The stock still trades at the highest multiple in its 14-year listed history, on the bet that the new business scales fast enough to make the mix shift worth it.

Headline numbers (FY2025, RNS basis, valued as of 13 July 2026):

* Revenue: $792.4m, +3% YoY
* EBITDA margin (H1 2026): 40.5%, down from 44.6% in H1 2025
* ROE: 50.5%, vs IG Group 26.1% and CMC Markets 16.3%
* Trailing P/E: 13.8x, the highest in the company's history; historical median is about 7.5x
* Net cash: $779.5m, effectively zero financial debt
* Dividend yield: 4.1%, vs a 1.8% peer median

**The margin compression is structural**

This isn't a cyclical dip. FY2024 EBITDA was $342.3m on $768.3m revenue (44.6% margin); FY2025 was $348.1m on $792.4m (43.9%); H1 2026 was $187.5m on $462.9m (40.5%). Revenue grew 12% year-on-year in H1 2026 but EBITDA rose just 1%, because the non-OTC business scaled and customer-acquisition spend accelerated at the same time. The buildout has moved fast: ICE Clear US and ICE Clear Europe memberships, an exclusive Topstep partnership, a clearing appointment for CME/FanDuel prediction markets, a US prediction-markets launch, and a small equities bolt-on in India. Non-OTC revenue reached about $70m in H1 2026, growing roughly 30% year-on-year. The core OTC business is durable in its own right though: about 48% of OTC revenue in the first nine months of 2025 came from customers trading more than five years, and ARPU hit a record $3,268 in FY2025.

**Cash conversion is slipping**

OCF conversion of net income fell from 1.29x in FY2023 to 1.03x in FY2025. Working capital reversed from a $47.4m tailwind to a $19.7m headwind, mostly receivables tied to the expanding clearing business. Share-based comp grew from $4.8m to $25.8m over three years, diluting shareholders while the company simultaneously buys back stock. Free cash flow fell from $453.3m in FY2022 to $286.0m in FY2025, down 37% in three years. The FY2025 results also introduced "Customer Income" as the headline performance metric, which strips out interest income and Customer Trading Performance (the latter came in negative in FY2025, meaning clients collectively made money, unusual for a CFD market-maker). In H1 2026, Customer Income grew 24% while revenue grew only 12%, a gap management hasn't quantified.

**What 13.8x is pricing**

The trailing P/E of 13.8x sits above every fiscal year-end print in the dataset back to FY2013; the historical median is about 7.5x and the prior high was 11.2x. Against peers, Plus500's P/E is only slightly above IG Group's 12.7x, but its ROE is nearly double (50.5% vs 26.1%) and its yield more than double (4.1% vs 1.8%), so the premium looks earned on those terms. The real test is FY2026 consensus, which needs $368.1m EBITDA on $811.5m revenue, a 45.4% full-year margin. H1 delivered 40.5%, so H2 needs to print around 52%, a level not seen since FY2022. At a stabilised 45% margin, EV/EBITDA works out to about 7.8x, a fair multiple for a high-return, net-cash business. At 40%, it's 8.7x with no room for error.

**Bottom line**

The balance sheet and capital return story are genuinely strong: $779.5m net cash, a 39% share-count reduction over a decade, 50.5% ROE, negative accruals confirming cash-backed earnings, and a 4.1% yield. But the market is already paying for a margin recovery that consensus says arrives in H2 2026, and the trend in earnings quality is pointing the other way, not confirming it. If the H2 step-up doesn't happen, a de-rating back toward the 8-10x historical range is the mechanical result.

**What to watch**

* H2 2026 EBITDA margin: consensus needs about 52% to hit the 45.4% full-year target after a 40.5% H1 print
* Non-OTC revenue growth decelerating below 20% YoY (currently around 30%)
* OCF-to-net-income conversion falling below 1.0x, which would push the earnings-quality concern past a working-capital timing issue

**Sources**

* FY2025 Preliminary Results, 9 Feb 2026 (RNS)
* H1 2026 Trading Update, 13 Jul 2026 (RNS)
* Selfside data: income statement, balance sheet, cash flow, FY2015-FY2025
* Selfside data: snapshot and peer stats, as of 13 Jul 2026
* IG Group and CMC Markets trading updates, Jul 2026 (RNS)

*For information purposes only, not investment advice - independent research, originally published in full at Selfside.*