On May 28, 2024, Futu Holdings Limited (Nasdaq: FUTU), a leading tech-driven online brokerage and wealth management platform, released its unaudited financial results for the first quarter ended March 31, 2024. The report highlights significant growth in key metrics despite challenges, showcasing the company’s resilience and strategic progress.
Operational Highlights:
- Paying Clients: The total number of paying clients increased by 23.5% year-over-year, reaching 1,887,270.
- Registered Clients: Registered clients rose by 15.4% year-over-year, totaling 3,812,326.
- Total Users: The user base expanded by 12.3% year-over-year to 22.5 million.
- Client Assets: Total client assets increased by 11.2% year-over-year to HK$517.9 billion. The daily average client assets stood at HK$480.0 billion, up 6.0% from the same period in 2023.
- Trading Volume: Total trading volume in the first quarter increased by 9.5% year-over-year to HK$1.3 trillion, with U.S. stocks making up HK$1.0 trillion of this volume.
- Daily Average Revenue Trades (DARTs): DARTs rose by 7.0% year-over-year to 549,854.
- Margin Financing and Securities Lending: The balance grew by 8.9% year-over-year to HK$37.6 billion.
Financial Highlights:
- Total Revenues: Increased by 3.7% year-over-year to HK$2,592.5 million (US$331.3 million).
- Gross Profit: Decreased by 3.9% year-over-year to HK$2,122.2 million (US$271.2 million), with a gross margin of 81.9%.
- Net Income: Decreased by 13.1% year-over-year to HK$1,035.1 million (US$132.3 million).
- Non-GAAP Adjusted Net Income: Decreased by 11.6% year-over-year to HK$1,121.1 million (US$143.3 million).
CEO Commentary
Leaf Hua Li, Chairman and CEO of Futu, highlighted the substantial growth in new paying clients, with a 330.8% year-over-year increase to 177,000 new clients. This growth contributed significantly to achieving over 50% of the full-year guidance for new paying clients within the first quarter alone. The CEO emphasized the strong performance in new markets like Malaysia and Japan, which contributed to the company”s robust client growth and asset inflow.
Market and Product Performance:
- Client Asset Growth: Total client assets in wealth management reached HK$64.0 billion, a 72.8% increase year-over-year.
- Trading Volume: A significant 40.0% quarter-over-quarter increase in total trading volume, driven by a surge in interest in technology, high-dividend stocks, and AI-themed stocks.
- Wealth Management: The wealth management segment saw a strong demand for U.S. treasury bills, with a 21.3% sequential increase in bond holdings.
Financial Breakdown:
- Revenues: Brokerage commission and handling charge income saw a slight increase of 0.3% year-over-year, while interest income grew by 4.6%, driven by higher margin financing and bank deposit interest.
- Costs: Total costs rose by 61.7% year-over-year to HK$470.2 million, largely due to increased interest expenses and higher processing and servicing costs.
- Operating Expenses: Increased by 15.6% year-over-year to HK$929.5 million, with notable increases in selling and marketing expenses due to a surge in new paying clients.
Conclusion
Despite a challenging market environment, Futu Holdings Limited demonstrated solid operational growth and strategic advancements in new markets. The company continues to focus on expanding its client base and enhancing its product offerings to drive future growth. To learn more please visit the earnings report.