On August 20, Futu Holdings Limited (NASDAQ:FUTU) reported the strongest quarter in its history, with trading volume pushing past HK$6 trillion for the first time. Buried inside those numbers, though, is a reminder that the company's oldest and largest client base isn't as untouchable as it once looked, with **** et outflows tied to new compliance rules. The result is a business firing on nearly every cylinder except the one investors have relied on the longest.
Futu's headline numbers back up the enthusiasm. Total revenue climbed 35.6% year over year to HK$7.2 billion, while net income jumped 41.6% to HK$3.6 billion, pushing net margin to 50.6%. Total trading volume rose 78.8% year over year to a record HK$6.42 trillion, with U.S. stock trading volume up 67.2% sequentially to HK$5.02 trillion as clients piled into semiconductor and artificial intelligence names. Client **** ets grew even faster than trading activity, up 43.6% year over year to HK$1.4 trillion, and margin financing and securities lending balances jumped 85.1% to HK$95.1 billion as an active Hong Kong IPO market encouraged clients to lean on leverage.
The growth isn't confined to trading. Net new funded accounts rose 23.7% year over year to 252,000, led by Malaysia, where the business reached operating breakeven for the first time. Futu also picked up a Type A securities license from Thailand's regulator, its third market launch in the ASEAN region, and became the first Hong Kong broker approved for securities-backed margin financing tied to virtual **** ets under an upgraded Type 1 license. In the U.S., moomoo's newly launched prediction markets generated more than $200 million in trade volume in their first month, while Futu's IPO business served nearly 60% of new Hong Kong listings during the quarter.
Not every part of the story is expanding. Chairman Leaf Li acknowledged that **** ulative **** et outflows tied to new regulations came to a mid-single-digit percentage of total client **** ets, the result of compliance-driven adjustments and risk-off sentiment among the company's Mainland Chinese clients. Growth is also getting more expensive to buy. Customer acquisition cost rose sequentially to HK$2,600 as new regulatory developments weighed on net new funded accounts.
Profitability showed some strain too, with gross margin slipping to 86.3% from 87.4% a year earlier as processing and cloud service fees increased, while operating expenses rose 35.1% year over year as research and development, selling and marketing, and general administrative costs all climbed on investments in AI, Web 3 initiatives, and international expansion. Even the brokerage business had a trade-off, as blended commission rates fell because a larger share of trading shifted into lower-margin U.S. stocks and options.
#Margin
Futu's headline numbers back up the enthusiasm. Total revenue climbed 35.6% year over year to HK$7.2 billion, while net income jumped 41.6% to HK$3.6 billion, pushing net margin to 50.6%. Total trading volume rose 78.8% year over year to a record HK$6.42 trillion, with U.S. stock trading volume up 67.2% sequentially to HK$5.02 trillion as clients piled into semiconductor and artificial intelligence names. Client **** ets grew even faster than trading activity, up 43.6% year over year to HK$1.4 trillion, and margin financing and securities lending balances jumped 85.1% to HK$95.1 billion as an active Hong Kong IPO market encouraged clients to lean on leverage.
The growth isn't confined to trading. Net new funded accounts rose 23.7% year over year to 252,000, led by Malaysia, where the business reached operating breakeven for the first time. Futu also picked up a Type A securities license from Thailand's regulator, its third market launch in the ASEAN region, and became the first Hong Kong broker approved for securities-backed margin financing tied to virtual **** ets under an upgraded Type 1 license. In the U.S., moomoo's newly launched prediction markets generated more than $200 million in trade volume in their first month, while Futu's IPO business served nearly 60% of new Hong Kong listings during the quarter.
Not every part of the story is expanding. Chairman Leaf Li acknowledged that **** ulative **** et outflows tied to new regulations came to a mid-single-digit percentage of total client **** ets, the result of compliance-driven adjustments and risk-off sentiment among the company's Mainland Chinese clients. Growth is also getting more expensive to buy. Customer acquisition cost rose sequentially to HK$2,600 as new regulatory developments weighed on net new funded accounts.
Profitability showed some strain too, with gross margin slipping to 86.3% from 87.4% a year earlier as processing and cloud service fees increased, while operating expenses rose 35.1% year over year as research and development, selling and marketing, and general administrative costs all climbed on investments in AI, Web 3 initiatives, and international expansion. Even the brokerage business had a trade-off, as blended commission rates fell because a larger share of trading shifted into lower-margin U.S. stocks and options.
#Margin
4 hours ago
