Futu Announces Fourth Quarter and Full Year 2023 Unaudited Financial Results

Rhea-AI Summary

Futu Holdings Limited announced its unaudited financial results for Q4 and full year 2023. The company saw a 15.0% increase in paying clients, totaling 1.7 million. Total client assets rose to HK$485.6 billion. However, total trading volume declined by 12.5% in Q4 2023. Financially, total revenues increased by 4.1% in Q4 and 31.4% for the full year 2023. Net income decreased by 8.6% in Q4 but increased by 46.2% for the full year.

Positive

• Strong growth in paying clients with a 15.0% increase to 1.7 million.
• Total client assets reached HK$485.6 billion, a 16.3% year-over-year increase.
• Decline in total trading volume by 12.5% in Q4 2023.
• Total revenues increased by 4.1% in Q4 and 31.4% for the full year 2023.
• Net income decreased by 8.6% in Q4 but increased by 46.2% for the full year.

Negative

• None.

Insights

Financial Analyst

The financial results of Futu Holdings Limited indicate a mixed performance, with a notable increase in total revenues and net income on an annual basis but a decline in net income for the fourth quarter. The growth in paying clients and client assets reflects a positive trend in user acquisition and asset retention, which is crucial for the company's revenue model that relies on trading volumes and margin financing. However, the decrease in total trading volume and DARTs suggests a potential reduction in user trading activity, which could impact future revenue streams.

From an investment perspective, the expansion into new markets, such as Malaysia and the strategic focus on reducing friction in the account opening process are promising signs of Futu's growth strategy. These moves could potentially offset the sluggish trading volumes observed in the Hong Kong market. Investors should monitor the company's ability to maintain client growth and asset accumulation, as these are critical drivers for sustained revenue growth in the brokerage industry.

Market Research Analyst

Futu's performance in various geographic markets provides insight into the company's strategic positioning. The decline in client acquisition in Hong Kong due to poor market performance contrasts with the sustained growth in Singapore and the rapid expansion in Japan and Malaysia. This geographical diversification could mitigate risks associated with market-specific downturns and is indicative of Futu's adaptive market entry strategies.

Furthermore, the company's focus on leveraging technology to streamline account opening and targeted marketing efforts are indicative of a user-centric approach, which is essential in the competitive fintech space. The increase in margin financing and securities lending balance suggests a growing trust in Futu's platform and services, which could enhance customer lifetime value and contribute to long-term profitability.

Economist

The performance of Futu Holdings in the context of global economic trends shows resilience amidst market volatility. The increase in client assets and margin financing indicates a robust demand for wealth management and trading services. However, the decline in trading volumes and DARTs may reflect broader economic uncertainties affecting investor behavior. As the company expands into new markets, it will need to navigate varying economic conditions and investor sentiment, which could influence its operational success.

The contrast between the year-over-year increase in revenues and the quarterly decline in net income could be indicative of rising costs or increased competition affecting profit margins. The company's future performance will depend on its ability to manage these challenges while capitalizing on growth opportunities in emerging markets and new investment products.

HONG KONG, March 14, 2024 (GLOBE NEWSWIRE) -- Futu Holdings Limited (“Futu” or the “Company”) (Nasdaq: FUTU), a leading tech-driven online brokerage and wealth management platform, today announced its unaudited financial results for the fourth quarter and full year ended December 31, 2023.

Fourth Quarter and Full Year 2023 Operational Highlights

• Total number of paying clients¹ increased 15.0% year-over-year to 1,710,106 as of December 31, 2023.
• Total number of registered clients² increased 10.2% year-over-year to 3,561,966 as of December 31, 2023.
• Total number of users³ increased 10.5% year-over-year to 21.6 million as of December 31, 2023.
• Total client assets increased 16.3% year-over-year to HK$485.6 billion as of December 31, 2023.
• Daily average client assets were HK$470.3 billion in the fourth quarter of 2023, an increase of 22.8% from the same period in 2022.
• Total trading volume in the fourth quarter of 2023 decreased by 12.5% year-over-year to HK$956.6 billion, in which trading volume for U.S. stocks was HK$704.6 billion, trading volume for Hong Kong stocks was HK$237.7 billion, and trading volume for stocks under the Stock Connect was HK$10.7 billion. Total trading volume in 2023 declined 12.8% year-over-year to HK$4.2 trillion.
• Daily average revenue trades (DARTs)⁴ in the fourth quarter of 2023 declined 22.2% year-over-year to 369,729. DARTs in 2023 declined 27.2% year-over-year to 428,745.
• Margin financing and securities lending balance increased 24.2% year-over-year to HK$33.1 billion as of December 31, 2023.

Fourth Quarter 2023 Financial Highlights

• Total revenues increased 4.1% year-over-year to HK$2,373.3 million (US$303.8 million).
• Total gross profit increased 0.1% year-over-year to HK$1,939.8 million (US$248.3 million).
• Net income decreased 8.6% year-over-year to HK$876.4 million (US$112.2 million).
• Non-GAAP adjusted net income⁵ decreased 6.3% year-over-year to HK$950.5 million (US$121.7 million).

Full Year 2023 Financial Highlights

• Total revenues increased 31.4% year-over-year to HK$10,008.4 million (US$1,281.3 million).
• Total gross profit increased 28.0% year-over-year to HK$8,472.2 million (US$1,084.7 million).
• Net income increased 46.2% year-over-year to HK$4,278.9 million (US$547.8 million).
• Non-GAAP adjusted net income increased 45.9% year-over-year to HK$4,569.8 million (US$585.1 million).

Mr. Leaf Hua Li, Futu’s Chairman and Chief Executive Officer, said, “In 2023, we added over 220 thousand paying clients, bringing the total number of paying clients to 1.7 million, up 15.0% year-over-year. We acquired over 59 thousand paying clients in the fourth quarter, down 8.6% quarter-over-quarter. In Hong Kong, client acquisition trended down due to sluggish Hong Kong stock market performance. In Singapore, client acquisition sustained the momentum in the third quarter as clients continued to demonstrate heightened interest in money market funds. Our efforts to reduce friction in the account opening process, combined with targeted marketing, led to an increase in client acquisition in Japan towards year-end, which further accelerated in the first quarter owing to the Japan stock market's exceptional performance. We officially launched our brokerage business in Malaysia on February 26^th, 2024. Leveraging the high brand awareness we garnered in the region through our rapid share gain in Singapore, we added over 30,000 clients within just one week of official launch, the fastest growth we have seen in any new market. Overall, we saw strong paying client growth across all markets in the first quarter as U.S. equities continued to post new highs and sentiments around Chinese equities rebounded. We are confident about client acquisition in 2024 and are guiding for 350 thousand net new paying clients.”

“Total client assets increased by 16.3% year-over-year and 3.7% quarter-over-quarter to HK$485.6 billion, driven by robust net asset inflow across all regions and market appreciation of our clients’ U.S. stock holdings. Notably, client assets in Singapore grew 25% sequentially as we continued to attract higher quality clients with our richer product portfolio and growing brand awareness. Margin financing and securities lending balance increased by 2.1%.”

“Total trading volume decreased by 12.2% quarter-over-quarter to HK$956.6 billion. Hong Kong stock trading volume fell by 12.8% sequentially to HK$237.7 billion against weak market performance. U.S. stock trading volume declined by 12.4% quarter-over-quarter to HK$704.6 billion due to lower turnover of the key U.S. technology names, partially offset by resilient trading turnover of leveraged and inverse ETFs.”

“Wealth management asset balance was HK$57.6 billion, up 82.3% year-over-year and 10.9% quarter-over-quarter. Clients’ bond holdings jumped by over 60% sequentially given robust demand for U.S. Treasury bills. In Hong Kong, we enriched our structured note offerings for professional investors. In Singapore, we entered into an exclusive distribution agreement with Fullerton Fund Management for its SGD-denominated money market fund, the first and only SGD T+0 money market fund for retail investors in Singapore.”

“We had 414 IPO distribution and IR clients as of quarter end, up 24.3% year-over-year. We underwrote 37 Hong Kong IPOs in 2023 and ranked first among all brokers, according to Wind. In the quarter, we acted as joint bookrunners for several high-profile HK IPOs, including those of J&T Express and UBTech.”

Fourth Quarter 2023 Financial Results

Revenues

Total revenues were HK$2,373.3 million (US$303.8 million), an increase of 4.1% from HK$2,280.7 million in the fourth quarter of 2022.

Brokerage commission and handling charge income was HK$904.0 million (US$115.7 million), a decrease of 13.8% from the fourth quarter of 2022. This was mainly due to lower trading volume.

Interest income was HK$1,331.9 million (US$170.5 million), an increase of 17.1% from the fourth quarter of 2022. The increase was mainly driven by higher interest income from bank deposits and higher margin financing income due to an increase in daily average margin balance.

Other income was HK$137.3 million (US$17.6 million), an increase of 45.6% from the fourth quarter of 2022. The increase was primarily attributable to higher fund distribution service income.

Costs

Total costs were HK$433.5 million (US$55.5 million), an increase of 26.7% from HK$342.2 million in the fourth quarter of 2022.

Brokerage commission and handling charge expenses were HK$59.2 million (US$7.6 million), a decrease of 7.5% from the fourth quarter of 2022. This decline was roughly in line with the decrease of our brokerage commission and handling charge income.

Interest expenses were HK$270.8 million (US$34.7 million), an increase of 48.8% from the fourth quarter of 2022. The increase was primarily due to higher expenses associated with our securities borrowing and lending business and higher margin financing interest expenses.

Processing and servicing costs were HK$103.5 million (US$13.3 million), an increase of 7.6% from the fourth quarter of 2022. The increase was primarily due to higher cloud service fee for new markets and higher system usage fee.

Gross Profit

Total gross profit was HK$1,939.8 million (US$248.3 million), an increase of 0.1% from HK$1,938.5 million in the fourth quarter of 2022. Gross margin was 81.7%, as compared to 85.0% in the fourth quarter of 2022.

Operating Expenses

Total operating expenses were HK$916.0 million (US$117.3 million), an increase of 12.0% from HK$817.9 million in the fourth quarter of 2022.

Research and development expenses were HK$363.1 million (US$46.5 million), an increase of 8.6% from the fourth quarter of 2022. This was primarily due to an increase in research and development headcount to support new product offerings in new markets, though the magnitude of the headcount growth decelerated throughout 2023.

Selling and marketing expenses were HK$182.5 million (US$23.4 million), an increase of 19.2% from HK$153.1 million in the fourth quarter of 2022. This was driven by a 41% year-over-year increase in net new paying clients, offset by lower client acquisition costs.

General and administrative expenses were HK$370.4 million (US$47.4 million), an increase of 12.1% from the fourth quarter of 2022. The increase was primarily due to an increase in general and administrative personnel, partially offset by lower professional service fees.

Income from Operations

Income from operations decreased by 8.6% to HK$1,023.8 million (US$131.1 million) from HK$1,120.7 million in the fourth quarter of 2022. Operating margin declined to 43.1% from 49.1% in the fourth quarter of 2022.

Net Income

Net income decreased by 8.6% to HK$876.4 million (US$112.2 million) from HK$958.7 million in the fourth quarter of 2022. Net income margin for the fourth quarter of 2022 declined to 36.9% from 42.0% in the year-ago quarter.

Non-GAAP adjusted net income decreased by 6.3% to HK$950.5 million (US$121.7 million) from the fourth quarter of 2022. Non-GAAP adjusted net income is defined as net income excluding share-based compensation expenses. For further information, see "Use of Non-GAAP Financial Measures" at the bottom of this press release.

Net Income per ADS

Basic net income per American Depositary Share (“ADS”) was HK$6.40 (US$0.82), compared with HK$6.88 in the fourth quarter of 2022. Diluted net income per ADS was HK$6.31 (US$0.81), compared with HK$6.80 in the fourth quarter of 2022. Each ADS represents eight Class A ordinary shares.

Full Year 2023 Financial Results

Revenues

Total revenues were HK$10,008.4 million (US$1,281.3 million), an increase of 31.4% from HK$7,614.0 million in 2022.

Brokerage commission and handling charge income was HK$3,944.8 million (US$505.0 million), a decrease of 1.6% from HK$4,007.6 million in 2022. This was mainly due to lower trading volume, largely offset by higher blended commission rate.

Interest income was HK$5,536.4 million (US$708.8 million), an increase of 72.2% from HK$3,214.3 million in 2022. The increase in interest income was mainly driven by higher interest income from bank deposits and securities borrowing and lending business.

Other income was HK$527.2 million (US$67.5 million), an increase of 34.5% from HK$392.1 million in 2022. The increase was primarily attributable to higher fund distribution service income.

Costs

Total costs were HK$1,536.2 million (US$196.7 million), an increase of 54.2% from HK$996.1 million in 2022.

Brokerage commission and handling charge expenses were HK$249.6 million (US$32.0 million), a decrease of 24.3% from HK$329.8 million in 2022. This was attributable to lower trading volume and cost savings from our U.S. self-clearing business.

Interest expenses were HK$910.8 million (US$116.6 million), an increase of 211.4% from HK$292.5 million in 2022. The increase was mainly driven by higher expenses associated with our securities borrowing and lending business.

Processing and servicing costs were HK$375.9 million (US$48.1 million), an increase of 0.6% from HK$373.8 million in 2022.

Gross Profit

Total gross profit was HK$8,472.2 million (US$1,084.7 million), an increase of 28.0% from HK$6,617.9 million in 2022. Gross profit margin declined from 86.9% in 2022 to 84.7% in 2023.

Operating Expenses

Total operating expenses were HK$3,464.7 million (US$443.6 million), an increase of 13.6% from HK$3,049.0 million in 2022.

Research and development expenses were HK$1,440.9 million (US$184.5 million), an increase of 17.9% from HK$1,222.1 million in 2022. The increase was primarily due to an increase in research and development headcount.

Selling and marketing expenses were HK$710.3 million (US$90.9 million), a decrease of 20.7% from HK$895.8 million in 2022. The decrease was mainly due to slower paying client growth and lower customer acquisition costs.

General and administrative expenses were HK$1,313.5 million (US$168.2 million), an increase of 41.1% from HK$931.1 million in 2022. The increase was primarily due to an increase in headcount for general and administrative personnel, especially in new markets.

Income from Operations

Income from operations increased by 40.3% to HK$5,007.5 million (US$641.1 million) from HK$3,568.9 million in 2022. Operating margin increased to 50.0% from 46.9% in 2022 primarily due to strong topline growth and operating leverage.

Net Income

Net income increased by 46.2% to HK$4,278.9 million (US$547.8 million) from HK$2,926.9 million in 2022.

Non-GAAP adjusted net income increased by 45.9% to HK$4,569.8 million (US$585.1 million) from HK$3,131.4 million in 2022. Non-GAAP adjusted net income is defined as net income excluding share-based compensation expenses. For further information, see "Use of Non-GAAP Financial Measures" at the bottom of this press release.

Net Income per ADS

Basic net income per American Depositary Share (“ADS”) was HK$31.00 (US$3.97), compared with HK$20.55 in 2022. Diluted net income per ADS was HK$30.59 (US$3.92), compared with HK$20.34 in 2022. Each ADS represents eight Class A ordinary shares.

New Share Repurchase Program

The Company announced its US$500 million share repurchase program in March 2022, and by 2023 year-end, the expiration date, the Company had repurchased an aggregate of 11 million ADSs with approximately US$365 million in open market transactions. In addition, the Company's board of directors has authorized a new share repurchase program under which the Company may repurchase up to US$500 million worth of its ADSs, until December 31, 2025. The Company plans to fund the repurchases from its existing cash balance.

Under the new share repurchase program, Futu may repurchase its ADSs from time to time in the open market at prevailing market prices, in privately negotiated transactions, in block trades and/or through other legally permissible means, depending on market conditions and in accordance with applicable rules and regulations. Futu's board of directors will review the share repurchase program periodically, and may modify, suspend or terminate the share repurchase program at any time.

Conference Call and Webcast

Futu's management will hold an earnings conference call on Thursday, March 14, 2023, at 7:30 AM U.S. Eastern Time (7:30 PM on the same day, Beijing/Hong Kong Time).

Please note that all participants will need to pre-register for the conference call, using the link

https://register.vevent.com/register/BI6ca5f071faa5463a85ad66444ee71849.

It will automatically lead to the registration page of "Futu Holdings Ltd Fourth Quarter and Full Year 2023 Earnings Conference Call", where details for RSVP are needed.

Upon registering, all participants will be provided in confirmation emails with participant dial-in numbers and personal PINs to access the conference call. Please dial in 10 minutes prior to the call start time using the conference access information.

Additionally, a live and archived webcast of this conference call will be available at https://ir.futuholdings.com/.

About Futu Holdings Limited

Futu Holdings Limited (Nasdaq: FUTU) is an advanced technology company transforming the investing experience by offering fully digitalized financial services. Through its proprietary digital platforms, Futubull and moomoo, the Company provides a full range of investment services, including trade execution and clearing, margin financing and securities lending, and wealth management. The Company has embedded social media tools to create a network centered around its users and provide connectivity to users, investors, companies, analysts, media and key opinion leaders. The Company also provides corporate services, including IPO distribution, investor relations and ESOP solution services.

Use of Non-GAAP Financial Measures

In evaluating the business, the Company considers and uses non-GAAP adjusted net income, a non-GAAP measure, as a supplemental measure to review and assess its operating performance. The presentation of the non-GAAP financial measure is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with U.S. GAAP. The Company defines non-GAAP adjusted net income as net income excluding share-based compensation expenses. The Company presents the non-GAAP financial measure because it is used by the management to evaluate the operating performance and formulate business plans. Non-GAAP adjusted net income enables the management to assess the Company's operating results without considering the impact of share-based compensation expenses, which are non-cash charges. The Company also believes that the use of the non-GAAP measure facilitates investors' assessment of its operating performance.

Non-GAAP adjusted net income is not defined under U.S. GAAP and is not presented in accordance with U.S. GAAP. This non-GAAP financial measure has limitations as analytical tools. One of the key limitations of using non-GAAP adjusted net income is that it does not reflect all items of expense that affect the Company's operations. Share-based compensation expenses have been and may continue to be incurred in the business and are not reflected in the presentation of non-GAAP adjusted net income. Further, the non-GAAP measure may differ from the non-GAAP information used by other companies, including peer companies, and therefore their comparability may be limited.

The Company compensates for these limitations by reconciling the non-GAAP financial measure to the nearest U.S. GAAP performance measure, all of which should be considered when evaluating the Company's performance.

For more information on this non-GAAP financial measure, please see the table captioned "Unaudited Reconciliations of Non-GAAP and GAAP Results" set forth at the end of this press release.

Exchange Rate Information

This announcement contains translations of certain HK dollars (“HK$”) amounts into U.S. dollars ("US$") at specified rates solely for the convenience of the reader. Unless otherwise stated, all translations from HK$ to US$ were made at the rate of HK$7.8109 to US$1.00, the noon buying rate in effect on December 29, 2023 in the H.10 statistical release of the Federal Reserve Board. The Company makes no representation that the HK$ or US$ amounts referred could be converted into US$ or HK$, as the case may be, at any particular rate or at all.

Safe Harbor Statement

This announcement contains forward-looking statements. These statements are made under the "safe harbor" provisions of the United States Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates" and similar statements. Among other things, the quotations from the management team of the Company, contain forward-looking statements. Futu may also make written or oral forward-looking statements in its periodic reports to the SEC, in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Statements that are not historical facts, including statements about Futu's beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, including but not limited to the following: Futu's goal and strategies; Futu's expansion plans; Futu's future business development, financial condition and results of operations; Futu's expectations regarding demand for, and market acceptance of, its credit products; Futu's expectations regarding keeping and strengthening its relationships with borrowers, institutional funding partners, merchandise suppliers and other parties it collaborates with; general economic and business conditions; and assumptions underlying or related to any of the foregoing. Further information regarding these and other risks is included in Futu's filings with the SEC. All information provided in this press release and in the attachments is as of the date of this press release, and Futu does not undertake any obligation to update any forward-looking statement, except as required under applicable law.

For investor inquiries, please contact:

Investor Relations
Futu Holdings Limited
ir@futuholdings.com

_________________________

_{¹ The number of paying clients refers to the number of clients with assets in their trading accounts with Futu.
² The number of registered clients refers to the number of users with one or more trading accounts with Futu.
³ The number of users refers to the number of user accounts registered with Futu.
⁴ The number of Daily Average Revenue Trades (DARTs) refers to the number of average trades per day that generate commissions or fees.
⁵ Non-GAAP adjusted net income is defined as net income excluding share-based compensation expenses.}

FUTU HOLDINGS LIMITED UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands, except for share and per share data)
	As of December 31,		As of December 31,
	2022		2023		2023
	HK$		HK$		US$
ASSETS
Cash and cash equivalents	5,028,898		4,937,538		632,134
Cash held on behalf of clients	50,685,472		44,369,310		5,680,435
Restricted cash	1,215		1,232		158
Term deposit	5,860		5,540		709
Short-term investments	675,064		3,114,613		398,752
Securities purchased under agreements to resell	32,000		133,039		17,032
Loans and advances-current (net of allowance of HK$27,840 thousand and HK$45,949 thousand as of December 31, 2022 and December 31, 2023, respectively)	26,676,358		32,528,421		4,164,491
Receivables:
Clients	513,358		293,505		37,576
Brokers	5,914,963		5,189,155		664,348
Clearing organizations	3,066,953		4,244,793		543,445
Fund management companies and fund distributors	79,086		151,691		19,420
Interest	254,310		268,504		34,376
Prepaid assets	28,507		54,691		7,002
Other current assets	102,258		135,479		17,345
Total current assets	93,064,302		95,427,511		12,217,223
Operating lease right-of-use assets	196,864		224,092		28,690
Long-term investments	239,694		238,556		30,541
Loans and advances-non-current	36,765		18,934		2,424
Other non-current assets	965,205		1,226,754		157,055
Total non-current assets	1,438,528		1,708,336		218,710
Total assets	94,502,830		97,135,847		12,435,933

LIABILITIES
Amounts due to related parties	52,725			69,018			8,836
Payables:
Clients	57,209,066			48,762,263			6,242,848
Brokers	11,815,274			15,648,286			2,003,391
Clearing organizations	51,867			24,096			3,085
Fund management companies and fund distributors	90,801			175,575			22,478
Interest	9,864			44,109			5,647
Borrowings	2,480,532			5,651,565			723,549
Lease liabilities-current	109,416			114,682			14,682
Accrued expenses and other current liabilities	1,706,159			1,939,004			248,243
Total current liabilities	73,525,704			72,428,598			9,272,759
Lease liabilities-non-current	101,727			123,335			15,789
Other non-current liabilities	13,620			12,183			1,560
Total non-current liabilities	115,347			135,518			17,349
Total liabilities	73,641,051			72,564,116			9,290,108
SHAREHOLDERS’ EQUITY
Class A ordinary shares	68			71			9
Class B ordinary shares	29			27			3
Additional paid-in capital	18,154,442			18,456,438			2,362,908
Treasury Stock	(4,324,565	)		(5,199,257	)		(665,641	)
Accumulated other comprehensive loss	(47,846	)		(49,433	)		(6,329	)
Retained earnings	7,079,416			11,360,890			1,454,492
Total shareholders' equity	20,861,544			24,568,736			3,145,442
Non-controlling interest	235			2,995			383
Total equity	20,861,779			24,571,731			3,145,825
Total liabilities and equity	94,502,830			97,135,847			12,435,933

FUTU HOLDINGS LIMITED UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (In thousands, except for share and per share data)
	For the Three Months Ended									For the Twelve Months Ended
	December 31, 2022			December 31, 2023			December 31, 2023			December 31, 2022			December 31, 2023			December 31, 2023
	HK$			HK$			US$			HK$			HK$			US$
Revenues
Brokerage commission and handling charge income	1,048,592			903,999			115,736			4,007,642			3,944,779			505,035
Interest income	1,137,843			1,331,945			170,524			3,214,327			5,536,422			708,807
Other income	94,284			137,318			17,580			392,058			527,217			67,498
Total revenues	2,280,719			2,373,262			303,840			7,614,027			10,008,418			1,281,340
Costs
Brokerage commission and handling charge expenses	(63,994	)		(59,166	)		(7,575	)		(329,789	)		(249,567	)		(31,951	)
Interest expenses	(181,978	)		(270,784	)		(34,667	)		(292,503	)		(910,759	)		(116,601	)
Processing and servicing costs	(96,198	)		(103,539	)		(13,256	)		(373,840	)		(375,904	)		(48,126	)
Total costs	(342,170	)		(433,489	)		(55,498	)		(996,132	)		(1,536,230	)		(196,678	)
Total gross profit	1,938,549			1,939,773			248,342			6,617,895			8,472,188			1,084,662
Operating expenses
Research and development expenses	(334,464	)		(363,132	)		(46,490	)		(1,222,077	)		(1,440,893	)		(184,472	)
Selling and marketing expenses	(153,080	)		(182,461	)		(23,360	)		(895,772	)		(710,348	)		(90,943	)
General and administrative expenses	(330,342	)		(370,397	)		(47,421	)		(931,144	)		(1,313,464	)		(168,158	)
Total operating expenses	(817,886	)		(915,990	)		(117,271	)		(3,048,993	)		(3,464,705	)		(443,573	)
Income from operations	1,120,663			1,023,783			131,071			3,568,902			5,007,483			641,089
Others, net	8,880			(16,749	)		(2,144	)		(210,295	)		33,442			4,281
Income before income tax expense and share of loss from equity    method investments	1,129,543			1,007,034			128,927			3,358,607			5,040,925			645,370
Income tax expense	(166,390	)		(125,812	)		(16,107	)		(413,962	)		(748,479	)		(95,825	)
Share of loss from equity method investments	(4,428	)		(4,836	)		(619	)		(17,752	)		(13,497	)		(1,728	)
Net income	958,725			876,386			112,201			2,926,893			4,278,949			547,817
Attributable to:
Ordinary shareholders of the Company	958,776			878,225			112,436			2,926,944			4,281,474			548,140
Non-controlling interest	(51	)		(1,839	)		(235	)		(51	)		(2,525	)		(323	)
	958,725			876,386			112,201			2,926,893			4,278,949			547,817

Net income per share attributable to ordinary shareholders of the    Company
Basic	0.86			0.80			0.10			2.57			3.88			0.50
Diluted	0.85			0.79			0.10			2.54			3.82			0.49
Net income per ADS
Basic	6.88			6.40			0.82			20.55			31.00			3.97
Diluted	6.80			6.31			0.81			20.34			30.59			3.92
Weighted average number of ordinary shares used in computing    net income per share
Basic	1,115,322,083			1,097,155,166			1,097,155,166			1,139,377,763			1,104,899,411			1,104,899,411
Diluted	1,127,497,510			1,112,774,804			1,112,774,804			1,151,021,697			1,119,653,571			1,119,653,571
Net income	958,725			876,386			112,201			2,926,893			4,278,949			547,817
Other comprehensive income/(loss), net of tax
Foreign currency translation adjustment	2,802			81,589			10,446			(123,840	)		(1,587	)		(203	)
Total comprehensive income	961,527			957,975			122,647			2,803,053			4,277,362			547,614
Attributable to:
Ordinary shareholders of the Company	961,560			959,786			122,879			2,803,086			4,279,887			547,937
Non-controlling interest	(33	)		(1,811	)		(232	)		(33	)		(2,525	)		(323	)
	961,527			957,975			122,647			2,803,053			4,277,362			547,614

FUTU HOLDINGS LIMITED UNAUDITED RECONCILIATIONS OF NON-GAAP AND GAAP RESULTS (In thousands)
	For the Three Months Ended						For the Twelve Months Ended
	December 31, 2022		December 31, 2023		December 31, 2023		December 31, 2022		December 31, 2023		December 31, 2023
	HK$		HK$		US$		HK$		HK$		US$
Net income	958,725		876,386		112,201		2,926,893		4,278,949		547,817
Add: Share-based compensation expenses	55,824		74,077		9,484		204,529		290,831		37,234
Adjusted net income	1,014,549		950,463		121,685		3,131,422		4,569,780		585,051

Non-GAAP to GAAP reconciling items have no income tax effect.

FAQ

How many paying clients did Futu Holdings have at the end of 2023?

Futu Holdings had 1,710,106 paying clients as of December 31, 2023.

What was the total client assets for Futu Holdings as of December 31, 2023?

Futu Holdings' total client assets were HK$485.6 billion as of December 31, 2023.

How did the total trading volume change in Q4 2023 compared to the previous year?

The total trading volume decreased by 12.5% year-over-year in Q4 2023.

What was the percentage change in total revenues for Futu Holdings in Q4 2023?

Total revenues for Futu Holdings increased by 4.1% year-over-year in Q4 2023.

How did the net income of Futu Holdings change in Q4 2023 compared to the previous year?

Net income decreased by 8.6% year-over-year for Futu Holdings in Q4 2023.