Futu Announces Second Quarter 2023 Unaudited Financial Results
- Total revenues increased 42.3% YoY
- Net income increased 74.5% YoY
- None.
HONG KONG, Aug. 24, 2023 (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 second quarter ended June 30, 2023.
Second Quarter 2023 Operational Highlights
- Total number of paying clients1 increased
14.3% year-over-year to 1,586,001 as of June 30, 2023. - Total number of registered clients2 increased
12.4% year-over-year to 3,395,654 as of June 30, 2023. - Total number of users3 increased
10.1% year-over-year to 20.5 million as of June 30, 2023. - Total client assets increased
7.5% year-over-year to HK$466.2 billion as of June 30, 2023. - Daily average client assets were HK
$450.1 billion in the second quarter of 2023, an increase of18.3% from the same period in 2022. - Total trading volume in the second quarter of 2023 declined
28.7% year-over-year to HK$1.0 trillion , in which trading volume for U.S. stocks was HK$675.9 billion , trading volume for Hong Kong stocks was HK$258.5 billion , and trading volume for stocks under the Stock Connect was HK$22.3 billion . - Daily average revenue trades (DARTs)4 in the second quarter of 2023 declined
32.1% year-over-year to 389,748. - Margin financing and securities lending balance increased
17.6% year-over-year to HK$34.0 billion as of June 30, 2023.
Second Quarter 2023 Financial Highlights
- Total revenues increased
42.3% year-over-year to HK$2,484.9 million (US$317.1 million ). - Total gross profit increased
37.1% year-over-year to HK$2,110.4 million (US$269.3 million ). - Net income increased
74.5% year-over-year to HK$1,119.6 million (US$142.9 million ). - Non-GAAP adjusted net income5 increased
73.3% year-over-year to HK$1,193.4 million (US$152.3 million ).
Mr. Leaf Hua Li, Futu’s Chairman and Chief Executive Officer, said, “In the second quarter, we added over 57 thousand paying clients, bringing the total number of paying clients to nearly 1.6 million. The sequential acceleration in client acquisition was mostly due to robust organic client growth. In Hong Kong, we leveraged offline marketing campaigns to build brand equity and attract clients that don’t typically engage with online promotional events. Client acquisition in Singapore also picked up, underpinned by strong U.S. equity market performance and attractive yields of money market funds. In the U.S., we maintained robust client growth while meaningfully improved new client quality.”
“Total client assets increased by
“Total trading volume declined by
“Total client assets in wealth management were HK
“We had 374 IPO distribution and IR clients as of quarter end, up
Mr. Arthur Yu Chen, Futu’s Chief Financial Officer, added, “We announced in March 2022 that our board of directors authorized a new share repurchase program, under which we may repurchase up to US
Second Quarter 2023 Financial Results
Revenues
Total revenues were HK
Brokerage commission and handling charge income was HK
Interest income was HK
Other income was HK
Costs
Total costs were HK
Brokerage commission and handling charge expenses were HK
Interest expenses were HK
Processing and servicing costs were HK
Gross Profit
Total gross profit was HK
Operating Expenses
Total operating expenses were HK
Research and development expenses were HK
Selling and marketing expenses were HK
General and administrative expenses were HK
Net Income
Net income increased by
Non-GAAP adjusted net income increased by
Net Income per ADS
Basic net income per American Depositary Share (“ADS”) was HK
Conference Call and Webcast
Futu's management will hold an earnings conference call on Thursday, August 24, 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/BIc800f9f81e9441dc89861b258b292dbd.
It will automatically lead to the registration page of "Futu Holdings Ltd Second Quarter 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 is 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
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 collaborate 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 who open 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 June 30, | ||||
2022 | 2023 | 2023 | |||
HK$ | HK$ | US$ | |||
ASSETS | |||||
Cash and cash equivalents | 5,028,898 | 3,720,180 | 474,737 | ||
Cash held on behalf of clients | 50,685,472 | 52,400,919 | 6,686,947 | ||
Restricted cash | 1,215 | 1,199 | 153 | ||
Term deposit | 5,860 | 5,430 | 693 | ||
Short-term investments | 675,064 | 1,689,124 | 215,551 | ||
Securities purchased under agreements to resell | 32,000 | 38,000 | 4,849 | ||
Loans and advances - current (net of allowance of HK | 26,676,358 | 30,995,245 | 3,955,342 | ||
Receivables: | |||||
Clients | 513,358 | 348,606 | 44,486 | ||
Brokers | 5,914,963 | 11,073,137 | 1,413,057 | ||
Clearing organizations | 3,066,953 | 2,190,599 | 279,545 | ||
Fund management companies and fund distributors | 79,086 | 119,942 | 15,306 | ||
Interest | 254,310 | 193,971 | 24,753 | ||
Prepaid assets | 28,507 | 39,133 | 4,994 | ||
Other current assets | 102,258 | 98,965 | 12,629 | ||
Total current assets | 93,064,302 | 102,914,450 | 13,133,042 | ||
Operating lease right-of-use assets | 196,864 | 173,140 | 22,095 | ||
Long-term investments | 239,694 | 232,979 | 29,731 | ||
Loans and advances - non-current | 36,765 | 18,986 | 2,423 | ||
Other non-current assets | 965,205 | 1,038,826 | 132,567 | ||
Total non-current assets | 1,438,528 | 1,463,931 | 186,816 | ||
Total assets | 94,502,830 | 104,378,381 | 13,319,858 |
LIABILITIES | ||||||||
Amounts due to related parties | 52,725 | 55,127 | 7,035 | |||||
Payables: | ||||||||
Clients | 57,209,066 | 55,281,990 | 7,054,604 | |||||
Brokers | 11,815,274 | 19,111,441 | 2,438,835 | |||||
Clearing organizations | 51,867 | 633,783 | 80,878 | |||||
Fund management companies and fund distributors | 90,801 | 193,047 | 24,635 | |||||
Interest | 9,864 | 35,761 | 4,564 | |||||
Borrowings | 2,480,532 | 4,563,875 | 582,402 | |||||
Lease liabilities - current | 109,416 | 93,997 | 11,995 | |||||
Accrued expenses and other current liabilities | 1,706,159 | 1,885,849 | 240,656 | |||||
Total current liabilities | 73,525,704 | 81,854,870 | 10,445,604 | |||||
Lease liabilities - non-current | 101,727 | 90,456 | 11,543 | |||||
Other non-current liabilities | 13,620 | 12,586 | 1,605 | |||||
Total non-current liabilities | 115,347 | 103,042 | 13,148 | |||||
Total liabilities | 73,641,051 | 81,957,912 | 10,458,752 | |||||
SHAREHOLDERS’ EQUITY | ||||||||
Class A ordinary shares | 68 | 68 | 9 | |||||
Class B ordinary shares | 29 | 29 | 4 | |||||
Additional paid-in capital | 18,154,442 | 18,309,388 | 2,336,484 | |||||
Treasury stock | (4,324,565 | ) | (5,173,786 | ) | (660,233 | ) | ||
Accumulated other comprehensive loss | (47,846 | ) | (106,286 | ) | (13,563 | ) | ||
Retained earnings | 7,079,416 | 9,391,200 | 1,198,423 | |||||
Total shareholders' equity | 20,861,544 | 22,420,613 | 2,861,124 | |||||
Non-controlling interest | 235 | (144 | ) | (18 | ) | |||
Total equity | 20,861,779 | 22,420,469 | 2,861,106 | |||||
Total liabilities and equity | 94,502,830 | 104,378,381 | 13,319,858 | |||||
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 Six Months Ended | ||||||||||||||||
June 30, 2022 | June 30, 2023 | June 30, 2023 | June 30, 2022 | June 30, 2023 | June 30, 2023 | ||||||||||||
HK$ | HK$ | US$ | HK$ | HK$ | US$ | ||||||||||||
Revenues | |||||||||||||||||
Brokerage commission and handling charge income | 1,033,780 | 952,615 | 121,565 | 2,001,246 | 2,031,926 | 259,297 | |||||||||||
Interest income | 620,439 | 1,405,716 | 179,385 | 1,195,661 | 2,699,976 | 344,547 | |||||||||||
Other income | 92,505 | 126,557 | 16,150 | 190,821 | 252,839 | 32,265 | |||||||||||
Total revenues | 1,746,724 | 2,484,888 | 317,100 | 3,387,728 | 4,984,741 | 636,109 | |||||||||||
Costs | |||||||||||||||||
Brokerage commission and handling charge expenses | (87,232 | ) | (55,341 | ) | (7,062 | ) | (183,221 | ) | (127,587 | ) | (16,282 | ) | |||||
Interest expenses | (26,602 | ) | (220,386 | ) | (28,124 | ) | (65,827 | ) | (351,226 | ) | (44,820 | ) | |||||
Processing and servicing costs | (94,058 | ) | (98,807 | ) | (12,609 | ) | (186,799 | ) | (186,531 | ) | (23,803 | ) | |||||
Total costs | (207,892 | ) | (374,534 | ) | (47,795 | ) | (435,847 | ) | (665,344 | ) | (84,905 | ) | |||||
Total gross profit | 1,538,832 | 2,110,354 | 269,305 | 2,951,881 | 4,319,397 | 551,204 | |||||||||||
Operating expenses | |||||||||||||||||
Research and development expenses | (291,725 | ) | (363,348 | ) | (46,368 | ) | (574,174 | ) | (718,247 | ) | (91,656 | ) | |||||
Selling and marketing expenses | (219,090 | ) | (174,925 | ) | (22,322 | ) | (507,235 | ) | (316,203 | ) | (40,351 | ) | |||||
General and administrative expenses | (210,790 | ) | (313,518 | ) | (40,008 | ) | (388,532 | ) | (621,411 | ) | (79,299 | ) | |||||
Total operating expenses | (721,605 | ) | (851,791 | ) | (108,698 | ) | (1,469,941 | ) | (1,655,861 | ) | (211,306 | ) | |||||
Others, net | (95,494 | ) | 74,693 | 9,532 | (115,819 | ) | 66,961 | 8,545 | |||||||||
Income before income tax expense and share of loss from equity method investments | 721,733 | 1,333,256 | 170,139 | 1,366,121 | 2,730,497 | 348,443 | |||||||||||
Income tax expense | (70,650 | ) | (209,467 | ) | (26,730 | ) | (143,198 | ) | (411,168 | ) | (52,470 | ) | |||||
Share of loss from equity method investments | (9,398 | ) | (4,228 | ) | (540 | ) | (9,398 | ) | (7,923 | ) | (1,011 | ) | |||||
Net income | 641,685 | 1,119,561 | 142,869 | 1,213,525 | 2,311,406 | 294,962 | |||||||||||
Attributable to: | |||||||||||||||||
Ordinary shareholders of the Company | 641,685 | 1,119,741 | 142,892 | 1,213,525 | 2,311,784 | 295,010 | |||||||||||
Non-controlling interest | - | (180 | ) | (23 | ) | - | (378 | ) | (48 | ) | |||||||
641,685 | 1,119,561 | 142,869 | 1,213,525 | 2,311,406 | 294,962 |
Net income per share attributable to ordinary shareholders of the Company | |||||||||||||||||
Basic | 0.56 | 1.01 | 0.13 | 1.05 | 2.08 | 0.27 | |||||||||||
Diluted | 0.56 | 1.00 | 0.13 | 1.04 | 2.06 | 0.26 | |||||||||||
Net income per ADS | |||||||||||||||||
Basic | 4.50 | 8.07 | 1.03 | 8.38 | 16.61 | 2.12 | |||||||||||
Diluted | 4.46 | 7.99 | 1.02 | 8.30 | 16.44 | 2.10 | |||||||||||
Weighted average number of ordinary shares used in computing net income per share | |||||||||||||||||
Basic | 1,139,418,888 | 1,110,112,831 | 1,110,112,831 | 1,158,972,163 | 1,113,421,781 | 1,113,421,781 | |||||||||||
Diluted | 1,149,398,944 | 1,120,734,239 | 1,120,734,239 | 1,169,572,515 | 1,124,704,502 | 1,124,704,502 | |||||||||||
Net income | 641,685 | 1,119,561 | 142,869 | 1,213,525 | 2,311,406 | 294,962 | |||||||||||
Other comprehensive loss, net of tax | |||||||||||||||||
Foreign currency translation adjustment | (62,829 | ) | (169,876 | ) | (21,679 | ) | (18,540 | ) | (58,441 | ) | (7,458 | ) | |||||
Total comprehensive income | 578,856 | 949,685 | 121,190 | 1,194,985 | 2,252,965 | 287,504 | |||||||||||
Attributable to: | |||||||||||||||||
Ordinary shareholders of the Company | 578,856 | 949,869 | 121,214 | 1,194,985 | 2,253,344 | 287,552 | |||||||||||
Non-controlling interest | - | (184 | ) | (24 | ) | - | (379 | ) | (48 | ) | |||||||
578,856 | 949,685 | 121,190 | 1,194,985 | 2,252,965 | 287,504 | ||||||||||||
FUTU HOLDINGS LIMITED UNAUDITED RECONCILIATIONS OF NON-GAAP AND GAAP RESULTS (In thousands) | |||||||||||
For the Three Months Ended | For the Six Months Ended | ||||||||||
June 30, 2022 | June 30, 2023 | June 30, 2023 | June 30, 2022 | June 30, 2023 | June 30, 2023 | ||||||
HK$ | HK$ | US$ | HK$ | HK$ | US$ | ||||||
Net income | 641,685 | 1,119,561 | 142,869 | 1,213,525 | 2,311,406 | 294,962 | |||||
Add: Share-based compensation expenses | 46,863 | 73,832 | 9,422 | 97,251 | 149,942 | 19,134 | |||||
Adjusted net income | 688,548 | 1,193,393 | 152,291 | 1,310,776 | 2,461,348 | 314,096 | |||||
Non-GAAP to GAAP reconciling items have no income tax effect.