UP Fintech Holding Limited (TIGR) Earnings

Management highlights

### User Growth & Client Assets - Onboarded 28,900 new funded accounts in Q1 2026, with the majority of new users coming from Singapore and the Hong Kong market. - Total funded accounts reached 1.28 million as of quarter-end, an 11.3% year-over-year increase. - Net asset inflow hit $2.9 billion in Q1; net inflow from retail consolidated accounts exceeded $2 billion for the first time in company history, validating the firm's user quality-focused strategy. - Q1 market turbulence led to $4.9 billion in mark-to-market losses on client assets, pulling total client assets down 3.2% quarter-over-quarter to $58.9 billion, but total client assets still grew 28.4% year-over-year. - All overseas markets recorded quarter-over-quarter growth in client assets: U.S. client assets rose nearly 40% QoQ, while Australia/New Zealand posted high single-digit growth and Hong Kong posted double-digit QoQ growth. - As of Q2 2026 quarter-to-date, all Q1 client asset market losses have been fully recovered following the Nasdaq rebound. ### Product & Technology Development - Delivered a major upgrade to the Tiger AI tool, transitioning from a dual-model framework to a three-model collaborative system by integrating an additional third-party large language model. - Implemented a new multi-agent architecture that splits core functions (market analysis, risk control, market search) into standalone smart modules, greatly improving the accuracy and reliability of AI-generated insights. - Launched a dedicated AI agent for commodity analysis and rolled out new trading features including Hong Kong index option trading and option TWAP orders to support investor strategy execution in volatile markets. ### 2B Business Development - Completed 10 Hong Kong IPO projects in Q1, including offerings from leading AI companies, plus two large U.S.-backed SPAC IPO projects. - Total Hong Kong IPO subscription volume on the platform year-to-date exceeded HK$1 trillion, reflecting strong market demand. - Added 42 new ESOP service clients in Q1, bringing total ESOP clients served to 790, demonstrating sustained strong demand for professional digital ESOP management solutions. ### Corporate Capital Management - The Board of Directors approved a $50 million share repurchase program, to be implemented over a 12-month period from June 1, 2026 to June 1, 2027, to demonstrate management confidence in long-term growth and deliver shareholder value. ### Cost & One-Time Item - A one-time regulatory penalty of approximately RMB 411 million (~$60 million) was fully accrued in Q1 results. This is a non-recurring charge that management states will not have a material impact on core operations or overall financial health.

Guidance

- Full-year 2026 new funded account guidance is maintained, with no adjustment following the implementation of new Chinese cross-border investment regulations. Management expects user growth to improve in the second half of 2026 as geopolitical tensions ease and inflation expectations improve. - The company's strategic priority remains user quality over raw user quantity, with net asset inflow and total client assets as core KPIs. Customer acquisition efficiency, measured as net asset inflow per dollar of customer acquisition cost, improved to $170 in Q1 2026 from ~$150 over the prior four quarters, demonstrating the effectiveness of the quality-focused strategy. - Excluding one-time non-cash tax impacts from the regulatory penalty and share-based compensation adjustments, management expects the full-year effective tax rate to remain below 20%. - Assuming no material change in market conditions through the end of Q2 2026, management expects total client assets to post a solid quarter-over-quarter increase, with new funded account count staying stable sequentially, and trading activity and commission income improving sequentially from Q1 levels.

Segment performance

Commission revenue for the first quarter of 2026 was $67.2 million, representing a 15% increase year-over-year and a 5% decrease quarter-over-quarter. Commission revenue contributed 43.4% of total company revenue. Within commission revenue, 67% comes from cash equities, 25% from options, and the remaining 8% from futures and other products. Interest income was $64.5 million, up 20% year-over-year and down 10% quarter-over-quarter, contributing 41.6% of total company revenue. Other revenue totaled $23.3 million, making up the remaining 15% of total revenue. Total company revenue reached $155 million, up 26% year-over-year and down 12% quarter-over-quarter. The blended cash equity commission take rate was 5 bps, down from 6.4 bps in the prior quarter.

Risks & headwinds

- New industry-wide cross-border securities regulation from Chinese authorities restricts onshore marketing of cross-border investment services, requires closure of onshore official websites and removal of local app downloads, and prohibits mainland-based users from trading while located onshore. Management notes there has been some uptick in short-term asset outflow from mainland retail accounts, which could pressure near-term revenue if outflows do not stabilize as expected. - Blended commission take rate has declined sequentially due to a higher mix of zero-commission trading volume (zero commission for U.S. local users and Hong Kong users trading Hong Kong shares), which could pressure overall commission revenue growth if the mix of zero-commission volume continues to increase. - Q1 client asset values were heavily impacted by broader market turbulence, and future market downturns could lead to additional mark-to-market losses and pressure net asset inflows. - One-time non-cash adjustments related to share-based compensation can lead to volatility in quarterly income tax expense, though management expects this to average out over time.

Analyst Q&A

• Q: What impact does the new May 2026 cross-border investment regulation have on the business, what share of client assets and revenue come from mainland retail users, and what is the regional breakdown of Q1 retail net asset inflow?

  A: The new regulation applies to the entire industry, not just Tiger Brokers, and shifts regulation to territory-based oversight rather than targeting user identity. All required compliance adjustments were completed in May 2023. The $60 million one-time fine will not materially impact core operations given the company's current cash reserves and profitability. As of Q1-end, mainland retail client assets make up ~10% of total client assets and contribute 20-25% of total net revenue. There has been some short-term asset outflow from mainland accounts, which management expects is a temporary reaction that will stabilize soon. Roughly 90% of Q1 omnibus retail net inflow came from outside mainland China: Singapore contributed over one-third, U.S. plus Australia/New Zealand contributed another one-third, and the remainder came from Hong Kong.

• Q: Why did the Q1 blended commission take rate decline sequentially, and why did income tax expense increase despite the one-time penalty leading to a quarterly net loss?

  A: The lower take rate was driven by three key mix shifts: Hong Kong trading volume made up a larger share of total equity volume, and Hong Kong users trade Hong Kong stocks commission-free with a 2 bps lower take rate than U.S. stocks. U.S. onboarding of active high-quality users also boosted zero-commission U.S. trading volume. Additionally, futures trading share grew from 6% to 8% of total volume, and futures volume is counted on a notional value basis, which expands the denominator and lowers the blended rate. The income tax increase is driven by a non-cash adjustment to deferred tax assets: as the company's share price fell in Q1, the fair value of unvested employee stock incentives fell, leading to a $4 million write-down of existing deferred tax assets that was recorded as income tax expense. Excluding this one-time impact, the long-term effective tax rate is expected to stay below 20%.

• Q: What are the Q2 2026 run rate trends for new users, trading activity and client assets, what is the regional breakdown of Q1 new funded accounts, and will full-year guidance be adjusted after slower-than-expected Q1 user growth?

  A: Q2 new funded account count is expected to stay stable sequentially, with Hong Kong and Singapore remaining the top contributing markets. Trading activity and commission income have improved notably from Q1 levels, with U.S. cash equity volume quarter-to-date already matching the full Q1 total. All Q1 client asset mark-to-market losses have been recovered in Q2, and net inflow remains healthy, so total client assets are on track for a solid QoQ increase if market conditions hold. Over 75% of Q1 new funded accounts came from Hong Kong and Singapore, split almost evenly between the two markets; Australia/New Zealand contributed ~20% and the U.S. contributed the remainder. Full-year guidance remains unchanged, as the new regulation does not impact the company's international expansion targets, and management expects stronger user growth in the second half as market sentiment improves. The company prioritizes user quality over raw user count, and acquisition efficiency for high-quality users has improved year-over-year.