UP Fintech Holding Ltd. Q1 FY2025 earnings call

• Total revenue grew 55.3% y-o-y to $122.6 million, driven by strong trading activity and increased commission and net interest income.
• Added 60,900 new funded accounts in Q1, with total funded accounts at 1,152,900. Client assets reached $45.9 billion, a record high.
• Upgraded TigerGPT to TigerAI, enhancing AI capabilities with dual model architecture and personalized insights. User satisfaction with TigerAI exceeded 80%.
• Tiger Brokers Hong Kong received approval for virtual asset trading, deposit, and withdrawal services. Launched equity repo and delivery versus payment features.
• Underwrote four Hong Kong IPOs in Q1 and added 20 new ESOP clients, bringing total ESOP clients to 633.

In the first quarter, UP Fintech Holding Limited's total revenue reached $122.6 million, up 55.3% year-over-year. Commission income was $58.3 million, a record-high, more than doubling year-over-year. Net interest income was $53.8 million, up 22.7% year-over-year. Commission revenue breakdown: approximately 65% from cash equities, 30% from options, and the rest from futures and other products. In terms of accounts, 60,900 new funded accounts were added in Q1, totaling 1,152,900 funded accounts as of the end of Q1. Client assets reached a record high of $45.9 billion, up 9.9% quarter-over-quarter and 39.5% year-over-year, with net inflow of $3.4 billion for the quarter.

• Aim to acquire at least 150,000 new funded accounts in 2025. In Q2, expect new funded users to decrease from Q1 high but confident in annual target.
• Headcount growth will be disciplined with compensation expense expected to grow 10%-20% annually.
• Marketing spending to increase in H2, with average CAC expected to rise to $250-$300 in the next few quarters due to focus on high-value markets like Hong Kong and brand investment.

Statements contain forward-looking statements. Factors could cause actual results to differ materially from forward-looking statements. Refer to Form 6-K furnished on May 30, 2025, and Annual Report on 20-F filed on April 23, 2025.

Q: With markets remaining volatile in second quarter, how has this affected the company's run rate so far? And could you share any early trends around trading volume, client assets and newly funded accounts?

A: In Q2, monthly trading volume crossed $100 billion for the first time. Client assets remained strong with net inflow continuing, and new funded users expected to decrease from Q1 high but user quality remains healthy.

Q: Could you elaborate on the breakdown of net asset inflow in terms of regions and account types? And about interest income, margin financing and securities lending balances grew around 15% in the first quarter, yet the net interest income remained flattish sequentially. Was this primarily driven by the declining interest rate? If the Fed cuts interest rate twice this year, say, by 25 bps each time, what would be the estimated impact on your P&L?

A: Net asset inflow in Q1: ~60% from Greater China area, 30% from Singapore, 10% from US and Australia/New Zealand; ~60% from retail clients. Net interest income flat due to US treasury investments maturing. For every 25 bps cut by Fed, quarterly net interest income negatively impacted by ~$1 million to $1.5 million, ~1% of quarterly revenue.

Q: Could you please provide a regional breakdown of the newly funded accounts in Q1? And update on your progress in the Hong Kong market during Q1 and how you view the market opportunity and strategic focus going forward considering the recent Ant Group's merger with Bright Smart Securities? Will this intensify the local competition?

A: In Q1, 45% of newly funded clients from Singapore and Southeast Asia, 35% from Greater China region, 10% each from Australia/New Zealand and US. Hong Kong is a competitive market; Ant Group's merger validates its attractiveness. Tiger has strong barriers with clearing efficiency, product set, virtual asset capabilities, and AI integration. Plan to invest in talent and marketing in Hong Kong to secure market share.