Earnings call transcript: Futu Holdings’ Q1 2026 revenue climbs 25% YoY

Futu Holdings Ltd reported strong financial performance for the first quarter of 2026, with revenue reaching HKD 5.9 billion, marking a 25% increase from the same period last year. Despite the robust revenue growth, net income took a hit due to a significant regulatory penalty. The company’s stock saw a premarket increase of 1.06%, reflecting investor optimism.

Futu Holdings demonstrated strong revenue growth in Q1 2026, driven by gains in brokerage commissions and interest income. However, the company’s net income was adversely affected by a regulatory penalty from the China Securities Regulatory Commission, which significantly impacted profitability. Despite this setback, the company’s diversified income streams helped sustain growth.

In premarket trading, Futu’s stock price rose by 1.06%, reflecting positive investor sentiment despite the net income decline. The stock’s performance indicates confidence in the company’s growth potential and resilience in the face of regulatory challenges.

Futu’s management emphasized their commitment to shareholder value, highlighted by a share repurchase program. They expressed confidence in the company’s strategic initiatives and growth prospects, despite the regulatory penalty’s impact on the quarterly results.

During the earnings call, analysts inquired about the impact of regulatory changes on future earnings and the company’s strategy to mitigate such risks. Executives reassured stakeholders of their proactive approach to compliance and their focus on diversifying revenue streams to bolster resilience.

Operator: Hello, ladies and gentlemen. Welcome to Futu Holdings’ first quarter 2026 earnings conference call. At this time, all participants are in a listen-only mode. After management’s prepared remarks, there will be a question-and-answer session. Today’s conference call is being recorded. If you have any objections, you may disconnect at this time. I would now like to turn the conference over to your host for today’s conference call, Alan Tsui, Investor Relations Manager at Futu. Please go ahead, sir.

Alan Tsui, Investor Relations Manager, Futu Holdings Limited: Thanks, operator. Thank you for joining us today to discuss our first quarter 2026 earnings results. Joining on the call today are Mr. Leaf Li, Chairman and Chief Executive Officer, Arthur Chen, Chief Financial Officer, and Robin Xu, Senior Vice President. As a reminder, today’s call may include forward-looking statements, which represent the company’s beliefs regarding future events, which by their nature are not certain and are outside of the company’s control. Forward-looking statements involve inherent risks and uncertainties. We caution you that a number of important factors would cause actual results to differ materially from those contained in any forward-looking statements. For more information about the potential risks and uncertainties, please refer to the company’s filings with the SEC, including its annual report. With that, I will now turn the call over to Leaf. Leaf will make his comments in Chinese, and I will translate.

Leaf Li, Chairman and Chief Executive Officer, Futu Holdings Limited: Thank you all for joining our earnings call today. In the first quarter, we added 225,000 net new funding accounts, bringing our total funding accounts to 3.59 million, up 34% year-over-year and 7% quarter-over-quarter. Although subdued Hong Kong equity markets weighed on client acquisition, Hong Kong still contributed the second-largest new account addition among all regions. We remain confident about sustained client growth in Hong Kong. Looking ahead, we will focus more on the growth of client assets and lifetime value, leveraging our strength in product innovation, brand trust, and one-stop platform to further unlock the commercial potential of the Hong Kong market. Singapore delivered double-digit sequential growth in net new funding accounts. Over the past three years, average client assets in Singapore grew at a CAGR of more than 50%.

Given the wealth profile of local residents, we continue to see significant room for further asset growth in Singapore. Malaysia led all markets in client additions for another quarter, thanks to our effective marketing initiatives around U.S. equities, as well as Moomoo’s strong IPO product capability, which allowed us to capitalize on the active Malaysian IPO window for accelerated client growth. Meanwhile, profitability in Malaysia continued to improve, and we expect the market to achieve breakeven within the next six to 12 months. In Japan, our superior U.S. equity trading capability continued to drive client acquisition. In the first quarter, U.S. stock trading volume in Japan recorded double-digit sequential growth while U.S. options contract volume doubled. This year, we will continue to enhance our Japanese equity trading experience to better meet domestic investment needs and further unlock client acquisition potential.

In the US, we officially received NFA approval to operate a prediction market brokerage business, and we will soon begin offering event contracts, including sports-related products, to local investors, further strengthening Moomoo’s value proposition to active traders. 客户市场参与热情高涨，净入金达到历史第二高的单季度水平。然而股票持仓市值的下跌对客户资产造成明显拖累。季末客户资产环比基本持平，同比增长47%。日本、澳大利亚及加拿大市场的客户资产均实现双位数环比增长，三地户均资产更创下历史新高。客户质量稳步提升。随着投资者的风险偏好上升，季末融资融券余额按季增长8%至729亿港元。

Alan Tsui, Investor Relations Manager, Futu Holdings Limited: Client engagements strengthened on the back of precious metal market volatility and geopolitical tension, leading to the second highest quarterly net asset inflow on record. Market losses in client equity holdings exerted a substantial negative impact. The client asset remained flat quarter-over-quarter, yet up 47% year-over-year. Client asset registered double-digit sequential growth in Japan, Australia, and Canada. The average client asset across these three regions also reached all-time high and is growing, improving client quality. Rising risk appetite drove margin financing and security lending balance up 8% sequentially to HKD 72.9 billion at quarter end.

Leaf Li, Chairman and Chief Executive Officer, Futu Holdings Limited: 总交易量再创平台纪录，达4.15万亿港元，同比增长29%，环比增长4%。美股交易量整体保持稳定，为3万亿港元。AI仍为最主要的美股投资主题，但客户投资兴趣逐步沿AI产业链下移，从芯片厂延伸至基础设施标的。港股方面，市场波动性加剧，客户入市抄底，推动港股交易量环比增长22%至1万亿港元。中国科技股及新上市的AI相关股票交易活跃，抵消了消费板块相对疲弱的交易表现。

Alan Tsui, Investor Relations Manager, Futu Holdings Limited: Total trading volume reached a record HKD 4.15 trillion, up 29% year-over-year and 4% quarter-over-quarter. U.S. stock trading volume remained broadly stable at HKD 3 trillion. AI continued to be the dominant investment theme, with client interest gradually shifting down the value chain from semiconductor names towards AI infrastructure beneficiaries. Hong Kong stock trading volume rose 22% sequentially to HKD 1 trillion, as heightened market volatility drove stronger bottom fishing activities. Active trading in China technology and newly listed AI-related companies more than compensated for softer momentum in the consumer sector.

Leaf Li, Chairman and Chief Executive Officer, Futu Holdings Limited: 3月，猎豹交易所正式通过香港证监会VATP牌照第二阶段审批，并全面展业。目前富途证券部分虚拟资产交易量及AUM已迁移至猎豹交易所。未来我们计划在香港推出证券融资交易虚拟资产服务，进一步提升客户跨资产资金使用效率。同时，我们也将持续推进OTC交易、更多币种支持及质押等核心能力，并积极探索机构服务相关新业务场景，逐步将猎豹交易所打造成香港Web3生态的重要基础设施。

Alan Tsui, Investor Relations Manager, Futu Holdings Limited: In March, PantherTrade officially obtained second phase approval for the Hong Kong SFC VATP license and commenced full operations. Since launch, a portion of Futu Securities’ crypto trading volume and AUM has migrated to PantherTrade. Looking ahead, we plan to introduce security-backed margin financing for virtual assets in Hong Kong to further enhance capital efficiency across asset classes. At the same time, we will continue to expand the capability of our crypto exchange, including OTC trading, broader token support, and staking services. We are also actively exploring new institutional service use cases with the goal of making PantherTrade a key infrastructure within the Hong Kong Web3 ecosystem.

Leaf Li, Chairman and Chief Executive Officer, Futu Holdings Limited: 截至一季度末，财富管理客户资产规模达1,784亿港元，同比增长28%，环比基本持平。一季度客户风险偏好提升，部分资产配置由货币基金流向股票基金。为满足客户不断演进的投资需求，我们进一步丰富了基金产品选择。在香港，我们成为首批推出太空经济主题公募基金的券商之一。在新加坡，我们上线了新加坡金管局证券市场发展计划下的本地股票基金。此外，我们还推出了挂钩黄金和石油的结构性票据，并进一步拓展发行人合作。季度内零售结构化产品认购客户数环比翻倍。

Alan Tsui, Investor Relations Manager, Futu Holdings Limited: Period end wealth management client assets were HKD 178.4 billion, up 28% year-over-year, and broadly stable quarter-over-quarter. In the first quarter, client asset allocation partly rotated from money market funds into equity funds amidst improving risk appetite. In response to evolving client demands, we further expanded our fund selection. In Hong Kong, we became one of the first brokers to offer space economic themed mutual funds, while in Singapore, we rolled out local equity funds under the MAS Equity Market Development Programme. We also launched gold and oil-linked structured notes and onboarded new issuers. Total retail subscribers for structured products doubled sequentially. As of quarter end, we served 625 IPO distribution and IR clients, up 26% year-over-year.

In the first quarter, 12 IPOs each saw over HKD 100 billion in subscription demands on our platform, while six issuers appointed us as overall coordinators for their Hong Kong listings, underscoring our strong distribution and underwriting capabilities. During the quarter, we also act as joint bookrunners for several prominent Hong Kong IPOs, including those of Zhipu AI, MiniMax, and Biren Technology. Next, I’d like to invite our CFO, Arthur, to discuss our financial performance.

Arthur Chen, Chief Financial Officer, Futu Holdings Limited: Thank you, Liv and Alan. Please allow me to walk you through our financial performance in the first quarter. All the numbers are in HKD unless otherwise noted. Total revenue was HKD 5.9 billion, up 25%