UP Fintech Holding Limited (TIGR) Q2 2025 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
The earnings call revealed strong financial performance, with record revenue, profit margin expansion, and significant net income growth. Despite increased expenses, the company showed robust client asset growth and strategic market expansions, particularly in digital assets. The Q&A highlighted promising developments in investment banking and crypto markets, though some uncertainties remain. Overall, the positive financial metrics and strategic advancements outweigh concerns, suggesting a positive stock price movement over the next two weeks.
Key Financial Performance
Total Revenue USD 139 million, representing a 58.7% year-over-year increase and a 13.1% quarter-over-quarter growth. Driven by growth in user base, client assets, and enhancements in product offerings.
Trading Volume USD 284 billion, a 90.1% year-over-year increase and an 11.1% quarter-over-quarter increase. Contributed to higher commission income.
Commission Income USD 64.8 million, increased 90% year-over-year and 11% quarter-over-quarter. Boosted by trading volume growth.
Margin Financing and Securities Lending Balance USD 5.7 billion, reflecting a 65.3% year-over-year growth. Driven by expanded user base and increased ARPU.
Net Interest Income USD 58.7 million, a 32.8% year-over-year increase. Benefited from expanded user base and increased ARPU.
Net Income Attributable to UP Fintech USD 41.4 million, up 36.2% from the previous quarter and 16x higher than the same quarter last year. Reflects improved profitability.
Non-GAAP Net Income USD 44.5 million, increasing 23.5% sequentially and 8.6x the number in the same quarter last year. Indicates strong operational performance.
Non-GAAP Net Profit Margin 32%, set another record high and has increased for 4 consecutive quarters. Reflects a more stable and healthier business model.
Total Client Assets USD 52.1 billion, up 13.5% quarter-over-quarter and 36.3% year-over-year. Driven by robust net asset inflows and mark-to-market gains.
New Funded Accounts 39,800 added in the quarter, with a 21.4% year-over-year increase in total funded accounts. Singapore and Hong Kong were primary contributors.
Interest Expense USD 17.3 million, increased 28% year-over-year. In line with the increase in interest income and margin and securities lending business.
Execution and Clearing Expense USD 5.4 million, increased 92% year-over-year. In line with the increase in commission and trading volume.
Employee Compensation and Benefits Expense USD 35.8 million, an increase of 25% year-over-year. Due to headcount increase in overseas offices and R&D.
Occupancy, Depreciation and Amortization Expense USD 2.7 million, increased 29% year-over-year. Due to the increase in office space and relevant leasehold improvements.
Communication and Market Data Expense USD 10.4 million, an increase of 18% year-over-year. Due to the increase in user base and IT-related service fees.
Marketing Expense USD 9.9 million, increased 54% year-over-year. Expanded marketing activities.
General and Administrative Expense USD 6.7 million, a decrease of 67% year-over-year. Last year included a onetime bad debt provision of $13.2 million.
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Operating Highlights
New product features in Singapore: Launched Central Provident Fund account trading and Supplementary Retirement Scheme account trading features, enabling clients to invest in approved financial products using CPF Ordinary Account savings and retirement funds while enjoying tax benefits.
Enhanced options trading features: Introduced pending order reminders for expiry date options and conditional market orders for single-leg options to improve user experience and reduce manual monitoring.
Market expansion in Singapore and Hong Kong: Added 39,800 new funded accounts in Q2, with Singapore and Hong Kong as primary contributors. Average net asset inflow of new clients in these markets exceeded USD 30,000.
Client asset growth: Total client assets reached USD 52.1 billion, marking 11 consecutive quarters of growth. Hong Kong and Singapore saw 50% and 20% quarter-over-quarter growth, respectively.
IPO underwriting: Underwrote 7 Hong Kong IPOs and 4 U.S. IPOs, including notable ones like Chagee and Zhou Liu Fu Jewelry, boosting other revenue to a new quarterly high.
Revenue growth: Total revenue reached USD 139 million, a 58.7% year-over-year increase. Commission income grew 90.1% year-over-year to USD 64.8 million.
Net income growth: Net income attributable to UP Fintech was USD 41.4 million, up 36.2% quarter-over-quarter and 16x higher year-over-year. Non-GAAP net income reached USD 44.5 million.
Cost management: Total operating costs increased by only 3% year-over-year, despite significant revenue growth.
User base quality improvement: Average net asset inflow of newly acquired clients exceeded USD 20,000, reaching a historic high.
2B business growth: Added 30 new ESOP clients in Q2, bringing the total to 663, a 15% year-over-year increase.
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Risk or Challenges
Market Turbulence: The company acknowledges the need to navigate market turbulence in a constantly changing environment, which could impact operations and financial performance.
Regulatory Risks: The introduction of new trading features in Singapore, such as the Central Provident Fund account trading, may expose the company to regulatory scrutiny and compliance challenges.
Operational Costs: Employee compensation and benefits expenses increased by 25% year-over-year due to headcount growth in overseas offices and R&D, which could pressure margins if revenue growth slows.
Interest Expense: Interest expenses increased by 28% year-over-year, which could impact profitability if interest rates rise further or if the company’s margin financing and securities lending business faces challenges.
Marketing Expenses: Marketing expenses increased by 54% year-over-year as the company expanded its marketing activities, which could strain financials if customer acquisition does not meet expectations.
Execution and Clearing Costs: Execution and clearing expenses increased by 92% year-over-year, reflecting higher trading volumes but also adding to operational costs.
Geopolitical Risks: The company operates in multiple regions, including Hong Kong, Singapore, Australia, New Zealand, and the U.S., which exposes it to geopolitical risks and economic uncertainties in these markets.
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Guidance & Outlook
User Base Growth: The company aims to acquire 150,000 new funded accounts by the end of 2025, having already achieved over 100,000 in the first half of the year.
Client Asset Growth: Total client assets reached USD 52.1 billion in Q2 2025, marking 11 consecutive quarters of growth. The company expects continued robust net asset inflows, particularly from retail investors.
Market Expansion: The company is focusing on penetrating existing markets, particularly in Singapore and Hong Kong, which have shown significant growth in client assets (50% and 20% quarter-over-quarter, respectively).
Product Enhancements: New features such as Central Provident Fund account trading and Supplementary Retirement Scheme account trading were launched in Singapore to attract high-value users.
IPO and ESOP Business: The company plans to continue leveraging its strong momentum in underwriting IPOs and expanding its ESOP business, which saw a 15% year-over-year increase in clients.
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Shareholder Return Plan
The selected topic was not discussed during the call.
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Key Q&A
Q:Why did the company's pretax profit increase sequentially while income tax expenses decreased, and is this sustainable?
A:The decline in the effective tax rate was due to two reasons: (1) Pretax profit rose across all licensed subsidiaries, reducing the weighting of the U.S. subsidiary (which has the highest tax rate) in total group profit, thereby lowering the overall group's tax rate. (2) The company secured a more favorable tax rate in Singapore, reducing it from 17% to 13.5% in Q2. This is sustainable as long as these factors remain consistent.
Q:What contributed to the strong rise in other revenue?
A:The growth in investment banking was a major contributor, with the company underwriting 4 U.S. IPOs in Q2 (2 as sole book runner). Additionally, foreign exchange income increased due to market volatility, and wealth management revenue rose by about 70% due to rapid growth in AUM.
Q:How is the company's cryptocurrency business progressing, and what are the plans for the Hong Kong crypto market and obtaining licenses in Singapore and the U.S.?
A:The company is committed to expanding its presence in the digital asset market by developing a one-stop platform connecting traditional and digital financial assets. They partnered with strategic investors in the Web 3 ecosystem to develop advanced digital asset trading products. In Q2, digital asset trading volume increased by 65% QoQ, and assets under custody nearly doubled. The company has a digital asset trading license in 14 U.S. states and is actively progressing its application in Singapore. They plan to focus on improving products and expanding trading features.
Q:What are the early trends in Q3 regarding trading volume, client assets, and new paying customer growth?
A:Trading activity in Q3 has been higher than the monthly average in Q2, with commission revenue on target. Client assets increased by a high single-digit percentage, driven by mark-to-market gains and positive net asset inflows, especially from retail clients. The company continues to prioritize user quality and net asset inflows, with significant contributions from the Hong Kong market.
Q:What is the progress in the Hong Kong market expansion, and how does it impact customer acquisition costs (CAC)?
A:The company has increased investment in the Hong Kong market through offline events and fintech solutions, resulting in higher user quality and client assets. In Q2, the average net asset inflow per new Hong Kong user was around USD 30,000, contributing to a 50% QoQ increase in client assets. The average CAC in Hong Kong is around USD 400+, with a payback period of about 2 quarters. The company expects CAC to fluctuate but remain at this level.
Q:What is the regional breakdown of newly added customers with deposits in Q2?
A:In Q2, 50% of new funded accounts came from Singapore and Southeast Asia, 30% from Hong Kong and Greater China, 15% from Australia and New Zealand, and 5% from the U.S.
Q:Why did the number of newly added customers with deposits decline in Q2, and what is the outlook for growth?
A:The decline was due to the impact of the tariff war in April, fluctuating investor sentiment, and targeted adjustments to customer acquisition channels, including shutting down low-quality channels and pausing certain online ads in Singapore. Despite fewer new users, the average net asset inflow per client increased, and customer acquisition costs decreased by 10% QoQ. The company plans to continue optimizing acquisition strategies to focus on user quality and client assets.
Q:Review of Unclear Management Responses
A:Management avoided directly addressing the sustainability of the cryptocurrency business's growth trajectory and the specific timeline for obtaining licenses in Singapore and the U.S. Their response lacked detailed projections or concrete plans for these aspects.
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Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
ARPU income
Account saving
Bai UBS
Bank Research
Brokers Conference
CEO Judy
CFO Director
CPF Ordinary
Central Provident
Chagee NASDAQ
Chairman Chief
Chief Executive
Citigroup Inc
Conference Instructions
Conference user
Director Tianhua
Division Conference
Division Weizhou
Division Yun
Executive Officer
Financial
Kong Singapore
Officer Mr
Research Division
Tiger
USD increase
account trading
income USD
inflow client
leg
market order
option user
position
quarter
TIGR Transcript
UP Fintech Holding Limited (TIGR) Q3 2025 Earnings Call Transcript
Positive12-4
The company demonstrated strong growth in user base, client assets, and market expansion, particularly in Singapore and Hong Kong. Despite increased expenses, the focus on high-value users and robust net asset inflows are promising. The Q&A revealed optimism in market trends and sustainable cost reductions, while the lack of specific guidance on Hong Kong's profit contribution was a minor concern. Overall, the positive financial metrics and optimistic outlook suggest a positive stock price movement over the next two weeks.
UP Fintech Holding Limited (TIGR) Q2 2025 Earnings Call Transcript
Positive8-27
The earnings call revealed strong financial performance, with record revenue, profit margin expansion, and significant net income growth. Despite increased expenses, the company showed robust client asset growth and strategic market expansions, particularly in digital assets. The Q&A highlighted promising developments in investment banking and crypto markets, though some uncertainties remain. Overall, the positive financial metrics and strategic advancements outweigh concerns, suggesting a positive stock price movement over the next two weeks.
UP Fintech Holding Limited (TIGR) Q1 2025 Earnings Call Transcript
Positive5-30
The earnings call presents strong financial performance with significant revenue and net income growth, despite increased operating costs. The Q&A highlights record trading volumes and client asset inflows, with management optimistic about market opportunities in Hong Kong. However, increased marketing expenses and execution costs suggest aggressive growth strategies. No share repurchase program was announced, but the overall sentiment remains positive due to strong financial metrics and optimistic guidance. The lack of market cap information limits precise impact prediction, but the positive outlook suggests a 2% to 8% stock price increase.
UP Fintech Holding Limited (NASDAQ:TIGR) Q4 2024 Earnings Call Transcript
Positive3-19
The earnings report shows strong financial performance with a 77.3% increase in quarterly revenue and a 58% increase in net income, coupled with optimistic guidance. Despite increased expenses, the strategic focus on high-quality user acquisition and market expansion, especially in Hong Kong and the U.S., is promising. The Q&A section reveals positive sentiment towards the company's market strategy and growth potential in the crypto sector. However, unclear management responses on interest income growth could pose minor concerns. Overall, the strong financial metrics and strategic initiatives suggest a positive stock price movement.
TIGR Report
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