Futu Q1 Earnings Call Highlights

Key Points

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• Futu posted record trading activity and strong account growth in Q1 2026, adding 225,000 net new funded accounts to reach 3.59 million. Total client assets rose 47% year over year, while platform trading volume hit a record HKD 4.15 trillion.

• Revenue increased but profit fell sharply because Futu booked a large administrative penalty from Chinese regulators. Revenue rose 25% year over year to HKD 5.9 billion, but net income dropped 61% to HKD 831 million; excluding the penalty, net income would have risen 36%.

• International markets and new products remain key growth drivers, with Hong Kong, Singapore, Malaysia and Japan all contributing to account expansion. Management also highlighted upcoming initiatives such as U.S. prediction market brokerage and Hong Kong crypto platform expansion through PantherTrade.

Futu (NASDAQ:FUTU) reported record trading activity and continued international account growth in the first quarter of 2026, while a regulatory penalty from Chinese authorities weighed sharply on reported net income.

On the company’s earnings call, Chairman and Chief Executive Officer Leaf Li said Futu added 225,000 net new funded accounts during the quarter, bringing total funded accounts to 3.59 million, up 34% from a year earlier and 7% from the prior quarter. Total client assets were broadly flat sequentially but rose 47% year-over-year, as strong net inflows were offset by declines in client equity holdings.

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Chief Financial Officer Arthur Chen said total revenue rose 25% year-over-year to HKD 5.9 billion. Net income fell 61% from a year earlier to HKD 831 million after the company reflected an administrative penalty from the China Securities Regulatory Commission’s Shenzhen Bureau. Excluding that adjustment, Chen said net income would have risen 36% year-over-year to HKD 2.9 billion.

Trading Volume Hits New High

Li said total trading volume reached a platform record of 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, with artificial intelligence continuing to be the dominant investment theme among clients.

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Li said client interest in U.S. equities was shifting “down the value chain” from semiconductor companies toward AI infrastructure beneficiaries. Hong Kong stock trading volume rose 22% sequentially to HKD 1 trillion, supported by heightened market volatility and “bottom fishing” activity, particularly in China technology stocks and newly listed AI-related companies.

Margin financing and securities lending balances rose 8% sequentially to HKD 72.9 billion at quarter-end, reflecting stronger risk appetite, according to Li.

International Markets Drive Account Growth

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Futu’s management highlighted continued growth across several international markets. Li said Hong Kong remained the company’s second-largest contributor to new account additions despite a subdued local equity market. He said the company would focus more on client assets and lifetime value in Hong Kong, citing product innovation, brand trust and its one-stop platform.

Singapore delivered double-digit sequential growth in net new funded accounts. Li said average client assets in Singapore had grown at a compound annual growth rate of more than 50% over the past three years, and that the company continued to see room for further asset growth.

Malaysia again led all markets in client additions, helped by marketing around U.S. equities and Moomoo’s IPO product capabilities. Li said profitability in Malaysia continued to improve and that Futu expected the market to reach breakeven within the next six to 12 months.

In Japan, Li said U.S. equity trading capability continued to support client acquisition. U.S. stock trading volume in Japan rose by double digits sequentially, while U.S. options contract volume doubled. The company plans to improve its Japanese equity trading experience this year.

During the question-and-answer session, management said Malaysia and Hong Kong together contributed more than half of net new funded accounts in the first quarter, while Singapore was the largest contributor among the remaining markets. Management also said more than 55% of group funded accounts were under the overseas Moomoo brand at quarter-end, primarily from Singapore, the United States and Malaysia.

Revenue Rises, Penalty Weighs on Profit

Chen said brokerage commission and handling charge income rose 14% year-over-year to HKD 2.6 billion but declined 5% from the prior quarter. He said trading volume grew, but the blended commission rate declined due to stronger activity in higher-priced U.S. stocks and options.

Interest income rose 28% year-over-year to HKD 2.7 billion but fell 13% quarter-over-quarter. Chen attributed the sequential decline to lower interest income from securities borrowing and lending, as well as bank deposits. Other income rose 80% from a year earlier to HKD 564 million, mainly due to higher currency exchange service income and IPO subscription service charge income.

Total gross profit increased 29% year-over-year to HKD 5.1 billion, with gross margin rising to 87.2% from 84% a year earlier. Operating expenses rose 25% year-over-year to HKD 1.6 billion and were flat sequentially. Chen said research and development spending increased due to higher headcount supporting strategic initiatives in new markets, while selling and marketing expenses rose on higher customer acquisition costs.

Chen said the company received an administrative penalty notification from the CSRC Shenzhen Bureau on May 22 in the aggregate amount of approximately RMB 1.85 billion. He said the amount was fully reflected in the first-quarter financial statements as an adjusted subsequent event under U.S. GAAP and “does not impact our business fundamentals or financial stability.”

Chen also said Futu had cumulatively repurchased approximately $418 million worth of American depositary shares as of the close of U.S. trading on May 27, under an $800 million share repurchase program announced in November 2025.

Regulatory Update and New Business Initiatives

In response to an analyst question about updated cross-border securities, futures and fund-related regulatory guidance from the CSRC and Hong Kong’s Securities and Futures Commission, management said the update applied across the industry. The company said it had already ceased opening accounts for Mainland Chinese identity holders and had rejected tens of thousands of non-compliant applications over the past two years.

Management said Mainland China funded accounts represented about 13% of total funded accounts at the end of the first quarter, while related client assets accounted for about 17% of total client assets and contributed about 20% of revenue. The company said it did not expect the regulatory update to have a material impact on its full-year guidance of 800,000 net new funded accounts.

Futu also discussed several new initiatives. In the U.S., Li said Moomoo Financial and Futu Clearing received approval to operate a prediction market brokerage and clearing business, with event contracts expected to be offered to U.S. retail investors soon. Management said prediction market products could support client acquisition, trading activity and future expansion into other jurisdictions.

In Hong Kong, Li said PantherTrade obtained second-phase approval for the SFC virtual asset trading platform license in March and began full operations. The company said a portion of Futu Securities’ crypto trading volume and assets under management had migrated to PantherTrade. Futu plans to expand capabilities including OTC trading, broader token support and staking, subject to regulation.

Wealth management client assets were HKD 178.4 billion at quarter-end, up 28% year-over-year and broadly stable sequentially. Li said clients rotated some assets from money market funds into equity funds during the quarter as risk appetite improved.

Looking ahead, management said second-quarter net new funded accounts were expected to remain stable sequentially, while net inflows had maintained strong momentum. The company said assets under management and trading volume had the potential to post double-digit sequential growth, supported by positive market performance and active client trading.

About Futu (NASDAQ:FUTU)

Futu Holdings Ltd. is a technology-driven brokerage and wealth management company that provides online brokerage services, market data, and investment tools to retail and institutional clients. Headquartered in Hong Kong and listed on the NASDAQ under the ticker FUTU, the company operates digital trading platforms that combine order execution, real-time quotes, news, and research tools to serve active investors and wealth management customers.

The firm’s product suite includes brokerage access to equities, exchange-traded funds and derivatives across major markets, margin financing, initial public offering (IPO) subscription services, wealth management products and discretionary investment solutions.

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