HONG KONG - Futu Holdings Limited (NASDAQ:FUTU), a prominent tech-driven online brokerage and wealth management platform, disclosed its unaudited financial results for the first quarter ending March 31, 2024.
Despite surpassing revenue expectations with HK$2.59 billion against the consensus estimate of HK$2.44 billion, the company's net income saw a decline of 13.1% year-over-year (YoY) to HK$1.035 billion (US$132.3 million). The reported earnings per share (EPS) of HK$7.46 were HK$0.59 higher than analyst expectations of HK$6.87 .
The company's stock experienced a slight downturn of 2.1% following the earnings release. The decrease in net income and gross profit, which dipped by 3.9% YoY to HK$2.122 billion (US$271.2 million), may have contributed to the negative market response.
Leaf Hua Li, Futu's Chairman and CEO, highlighted the company's robust client growth, with paying clients increasing by 23.5% YoY to nearly 1.9 million. Li also noted the significant client asset growth in Singapore and the successful launch in Malaysia, which led to the company becoming the most downloaded financial app in the country. Despite these achievements, the company's total gross profit and net income declined compared to the same period last year.
The company's operating expenses rose by 15.6% YoY, driven by a 107.1% increase in selling and marketing expenses, which was partially offset by a decrease in research and development expenses. This increase in spending, primarily due to client acquisition efforts, contributed to the decline in income from operations, which fell by 15.1% to HK$1.193 billion (US$152.4 million).
Futu's strong revenue growth, however, did not translate into higher profits, as the company faced increased costs and expenses. The company's total revenues increased by 3.7% YoY, mainly driven by a slight increase in brokerage commission and handling charge income and a 4.6% rise in interest income. The company also reported a 23.7% increase in other income, primarily attributable to higher fund distribution service income.
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