Hong Kong-based online brokerage Futu Holdings Limited (Nasdaq: FUTU) reported solid first quarter 2024 financial results, driven by robust growth in new paying clients across its key markets.
Despite an increase in revenue, the company's net profit fell by more than 13% to $132.3 million. This was attributed to higher marketing costs associated with acquiring more customers.
Futu Reports Q1 2024 Results Driven by Surge in New Paying Clients
In the first quarter, Futu added 177,000 new paying clients, a 330.8% jump compared to the same period last year. This was the third highest quarterly paying client growth in the company's history. The total number of paying clients reached 1.89 million as of March 31, 2024, increasing by 23.5% year-over-year.
Futu's Chairman and CEO, Leaf Hua Li, attributed the strong paying client growth to "strong market performance and solid execution in new markets. Given the year-to-date momentum, we would like to raise our full-year new paying client guidance to 400 thousand for now.”
The company saw double-digit sequential growth in new paying clients in Hong Kong and Singapore. Its recent launch in Malaysia also exceeded expectations, with Futu attracting over 100,000 registered clients within six weeks of launching its brokerage business there.
Total revenues in Q1 2024 increased 3.7% year-over-year to HK$2.59 billion ($331.3 million). However, net income decreased 13.1% to HK$1.04 billion ($132.3 million), mainly due to higher marketing expenses related to robust client acquisition . Despite rapid expansion, Futu maintained a quarterly paying client retention rate of over 98%.
Total client assets grew 11.2% year-over-year to HK$517.9 billion. Trading volume increased 40% sequentially to HK$1.3 trillion, driven by strong interests in the Hong Kong and US markets. Futu's wealth management business also saw solid growth, with client assets increasing 72.8% year-over-year to HK$64.0 billion.
Futu and Moomoo
Outside Hong Kong, Futu offers trading through its subsidiary Moomoo, which operates in markets including the USA, Australia, and Japan. By the end of 2023, Moomoo Japan entered the online brokerage sector, offering local investors access to over 7,000 stocks listed on Wall Street.
Last year, Futu introduced 24/5 stock trading, available to clients in Singapore and Australia. The company emphasized that its customers can trade more than 100 US stocks and exchange-traded funds (ETFs) around the clock for five days.
