UP Fintech Q1 2025 Earnings Call Transcript

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May 30, 2025

Key Takeaways

  • First-quarter revenue rose 55.3% year-over-year to US$122.6 million, with non-GAAP net income up 145% to US$36 million and record-high profit margins.
  • The firm added 60,900 new funded accounts in Q1, bringing total funded accounts to 1,152,900 and client assets to a record US$45.9 billion, up 39.5% year-over-year.
  • UP Fintech upgraded Tiger AI to a dual-model architecture with >80% user satisfaction and secured a Hong Kong SFC crypto license to offer trading, deposit and withdrawal services.
  • Marketing expenses jumped 148% year-over-year and average customer acquisition cost is expected to rise to US$250–300, while compensation expense is guided to grow 10–20%.
  • Net interest income was flat sequentially due to US Treasury maturities, and each 25 bps Fed rate cut could reduce quarterly net interest income by US$1–1.5 million (≈1% of revenue).
AI Generated. May Contain Errors.
Earnings Conference Call
UP Fintech Q1 2025
00:00 / 00:00

Transcript Sections

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Operator

Ladies and gentlemen, thank you for standing by, and welcome to the UP Fintech Holding Limited First Quarter twenty twenty five Earnings Conference Call. At this time, all participants are in listen only mode. There will be a presentation followed by the question and answer session. I must advise you that this conference is being recorded today, 05/30/2025. I would now like to hand the conference over to our first speaker today, Mr. Arun Li, the Head of Investor Relations. Thank you. Please go ahead.

Arun Li
Arun Li
Head of Investor Relations at UP Fintech

Thank you, Nadia. Hello, everyone, and thank you for joining us for the call today. UP Fintech Coding Limited's first quarter twenty twenty five earnings release was distributed earlier today and is available on our IR website at ir.itigerup.com as well as GlobeNewsFire Services. On the call today from UP Fintech are Mr. Wu Tianhua, Chairman and Chief Executive Officer Mr. Zhang Zheng, Chief Financial Officer Mr. Fang Lei, CEO of US Tiger Securities and Mr. Kenny Zhao, our Financial Controller. Mr. Wu will give an overview of our business operations and discuss corporate highlights.

Arun Li
Arun Li
Head of Investor Relations at UP Fintech

Mr. Song will then discuss our financial results. They will both be available to answer your questions during the Q and A session that follows the remarks. Now let me cover the safe harbor. The statements we are about to make contain forward looking statements within the meaning of The US Private Securities Litigation Reform Act of 1995.

Arun Li
Arun Li
Head of Investor Relations at UP Fintech

A number of factors could cause actual results to differ materially from those contained in any forward looking statements. For more information about factors that could cause actual results to materially differ from those in the forward looking statements, please refer to our Form six ks furnished today, 05/30/2025, and our annual report on Form 20 F filed on 04/23/2025. We undertake no obligation to update any forward looking statement, except as required under applicable law. It is my pleasure to now introduce our Chairman and Chief Executive Officer, Mr. Wu.

Arun Li
Arun Li
Head of Investor Relations at UP Fintech

Mr. Wu will make remarks in Chinese, which will be followed by an English translation. Mr. Wu, please go ahead with your remarks. Hello, everyone.

Arun Li
Arun Li
Head of Investor Relations at UP Fintech

Thank you for joining the Tiger Brokers first quarter twenty twenty five earnings In the first quarter, our total revenue reached US122.6 million dollars up 55.3 year over year. Despite heightened volatility in the Hong Kong and The US markets, trading activity remained strong. As a result, total trading volume reached $217,000,000,000 US dollar, driving commission income to a record high of 58,300,000.0 US dollar, more than doubling year over year. In addition, marketing financing and securities lending balance increased to 5,200,000,000.0 US dollar, increased 89.4% year over year.

Arun Li
Arun Li
Head of Investor Relations at UP Fintech

Net interest income reached 53,800,000.0 US dollar increased 22.7% year over year. On our bottom line, continued growth in our user base and rising ARPU driven by product diversification helped us further leverage fixed operation costs, leading to stronger, more sustainable profitability. Non GAAP net income attributable to Outfintech increased to 36,000,000 US dollar, reflecting an 18.3% sequential increase and a 145% increase year over year. GAAP net income attributable to our fintech reached 30,400,000.0 US dollar, up 8.4% quarter over quarter and and 146.7% year over year. Both net income and profit margin set record high and this continued improvement in earnings quality gives us greater flexibility to pursue strategic initiatives and further accelerate long term growth.

Arun Li
Arun Li
Head of Investor Relations at UP Fintech

In the first quarter, we added 60,900 new funded accounts, which accounts for over 40% of our fully target of acquired at least 150,000 new funded accounts in 2025 and representing a 2.9% increase quarter over quarter and a strong 111.2% growth year over year. The total number of funded accounts reached 1,152,900 as of the end of the first quarter, an increase of 23.5% year over year. In terms of client assets, net inflow remained strong, reaching US3.4 billion dollars for the quarter, driven primarily by retail clients in Singapore and Greater China region. Combined with approximately US780 million dollars in mark to market gains, total gland assets reached a record high of 45,900,000,000.0 US dollar, up 9.9% quarter over quarter and 39.5% year over year, marking our tenth consecutive quarter of growth. In addition, client assets from the Greater China region increased by over 20% quarter over quarter.

Arun Li
Arun Li
Head of Investor Relations at UP Fintech

Also, we are encouraged to see the average net asset inflow of newly acquired clients from the Hong Kong market in the first quarter exceeded 30,000, demonstrating the growing trust and engagement they've built in the market during the two years after entering. Following the success in Singapore, Hong Kong has become a key strategic market where we are investing further to deepen our presence. In the first quarter, we continue to enhance our product offerings and improve user experience. On the AI front, we officially upgraded TigerGPT to Tiger AI, marking a significant step forward in the personalization and intelligence. The upgrade expanded our AI capability from a single model to a dual model architecture and introduce new features that allow integration with users' watch list and portfolio data.

Arun Li
Arun Li
Head of Investor Relations at UP Fintech

This allows Tiger AI to deliver more personalized and relevant investment insights. Following the upgrade, user satisfaction with Tiger AI exceeded 80%. As for crypto, following type one license uplift, Tiger Brokers Hong Kong has now received approval from the Hong Kong SFC to offer virtual asset trading, deposit, and withdrawal services to both retail and professional investors. This means not only can we support multi asset classes within a single account, while also building greater synergy between traditional investors and digital asset holders, laying the groundwork for increased market participation and advisory activity. In addition, we recently launched the equity repo and delivery versus payment features, significantly improving the efficiency of our stock borrowing and lending operations and strengthening our service capability for institution and high net worth clients.

Arun Li
Arun Li
Head of Investor Relations at UP Fintech

In our corporate business, we enrolled four Hong Kong IPOs in the first quarter, including Chip and Go and Nanshan Aluminum and participated in Mishia Group's IPO, which set new record for IPO subscription amount in the Hong Kong market. And total subscription amount for this IPO exceeded HKD 100,000,000,000 on our platform. In our ESOP business, we added 20 new clients in the first quarter, bringing the total number of Easoft clients served to six thirty three as of 03/31/2025, increased by 14% year over year. Now I'd like to invite our CFO Zhang to go over our financials.

John Zeng
John Zeng
CFO at UP Fintech

Great. Thanks, Tianhua and Aaron. Let me go through our financial performance for for the first quarter. All numbers are in US dollar. Committed income was 58,300,000.0, increased 4% quarter over quarter and more than doubled year over year.

John Zeng
John Zeng
CFO at UP Fintech

Interest income was 53,800,000.0, increased 23 year over year, but slightly decreased 4% quarter over quarter. The slight decrease was due to majority of our US treasury holdings were matured in the fourth quarter. So in this quarter, we had a one time decrease of 1,500,000.0 in interest income. Together, total revenue reached 122,600,000.0, up 55.3% year over year. Cash equities take rate was 6.7 bps this quarter, slightly decreased from 6.9 bps of last quarter.

John Zeng
John Zeng
CFO at UP Fintech

Within commission revenue, about six about 65% comes from cash equities, 30% from options, and the rest from future and other products. Now to cost. Interest expense was $50,000,000 decreased 10% quarter over quarter, in line with the decrease in interest income and slightly increased 2% compared to the same quarter of last year. Execution and clearing expense were $5,300,000 increased 139% from the same period last year, in line with the increase in commission and trading volume. Employee compensation and benefits expense were 33,800,000.0, an increase of 22 year over year due to headcount increase to strengthen overseas growth and R and D.

John Zeng
John Zeng
CFO at UP Fintech

Occupancy depreciation and amortization expense were $2,100,000 remained flat year over year. Communication and market data expense were $9,800,000 an increase of 14% year over year due to the increase in user base and IT related service fees. Marketing expenses were $10,900,000 this quarter, increased 148% year over year, as market condition is more favorable versus a year ago for user acquisition. General and administrative expenses were $5,100,000 a decrease of 5% year over year due to a decrease in professional service fees. Total operating costs were $67,100,000 an increase of 32% from the same quarter of last year.

John Zeng
John Zeng
CFO at UP Fintech

As a result, bottom line increased on both GAAP and non GAAP basis. GAAP net income were $30,400,000 up 8.4% quarter over quarter and 146.7% year over year. Non net income were 36,000,000, an 18.3% increase quarter over quarter and a 145% increase year over year. The non GAAP net profit margin expanded from 25% in the previous quarter to nearly 30% this quarter. Now I have concluded our presentation.

John Zeng
John Zeng
CFO at UP Fintech

Operator, please open the line for Q and A. Thanks.

Operator

Thank you, dear participants. If you would like to ask a question, please press 11 on your telephone keypad and wait for your name to be announced. To withdraw a question, please press 11 again. Once again, if you would like to ask a question, please press 11. And now we're going to take our first question.

Operator

And the question comes from the line of Cindy Wang from China Renaissance. Your line is open. Please ask your question.

Cindy Wang
Director at China Renaissance

Thanks for taking my question and congrats for the great first quarter results. I have two questions here. First, with markets remaining volatile in second quarter, how have these affected the company's run rate so far? And could you share any early trends around trading volume, client assets and newly funded accounts? Second, company saw further improvement in profitability in first quarter.

Cindy Wang
Director at China Renaissance

Looking ahead, how should we think about the cost, particularly like headcount and customer acquisition? Can you provide us some guidance on the outlook for customer acquisition cost? Thank you.

Arun Li
Arun Li
Head of Investor Relations at UP Fintech

Okay. I'll translate for this part. Overall, we are quite pleased with how things are shaping up in the second quarter so far. In terms of trading volume, we saw a significant pickup in market volatility in April, mainly driven by the concerns over the tariff. That actually pushed our monthly trading volume to a new record, crossing $100,000,000,000 for the first time in our history.

Arun Li
Arun Li
Head of Investor Relations at UP Fintech

So far in Q2, we've seen an improvement compared to the same period in the Q1. And it's hard to predict what headline news might emerge in June, but we will be closing sorry, closely monitoring market activity throughout the month. And in terms of client assets, net asset inflow remained strong throughout April and May, continuing the solid pace we saw in the first quarter. Both institution and retail clients across all of our licensed markets contributed positively. And starting from late April, the market rebound helps drive some meaningful mark to market gains as well.

Arun Li
Arun Li
Head of Investor Relations at UP Fintech

As of now, client assets already set another record high and increased by around double digits compared to the end of the first quarter. And when it comes to the new funded accounts, during the increased market volatility in q two, we made dynamic adjustment to our acquisition strategies. So we expect the number of new funded users will decrease compared to the high base in the Q1. While the user quality remained healthy and net asset inflow continued to be robust, Therefore, we are confident to meet our annual guidance of acquiring at least 150,000 new family users this year. Yes.

John Zeng
John Zeng
CFO at UP Fintech

Okay, now So in regards to labor cost, we will continue to invest in product and R and D to maintain our competitive edge as technology is the core of our platform. At the same time, we will be expanding our team in key markets like Hong Kong and The US, and of course functions from front office to back office. Let me say, our overall headcount growth will remain disciplined. We expect compensation expense to grow about 10 to 20% per year. We will invest more in customer acquisition to build stronger brand and penetrate deeper into our core markets.

John Zeng
John Zeng
CFO at UP Fintech

The pace of our marketing spending will be based on market conditions. By the way, expect to spend more in the second half of this year. Our average CAC is between 150 to 180 through 2024 and the first quarter of twenty twenty five. For the next few quarters, we expect the average CAC to rise to around $2.50 to 300 US dollar. There are two key reasons for this.

John Zeng
John Zeng
CFO at UP Fintech

First of all, we will beef up our efforts in high value markets like Hong Kong, where the quality of users is significantly higher. From a payback perspective, a higher CAC in those markets is acceptable. We're also ready to invest more in brand and user awareness. This type of investments might not yield immediate conversions, which can push up CAC in the short term, But they are important for our long term growth and the brand awareness. Thanks.

Arun Li
Arun Li
Head of Investor Relations at UP Fintech

Thank you. Lydia, please go for the next question.

Operator

Thank you. Now we're going to take our next question. And the next question comes from the line of Emma Xu from Bank of America. Your line is open. Please ask your question.

Emma Xu
Emma Xu
Analyst at Bank of America

So congratulations on another quarter of strong growth. I have two questions. The first one is about net asset inflow. It was particularly strong in the first quarter, contributing to a double digit increase in your total client assets. So could you elaborate on the breakdown of lease inflows in terms of regions and account types?

Emma Xu
Emma Xu
Analyst at Bank of America

The second question is about your interest income. We can see that your margin financing and security lending balances grew around 15% in the first quarter, yet the net interest income remained flattish sequentially. Was this primarily driven by the declining interest rate? If the Fed cuts interest rate twice this year, say, by 25 bps each time, what will be the estimated impact on your P and L?

Arun Li
Arun Li
Head of Investor Relations at UP Fintech

In the first quarter, we recorded about US3.2 billion dollars in net asset inflows. Around 60% of them came from the users in the Greater China area, 30% from Singapore, and the remaining 10% from US and Australia New Zealand markets. Overall, roughly 60% of net asset inflow were contributed by retail clients.

John Zeng
John Zeng
CFO at UP Fintech

Okay. Okay, so the gross margin financing and security lending balance was mainly driven by more active market backdrop. Our net interest income from margin financing alone actually increased quarter over quarter despite the rate cut implication. The reason our total net interest income remained flat this quarter is because a larger portion of our US treasury investment mature at the end of last year, which had a quarter over quarter impact of 500,000.0 US dollar. As for the impact of future records, we estimate that for every 25 bps cut by the Federal Reserve, our quarterly net interest income would be negatively impacted by about $1 to $1,500,000 is about roughly 1% of our quarterly revenue. Thanks.

Arun Li
Arun Li
Head of Investor Relations at UP Fintech

Thanks, Emma. Operator, please proceed to next question.

Operator

Thank you. Now we're going to take our next question. And the question comes from the line of Yu Fan from CICC. Your line is open. Please ask your question.

Yang Fan
Managing Director at China International Capital Corporation (CICC)

Thanks management for taking my questions. This is Youyoufan from CICC. I have two questions here. The first one is that we see the strong new customer acquisition this quarter. Could you please provide a regional breakdown of the newly funded accounts in Q1?

Yang Fan
Managing Director at China International Capital Corporation (CICC)

The second question, could you please update on your progress in the Hong Kong market during Q1? And how you view the market opportunity and the strategic focus going forward considering the recent Ant Group's merger with BrightSmart Securities while this intensified local competition? Thank you.

Arun Li
Arun Li
Head of Investor Relations at UP Fintech

In the first quarter, about 45% of newly sanitized came from Singapore and Southeast Asia. Around 35% were from the Greater China region. And Australia, New Zealand and The US market each accounted for about 10%. Hong Kong has always been a highly competitive market and the recent merge between Ant Group and Bright Smart Securities, in our view, future validates the attractiveness of this market. Whether we look at its status as the global financial hub or the high quality of its user base, Hong Kong remains a very compelling market.

Arun Li
Arun Li
Head of Investor Relations at UP Fintech

With more players entered simply highlights the long term potential of this market. And from our perspective, increased competition is a good thing for local users. It raised the bar for the entire industry and encourages all of us to keep improving. As a tech driven brokerage, Tiger has already built strong barriers across different key areas. This include our clearing efficiency for Hong Kong and US equities, a robust product set, especially in The US derivatives, virtual asset trading capabilities, and the deep integration of AI in the in the in the investment process, All of which set set us apart.

Arun Li
Arun Li
Head of Investor Relations at UP Fintech

We've also introduced some product that differentiation to better serve local users. For example, our trading commission are generally lower than the most platforms in this market, and our emerging market fund yields are comparatively attractive. These are just a few ways we are delivering real value to users. So looking ahead, we plan to continue invest in both talent and marketing in Hong Kong with the goal of delivering a superior product experience. We are confident that with time, continued optimization, and consistent execution, we will be able to secure a meaningful share of the Hong Kong market.

Arun Li
Arun Li
Head of Investor Relations at UP Fintech

And here are some highlights about the Q1 operational highlights about the Hong Kong market. Firstly, thanks to the high average client assets and strong trading velocity, ARPU from our Hong Kong users remained the highest among all the market we enter. In the first quarter, new funded clients in Hong Kong brought in an average net asset inflow of over 30,000 US dollar. Secondly, client assets in Hong Kong continued to grow at a strong pace, up more than 20% quarter over quarter and over four times year over year, marking it one our third largest market in terms of asset under custody. In March, we officially rolled out the upgraded Tiger AI for Hong Kong users.

Arun Li
Arun Li
Head of Investor Relations at UP Fintech

Now it's available with unlimited free access. Powered by world class leading language AI models and our market data, Tiger AI is designed to help users analyze investments more efficiently and make smarter decisions. Thank you. Operator, next question, please.

Operator

Yes. This for today. I would now like to hand the conference over to Arun Lee for any closing remarks.

Arun Li
Arun Li
Head of Investor Relations at UP Fintech

Thank you. I'd like to thank everyone for joining our call today. I'm now closing the call on behalf of the management team here at Tiger. We do appreciate your participation in today's call. If you have any further questions, please reach out to our Investor Relations team.

Arun Li
Arun Li
Head of Investor Relations at UP Fintech

This concludes the call and thank you very much for your time. Bye bye.

Operator

This concludes today's conference call. Thank you for participating. You may now disconnect. Have a nice day.

Executives
    • Arun Li
      Arun Li
      Head of Investor Relations
    • John Zeng
      John Zeng
      CFO
Analysts
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