Futu Holdings’ Earnings Call Highlights Robust Growth

Futu Holdings ((FUTU)) has held its Q3 earnings call. Read on for the main highlights of the call.

Futu Holdings’ recent earnings call painted a picture of robust growth and strategic investments, with a generally positive sentiment. The company showcased strong growth in client accounts, revenue, and net income, primarily fueled by increased trading volume and a strategic expansion into the crypto market. Despite facing rising operating expenses and customer acquisition costs, Futu Holdings’ commitment to investing in AI and crypto indicates a forward-looking strategy that aims to capitalize on emerging market trends.

Strong Client Growth

Futu Holdings Limited reported a remarkable increase in client accounts, ending the third quarter with 3,130,000 funded accounts. This represents a 43% year-over-year and 9% quarter-over-quarter growth. The company also saw a significant rise in net new funded accounts, which increased by 65% year-over-year and 25% sequentially, highlighting the effectiveness of its client acquisition strategies.

Significant Revenue Growth

The company achieved a total revenue of HKD 6.4 billion, marking an impressive 86% increase from HKD 3.4 billion in 2024. Brokerage commission and handling charge income contributed significantly to this growth, reaching HKD 2.9 billion, up 91% year-over-year and 13% quarter-over-quarter.

Impressive Net Income Increase

Futu Holdings reported a substantial increase in net income, which rose by 143% year-over-year and 25% quarter-over-quarter to HKD 3.2 billion. The net income margin expanded to 50.1% from 38.4% year-over-year, reflecting improved profitability and operational efficiency.

Crypto Business Expansion

The company’s crypto trading segment demonstrated strong growth, with triple-digit sequential growth in client crypto assets under management (AUM) and trading volume in Hong Kong. Solana emerged as a popular choice among clients, and Futu Holdings plans to expand its token offerings to capture further market share.

Investment in AI and Crypto

Futu Holdings has increased its investment in AI and crypto capabilities, resulting in a 49% year-over-year and 30% quarter-over-quarter rise in research and development expenses. These investments are aimed at enhancing the company’s technological infrastructure and staying ahead in the rapidly evolving financial landscape.

Increased Operating Expenses

Operating expenses rose by 57% year-over-year and 31% quarter-over-quarter to HKD 1.7 billion. This increase was driven by the company’s strategic investments in crypto and AI capabilities, as well as an expanded workforce to support its growth initiatives.

Higher Customer Acquisition Costs

Customer acquisition costs in the third quarter were around HKD 2,300, slightly higher quarter-over-quarter. However, these costs remain below the full-year target range, indicating efficient client acquisition strategies despite the rising expenses.

Forward-Looking Guidance

Looking ahead, Futu Holdings provided optimistic guidance, highlighting significant growth across several metrics. The number of funded accounts is expected to continue its upward trajectory, with total client assets surging to HKD 1.24 trillion, marking a 79% increase year-over-year. The company’s total trading volume is projected to rise further, with notable growth in the Hong Kong and US markets. Additionally, the crypto sector is poised for expansion, with Ethereum trading volume quadrupling and the introduction of Solana for retail investors.

In summary, Futu Holdings’ earnings call underscored a strong performance and strategic investments that position the company for continued growth. The positive sentiment was driven by impressive growth in client accounts, revenue, and net income, alongside a strategic focus on AI and crypto. Despite rising expenses, the company’s forward-looking strategies and market expansion plans suggest a promising future for investors and stakeholders.