Futu Holdings ((FUTU)) has held its Q4 earnings call. Read on for the main highlights of the call.
Futu Holdings’ recent earnings call painted a picture of robust growth and strategic advancements, with a strong emphasis on increased paying clients, revenue, and trading volume. The company showcased significant achievements in product development and maintained its market leadership in IPO underwriting. Despite facing challenges such as rising operating expenses and a decline in commission rates, the overall sentiment was overwhelmingly positive, highlighting the company’s successful trajectory.
Record Growth in Paying Clients
Futu Holdings reported a remarkable increase in paying clients, adding 215,000 in the fourth quarter alone. This surge brought the total number of paying clients to over 2.4 million, marking a 41% year-over-year growth. This milestone underscores the company’s ability to attract and retain a growing customer base, reflecting its strong market presence and appeal.
Strong Revenue and Profit Growth
The company achieved impressive financial results, with total revenue reaching HK$4.4 billion, an 87% increase year-over-year. Net income also saw a substantial rise, increasing by 113% to HK$1.9 billion. These figures highlight Futu Holdings’ effective business strategies and its capacity to generate significant financial returns.
High Product Development Velocity
Futu Holdings demonstrated a high velocity in product development, delivering 209 app iterations and adding 7,762 new features in 2024. This represents a 37% and 32% year-over-year increase, respectively, showcasing the company’s commitment to innovation and enhancing user experience.
Expansion in Trading Volume
The company experienced a significant expansion in trading volume, which jumped by 202% year-over-year to HK$2.89 trillion. Notably, U.S. stock trading volume grew by 36% sequentially, indicating Futu Holdings’ strong performance in the trading sector.
Increase in Wealth Management Assets
Futu Holdings reported a 93% year-over-year increase in total client assets within its wealth management division, reaching HK$111 billion. This growth accounts for 15% of total client assets, highlighting the company’s successful expansion in wealth management services.
IPO Underwriting Leadership
Maintaining its leadership in IPO underwriting, Futu Holdings underwrote 40 Hong Kong IPOs, ranking first among all brokers for the third consecutive year. This achievement reinforces the company’s dominant position in the IPO market.
Challenges in China
Despite the positive developments, Futu Holdings faced challenges in China, where a pullback in equity markets during the second half of Q4 affected the valuation of client assets. This challenge underscores the volatility and risks associated with the Chinese market.
Increased Operating Expenses
Operating expenses rose by 57% year-over-year to HK$1.4 billion, driven by costs related to organizational restructuring and increased headcount. This increase highlights the company’s investment in its workforce and organizational capabilities.
Blended Commission Rate Decline
The earnings call noted a decline in the blended trading commission rate, both year-over-year and sequentially in Q4. This decline was partially attributed to a shift in the product mix, indicating a need for strategic adjustments in pricing strategies.
Forward-Looking Guidance
Looking ahead, Futu Holdings exceeded its full-year guidance by adding 215,000 paying clients in Q4, with a total of over 2.4 million clients, a 41% increase year-over-year. The company is guiding for 800,000 new paying clients in 2025. Total client assets reached HK$743 billion, up 43% year-over-year, with overseas markets showing the highest net asset inflow. Margin financing and security lending balances rose to a record HK$51 billion. The company anticipates continued growth in trading volume and revenue, with a focus on expanding its wealth management business.
In conclusion, Futu Holdings’ earnings call highlighted a period of significant growth and strategic achievements, with a strong focus on expanding its client base, revenue, and trading volume. Despite facing challenges such as increased operating expenses and a decline in commission rates, the company’s positive outlook and forward-looking guidance suggest a promising future. Investors and market enthusiasts will be keen to watch how Futu Holdings navigates its growth trajectory in the coming year.