Unlock Premium Data: Up to 50% Off InvestingProCLAIM SALE

Futu Holdings shares dip as Q1 net income decreases YoY

EditorRachael Rajan
Published 05/28/2024, 07:06 AM
© Reuters.

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.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.