Futu Holdings Q1 Net Profit Down by 60% YoY, Revenue Up by Double Digits

Futu Holdings released its unaudited financial results for the first quarter of 2026 on May 28. The company's revenue increased by 24.7% year-on-year to 5.856 billion Hong Kong dollars, and its gross profit grew by 29.4% year-on-year to 5.107 billion Hong Kong dollars, but net profit plummeted by 61.2% year-on-year to 831 million Hong Kong dollars. Non-GAAP adjusted net profit also declined by 58.5% year-on-year to 920 million Hong Kong dollars.

The performance exhibited a typical characteristic of increasing revenue without increasing profit. Although operational indicators such as user growth, asset scale, and trading activity are all positive, the significant contraction in profits indicates that the company is under considerable pressure in terms of costs or expenses. The improvement in gross margin but deterioration in net margin suggests that the problem lies primarily in operating expenses.

Continued Expansion of Users and Asset Scale

As of March 31, 2026, Futu's total number of funded accounts increased by 34.3% year-on-year to 3.5903 million, brokerage accounts grew by 26.8% year-on-year to 62.844 million, and registered users increased by 14.9% year-on-year to 30.2 million.

In terms of customer assets, the performance was particularly outstanding. Total customer assets surged by 47.2% year-on-year to 122 billion Hong Kong dollars, and the average daily customer assets increased by 60.8% year-on-year to 127 billion Hong Kong dollars in the first quarter, indicating a strong willingness from customers to deposit funds.

The balance of margin trading and securities lending increased by 44.9% year-on-year to 72.9 billion Hong Kong dollars, reflecting strong customer demand for leveraged trading, which is also an important source of the company's interest income.

Trading Volume Maintains High Growth

In the first quarter, the total transaction value increased by 29.1% year-on-year to 4.15 trillion Hong Kong dollars. Among them, the transaction value of U.S. stocks was 3.00 trillion Hong Kong dollars, and the transaction value of Hong Kong stocks was 1.01 trillion Hong Kong dollars, with U.S. stocks remaining the core contributor to the company's trading volume.

The increase in transaction volume, corroborated by the rapid expansion of the number of funded accounts, indicates that the company's strategies for customer acquisition and activation continue to be effective.

Profitability Under Pressure is the Core Concern

Looking at the structure of financial data, with a 24.7% increase in revenue and a 29.4% increase in gross profit, but a decline in net profit of over 60%, it implies that expenses below the gross profit line have grown significantly.

Considering that Futu is actively promoting overseas market expansion, it is reasonable to deduce that customer acquisition costs, compliance costs, and localized operating expenses are on the rise. The guidance from management on the pace of expenditure and the path to profitability restoration will be the key focus for the market moving forward.