Q2 2026 Futu Holdings Limited Earnings Call Transcript
Key Points
- Futu Holdings Ltd (FUTU) reported a record total trading volume of HKD6.42 trillion, up 78.8% year-over-year and 54.6% quarter-over-quarter, driven by strong client interest in AI-related US stocks and active Hong Kong IPO market.
- Net new funded accounts grew 23.7% year-over-year to 252,000, with total funded accounts reaching 3.84 million, up 33.6% year-over-year, supported by strong client acquisition in Hong Kong, Singapore, and Malaysia.
- Total client assets surged 43.6% year-over-year to HKD1.4 trillion, reflecting higher market valuations and net asset inflows, while margin financing and securities lending balance rose 31% quarter-over-quarter to HKD95.1 billion.
- The company achieved strong financial performance with net income up 42% year-over-year to HKD3.6 billion, and net income margin expanding to 50.6% from 48.4% in the prior year quarter.
- Futu Holdings Ltd (FUTU) expanded its international footprint, with Malaysia achieving operational breakeven, Singapore's profitability improving, and the acquisition of a Thailand securities license, positioning for future growth in Southeast Asia.
- The launch of prediction markets in the US, with over 200 million event contracts traded within the first month, has driven new client acquisition and increased engagement, showing cross-sell synergies with core brokerage services.
- Following new regulations on May 22, Futu Holdings Ltd (FUTU) experienced cumulative asset outflows of mid-single-digit percentage of total client assets, with the bulk of the impact absorbed in Q2, and Mainland client attrition continuing into July and August.
- The blended commission rate declined due to stronger trading activities in higher-priced US stocks and options, which could pressure future revenue growth if the trend persists.
- Blended customer acquisition cost (CAC) rose sequentially to around HKD2,600, and trended higher in July, driven by regulatory impacts and sustained brand investment, potentially affecting profitability.
- Q3 quarter-to-date metrics are trending modestly softer, with net new funded accounts moderating, net asset inflows normalizing, and total trading volume down sequentially due to cooling retail sentiment.
- Operating expenses increased 35% year-over-year, with selling and marketing expenses up 53% and G&A expenses up 40%, reflecting higher costs associated with client acquisition and strategic investments.
- The company faces regulatory uncertainty, particularly in Mainland China, which could lead to further compliance-driven outflows and impact future growth in that market.
Ladies and gentlemen, welcome to Futu Holdings second-quarter 2026 earnings conference call. (Operator Instructions) Today's conference is being recorded. If you have any objections, you may disconnect at this time.
I would now like to turn the conference over to your host for today's conference call, Michelle Li, Investor Relations Manager at Futu. Ma'am, please go ahead.
Thanks, operator. Thank you for joining us today to discuss our second quarter 2026 earnings results. Joining me on the call today are Mr. Leaf Li, Chairman and Chief Executive Officer; Arthur Chen, Chief Financial Officer; and Robin Xu, Senior Vice President. As a reminder, today's call may include forward-looking statements, which represent the company's belief regarding future events, which, by their nature, are not certain and are outside of the company's control.
Forward-looking statements involve inherent risks and uncertainties. We caution you that a number of important factors could cause actual results
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