Earnings call transcript Q2 2023

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Ladies and gentlemen, thank you for standing by, and welcome to UP Fintech Holdings Limited second quarter 2023 earnings conference call.

At this time, all participants are in a listen-only mode. There will be a presentation followed by a question and answer session. I must advise you that this conference is being recorded today, August 29, 2023.

I’d now like to hand the conference over to your first speaker today, Mr. IR. of Head Li, Aaron Thank you, go ahead. please

Aaron Li

today you us for Hello second at XXXX distributed ir.itigerup.com, and IR as on Fintech everyone joining for quarter earlier was release services. you as thank earnings is the website Limited’s available our Thank Holding Operator. and GlobeNewswire call well UP today.

remarks. of and Wu an our Officer; and recent Officer; give both Mr. corporate that Securities, your John will discuss On the Fintech They the their Kenny highlights. results. Zeng UP U.S. overview Executive be from discuss Mr. our Lei, are Mr. of then during Chief accomplishments answer Financial Chief Financial to session Mr. our call questions today Tianhua will and Huang CEO Wu, available Controller. will Mr. Chairman Zhao, Zeng, Q&A financial Tiger Mr. follows

the cover me let Safe Now Harbor.

are we statement. factors differ U.S. those statements within the forward-looking contain of in materially XXXX. Some number meaning of Litigation to the forward-looking results any to about Act contained cause actual A Securities statements Private from make Reform could of

applicable For those more August statements, our the any April XX, report factors no to information statement refer undertake actual furnished obligation law. please under in X-K our on update to forward-looking Form forward-looking XX-F XX, materially differ as XXXX could filed on results today, cause to about and Form from annual that required XXXX. We except

Wu, pleasure ahead Mr. followed Chinese your my be please to our which and Wu. in Mr. Wu English with is It remarks Mr. introduce go translation. remarks. by Executive make Chairman Chief now will Officer, will

Tianhua Wu

quarter for conference joining Hello earnings [translated] XXXX call. Thank Tiger Broker’s you second everyone.

US of revenue we million. management. to $XX our and optimizing reaching by increased the second expense remained XX.X% committed year-over-year, In our quarter, Total revenue mix strategy

a was quarter. the X.X attributed of Non-GAAP of net was $XX.X has year about XX% compared compared year Fintech in UP million, for to times XXXX. an net a and net attributable profit a increase net the already and Our non-GAAP this to exceeded quarter. XX% from non-GAAP net quarter with quarter The loss $XX.X to profit entire same UP earned previous of the Fintech representing turnaround quarter million, last the last significant increase year total the profit same previous profit

new In the added first in second the funded to bringing total of year quarter, new this we number accounts, XX,XXX of the funded XX,XXX. half approximately accounts

our quarter at accounts XX% Total annual least We of [indiscernible] reached guidance year. second funded the XXXX. new are same XXX,XXX representing end in of growth XXX,XXX, deliver last accounts quarter funded of confident to to of at of number compared

loss, terms mark-to-market trend billion the of first $X.X quarter, asset our billion. client with neutralizing in net inflow the assets total by over US compared in this After impact reaching total client of the quarter increased of inflow the assets, US $XX.X quarter. strong second X.X% remains In to

as previous Tiger our strategy users CAC cost positive gained Singapore in decreased and efficiencies. resulting representing highlights expanding average quarter, local Broker X% $XXX second among referrals, the brand This [indiscernible] decline in our Additionally, in reduction international our in compared the to success to further word-of-mouth organic quarter. a traction addition through

conditions. Moving on we adjust acquisition will based customer dynamically forward, strategy our market

user increasing enhancing and are profitability. base We quality while steadily client

user research We development operational experience. to and to in investment our enhance have and increase continued efficiency

in We markets enter, all It launched officially internal six year. months are TigerGPT this the mainland China. for in free to testing, feature, registered of to after users we announce now July available our except delighted is that

We feature. experience will to this continue user and refine of optimize the

down this the we quarter. in Hong have majority in last self-clearing Kong in of first entry year, clearing commissions the second our market as helping December in In the of XX% total equities below to for expense the half our Hong Kong a achieved proportion business, to bring of successfully following retail the year,

Kong second investment the for budget. for brokers recurring one with of offers Additionally, recurring U.S. This features introduced those equities. both Hong fixed quarter, makes shares the Hong term catering we us a few investment in Kong investors investment that to and functions and long

We in Hong local futures Kong clients. serve better June also added to our

more In in fund Hong manage a market options the management fourth cycles. cash the during rate idle business, users following of hiking market second money the we a money quarter, wealth dollar-denominated fund introduced the USD-denominated introduction Kong providing in quarter, with to

the in served and business Our Ispire U.S. second [ph] the perform we U.S. we Kong ESOP Technology quarter. to our bringing business, lead in to the of quarter, by serve second ESOP IPOs the of Notably, continues of by for IPO. exclusive In total Hong as well. XXXX, underwrote seven XB investment second clients clients banking, we increased underwriter XX% In added XXX quarter the number year-over-year. new end XX

financials. Now to go to our John I’d like invite over our CFO

John Zeng

Aaron. and Tianhua thanks Okay,

All go performance are in dollars. quarter. the for financial numbers Let our me second through U.S.

related equities rest quarter, Total was quarter. other from products. this revenues cash comes quarter, the in from primarily same and last XXX% take rate this from comes remained Within XX.X% XX% due options, equities, quarter-over-quarter about interest were increased versus XX% from jump quarter unchanged year-over-year and futures BPs income commission X.X rate revenue, the and a last of flat to million $XX.X year. Cash

U.S. for adding of self-clearing restructuring one-time people last when decrease due as expense year-over-year due interest million, in in expense hike. increased year rate quarter interest clearing decreased same same expansion. XXX% with line XX% by we securities million, $X from was incurred benefits business. a ESOP expense we expense increased year-over-year and headcount the efficiency our costs, year X% million, and Actual of expense onto $XX.X both to Execution and to to keep and expense compensation from were last a Employee global year the our Now primarily increased the last lending securities. were of Hong support Kong more $XX.X quarter as

the in and relevant to space Occupancy, in due an due expense leasehold depreciation and increased increase and user Communication office $X.X base. million, increase improvements. were of X% slightly data expense to X% amortization to market overseas increase year-over-year $X.X an million

Marketing expense year-over-year. see from was marketing didn’t XX% were X% $XXX major conditions CAC we second Average million suitable to this for quarter-over-quarter in dropped quarter campaigns. quarter, market $XXX the decreased as $X.X

will increase dynamically based same of marketing strategy Total year. cost million, our We were adjust General from $XX.X sentiment last XX% on X% were market million, regions. the expense quarter slight decreased the operating year-over-year. administrative and different a in $X.X of

GAAP As year-over-year. non-GAAP increased bottom a result, both line and

$X.X net Non-GAAP same to times income turned year. net was $XX.X million, of GAAP million loss quarter about income of X.X compared the million same versus quarter $XX.X a last GAAP year. the higher in positive net to last of

Operator, have our I for Now presentation. concluded open Q&A. Thanks. the line please

Operator

Thank you.

the answer session. begin now We and [Operator will instructions] question

comes line Our Han CICC. Pu from first from question of question. Please ask the your

Han Pu

strong CICC. [translated] Han on Thanks for the This quarter taking results. from Congrats is my question.

two have quick questions. I

provide mainland us please quarter? original more new you on requirements? regulation could recent the in updates Firstly, the funded second you please the accounts of breakdown Thanks. give Secondly, could

Tianhua Wu

New the from first question, in XX% the quarter Singapore, from and Hong U.S. To from accounts Kong. newly the XX% from [translated] second Australia and about came XX% of about around nearly Zealand, XX% funded

comprehensive to inspection Beijing four New Securities last Subsequently, an Chinese XX year, a requirements announcement Tiger forth Bureau before onsite the regulatory and by Year. the with Brokers Regulatory conducted prompt comply the the weeks CSRC on set After effort made the response a December CSRC.

During remediation that related the and time, plan reports. regulators provided we with our

open who other users holders We with scenarios to direct opening received live firms. regulatory for have for brokerage overseas throughout us, communication from and example, have passport or the special authority or and securities period certain work maintained PRC clear holders with to allowing for good new accounts permitting passport on new the open and the PRC of transfer accounts guidance accounts

mid-July, acceptance report to with remediation CSRC we regulatory mid-July, conducted submitted inspection based remediation requirements. an our report. regulatory in Recently in on in the the onsite accordance the authorities Subsequently final

you. Thank

Han Pu

That’s thank helpful, you. very

Operator

Thank you Han.

Our comes your the question of from Judy. question, Please next line Citi. ask Judy Zhang from

Judy Zhang

Thank Judy have Citi. I my is Zhang taking questions. This you question. [translated] questions. my translate from for I two will

have existing and seen after from outflows you the investors’ The first losing impact activity removed App onshore do investors? asset or sentiment? onshore Store, think you term long was is on How trading question the TigerCPT

regarding gain and going year competitive Hong market to market, How is very in you. and this is for how strategy. Thank Kong question the market Kong going you this share Second cost can forward? think do you impact company’s Hong the

Tianhua Wu

[translated] first second Okay, your your question will so I’ll take and CFO take our question. John

China About in your first count our based concerns users; question, incremental of this in on year, the we growth no we half first the market clients confidence of of data the almost regarding have with overall mainland existing aware of and have from loss the mainland China. gradual in however, our retention been user in

rate above retention in with overall of well mainland users the first the rate retention of In as XX%. retention, the terms user for year this users assets, half remained has for China as

in have flow, in cash been in changed. net indicating mainland a regarding of recent Tiger there asset inflows significant their quarter of not clients’ December activity trust has clients year. has understanding both trading change XX the no of trading second quarter first Regarding users, this events of and Broker and of users mainland [indiscernible] the existing our Chinese that trend since Besides, velocity last have and shown year

John Zeng

the quarter, newly acquisition more Judy. accounts low Hong the Okay, of user From digits the in in hello from Kong first quarter. up second for single perspective, XX% a [translated] than users acquired

We potential out investing build more corporate we in will to image Kong reach keep users. branding Hong Hong our so in to can Kong

charge we all for don’t the From a or pricing. options product We either. don’t equities trading free [indiscernible] charge perspective, Kong first offer of Hong most for one commission and we U.S. of competitive commission

and offer and money both the our Hong D also are to Kong liquidity. few of have USD for help one funds users that U.S. manage investment and their Hong recurring Kong market brokers trading We

which infrastructure, self-clearing below now to clearing Group’s In the brings we expense terms for Kong XX%. down equities, of are Hong total fully

offer offer allows Our buying Hong portfolio fractional Kong such and for us proprietary also and differentiated as U.S. power share trading. services, to system

Thanks.

Judy Zhang

Thanks.

Operator

Thank Judy. you

of comes Please ahead, question Cindy. Our go next line from Cindy China Wang Renaissance. the from

Cindy Wang

Thanks Renaissance. taking Cindy two [translated] This from for have questions. is management China my question. I

in to a what’s costs. customer is costs related stable customer Customer acquisition relative do costs is lower strategy you acquisition $XXX, acquisition for strategy to--customer quarter and second was forward? the question level. acquisition at which costs going customer First US acquisition How

the mean profitability? high reached has fifth is has from profit question non-GAAP together over-extending. an Does quarter, rate breakeven The net for positive with to second interest inflection non-GAAP consecutive is you. profit turned point margin environment, Thank so Tiger the Tiger’s that

Tianhua Wu

about funded In low of your $XXX quarter, Okay, we jeopardize which reasonable we number historically the reaching first in and quarter, further question quality decreased ROI the quarter, first period, [translated] the very accounts. $XXX, was and the levels. payback merely not was second second quality average to CAC In compared and CAC. will CAC client paid for the ratio close attention our a to

With ADRs some underperformance good the compared have a clients to names Chinese quarter. the in mark-to-market quarter, that to inflows client asset however, of quality reducing Kong maintained indicates net technology CAC. losses; experienced the led and assets average This previous increase strong while total in we customer the X.X% our second Hong

look customer [indiscernible] average that some Furthermore, channels overseas at CAC twice more second in newly us the regions average if overall is through the clients from from gained acquired save traffic This costs. we you. average have the can we demonstrates CAC that Thank gradually more their CAC. acquisition than organic quarter,

profit the million highest to is glad quarter, US the reached quarterly profits past in $XX second two net say years. non-GAAP in I’m which non-GAAP our net the

during the capital market deployment, we we however, at stage back losses; experienced income optimizing quarterly hike gradually cycle, interest the reduced of improved Looking interest and rate some activity early profitability. prudent our through

been model net has two margin past healthy company. and business our quarters, a the Over expanding, the profit robust indicating for

Kong, costs Given penetrate profit most that activity, stable in if market better more there our markets, is and operating to if believe and leverage, or backdrop, which fixed to Hong New we tied leads Zealand the more improvement Australia are of we we can overall can margins. market relatively in enjoy

black the is Thank your question, swings, assuming of terms in should be we answer extreme there profitability. market To you. in no

Operator

Thank you Cindy.

of Our from Ling question Tan Daiwa from the Please next line your question, Markets. ask comes Ling. Capital

Ling Tan

management taking you questions. Thank This [translated] my from is for Ling Daiwa.

billion other provide I the noticed income the of two Can the [indiscernible] P&L. of color breakdown non-operating quarters? terms in management and in is--you received $X.X under the next that you. income non-operating Thank more there

John Zeng

against pure other half About FX a other quarter, of the accounting so this appreciation due comes from income [indiscernible] item. this [translated] USD to is currencies

our part income comes other the The of other actually treasury from management.

are As see our can so our you has management. balance we quarter-over-quarter, from sheet, increased doing financial balance treasury instrument

U.S. into next interest for monies investing the be few term this We of will Thanks. quarters. some are of think short kind bonds, those so sustainable we income

Operator

I’m questions. now closing you. turn all to comments. very much for back the further Thank questions. you conference for Aaron showing your Thank Li no Mr. I’ll

Aaron Li

everyone I we Thank now on do behalf call would our at Tiger, today’s the Operator. of you closing like the I’m today. call. for appreciate call. here to management participation your thank On joining team

If any reach Investor questions, to Relations have further out team. you please our

very and This you thank much concludes the call, your for time.

Operator

for today’s Thank concludes you participating. conference call. This

disconnect. You may now

UP Fintech Holding Limited (TIGR) 29 Aug 232023 Q2 Earnings call transcript