Futu Q2 2025 Earnings Report

Futu EPS Results

• Actual EPS: N/A
• Consensus EPS: $1.99
• Beat/Miss: N/A
• One Year Ago EPS: N/A

Futu Revenue Results

• Actual Revenue: N/A
• Expected Revenue: $539.76 million
• Beat/Miss: N/A
• YoY Revenue Growth: N/A

Futu Announcement Details

• Quarter: Q2 2025
• Date: 8/20/2025
• Time: Before Market Opens
• Conference Call Date: Wednesday, August 20, 2025
• Conference Call Time: 7:30AM ET

Futu (NASDAQ:FUTU) Holdings Limited is a technology-driven online brokerage and wealth management platform primarily catering to retail investors. Headquartered in Hong Kong, the company operates a suite of digital trading applications that enable clients to access global equity markets, including Hong Kong, U.S. and select Asian exchanges. With a focus on seamless user experience and advanced analytical tools, Futu aims to democratize investment by combining intuitive mobile and desktop interfaces with professional-grade research capabilities.

At the core of Futu’s offering is its flagship trading platform, which provides real-time market data, customizable charting tools, algorithmic order types and in-app community features. Investors can trade stocks, exchange-traded funds (ETFs), options and warrants, and can also access margin financing and securities lending services. The platform integrates proprietary research reports, financial calendars and in-house market commentary to help users make more informed investment decisions.

Futu was founded in 2007 by Leaf Hua Li, who serves as the company’s Chief Executive Officer. It began servicing clients in Hong Kong before gradually expanding its reach to Mainland China and the United States. In March 2019, Futu completed a listing on the Nasdaq Stock Market, reinforcing its commitment to transparency and global best practices. The company holds multiple licenses and registrations, including approvals from the Hong Kong Securities and Futures Commission (SFC) and U.S. regulatory bodies, enabling it to operate across multiple jurisdictions.

Under the leadership of Leaf Hua Li and a management team with extensive experience in financial technology and brokerage operations, Futu continues to invest in platform enhancements, product innovation and customer support. Its strategic partnerships and continuous feature upgrades reflect the company’s ambition to build a one-stop ecosystem for trading, research and portfolio management on a global scale.

Futu Q2 2025 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: We reached 2.9 million funded accounts in Q2, up 41% year-over-year and 8% quarter-over-quarter, with over 50% of accounts now from international markets including the US, Singapore, Malaysia and Japan.
• Positive Sentiment: Total client assets hit a record HKD 974 billion, rising 68% year-over-year and 17% quarter-over-quarter, driven by net asset inflows that nearly doubled year-over-year.
• Positive Sentiment: Second quarter revenue was HKD 5.3 billion, up 70% year-over-year, and net income grew 113% to HKD 2.6 billion, expanding net margin to 48.4% from 38.6% in Q2 2024.
• Positive Sentiment: Total trading volume climbed 121% year-over-year to HKD 3.59 trillion, with US stock volume up 20% sequentially and cryptocurrency trading launched in most US states in June.
• Positive Sentiment: Key product and branding initiatives included rolling out Moomoo AI globally, becoming the New York Mets’ official sponsor, and offering tokenized money-market funds and principal-protected products in Hong Kong.

Presentation

[Operator]

Hello, ladies and gentlemen. Welcome to Futu Holdings Second Quarter twenty twenty five Earnings Conference Call. At this time, all participants are in a listen only mode. After management's prepared remarks, there will be a Q and A session. Today's conference call is being recorded. If you have any objections, you may now disconnect at this time.

[Operator]

Would now like to turn the conference over to your host for today's conference call, Daniel Yuan, Chief of Staff to CEO, Head of Strategy and IRFU2. Please go ahead, sir.

[Jingyu (Daniel) Yuan, Chief of Staff to CEO & Head - Strategy and IR at Futu]

Thanks, operator, and thank you for joining us today to discuss our second quarter twenty twenty five earnings results. Joining me on the call today are Mr. Leaf Li, Chairman and Chief Executive Officer Arthur Chen, Chief Financial Officer and Robin Shu, 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.

[Jingyu (Daniel) Yuan, Chief of Staff to CEO & Head - Strategy and IR at Futu]

We caution you that a number of important factors could cause actual results to differ materially from those contained in any forward looking statements. For more information about the potential risks and uncertainties, please refer to the company's filings with the SEC, including its annual report. With that, I will now turn the call over to Li. Li will make his comments in Chinese, and I will translate. Thank you all for joining our earnings call today.

[Jingyu (Daniel) Yuan, Chief of Staff to CEO & Head - Strategy and IR at Futu]

As of quarter end, total funded accounts reached approximately 2,900,000, representing a 41% increase year over year and an 8% rise quarter over quarter. We've reached a key milestone in our international expansion, which is at the quarter end, over 50% of funded accounts are from clients outside of future security Hong Kong. Singapore and The US are our largest international market, followed by the rapidly expanding Malaysia and Japan, while Australia and Canada show robust growth momentum. This this expanding international footprint is a testament to our vision of becoming an influential global financial services platform. During the quarter, we acquired 204,000 new funded accounts, up 32% from a year earlier.

[Jingyu (Daniel) Yuan, Chief of Staff to CEO & Head - Strategy and IR at Futu]

Hong Kong continued to lead all markets to new funded accounts for the third straight quarter. Elevated market volatility from trade tensions in early April, followed by a sharp rebound from trade truths, as well as the wave of high profile IPOs in May, spurred retail participation. Our US business also delivered robust growth. In the second quarter, we became the official sponsor of the New York Met, a partnership that will continue to broaden our brand reach in The US and internationally. We also launched cryptocurrency trading in most of the states in June, reinforcing our value proposition as a one stop trading platform.

[Jingyu (Daniel) Yuan, Chief of Staff to CEO & Head - Strategy and IR at Futu]

In Malaysia, we further localized our offerings by introducing IPO financing services for local listings and the Malaysian stock earnings calendar. In Japan, we partnered with Nasdaq and the Japan Exchange Group to host our inaugural offline investment event, MoveUp Japan, which attracted over 12,000 Tokyo investors to sign up, strengthening our brand recognition in Japan. Building on the successful debut of Futubo AI in Hong Kong, we rolled out Moomoo AI across all international markets, equipping investors worldwide with smarter tools for more efficient investing. Client engagement remains strong across regions. Our funded account quarterly retention rate was once again well above 98%, reflecting the high level of loyalty and satisfaction among our global client base.

[Jingyu (Daniel) Yuan, Chief of Staff to CEO & Head - Strategy and IR at Futu]

By the end of the second quarter, total client assets hit a record HKD $974,000,000,000, up 68% year over year and 17% quarter over quarter. Notably, net asset inflow in the 2025 nearly doubled compared to the same period last year. Thanks to robust net asset inflow and favorable mark to market depreciation from Hong Kong and US equity, average client assets across all markets register sequential increase. In Singapore, average client assets and total client assets rose 1926% quarter over quarter respectively. The group's margin financing and security lending balance remained stable at 51,400,000,000.0 Hong Kong dollars by quarter end.

[Jingyu (Daniel) Yuan, Chief of Staff to CEO & Head - Strategy and IR at Futu]

While clients initially deleveraged under the sharp market downturn in early April, a gradual recovery in risk appetite fostered a rebound in margin financing activity. In the second quarter, total trading volume reached HKD 3,590,000,000,000.00, representing a 121% year over year and 12% quarter over quarter growth. During the quarter, volatility stemming from trade talks drove unprecedented spikes in daily trading volume, while renewed enthusiasm in the cryptocurrency space further accelerated trading momentum. US stock trading volume went 20% sequentially to 2,700,000,000,000.0 Hong Kong dollars, led by EVN crypto stocks. Hong Kong stock trading volume contracted 9% quarter over quarter to 833,500,000,000.0 Hong Kong dollars, primarily due to tempered interest in the technology sector, partially offset by higher turnover in new consumption names.

[Jingyu (Daniel) Yuan, Chief of Staff to CEO & Head - Strategy and IR at Futu]

Wealth management client assets were a 163,200,000,000.0 Hong Kong dollars at the quarter end up a 104% year over year and 17% quarter over quarter. In Hong Kong and Singapore, we strengthened our fixed income offerings with Hong Kong dollar and RMB denominated bonds as well as floating rate bonds. In Hong Kong, we launched principal protective structure products, becoming the first online broker to offer retail facing structure products. We also became the first and only online brokerage platform in Hong Kong to distribute China AMC Hong Kong's tokenized money market funds, solidifying our position at the forefront of digital asset innovation. As of quarter end, we have 517 IPO distribution and IR clients, up 15% year over year.

[Jingyu (Daniel) Yuan, Chief of Staff to CEO & Head - Strategy and IR at Futu]

Hong Kong IPO market gained further momentum from the first quarter with increased deal volume and rising investor participation. During the quarter, we acted as joint book runners through multiple prominent listings. Notably, in the Hai Tin Flavoring and Food IPO, we attracted a record 102,000 subscribers, ranking first among all brokers in both number of subscribers and total subscription amounts. In the 2025, we partnered with six of the 10 largest Hong Kong IPOs by fundraising slides and facilitated over HKD 10,000,000,000 in subscription amount for 12 IPOs each, underscoring our unparalleled retail distribution capabilities. Next, I'd like to invite our CFO Arthur to discuss our financial performance.

[Arthur Yu Chen, Chief Financial Officer at Futu]

Thank you, Li Bin and Daniel. Please allow me to walk you through our financial performance in the second quarter. All the numbers are in Hong Kong dollars unless otherwise noted. Total revenue was 5,300,000,000.0 up 70% from what 3,100,000,000.0 in the 2024. Brokerage commission and handling charge income was 2,600,000,000.0, an increase of 87% year over year and the 12% Q over Q.

[Arthur Yu Chen, Chief Financial Officer at Futu]

The year over year increase was driven by higher trading volume partially offset by the decline in blended commission rate. We adopt per share and a per contract pricing model for US stocks and The US option trading respectively. As a result, brokerage income will grow at a slower rate than trading volume where our clients trade a higher price stocks and options. The Q over Q increase was mainly driven by the sequential growth in trading volume. Interest income was 2,300,000,000.0, up 44% year over year and 11% Q over Q.

[Arthur Yu Chen, Chief Financial Officer at Futu]

The year over year increase was driven by high interest income from security borrowing and the lending business, bank deposits and the margin financing. The Q over Q increase was driven by higher interest income from security borrowing and the lending business as well as higher interest income from bank deposits, partially offset by lower margin financing income due to sequential decline in daily average margin financing balance. Other income was $444,000,000 up 176% year over year and 41% Q over Q. The year over year and the Q over Q increase was primarily attributable to higher fund distribution service income and the currency exchange income. Our total cost was $671,000,000, an increase of 13% from $574,000,000 in the 2024.

[Arthur Yu Chen, Chief Financial Officer at Futu]

Brokerage commission and handling charge expenses was 161,000,000 of 84% year over year and the 12% Q over Q. Both the year over year and the Q over Q increase was roughly in line with the movement of our brokerage commission and handling charge income. Interest expenses was $378,000,000 flat year over year and down 20% Q over Q. The year over year increase in interest expenses associated with our security borrowing and the lending business was offset by the year over year decrease in margin financing interest expenses. The Q over Q decrease was mainly due to lower interest expenses associated with our security borrowing and the lending business, as well as lower margin financing interest expenses because of the high borrowing decline.

[Arthur Yu Chen, Chief Financial Officer at Futu]

Processing and servicing costs was 133,000,000 up 21% year over year and down 2% Q over Q. The year over year increase was largely due to higher data transmission fees and the market information and data fees. The Q over Q decline was mainly driven by lower market information and the data fee as well as lower crowd service fees. As a result, total gross profit was 4,600,000,000.0, an increase of 82% from 2,600,000,000.0 in the 2024. Gross margin was 87.4% as compared to 81.6% in the 2024.

[Arthur Yu Chen, Chief Financial Officer at Futu]

Operating expenses was up 21% year over year and 3% Q o Q Q to 1,300,000,000.0. R and D expenses was $442,000,000 up 18% year over year and 14% Q over Q. The year over year and the Q over Q increase was mainly driven by greater investments in AI capabilities. Selling and marketing expenses was $429,000,000 up 27% year over year and down 7% Q over Q. The year over year increase was mainly attributable to higher new fund accounts partially offset by lower client acquisition cost per unit.

[Arthur Yu Chen, Chief Financial Officer at Futu]

The Q over Q decrease was due to sequential decrease in new fund accounts partially offset by higher client acquisition cost per unit. General and administrative expenses were $425,000,000 up 17% year over year and the 2% Q over Q. The year over year increase was primarily due to increase in general and administrative headcounts. As a result, income from operation increased to 126% year over year and the 25% Q o Q to 3,300,000,000.0. Operating margin increased to 63 from 47.3% in the 2024, mostly due to strong top line growth and operating leverage.

[Arthur Yu Chen, Chief Financial Officer at Futu]

Our net income increased by 113% year over year and 20% Q o Q to 2,600,000,000.0. Net income margin expand to 48.4% in the second quarter as compared to 38.6% in the same in the same quarter last year. Our effective tax rate for the quarter was 18.4%. That concludes our prepared remarks. We now like to open the call to questions. Operator, please go ahead. Thank you.

[Operator]

Thank one, and one on your telephone keypad, and wait for your name to be announced. To withdraw your question, please press star, 11 again. Please stand by as we compile the Q and A roster. Thank you for your patience. Thank you for your patience.

[Operator]

Please stand by as we compile the Q and A roster. Our first question comes from the line of Cindy Wang from China Resolutions. Please go ahead.

[Cindy Wang, Director at China Renaissance]

Thanks for taking my call and congrats for the very good results in second quarter. And I have two questions here. First one is the net asset inflow was very strong in first half of this year and almost double compared to last year. So what's the reasoning behind it? And do you adjust any marketing campaign to attract asset inflow?

[Cindy Wang, Director at China Renaissance]

And how do you maintain the momentum in second half? Second question is crypto trading has launched in Hong Kong, Singapore and U. S. Can you give us some color on the number of clients and trading volume in the second quarter or the first half and also July? And any new product or market will launch in second half? Thank you.

[Arthur Yu Chen, Chief Financial Officer at Futu]

In terms of a very strong asset inflow in the first half, I think the band alongside of the benefit we got from the market itself, given that The US market and the Hong Kong markets performed quite well in the first half, which definitely is a positive implications to the client as inflows. Internal wise on the product side, we further enrich our product offering, especially in the first half. A lot of new products in terms in the areas of wealth management, crypto and the fixed incomes actually provide further enrich our positions as a one stop investment platforms to our users. This will definitely be a positive for our clients engagement and also new client asset inflows. On the marketing branding wise and operational wise, we also put a lot of efforts, especially in the overseas markets such as The US, our collaborations with Matt in the second quarters bear a very strong fruit in terms of the new client acquisition in The US and also the brand the brand implication further expands to other overseas markets as well in particular in the second quarter all the assets inflows from the overseas markets outside of Great China's the amount is almost exceed the absolute amount what we acquired from similar markets in 2024, which was very impressive.

[Arthur Yu Chen, Chief Financial Officer at Futu]

I think in the second half, we will continue to enhance our brand acquisitions in terms of, for instance, there will be more physical stores roll out in different markets in the second half. And also there will be some new port offering in the wealth management and in the crypto side as well in the second half. For instance, we do have the plans to provide crypto transfer in and the transport out functionalities for overseas markets alongside the Hong Kong markets as well. And secondly, for specific for the crypto tradings, in terms of the momentums, we we saw very strong momentums in terms of crypto asset holding and also the the trading velocity. For instance, the asset value of the cryptos at the second quarter end reached billion compared with the first half, which recorded over 40% Q on Q increase.

[Arthur Yu Chen, Chief Financial Officer at Futu]

And I do see, I do believe that the numbers will continue to see a very strong robust in third quarter as well. Thanks to further penetrations in our paying clients to engage crypto tradings. In the second half, we'll also there will be some new, you know, product pipelines in the crypto trading as well. Besides that, we are also doing some new feasibility studies for certain new markets, which we want to acquire the exchange license as well. Thank you.

[Operator]

Thank you. Just a moment for our next question, please. Next we have Chiyao Huang from MS. Please go ahead.

[Huang Chiyao, Research Associate at Morgan Stanley]

Let me briefly translate two questions basically. One is on crypto. Just wondering what's the mid to long term strategic views on crypto business in terms of licensing products and also the potential for monetization. And in particular, was wondering what's the strategic upside coming from the crypto exchange license in Hong Kong? And the second question is regarding the Japan market as the company has been in Japan market for almost two years.

[Huang Chiyao, Research Associate at Morgan Stanley]

Guess what's the understanding about the market? Any change in the understanding, especially regarding the competitive landscape and the the major competitive strength of the incumbents? How Futu is dealing with the competition? What's our key value at at the moment? And what's our targeted clients there versus the incumbents? Thank you.

[Arthur Yu Chen, Chief Financial Officer at Futu]

In my personal view, think our narrative for the whole group in the crypto side can be consist of four aspects. I will summarize, I call it the RACE R A C E. The R means the real world assets, because we have a very strong positions in terms of the traditional finance. So there will be a lot of bargaining powers or positions in the traditional asset products offerings. For instance, we have a very strong positions in the wealth management segments.

[Arthur Yu Chen, Chief Financial Officer at Futu]

We have already partnership over 80 world class fund manager companies. For instance, recently we just do our collaborations with China Asset Management in Hong Kong to be the first and exclusive retail distributors for their first tokenized money market funds. Down the road, I think such kind of collaborations in the fund distributions, how to connect traditional finance from web streams, from the offline to on chains would be definitely a very interesting areas to explore. Secondly, the A means advanced technologies. I think this is a very important part to set us apart from our partners or from our peers, because we always emphasize the safety as the first parameters when we do Web three products.

[Arthur Yu Chen, Chief Financial Officer at Futu]

Not to mention, there will be more integrations for our AI capabilities, how to further utilize our AI capabilities to in the Web three segment as well. Thirdly, it's the conversions between the traditional finance and the crypto native in terms of the the new clients referrals and also the cross selling opportunities. For instance, a couple of days ago, we just launched the product offerings for the Solana tradings to all Hong Kong retail investors. And we do have the plans to provide paper tradings for Solana tradings a very short time in order to further engage the newcomers to the crypto universe. The last word E means exchange.

[Arthur Yu Chen, Chief Financial Officer at Futu]

As you said, we are in the phase two of the ATP license application in Hong Kong, and we are doing the feasibility studies for more license applications in other markets. Exchange will definitely will be a gateways to connect crypto native and also traditional finance, and also in terms of monetizations, despite now the monetization more come from the trading itself. But in the long terms, I think VATP will, number one, will save our upstream cost to further enhance our user experience to provide a seamless user experience to our clients. And secondly, our client target will not only be the retail investor for ourselves, we may also to expand our offerings to other peers or institution clients as well. Thirdly, as you can see a lot of new initiatives mentioned by Hong Kong regulators, for instance, they mentioned Aspire initiative this year, which was quite encouraging.

[Arthur Yu Chen, Chief Financial Officer at Futu]

I think there will be a lot of new initial new monetization potentials, such as the derivatives, the stakings. So these are all incremental revenues in the long term, will benefit from the regulatory push up. Thank you.

[Jingyu (Daniel) Yuan, Chief of Staff to CEO & Head - Strategy and IR at Futu]

Hi, Kjell. This is

[Jingyu (Daniel) Yuan, Chief of Staff to CEO & Head - Strategy and IR at Futu]

Daniel. And I'll take your second question. I'll take your second question on Japan. I think I'm gonna first share about our understanding about the competitive landscape, market dynamics, and then I'm gonna talk about what we have done, in two q accordingly. So in terms of the competitive landscape, as we all know, it's been a pretty steady market structure over the past couple of years.

[Jingyu (Daniel) Yuan, Chief of Staff to CEO & Head - Strategy and IR at Futu]

SBI and Rakuten consistently have 80% of the market share in terms of retail investors, and they have both constructed a very robust ecosystem of, you know, one stop financial services and and even beyond financial services and create a lot of very sticky, very sticky touch points, with the end clients. That being said, we think Moomoo still has a very unique value proposition, especially for self directed investors interested in, The US markets. Whether it's our pricing or market data or a trading experience or our social community, these are all very friendly and super competitive for our self directed investors. So we'd like so we're thinking there is a real gap in the market for us to fill. And on top of that, what we have come to realize, and also something we've shared before, is that branding is super important in Japan.

[Jingyu (Daniel) Yuan, Chief of Staff to CEO & Head - Strategy and IR at Futu]

It takes time to win the trust of the Japan retail investors. So accordingly, we have done lots of branding events, whether it's advertising or hosting events with some of the other very prominent financial institutions or organizations in in Japan. And back to what we have done in the second quarter based on, you know, these understanding. So we continue to optimize our US related trading capabilities to and to streamline that investing experience. In the second quarter, we launched US options trading, and we have seen that the penetration of US options as well as the revenue contribution from from US options has been coming up steadily month over month.

[Jingyu (Daniel) Yuan, Chief of Staff to CEO & Head - Strategy and IR at Futu]

We also started to support the deposit and and and the outflow of US dollars. So before, clients need to exchange that into into Japanese yen. So by doing that, we reduced the friction in this currency exchange. We have also seen very high engagement and and turnover in the second quarter in Japan. And in fact, the total trading volume in Japan went up over by over 50% quarter over quarter.

[Jingyu (Daniel) Yuan, Chief of Staff to CEO & Head - Strategy and IR at Futu]

And we have seen a sequential increase in both the trading turnover of The US stocks and Japan stocks. And the average client assets as of quarter end also registered double digit sequential growth. So we think these are all super encouraging signs and data points. And going forward, we'll continue to optimize our churn experience for both The US docs and Japan docs. And in the second quarter, we also launched some AI related capabilities in Japan.

[Jingyu (Daniel) Yuan, Chief of Staff to CEO & Head - Strategy and IR at Futu]

And what we have seen this side, the penetration or adoption rate of AI chat box is actually the highest in Japan among all of our international markets. And the customer satisfaction rate consistently stayed above 90%, which shows that, there are a sizable number of, self directed Japanese investors who are interested in doing their own research, and help and use these tools to help them make informed investment decisions. And we want to leverage AI, leverage financial technology to continue to lower the barrier of investing for US stocks. And we think that there is a growing demand for US stocks for us to cater to. And also in terms of brand building, we've also done a fair amount.

[Jingyu (Daniel) Yuan, Chief of Staff to CEO & Head - Strategy and IR at Futu]

In the second quarter, we partnered with Nasdaq and the Japan Stock Exchange to host the Move Fest event. Over 12,000 retail investors in Tokyo signed up, which we think is a quite sizable crowd. And we think that over the past couple of quarters, we've really been able to elevate our brand recognition and trust among the retail investors in Japan. And let me translate for myself. Thank you.

[Operator]

You. Just a moment for our next question, please. Next we have Yu Fan from CICC. Please go ahead.

[Analyst]

Thanks management for taking my question. This is from CICC, And I have two questions here. The first one is, can you please give more color on the third quarter regarding the like the client acquisitions and net asset inflow and also the trading volume? And second question is about The U. S.

[Analyst]

Market. We see solid growth achieved this yield. So would you please share more data and also what's the plan and target for The U. S. Market? Thank you.

[Jingyu (Daniel) Yuan, Chief of Staff to CEO & Head - Strategy and IR at Futu]

Well, thank you for these two questions. This is Daniel. I'll take both of these questions. First of all, in terms of the third quarter quarter to date trend, based on the run rate, we expect a steady q on q net new net new funded accounts. So it's pretty steady compared to the last quarter.

[Jingyu (Daniel) Yuan, Chief of Staff to CEO & Head - Strategy and IR at Futu]

We've also seen a positive mark to market impact, which coupled with net asset inflow should continue to push total client AUM to grow sequentially. We've also seen very active trading behaviors. And based on the current run rate, if the market sentiment is able to persist, we think there is a chance that our trading volume could have another Q on Q increase on top of the very high base in the second quarter. And in terms of our development in The US market, a couple of data points we could share. Well, first of all, we've really seen the positive flywheel, thanks to the continued product development and the strengthening brand equity.

[Jingyu (Daniel) Yuan, Chief of Staff to CEO & Head - Strategy and IR at Futu]

The net new ads in terms of funded accounts in The US continue to contribute very meaningfully to the group. And in the second quarter, we've also seen the number of options traders, as well as the total number of options contracts traded reached historic high. And in fact, both numbers registered five consecutive quarters of sequential increase. So we think these are super encouraging. And in the second quarter, as we shared earlier, we strived this partnership with the New York Mets, and we've been deeply embed embedded in this ecosystem of of New York Mets.

[Jingyu (Daniel) Yuan, Chief of Staff to CEO & Head - Strategy and IR at Futu]

We think this strategic partnership, help us elevate our brand image among the team's tens of millions of fans in The US. But also, we really get our name out there internationally, thanks to the sports team's international influence. Besides building our brand, we've also iterated on our product. In June, we launched cryptocurrency trading in most states in The US, and we now support over 30 mainstream crypto trading pairs. And we've seen a continuous increase in adoption rate among our US clients.

[Jingyu (Daniel) Yuan, Chief of Staff to CEO & Head - Strategy and IR at Futu]

We've also launched Moomoo AI, including AI chat box, AI powered stock investment tools, and lots of technical charts and and stock related fundamental data. We also in the future, we plan to launch kind of AI stock screeners to help our investors better sit through the thousands of stocks. So, yeah, lots of product innovations as well. And and overall, we are very optimistic about the growth prospects in the in The US market. And let me translate.

[Operator]

You. One moment for our next question, please. Next we have Charles Zhou from UBS. Please go ahead.

[Charles Zhou, Managing Director at UBS Group]

So I have two questions. So first, can you maybe give us a little bit more information about the regional mix of the client acquisition in the second quarter? And also, noticed that on a Q on Q basis, there's a sequential slowdown for the customer acquisition. Meanwhile, also noticed some news report about more stringent onboarding of the Mainland Chinese clients in Hong Kong in June. So what will be the potential impact to your client acquisition looking forward?

[Charles Zhou, Managing Director at UBS Group]

And also any potential change to your full year guidance of 800,000? Thank you.

[Arthur Yu Chen, Chief Financial Officer at Futu]

In terms of the new clients, new paying client, for the accounts we acquired in the second quarter, Hong Kong and Malaysia collective basis account for over 50% of the new client acquisitions in the second quarter. Then the remaining part was mainly come from Singapore, US and also Japan. In total for the first half of this year, we have already achieved four and sixty thousand new fund accounts, which accounts for over 50% of our annual 800,000 new fund accounts targets. We remain very confident to achieve our full year target nowadays. And that there we do not see any meaningful implications for the new regulations in terms of the new client on boardings in Hong Kong.

[Arthur Yu Chen, Chief Financial Officer at Futu]

So far all the new clients acquisition across different markets remain very healthy and robust. So I personally feel very confident to achieve our full year target. Thank you.

[Charles Zhou, Managing Director at UBS Group]

Thank

[Operator]

you. Just a moment for the next question, please. Next, we have Emma Su from BRFA Securities.

[Emma Xu, Research Analyst - Banks & Fintech at Bank of America Merrill Lynch]

So the first question is about the interest income. It's actually stronger much stronger than expected. So you mentioned that the gross interest income increased mainly due to the increased income from the stock borrowing and lending business as well as interest income from idle cash. But in second quarter, HEIBOR dropped a lot. It seems it doesn't impact your interest income a lot.

[Emma Xu, Research Analyst - Banks & Fintech at Bank of America Merrill Lynch]

So could you tell us what's the reason behind? But on the other hand, your interest expense declined due to lower cost related to the margin to the stock borrowing and lending business as well as lower highball. So why there is a divergence between the trend of the gross interest income and interest expense? And what will be the trend in the third quarter for your net interest income? And the second question is about other income, which grew very strongly in the second quarter, up 42% quarter over quarter and 176% year over year.

[Emma Xu, Research Analyst - Banks & Fintech at Bank of America Merrill Lynch]

You mentioned that it is mainly related to your foreign distribution business and FX income business. So could you tell us, do you expect could you tell us what drives the strong growth behind? And do you expect such strong momentum to continue in the future? Thank you.

[Arthur Yu Chen, Chief Financial Officer at Futu]

For the first questions regarding the interest income, despite we see a very meaningful stable declines, which may have some certain negative implications to our interest income. But thanks to some policy factors. Number one is given the markets become more volatile and the people, the investor take different opinions, then the interest for the short on the short side has increased a lot in the second quarter. In particular, we got a lot of benefit from some hard to borrow stock from the securities landings. Secondly is, we see more clients to lock in their profit, given the markets become volatile and that they want know, took the take some money off the tables.

[Arthur Yu Chen, Chief Financial Officer at Futu]

Consequently, the cash positions within their portfolios increase a lot. Therefore, you know, these benefits actually fully offset the negative implications from the yield. And also in the second in the third quarter so far, we see a little bit rebound in the high growth. And at the same time, we also see the cash positions for our clients continue to be maintaining a relatively high levels. And also we see a very strong client asset inflow as well.

[Arthur Yu Chen, Chief Financial Officer at Futu]

So, you know, compare with the second quarter, I think the interest income in the third quarter, the momentum will continue. Then for the second question regarding the other incomes, you're right, we got some benefits from the FX and also the management fees arising from our wealth management products. And I strongly believe that these two revenue streams can continue in line with our expansions for our wealth management products. And also if the market continue to be choppy, actually, there will be more consequence demand for the FX exchange. So besides these two normal parts also we increase, we record certain technology service fee incomes from our technology expense, service provided by L Star Bank in the second quarter as well. Thank you.

[Emma Xu, Research Analyst - Banks & Fintech at Bank of America Merrill Lynch]

Thank you. Very helpful.

[Operator]

Thank you. Thank you for all the questions. I will now pass back to Daniel for closing remarks. Thank you for all the questions. I will now pass back to Daniel for closing remarks.

[Jingyu (Daniel) Yuan, Chief of Staff to CEO & Head - Strategy and IR at Futu]

That concludes our call today. On behalf of the Futu management team, I would like to thank you for joining us today. If you have any further questions, please do not hesitate to contact me or any of our investor relations representatives. Thank you, and goodbye.

[Operator]

This concludes today's conference call. Thank you for participating. You may now disconnect.

Participants

Executives

• Jingyu (Daniel) Yuan, Chief of Staff to CEO & Head - Strategy and IR
• Arthur Yu Chen, Chief Financial Officer

Analysts

• Cindy Wang, Director at China Renaissance
• Huang Chiyao, Research Associate at Morgan Stanley
• Analyst
• Charles Zhou, Managing Director at UBS Group
• Emma Xu, Research Analyst - Banks & Fintech at Bank of America Merrill Lynch