UP Fintech NASDAQ: TIGR reported record second-quarter revenue as commission and interest-related income increased, while management pointed to continued client-asset growth across its international markets and said the effects of its May regulatory update for mainland China users had largely run their course.
Total revenue rose 31.4% year over year and 17.7% sequentially to $182 million, Chairman and CEO Tianhua Wu said. Operating profit was $56.8 million, up 12.6% from a year earlier and 19.5% from the first quarter. GAAP net income attributable to UP Fintech was $39.4 million, while non-GAAP net income attributable to the company was $42.8 million, compared with a net loss in the prior quarter.
Wu said the first-quarter results had included an approximately $59.7 million one-time penalty. Excluding that impact, second-quarter GAAP and non-GAAP net income attributable to UP Fintech increased by about 20% sequentially.
Revenue Growth Led by Commissions and Interest Income
CFO John Zeng said commission income reached $78.3 million, increasing 21% from the prior-year period and 17% from the first quarter. Interest income totaled $79.8 million, up 36% year over year and 24% sequentially.
Cash-equity take rate declined to 3.6 basis points from 5.9 basis points in the first quarter. Zeng attributed the decline partly to roughly $15 billion of additional trading volume from Tiger Brokers U.S., where local users receive zero-commission trading. He also cited heavier trading in AI and semiconductor stocks with higher share prices and lower effective take rates, as well as a rise in average stock prices during a Nasdaq rally.
About 71% of commission revenue came from cash equities, 24% from options, and the remainder from futures and other products, Zeng said. Management expects the cash-equity take rate to recover somewhat in the third quarter, citing a recent pullback in share prices.
Operating costs totaled $103.9 million, up 47% year over year. Employee compensation and benefits expense increased 39%, primarily due to severance costs associated with the company’s reorganization of business units. Marketing expense rose 87% to $18.4 million as the company pursued what it described as high-quality customer acquisition and expanded wealth-management efforts.
International Markets Drive Account and Asset Growth
The company added 32,600 funded accounts during the quarter, up 12.7% sequentially, bringing total funded accounts to 1.32 million as of June 30, an increase of 10.3% from a year earlier. Singapore and Hong Kong together contributed more than 70% of new funded accounts, split roughly evenly, while Australia and New Zealand accounted for around 25% and the United States provided the remainder.
Total client assets reached $60.7 billion, rising 3.1% from the preceding quarter and 16.7% year over year. Retail clients in markets including Singapore and Hong Kong generated more than $1.5 billion in net asset inflows during the quarter, while market appreciation also supported asset growth.
Wu said client assets increased sequentially in every market where UP Fintech operates. Hong Kong client assets rose nearly 30% during the quarter after the company increased offline promotions and brand visibility. Client assets in Australia and New Zealand increased by more than 30%, while U.S. client assets grew by nearly 50%.
The company launched fractional-share trading for Singapore-listed stocks and REITs in Singapore. It also introduced tax-reporting tools in Hong Kong, Singapore and New Zealand. In Hong Kong, UP Fintech introduced Cboe index options trading and held investor education events, while its marketing activity included a SpaceX-themed campaign featuring outdoor advertising, social media, new-user offers and advertising at Hong Kong Airport.
Mainland China Update and Third-Quarter Trends
Wu said UP Fintech implemented monitoring mechanisms on June 12 to restrict certain onshore activities by mainland China users, including opening positions and making deposits, in response to regulatory requirements. The company has not received further policy changes or adjustments since then, he said.
Mainland retail users recorded approximately $500 million in net asset outflows in the second quarter, with most of the outflows occurring between May 22 and June 12, according to Wu. He said the amount represented a high-single-digit percentage of the users’ client assets before the regulatory update and that the pace of outflows has since eased.
Mainland retail users now represent less than 10% of total client assets. Their revenue contribution declined to between 15% and 20% in the second quarter, from a range of 20% to 25% in full-year 2025 and the first quarter of 2026, management said.
For the third quarter to date, Wu said net asset inflows and market appreciation had each contributed more than $1 billion, resulting in a high-single-digit increase in client assets compared with the end of the second quarter. Trading volume and commission revenue were running slightly below the comparable point in the second quarter, reflecting a high comparison base and a market pullback, he said.
Management expects third-quarter new funded accounts to be flat to higher than the second quarter. Average net asset inflow per new funded account has risen to about $25,000 so far in the third quarter, Wu said.
Tax Rate, Marketing Spending and Buyback Activity
Zeng said a roughly $2 million loss in “other, net” during the second quarter was a non-cash foreign-exchange loss associated with renminbi appreciation and U.S. dollar depreciation. He said the company views a normalized effective tax rate of 10% to 15% as reasonable.
The second-quarter tax expense was elevated by about $1 million of non-cash deferred-tax-asset writedowns related to share-based compensation, as well as roughly $6 million tied to the company’s prudent treatment of the first-quarter one-time penalty as a non-deductible expense. Zeng said the company aims to optimize its tax arrangements and potentially reverse part of the tax expense during the second half, subject to applicable rules.
Excluding FCN rebates, marketing spending increased by about $2.5 million sequentially, and average customer acquisition cost rose to approximately $450 from about $420 in the first quarter. Customer acquisition and branding represented roughly 60% to 70% of marketing spending, with incremental investment focused mainly on Hong Kong and Singapore. Management expects average customer acquisition cost to range from $450 to $550 in the second half.
Separately, Zeng said the company had repurchased approximately $5 million of American depositary shares as of the previous U.S. market close under its $50 million repurchase program announced June 2. UP Fintech may continue repurchases from time to time under the program, he said.
About UP Fintech (NASDAQ:TIGR)
Up Fintech Holding Ltd, trading on NASDAQ under the ticker TIGR, is a China-based financial technology company that provides online brokerage and wealth management services through its proprietary trading platform. The company's primary offering, Tiger Brokers, enables retail and institutional clients to access global financial markets, including equities, exchange-traded funds (ETFs), options, and futures across the United States, Hong Kong, China A-shares, Australia, and Singapore.
Founded in 2014 by Zhang Zhen, Up Fintech has focused on developing an intuitive mobile and desktop trading experience, complete with real-time market data, customizable charting tools, and in-app research insights.
This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.
Continue following MarketBeat
Add MarketBeat as your preferred source on Google to see our latest stories in your feed.
Before you consider UP Fintech, you'll want to hear this.
MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and UP Fintech wasn't on the list.
While UP Fintech currently has a Moderate Buy rating among analysts, top-rated analysts believe these five stocks are better buys.
View The Five Stocks Here
The AI boom is creating opportunities across semiconductors, cloud computing, enterprise software, infrastructure, cybersecurity, and automation.
Inside this report, you’ll find 10 companies positioned to benefit as artificial intelligence moves from hype to real-world deployment and becomes a core growth driver for corporate America.
Get This Free Report
