Hong Kong-based online brokerage Futu Holdings Limited (Nasdaq: FUTU) announced its second-quarter results today (Tuesday), surpassing analyst expectations and prompting an increase to its full-year outlook.

Futu Raises Guidance as Q2 Revenue Jumps 26%, Beating Estimates

The company reported a 25.9% year-over-year (YoY) increase in total revenues to $400.7 million, driven by strong growth across its key business segments. Net income rose 8.0% to $154.9 million, while non-GAAP adjusted net income grew 8.6% to $166.0 million.

This also marks an increase compared to the first quarter of the current year, when net profit stood at $132.3 million, and revenues amounted to $331.3 million.

Futu's client base continued to expand rapidly, with paying clients increasing 28.8% YoY to 2.04 million. The company added 155,000 new paying clients in Q2, representing a 167.8% increase from the same period last year.

“Given the strong year-to-date momentum, we would like to raise our guidance again to 550 thousand new paying clients in 2024,” said Leaf Hua Li, Futu's Chairman and CEO. This marks the second upward revision to the company's full-year guidance.

Despite the strong top-line growth, Futu's operating margin declined to 47.3% from 50.6% in the year-ago quarter. That was primarily due to increased operating expenses as the company invested in research and development and marketing to support its growth initiatives.

Other Metrics Also Up

Total client assets reached a record HK$579.3 billion, up 24.3% YoY and 11.9% quarter-over-quarter, buoyed by robust net asset inflows and favorable market conditions. The company's margin financing and securities lending balance hit an all-time high of HK$43.8 billion, reflecting increased client risk appetite.

Trading volume surged 69.0% YoY to HK$1.62 trillion, with US stocks accounting for the lion's share at HK$1.24 trillion. The company benefited from heightened trading activity in AI-themed stocks and meme stocks.

Futu's expansion into new markets showed promising results, with Hong Kong and Singapore both recording double-digit sequential growth in new paying clients. The company recently launched cryptocurrency trading in these markets to diversify its offerings.

The firm has also invested in Gravitation Fintech HK Limited, the parent company of Airstar Bank, a licensed virtual bank in Hong Kong. After a HK$440 million investment, the company holds an indirect 44.11% stake in Airstar Bank.