Futu Holdings reported higher revenue and trading activity in the first quarter of 2026, but net profit dropped sharply after a regulatory penalty impacted earnings. The online broker posted total revenue of HK$5.86 billion, up 24% year-over-year, while net income fell 61% to HK$831 million.

Revenue Growth, Profit Decline

The increase in revenue came from stronger trading activity and higher interest income. Brokerage commission income rose 14% to HK$2.64 billion, while interest income climbed 28% to HK$2.65 billion. Other income surged nearly 80% to HK$564.3 million, driven by currency exchange Exchange An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv Read this Term, IPO financing, and fund distribution services.

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Gross profit reached HK$5.11 billion, up 29%, with margins improving to 87%. Operating income also increased 31% to HK$3.53 billion.

However, net income declined significantly from HK$2.14 billion a year earlier. The drop followed a penalty of about RMB1.85 billion, equivalent to $271 million, issued by the China Securities Regulatory Commission, which the company recorded in its financial statements.

CFO Arthur Yu Chen said the penalty does not affect the business fundamentals or financial stability.

“On May 22, 2026, the Company received an Administrative Penalty Pre-Notification Letter from the China Securities Regulatory Commission Shenzhen Bureau in an aggregate amount of approximately RMB1.85 billion, which has been fully reflected in our first quarter financial statements as an adjusted subsequent event under U.S. GAAP. This amount does not impact our business fundamentals or financial stability. We remain focused on long-term growth across international markets.”

The regulator alleges that certain Futu-related entities in mainland China and Hong Kong carried out securities trading, public fund sales, and futures business in mainland China without obtaining the necessary approvals.

Client Growth and Trading Activity

Meanwhile, Futu continued to expand its user base and assets during the quarter. Funded accounts increased 34% to 3.59 million, while total users reached 30.2 million. Client assets rose 47% to HK$1.22 trillion.

Trading volume climbed 29% to HK$4.15 trillion. Activity in Hong Kong equities Equities Equities can be characterized as stocks or shares in a company that investors can buy or sell. When you buy a stock, you are in essence buying an equity, becoming a partial owner of shares in a specific company or fund.However, equities do not pay a fixed interest rate, and as such are not considered guaranteed income. As such, equity markets are often associated with risk.When a company issues bonds, it’s taking loans from buyers. When a company offers shares, on the other hand, it’s selling pa Equities can be characterized as stocks or shares in a company that investors can buy or sell. When you buy a stock, you are in essence buying an equity, becoming a partial owner of shares in a specific company or fund.However, equities do not pay a fixed interest rate, and as such are not considered guaranteed income. As such, equity markets are often associated with risk.When a company issues bonds, it’s taking loans from buyers. When a company offers shares, on the other hand, it’s selling pa Read this Term increased, offsetting softer trading in US stocks. Margin financing and securities lending balances rose 44% year-over-year to HK$72.9 billion.

CEO Leaf Hua Li said the company added 225,000 funded accounts during the quarter and remains on track to meet its full-year target. The company also expanded its product offerings and received regulatory approval in Hong Kong to operate its virtual asset exchange, PantherTrade.

Futu posted strong full-year results for 2025, with net income more than doubling to HK$11.3 billion (US$1.45 billion). Revenue climbed 68% year-over-year to HK$22.8 billion (US$2.94 billion) as clients piled into U.S. technology stocks and the Hong Kong-based online broker expanded across Asia. This lifted its gross profit margin to 87% from 82% and strengthened its ambition to add 800,000 new funded accounts in 2026.