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UP Fintech Holding Limited Reports Unaudited Second Quarter 2024 Financial Results

SINGAPORE, Aug. 30, 2024 (GLOBE NEWSWIRE) -- UP Fintech Holding Limited (NASDAQ: TIGR) (“UP Fintech” or the “Company”), a leading online brokerage firm focusing on global investors, today announced its unaudited financial results for the second quarter ended June 30, 2024.

Mr. Wu Tianhua, Chairman and CEO of UP Fintech stated: “In the second quarter, driven by a more active market environment and our comprehensive product offerings, trading volumes increased 23.9% quarter over quarter and 62.5% year over year to US$105.9 billion. Our total revenue for the second quarter amounted to US$87.4 million, an all-time high and reflected a quarter-over-quarter increase of 10.8% and a year-over-year increase of 32.4%. Our GAAP net income and non-GAAP net income attributable to ordinary shareholders of UP Fintech for the second quarter were US$2.6 million and US$5.2 million respectively. The quarter-over-quarter decrease in net income was due to a US$13.2 million loss provision for the suspended Hong Kong stock pledge business faced with extreme market situation and significant price drop, leading to a provision for the loan balance.

In the second quarter, we added 48,900 new funded accounts, bringing our total number of funded accounts at the end of the second quarter to 982,300, a 16.8% increase compared to the same quarter last year. In addition, as of early August, the total number of funded accounts has exceeded the 1 million milestone. Client assets inflow remained strong, with a net asset inflow of US$1.7 billion in the second quarter, fueled by a US$3.6 billion mark-to-market gain, leading the total account balance to rise by 16.2% quarter over quarter and 121.1% year over year to US$38.2 billion. The rapid expansion of our client base and the record-setting of total client assets over the past three quarters will position us well for sustained long-term growth.

We continued to invest in research and development to better serve our users and improve operating efficiency. In August, we introduced short selling and options trading features for Hong Kong stocks, expanding our product offerings and enabling more flexible trading strategies. Furthermore, since our Hong Kong subsidiary officially uplifted its Type 1 license to include virtual asset dealing service for professional investors in January of this year, we received approval in June to expand this license to retail clients in Hong Kong. We offer zero commission and no platform fees for both professional investors and Hong Kong retail clients to trade spot cryptocurrency on Tiger platform.

Our corporate businesses continued to perform well in the second quarter of 2024. During this period, we underwrote a total of 12 U.S. and Hong Kong IPOs, including “Laopu Gold” and “Dida” and we served as the exclusive lead bank for the U.S. IPOs of “Tungray Technologies” and “YY Group”. In our ESOP business, we added 22 new clients in the second quarter, bringing the total number of ESOP clients served to 579 as of June 30, 2024.”

Financial Highlights for Second Quarter 2024

  • Total revenues increased 32.4% year-over-year to US$87.4 million.
  • Total net revenues increased 32.8% year-over-year to US$73.9 million.
  • Net income attributable to ordinary shareholders of UP Fintech was US$2.6 million compared to a net income of US$13.2 million in the same quarter of last year.
  • Non-GAAP net income attributable to ordinary shareholders of UP Fintech was US$5.2 million, compared to a non-GAAP net income of US$15.3 million in the same quarter of last year. A reconciliation of non-GAAP financial metrics to the most comparable GAAP metrics is set forth below.

Operating Highlights for Second Quarter 2024

  • Total account balance increased 121.1% year-over-year to US$38.2 billion.
  • Total margin financing and securities lending balance increased 65.6% year-over-year to US$3.5 billion.
  • Total number of customers with deposit increased 16.8% year-over-year to 982,300.
 
Selected Operating Data for Second Quarter 2024
 
  As of and for the three months ended 
  June 30,  March 31,  June 30, 
  2023  2024  2024 
In 000’s         
Number of customer accounts  2,119.1   2,247.4   2,307.9 
Number of customers with deposits  840.9   933.4   982.3 
Number of options and futures contracts traded  7,758.0   10,850.3   12,175.1 
In USD millions         
Trading volume  65,135.9   85,410.6   105,860.0 
Trading volume of stocks  19,313.7   28,606.3   33,504.7 
Total account balance  17,269.4   32,872.1   38,188.6 
             

Second Quarter 2024 Financial Results

REVENUES

Total revenues were US$87.4 million, an increase of 32.4% from US$66.1 million in the same quarter of last year.

Commissions were US$34.1 million, an increase of 54.9% from US$22 million in the same quarter of last year, due to an increase in trading volume.

Financing service fees were US$2.9 million, a slight increase of 2.2% from US$2.8 million in the same quarter of last year.

Interest income was US$44.2 million, an increase of 21.2% from US$36.4 million in the same quarter of last year, primarily due to the increase in margin financing and securities lending activities.

Other revenues were US$6.3 million, an increase of 31.6% from US$4.8 million in the same quarter of last year, primarily due to the increase of our IPO subscription income.

Interest expense was US$13.6 million, an increase of 30.3% from US$10.4 million in the same quarter of last year, primarily due to increased interest rates.

OPERATING COSTS AND EXPENSES

Total operating costs and expenses were US$69.0 million, an increase of 51.7% from US$45.5 million in the same quarter of last year.

Execution and clearing expenses were US$2.8 million, an increase of 37.9% from US$2.0 million in the same quarter of last year due to an increase in our trading volume.

Employee compensation and benefits expenses were US$28.6 million, an increase of 19.8% from US$23.9 million in the same quarter of last year, primarily due to an increase of global headcount to support our global expansion.

Occupancy, depreciation and amortization expenses were US$2.1 million, a decrease of 16.6% from US$2.5 million in the same quarter of last year.

Communication and market data expenses were US$8.8 million, an increase of 13.5% from US$7.8 million in the same quarter of last year due to the increase of IT-related service fees.

Marketing and branding expenses were US$6.4 million, an increase of 35.7% from US$4.7 million in the same quarter of last year, primarily due to higher marketing spending this quarter.

General and administrative expenses were US$20.2 million, an increase of 345.1% from US$4.5 million in the same quarter of last year due to an increase in bad debt expense.

NET INCOME attributable to ordinary shareholders of UP Fintech

Net income attributable to ordinary shareholders of UP Fintech was US$2.6 million, as compared to a net income of US$13.2 million in the same quarter of last year. Net income per ADS – diluted was US$0.016, as compared to a net income per ADS – diluted of US$0.084 in the same quarter of last year.

Non-GAAP net income attributable to ordinary shareholders of UP Fintech, which excludes share-based compensation was US$5.2 million, as compared to a US$15.3 million in the same quarter of last year. Non-GAAP net income per ADS – diluted was US$0.033 as compared to a non-GAAP net income per ADS – diluted of US$0.097 in the same quarter of last year.

For the second quarter of 2024, the Company’s weighted average number of ADSs used in calculating non-GAAP net income per ADS – diluted was 158,583,497. As of June 30, 2024, the Company had a total of 2,370,174,212 Class A and B ordinary shares outstanding, or the equivalent of 158,011,614 ADSs.

CERTAIN OTHER FINANCIAL ITEMS

As of June 30, 2024, the Company’s cash and cash equivalents, term deposits and long-term deposits were US$394.8 million, compared to US$327.7 million as of December 31, 2023.

As of June 30, 2024, the allowance balance of receivables from customers was US$14.9 million compared to US$1.0 million as of December 31, 2023, which was due to a bad debt provision concerning the recoverability of a specific Hong Kong stock pledge business faced with extreme market situation and significant price drop, leading to a provision for the loan balance.

Conference Call Information:

UP Fintech’s management will hold an earnings conference call at 8:00 AM on August 30, 2024, U.S. Eastern Time (8:00 PM on August 30, 2024 Singapore/Hong Kong Time).

All participants wishing to attend the call must preregister online before they may receive the dial-in numbers. Preregistration may require a few minutes to complete.        

Preregistration Information:

Please note that all participants will need to pre-register for the conference call, using the link: https://register.vevent.com/register/BI7309255183fa46aab813840c89c237ef

It will automatically lead to the registration page of “UP Fintech Holding Limited Second Quarter 2024 Earnings Conference Call”, where details for RSVP are needed.

Upon registering, all participants will be provided in confirmation emails with participant dial-in numbers and personal PINs to access the conference call. Please dial in 10 minutes prior to the call start time using the conference access information.

Additionally, a live and archived webcast of the conference call will be available at https://ir.itigerup.com

Use of Non-GAAP Financial Measures

In evaluating our business, we consider and use non-GAAP net loss or income attributable to ordinary shareholders of UP Fintech and non-GAAP net loss or income per ADS - diluted as supplemental measures to review and assess our operating performance. The presentation of the non-GAAP financial measures is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with the United States Generally Accepted Accounting Principles (“U.S. GAAP”). We define non-GAAP net loss or income attributable to ordinary shareholders of UP Fintech as net loss or income attributable to ordinary shareholders of UP Fintech excluding share-based compensation. Non-GAAP net loss or income per ADS - diluted is non-GAAP net loss or income attributable to ordinary shareholders of UP Fintech divided by the weighted average number of diluted ADSs.

We present these non-GAAP financial measures because they are used by our management to evaluate our operating performance and formulate business plans. Non-GAAP net loss or income attributable to ordinary shareholders of UP Fintech enables our management to assess our operating results without considering the impact of share-based compensation. We also believe that the use of these non-GAAP financial measures facilitates investors' assessment of our operating performance.

These non-GAAP financial measures are not defined under U.S. GAAP and are not presented in accordance with U.S. GAAP. These non-GAAP financial measures have limitations as an analytical tool. One of the key limitations of using these non-GAAP financial measures is that they do not reflect all items of income and expenses that affect our operations. Share-based compensation has been and may continue to be incurred in our business and are not reflected in the presentation of non-GAAP net loss or income attributable to ordinary shareholders of UP Fintech. Further, these non-GAAP financial measures may differ from the non-GAAP financial information used by other companies, including peer companies, and therefore their comparability may be limited.

These non-GAAP financial measures should not be considered in isolation or construed as alternatives to total operating costs and expenses, net loss or income attributable to ordinary shareholders of UP Fintech or any other measure of performance or as an indicator of our operating performance. Investors are encouraged to review these historical non-GAAP financial measures in light of the most directly comparable GAAP measures. These non-GAAP financial measures presented here may not be comparable to similarly titled measures presented by other companies. Other companies may calculate similarly titled measures differently, limiting the usefulness of such measures when analyzing our data comparatively. We encourage investors and others to review our financial information in its entirety and not rely on a single financial measure.

About UP Fintech Holding Limited

UP Fintech Holding Limited is a leading online brokerage firm focusing on global investors. The Company’s proprietary mobile and online trading platform enables investors to trade in equities and other financial instruments on multiple exchanges around the world. The Company offers innovative products and services as well as a superior user experience to customers through its “mobile first” strategy, which enables it to better serve and retain current customers as well as attract new ones. The Company offers customers comprehensive brokerage and value-added services, including trade order placement and execution, margin financing, IPO subscription, ESOP management, investor education, community discussion and customer support. The Company’s proprietary infrastructure and advanced technology are able to support trades across multiple currencies, multiple markets, multiple products, multiple execution venues and multiple clearinghouses.

For more information on the Company, please visit: https://ir.itigerup.com.

Safe Harbor Statement

This announcement contains forward−looking statements. These statements are made under the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward−looking statements can be identified by terminology such as “may,” “might,” “aim,” “likely to,” “will,” “expects,” “anticipates,” “future,” “intends,” “plans,” “believes,” “estimates” and similar statements or expressions. Among other statements, the business outlook and quotations from management in this announcement, the Company’s strategic and operational plans and expectations regarding growth and expansion of its business lines, and the Company’s plans for future financing of its business contain forward-looking statements. The Company may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission (“SEC”) on Forms 20−F and 6−K, in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties, including the earnings conference call. Statements that are not historical facts, including statements about the Company’s beliefs and expectations, are forward−looking statements. Forward−looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, including but not limited to the following: the cooperation with Interactive Brokers LLC and Xiaomi Corporation and its affiliates; the Company’s ability to effectively implement its growth strategies; trends and competition in global financial markets; changes in the Company’s revenues and certain cost or expense accounting policies; and governmental policies and regulations affecting the Company’s industry and general economic conditions in China, Singapore and other countries. Further information regarding these and other risks is included in the Company’s filings with the SEC, including the Company’s annual report on Form 20-F filed with the SEC on April 22, 2024. All information provided in this press release and in the attachments is as of the date of this press release, and the Company undertakes no obligation to update any forward-looking statement, except as required under applicable law. Further information regarding these and other risks is included in the Company’s filings with the SEC.

For investor and media inquiries please contact:

Investor Relations Contact

UP Fintech Holding Limited

Email: ir@itiger.com

 
UP FINTECH HOLDING LIMITED
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(All amounts in U.S. dollars (“US$”))
 
  As of
December 31,
  As of
June 30,
 
  2023  2024 
  US$  US$ 
Assets:      
Cash and cash equivalents  322,599,616   392,528,408 
Cash-segregated for regulatory purpose  1,617,154,185   1,701,707,286 
Term deposits  896,683   901,409 
Receivables from customers (net of allowance of US$991,286 and US$14,870,240 as of December 31, 2023 and June 30, 2024)  753,361,199   846,675,954 
Receivables from brokers, dealers, and clearing organizations  541,876,929   1,591,933,989 
Financial instruments held, at fair value  428,159,554   175,701,579 
Prepaid expenses and other current assets  17,936,180   17,769,978 
Amounts due from related parties  7,987,756   9,963,636 
Total current assets  3,689,972,102   4,737,182,239 
Non-current assets:      
Long-term deposits  4,225,412   1,376,046 
Right-of-use assets  9,067,885   13,053,689 
Property, equipment and intangible assets, net  16,429,543   16,473,565 
Goodwill  2,492,668   2,492,668 
Long-term investments  7,586,483   7,326,173 
Other non-current assets  5,282,012   6,365,576 
Deferred tax assets  10,990,998   9,103,304 
Total non-current assets  56,075,001   56,191,021 
Total assets  3,746,047,103   4,793,373,260 
Current liabilities:      
Payables to customers  2,913,306,558   2,805,723,816 
Payables to brokers, dealers and clearing organizations:  114,771,931   1,241,375,223 
Accrued expenses and other current liabilities  42,381,946   43,395,355 
Deferred income-current  819,809    
Lease liabilities-current  4,133,883   4,445,007 
Amounts due to related parties  10,148,142   21,995,813 
Total current liabilities  3,085,562,269   4,116,935,214 
Convertible bonds  156,887,691   158,181,706 
Lease liabilities- non-current  4,777,134   8,140,018 
Deferred tax liabilities  3,397,831   2,315,326 
Total liabilities  3,250,624,925   4,285,572,264 
Mezzanine equity      
Redeemable non-controlling interests  6,706,660   6,871,175 
Total Mezzanine equity  6,706,660   6,871,175 
Shareholders’ equity:      
Class A ordinary shares  22,528   22,725 
Class B ordinary shares  976   976 
Additional paid-in capital  505,448,080   510,169,203 
Statutory reserve  8,511,039   8,511,039 
Accumulated deficit  (19,600,434)  (4,371,906)
Treasury stock  (2,172,819)  (2,172,819)
Accumulated other comprehensive loss  (3,232,993)  (10,940,152)
Total UP Fintech shareholders’ equity  488,976,377   501,219,066 
Non-controlling interests  (260,859)  (289,245)
Total equity  488,715,518   500,929,821 
Total liabilities, mezzanine equity and equity  3,746,047,103   4,793,373,260 


  
UP FINTECH HOLDING LIMITED 
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME/(LOSS) 
(All amounts in U.S. dollars (“US$”), except for number of shares (or ADSs) and per share (or ADS) data) 
  For the three months ended  For the six months ended 
  June 30,  March 31,  June 30,  June 30,  June 30, 
  2023  2024  2024  2023  2024 
  US$  US$  US$  US$  US$ 
Revenues(a):               
Commissions 22,011,990  27,786,218  34,086,778  47,450,496  61,872,996 
Interest related income               
Financing service fees 2,843,586  2,832,065  2,905,198  5,696,169  5,737,263 
Interest income 36,448,761  43,841,220  44,193,949  71,036,277  88,035,169 
Other revenues 4,750,411  4,488,989  6,251,083  8,197,482  10,740,072 
Total revenues 66,054,748  78,948,492  87,437,008  132,380,424  166,385,500 
Interest expense (10,423,344) (14,789,835) (13,581,981) (18,831,305) (28,371,816)
Total net revenues 55,631,404  64,158,657  73,855,027  113,549,119  138,013,684 
Operating costs and expenses:               
Execution and clearing (2,035,327) (2,230,863) (2,807,006) (4,467,162) (5,037,869)
Employee compensation and benefits (23,908,787) (27,787,218) (28,645,229) (48,315,075) (56,432,447)
Occupancy, depreciation and amortization (2,528,576) (2,144,337) (2,109,688) (4,961,362) (4,254,025)
Communication and market data(a) (7,763,372) (8,561,482) (8,813,405) (14,720,003) (17,374,887)
Marketing and branding (4,720,995) (4,390,987) (6,407,744) (9,905,192) (10,798,731)
General and administrative (4,549,052) (5,667,137) (20,246,128) (9,049,772) (25,913,265)
Total operating costs and expenses (45,506,109) (50,782,024) (69,029,200) (91,418,566) (119,811,224)
Other income:               
Others, net 7,755,429  3,615,219  1,405,013  8,087,095  5,020,232 
Income before income tax 17,880,724  16,991,852  6,230,840  30,217,648  23,222,692 
Income tax expenses (4,577,748) (4,528,297) (3,486,260) (8,894,968) (8,014,557)
Net income 13,302,976  12,463,555  2,744,580  21,322,680  15,208,135 
Less: net loss attributable to non-controlling interests (24,428) (17,914) (2,479) (75,442) (20,393)
Accretion of redeemable non-controlling interests to redemption value (141,578) (151,322) (153,837) (248,863) (305,159)
Net income attributable to ordinary shareholders of UP Fintech 13,185,826  12,330,147  2,593,222  21,149,259  14,923,369 
Other comprehensive loss, net of tax:               
Changes in cumulative foreign currency translation adjustment (6,524,752) (4,791,040) (2,909,808) (6,136,206) (7,700,848)
Total Comprehensive income (loss) 6,778,224  7,672,515  (165,228) 15,186,474  7,507,287 
Less: comprehensive loss attributable to non-controlling interests (12,873) (13,454) (628) (64,296) (14,082)
Accretion of redeemable non-controlling interests to redemption value (141,578) (151,322) (153,837) (248,863) (305,159)
Total Comprehensive income (loss) attributable to ordinary shareholders of Up Fintech 6,649,519  7,534,647  (318,437) 15,001,907  7,216,210 
Net income per ordinary share:               
Basic 0.006  0.005  0.001  0.009  0.006 
Diluted 0.006  0.005  0.001  0.009  0.006 
Net income per ADS (1 ADS represents 15 Class A ordinary shares):               
Basic 0.085  0.079  0.017  0.137  0.095 
Diluted 0.084  0.077  0.016  0.135  0.094 
Weighted average number of ordinary shares used in calculating net income per ordinary share:               
Basic 2,321,875,787  2,342,468,897  2,354,432,689  2,317,687,839  2,348,450,793 
Diluted 2,417,213,764  2,452,022,959  2,378,752,460  2,413,294,307  2,371,490,247 
                

(a) Includes the following revenues, costs and expenses resulting from transactions with related parties as follow:

  For the three months ended  For the six months ended 
  June 30,  March 31,  June 30,  June 30,  June 30, 
  2023  2024  2024  2023  2024 
  US$  US$  US$  US$  US$ 
Revenues:               
Commissions 1,782  42,647  38,231  2,979  80,878 
Interest related income               
Interest income 34,652  845,345  410,731  75,264  1,256,076 
Communication and market data (36,330) (39,690) (26,460) (70,980) (66,150)
                


Reconciliations of Unaudited Non-GAAP Results of Operations Measures to the Nearest Comparable GAAP Measures
(All amounts in U.S. dollars (“US$”), except for number of ADSs and per ADS data)
 
 For the three months ended June 30,
2023
 For the three months ended March 31,
2024
 For the three months ended June 30,
2024
   non-GAAP      non-GAAP      non-GAAP   
 GAAP Adjustment  non-GAAP GAAP Adjustment  non-GAAP GAAP Adjustment  non-GAAP
 US$ US$  US$ US$ US$  US$ US$ US$  US$
 Unaudited Unaudited  Unaudited Unaudited Unaudited  Unaudited Unaudited Unaudited  Unaudited
   2,142,240 (1)    2,380,637 (1)    2,603,648 (1) 
Net income attributable to ordinary shareholders of UP Fintech13,185,826 2,142,240  15,328,066 12,330,147 2,380,637  14,710,784 2,593,222 2,603,648  5,196,870
                     
Net income per ADS - diluted0.084    0.097 0.077    0.092 0.016    0.033
Weighted average number of ADSs used in calculating diluted net income per ADS161,147,584    161,147,584 163,468,197    163,468,197 158,583,497    158,583,497

(1) Share-based compensation.


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