UP Fintech (TIGR) Q2 2024 earnings summary

Executive summary

• Total revenue for Q2 2024 reached $87.4 million, an all-time high, up 10.8% sequentially and 32.4% year-over-year, driven by a 23.9% QoQ and 62.5% YoY increase in trading volumes to $105.9 billion.

• Commission income was $34.1 million, up 22.7% quarter-over-quarter and 54.9% year-over-year, the second-highest in company history.

• GAAP net income was $2.6 million and non-GAAP net income was $5.2 million, both impacted by a $13.2 million loss provision related to a Hong Kong stock pledging case.

• Excluding the loss provision, pre-tax profit was $19.4 million, up 13.9% quarter-over-quarter and 8.3% year-over-year.

• Added 48,900 new funded accounts, reaching 982,300, a 16.8% YoY increase; total funded accounts surpassed 1 million in early August.

Financial highlights

• Interest expense was $13.6 million, up 30% year-over-year due to high interest rates.

• Execution and clearing expense rose 38% year-over-year to $2.8 million, reflecting higher trading volume.

• Employee compensation and benefits increased 20% year-over-year to $28.6 million, driven by headcount growth.

• General and administrative expense surged 345% year-over-year to $20.2 million, mainly due to the one-time loss provision.

• Total operating costs and expenses rose 51.7% year-over-year to $69.0 million.

Outlook and guidance

• Confident in achieving annual guidance of at least 150,000 newly funded accounts in 2024.

• Q3 so far has seen strong net asset inflow and record monthly revenue in July; August trading volume remains active.

• A 25 basis point Fed rate cut would reduce quarterly revenue by about 1%, but could boost trading activity.