UP Fintech Holding (NASDAQ:TIGR) released first-quarter financial results and hosted an earnings call on Tuesday. Read the complete transcript below.

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Summary

UP Fintech Holding reported a 26.3% year-over-year increase in total revenue for Q1 2026, reaching $155 million, with operating profits up 17.5% at $47.6 million.

The company onboarded 28,900 new funded accounts, with significant contributions from Singapore and Hong Kong, and saw a net asset inflow of $2.9 billion, despite a $4.9 billion mark-to-market loss due to market turbulence.

UP Fintech introduced major upgrades to its Tiger AI platform and launched a share repurchase program of up to $50 million over the next year.

A regulatory penalty of RMB 411 million was accounted for as a one-time charge, which the company states will not materially impact its core operations.

Management expressed confidence in recovering mark-to-market losses and highlighted strong net asset inflows from overseas markets, while noting that recent regulatory changes in China would not affect offshore clients.

Full Transcript

Operator

Ladies and Gentlemen, thank you for standing by and welcome to the UP FinTech Holding Limited First Quarter 2026 Earnings Conference Call. At this time, all participants are in a listen only mode. There will be a presentation followed by a question and answer session. I must advise you that this conference is being recorded today, June 2, 2026. I would now like to hand the conference over to your first speaker today, Mr. Aaron Lee, the head of Investor Relations. Thank you. Please go ahead.

Aaron Lee (Head of Investor Relations)

Thank you. Operator Hello everyone and thank you for joining us. The call today of FinTech Holding Limited's first quarter 2026 earnings release was distributed earlier today and is available on our IR website at ir.itigerup.com as well as GlobeNewswire services. On the call today from UP Fintech Holding, Mr. Wu Tianhua, Chairman and CEO Mr. Zheng Zheng, our CFO Mr. Fang Le, CEO of US Tiger securities and Mr. Kenny Zhao, our Financial Controller. Mr. Wu will give an overview of our business operations and discuss corporate highlights. Mr. Zheng will then discuss our financial results. They will both be available to answer your questions during the Q and A session that follows the remarks. Now let me cover the safe harbor. The statements we are about to make contain forward looking statements within the meaning of the US Private Security Litigation Reform act of 1995. A number of factors could cause actual results to differ materially from those containing any forward looking statements. For more information, please refer to our Form 6K furnished today and our Annual Report on Form 20F filed on April 24, 2026. We undertake no obligation to update any forward looking statement except as required under applicable law. It is my pleasure to now introduce our chairman and CEO, Mr. Wu. Mr. Wu will make remarks in Chinese which will be followed by English translation. Mr. Wu, please go ahead with your remarks. Hello everyone. Thank you for joining The Tiger Brokers fourth quarter 2026 earnings conference. In the first quarter of 2026, benefiting from our diversified offering and steady expansion of core operations, we achieved solid year over year growth in total revenue and key operating metrics. Our total revenue for the quarter reached US$155 million representing a 26.3% increase year over year. Operating profit reached US$47.6 million up 17.5% from the same period. Nanjing. The shiju fukui nashot. We onboarded 28,900 new funded accounts this quarter. Singapore and Hong Kong market are the primary contributors. As of the end of the first quarter, the number of our total funded accounts reached 1.28 million a year over year increase of 11.3%. In terms of client assets, we saw net asset inflow of 2.9 billion US dollar in the first quarter. In particular, net asset inflow from retail user under consolidated accounts exceeded US$2 billion for the first time in our history. This fully demonstrated that our strategy prioritizing user quality has delivered tangible results. With our user profile and client quality seeing further improvement due to the market turbulence in the first quarter, our client assets experienced mark to market losses of US$4.9 billion. As a result, total client assets at quarter end slightly down 3.2% quarter over quarter yet maintained robust year over year growth of 28.4% reached 58.9 billion US dollar at the end of the first quarter. Looking into the second quarter, Nasdaq has started to rebound and all mark to market losses on client assets recorded in the first quarter have been fully recovered on a quarter to date basis. Additionally, we are glad to see that despite notable market pullbacks which led to substantial mark to market losses on client assets, healthy net asset inflow drove a quarter over quarter increase in client assets across all the overseas markets. US client assets rose nearly 40% quarter over quarter while Australia, New Zealand and Hong Kong posted high single digit and double digit quarter by quarter growth respectively. Natangzhua miya shang sanguan xing. We keep building out features updates to enhance users overall investment experience. This quarter we delivered a major upgrade to Tiger AI with a brand new multi agent architecture. This lead functions including market code search, market analysis and risk control into standalone AI agents which has greatly boosted the accuracy of our AI building insights. We also officially launched a dedicated AI agent for futures. It delivers more reliable practical analysis and improves our user interact with our future tools. Besides, Tiger AI has upgraded from our original dual model framework to a three model collaborative system by integrating with cloud model marking a substantial improvement in our intelligent service capability for derivative features. We rolled out Hong Kong Index, auction trading and option TWEV orders. How can investors execute better trading strategies under volatile markets? Minimax. R2B business continued to perform well in the fourth quarter. We enrolled 10 Hong Kong IPO covering leading AI companies including Minimax and Dripu AI. We also successfully completed two large scale US backed IPOs. In addition, demand for Hong Kong IPO subscription remains robust. Year to date the total subscription amount for Hong Kong IPOs on our platform has exceeded 1 trillion HKD. As for our ESOP business, we added 42 new clients in the first quarter. As of the end of March 2026, our total ESOP clients served reached 790 indicating a sustained strong market demand for professional ECOP services and digital management solutions. To demonstrate our confidence in the company's long term growth and our commitment to delivering shareholder value, our Board of Directors has approved a share repurchase program of up to US$50 million to be implemented over a 12 month period from June 1, 2026 to June 1, 2027. Now I'd like to invite our CFO John to go over our financials.

John Zeng (Chief Financial Officer)

All right, Thanks Tiehua and Aaron, Let me go through our financial performance for the first quarter. All numbers are in U.S. dollar commission income was 67.2 million, increased 15% year over year and decreased 5% quarter over quarter. Interest income was 64.5 million, increased 20% year over year while decreased 10% quarter over quarter. Together total revenue reached 155 million, up 26% year over year and down 12% quarter over quarter. Cash equity take rate was 5bps this quarter down from 6.4bps a quarter ago. The main driver was a quarter over quarter increase of roughly 10 billion in trading volume in US tiger. Also, this uptick didn't translate into commission revenue as in the US we offer zero commission pricing for local users within commission revenue about 67% comes from cash equities, 25% from options at the rest from futures and other products. Now onto cost interest expense was 18.1 million, decreased by 5% quarter over quarter in line with the decrease in interest income and increased 21% compared to the same quarter last year. Execution and clearing expense were 5 million, a decrease of 6% from the same period last year due to more self clearing of US and Hong Kong securities. Employee compensation and Benefits expense were 46.8 million, an increase of 39% year over year due to the headcount increase to strengthen low R&D occupancy. Depreciation and amortization expense were 2.7 million, increased 25% year over year due to the increase in office space and the relevant lease code improvements. Communication and market Data expense were 13.6 million, an increase of 39% year over year due to the increase in user base and IT related service fees. Marketing expense were 14 million this quarter increased 29% year over year as we focus on acquiring higher quality users and accelerating the expansion of our rose Management products channel and administrative expense were 7 million, increased 37% year over year due to an increase in professional service fees. Total operating costs were 89.2 million, an increase of 33% from the same quarter of last year. On May 22 we received a regulatory penalty notice totaling approximately RMB 411 million. We have fully accounted for this amount in our first quarter results as a result. This is a one time non recurring charge and will not have material impact on our Corp. Business and overall financial health. As of the result, net loss and the non GAAP net loss were 26.9 million and 23.8 million. Operating profits were 47.5 million increased 17% year over year. Now I have concluded our presentations Operator, please open the line for Q and A. Thanks.

Operator

Thank you. To ask a question, you will need to press star one and one on your telephone and wait for your name to be announced. To withdraw your question, please press star one and one again. We'll now go to our first question. And our first question comes from the line of Peter Zhang from JP Morgan. Please go ahead. Your line is open.

Peter Zhang (Equity Analyst)

Li shi xing gao known for. Thanks for giving me the opportunity to ask questions. This is Peter Zhang from JP Morgan. I have two questions. First is how do you interpret the new regulatory rules released on May 22 and what will be the impact on your business? Also, could you share the mainland rate of client's share of your total client asset as of end first quarter as well as their contribution to the total revenue in first quarter? Second Amendment has mentioned that the quarterly net asset inflow from retail plan has reached a record high in first quarter. Can we have some color on the regional breakdown? Thank you. This text appears to be a transcription error and should be removed. I'll translate. On May 22, China's securities regulator together with multiple ministries rolled out a new industry wide regulation governing cross border securities futures and fund trading by mainland investors. These new rules apply to the entire industry, not only our firm. We took this new regulation very seriously with swift response. First, regarding the fine, this is the one time penalty totaling approximately 410 million RMB equivalent to around 60 million US dollars. Given our current profitability and cash reserves, this fine will not materially affect our core operation for long term development. Second, on the regulatory overhaul and its business impact, the core shift here is the regulatory approach moving from user identity verification to territory based oversight. Therefore, the two year rectification period is not about closing all existing PRC client accounts but to restrict trading activities when they are onshore in mainland of China. This new regulation targets onshore operation of all industry players. Under this new rule, brokers and banks cannot market cross border investment services within mainland of China and are required to close down mainland focused official websites and to remove relevant apps from local app stores. We've already completed all this requirement rectification back in May20. It is important to note that policy changes have no impact on users offshore. As of the end of the fourth quarter, million retail investors client assets under consolidated accounts accounted for roughly 10% of our total client assets and contributed between 20 to 25% of our total net revenue. Since the new rules were announced, we saw some uptick in asset outflow from mainland retail accounts. We believe this is a normal short term market reaction and we expect outflow to stabilize soon. Our retail users in other overseas markets remain unaffected and still record net asset inflows at zero throughout the period. For a second question, roughly 90% of our total net asset inflow from omnibus retail accounts this quarter came from markets outside of mainland China. By region, Singapore contributed over 1/3 of the total net asset inflow. Australia and New Zealand plus US combined for around another 1/3. And the reminder came from Hong Kong retail users. Thanks, Peter and Operator. Move on to the next question please.

Cindy Wang

Thank you. And our next question comes from the line of Cindy Wang from China Renaissance. Please go ahead. Your line is open. Thanks for taking my call. I have 2 questions here. First one is we noticed that the first quarter take rate decreased sequentially, especially for the stock commission rate. Can you let us know what's the reasoning behind it? Second, this quarter the company was affected by the one off penalty resulting in a quarterly loss, but income tax expense increase sequentially. So what are the reasons for this and how should we expect an effective tax rate going forward? Thank you.

John Zeng (Chief Financial Officer)

Okay. This text appears to be a transcription error and should be removed. So total trading volume and equity trading volume both increased quarter over quarter, but the commission revenue fell roughly 5% leading to a lower blended take rate. There are two key main factors. Number one is Hong Kong trading volume made up a larger share of total stock trading volume in the first quarter. We offer zero commission for Hong Kong users trading Hong Kong stock and the take rate for Hong Kong stock is about 2bps lower than that of the US stocks. A higher proportion of Hong Kong's trading volume will drag down the overall stock. A lot of reason is Tiger US onboarded some active user this quarter and saw an uptick in total trading volume. But in the US we follow market practice and offer zero commissions which further compressed the stock take rate. Beyond those two factors, revenue from futures trading rose around 6% in fourth quarter to roughly 8% in first quarter. Since future volume is calculated based on notional value, the enlarged total trading volume caused a decrease in blended commission rate. Based on tax rules and administrative deductible. Our tax is based on pre tax profit before the penalty. The primary reason of this income tax rate increase was due to a non cash tax adjustment linked to employee starting incentives. We amortized share based compensation expense for accounting purpose covering both vested and unvested stock employee stocks for tax purpose. However, only amortization relates to vested award is tax deductible. Non deductible amortization on unvested shares is factored in deferred tax assets. As our share price declined in first quarter which reduced the fair value of unvested employee stock incentives, this led to a write down of prior deferred tax assets of around US$4million and this amount was recorded as an increase in income tax expense. Conversely, a future share price rebound would also boost deferred tax assets and reduce tax expense accordingly. Excluding this one time non cash impact, we expect our effective tax rate to stay below 20%. Board thanks.

Operator

Thanks Mel. Move on to the next question please.

Yu Fan

Thank you. And our next question comes from the line of Yu Fan from cicc. Please go ahead. Your line is open. Thanks management for taking my questions. This is Yoyo Fan from cicc. I have two questions. Firstly, could you share more on our run rate since Q2 with the trend of the new funded client trading velocity and the client second question is on the net new funded account in Q1 what's the regional breakdown? And it seems that the number of the new added clients have not met the pace required for the full year guidance. So will you invest more in client acquisition or adjust the four year guidance?

John Zeng (Chief Financial Officer)

Now. Your first question about our run rates in the second quarter. For the number of new users, we expect the number to stay stable quarter over quarter. With Hong Kong and Singapore remaining our top contributing markets. Trading activity has picked up notably in the second quarter quarter to date, both starts and commission income are higher than the Q1 level. US stock trading activities saw the most significant improvement with Q2 to date. US cash equity trading volume already matching the full Q1 total. Regarding Kalan assets quarter today, we have fully recovered the nearly 5 billion US dollar mark to market losses recorded in the fourth quarter. Retail net asset inflow remained healthy so far in the second quarter. Assuming no material shifts in the market conditions through June, we expect total client assets to post a solid quarter per quarter increase. This text appears to be a transcription error and should be removed. For new funded accounts in the first quarter, Singapore and Hong Kong together accounted for over 75% of the total split almost evenly between these two markets. Australia and New Zealand contributed around 20%, with the rest coming from the U.S. even with the headline news on May 22, we are confident about our full year guidance and our global expansion market volatility has affected investor sentiment so far this year. We are optimistic that easing geopolitical tensions and improved inflation expectations in the second half will drive stronger user growth. In addition, it's noteworthy to point out that when evaluating customer acquisition, while indicators like average tag or ROI are important, our strategic priority is user quality, risk line asset and net asset inflow as our core KPIs. Therefore, we view the ratio of customer acquisition cost to quarterly retail net asset inflow as a more relevant measure of acquisition efficiency. The other word is just how much net asset inflow we can generate per dollar spent on the client acquisition. This ratio was at roughly 170 US dollar in the first quarter, compared to around 150 US dollar over the past four quarters and approximately 120 US dollar in the year before that. This shows that our customer acquisition strategy is indeed effective in acquiring high quality users. Thanks Meo. Let's just move on to the next question.

Operator

Thank you. There are no further questions at this time, so I'll hand the call back to Aaron for closing remarks.

Aaron Lee (Head of Investor Relations)

Thanks. I'd like to thank everyone for joining our call today. I am now closing the call. On behalf of the management team here at Tiger, we do appreciate your participation in today's call. If you have any further questions, please reach out to our investor relations team. This concludes the call and thank you very much for your time.

Disclaimer: This transcript is provided for informational purposes only. While we strive for accuracy, there may be errors or omissions in this automated transcription. For official company statements and financial information, please refer to the company's SEC filings and official press releases. Corporate participants' and analysts' statements reflect their views as of the date of this call and are subject to change without notice.