UP Fintech Holding Limited

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 2nd, 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.

Thank you, operator. Hello, everyone, and thank you for joining us for the call today. AppFintech Coding Limited's first quarter 2026 earnings release was distributed earlier today and is available on our IR website at ir.itigerapp.com, as well as Globe Newswire Services. On the call today from Upstream Tech are Mr. Wu Tianhua, Chairman and CEO, Mr. Zhuang Zeng, our CFO, Mr. Huang Lei, 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. Zeng will then discuss our financial results. They will both be available to answer your questions during the Q&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 U.S. Private Security Statistic Reform Act of 1995, a number of factors could cause X results to differ materially from those containing any forward-looking statements. For more information, please refer to our Form 6-K furnished today, and our annual report on Form 20-X, filed on April 24, 2026, will undertake no obligation to update any forward-looking statements. 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 an English translation.

Mr. Wu, please go ahead with your remarks.

Hello, everyone. Thank you for joining Tiger Brokers' first quarter 2026 earnings conference call.

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 $155 million, representing a 26.3% increase year-over-year. Operating profit reached $47.6 million, up 17.5% from the same period last year.

In terms of customer growth, this quarter's new company has 28,900 new users. These new users mainly come from Singapore and the Hong Kong market. By the end of the first quarter of 2026, the total number of new customers in each quarter reached 1,282,000, with a growth of 11.3% in the same period last year. In terms of customer nature, the first quarter's number of new customers reached $2.9 billion, This is also the first time in the history of the company to achieve a single-segment income of over $2 billion from the overall account of the sales user contribution, which fully confirms the performance of the company's focus on user quality development strategy. User structure and customer quality continue to optimize. Low-segment market fluctuations led to a loss of market value of $49 billion in company customer assets, which was affected by this. At the end of the first quarter, the company's total assets returned 3.2%. But it still maintained a strong share price increase. The share price increased 28.4%. At the end of the seventh quarter, the total assets reached 5.89 billion US dollars. After entering the second quarter, the Nasdaq market has started to rebound. The second quarter has come to the point where the loss of the asset market in the first quarter has been fully repaired. In addition, we are also very happy to see In the first quarter, all overseas markets achieved an increase in the share of customer assets, of which the share of American customers rose by nearly 40%. The share of customer assets in Auxin and Hong Kong also achieved high-end and double-digit share growth.

We onboarded 28,900 new funded accounts this quarter. Singapore and Hong Kong markets 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 in the first quarter, In particular, net asset inflow from retail users and their consolidated accounts exceeded $2 billion for the first time in our history. This fully demonstrates 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 market-to-market losses of $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 at the end of the first quarter. Looking into the second quarter, Nasdaq has started to rebound, and all marked 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 market losses on client assets, healthy net asset inflow drove a quarter-over-quarter increase in client assets across all the oversea markets. U.S. client assets rose nearly 40% quarter-over-quarter, while Australia, New Zealand, and Hong Kong posted high single-digit and double-digit quarter-over-quarter growth, respectively.

Coming, Glenn. The function continues to replace the upgrade product function to optimize the investment experience of users. In this record, we have made important upgrades to the tiger AI function. A new multi-organized structure has been built, which will unlock the market analysis, risk control and other functions, and divide them into independent smart modules to greatly improve the accuracy and professionalism of smart analysis output. At the same time, we are also implementing the smart module of the 7 goods AI to effectively improve the accuracy and usability of the 7 goods related analysis. clearly improved users support the use of Tiger AI. In addition, Tiger AI has successfully integrated Colt's large model into the original dual-model price range, and upgraded into a three-model co-operative AI tool. Intelligent service capabilities have been greatly improved. In the field of eye-catching products, the platform offers professional features such as Hong Kong index期权交易 and期权 T-Web orders to help investors achieve better trading plans in a complex market environment.

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. We split functions including market code search, market analysis, and risk control into standalone AI agents, which has greatly boosted the accuracy of our AI-driven insights. We also officially launched a dedicated AI agent for features, 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 option trading and option TWAP orders. How can investors execute better trading strategies under volatile markets?

Tiger International's 2B business continues to develop. In terms of business strategy, this quarter, we have sold 10 Hong Kong stock IPO projects, including Minimax, Zhibo AI, and other top AI companies. At the same time, we have successfully completed a large-scale US SPAC IPO project. In addition, the demand for Hong Kong stock in the market continues to rise. Our 2B business continues to perform well.

In the first quarter, we enrolled 10 Hong Kong IPO. covering leading AI companies including Minimax and Drupal AI. We also successfully completed two large-scale US-backed IPOs. In addition, demand for Hong Kong IPOs subscription remains robust. Year-to-date, the total subscription amount for Hong Kong IPOs on our platform has exceeded HK$1 trillion. As for our ethos 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 ESOP services and digital management solutions.

To show our confidence in the long-term development of the company and our commitment to repay the value of the shareholders, the Board of Directors has approved a stock recovery plan. The recovery amount is no more than $50 million. During the recovery period, from June 1, 2026 to June 1, 2027, a total of 12 months.

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 $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. All right.

Thanks, Tianhua 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 it 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 5 bps this quarter, down from 6.4 bps a quarter ago. The main driver was a quarter-over-quarter increase of roughly $10 billion in trading volume in U.S. Tiger. However, this uptick didn't translate into commission revenue, as in the U.S., we offer zero commission pricing for local users. Within commission revenue, about 67% comes from cash equities, 25% from options, and the rest from futures and other products. Now on to 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 U.S. 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 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 leasehold 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 focused on acquiring higher quality users and accelerating the expensing of our roles management products. General 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 22nd, we received a regulatory penalty notice totaling approximately RMB 411 million. We have fully accounted for this among our first quarter results. This is a one-time non-recurring charge and will not have material impact on our core business and overall financial health. As a result, net loss and 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&A. Thanks.

Thank you. To ask a question, you will need to press star 1 and 1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1 and 1 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.

Thank you for giving me the opportunity to ask the first question. I'm Peter Zhang from Morgan. We have two questions here. First, I would like to ask the management to explain how to interpret the new regulation issued on May 22. What impact will it have on our business and relevant mainland customers? Thank you for giving me the opportunity to ask questions. This is Peter Zhang from JPMorgan. I have two questions. First is, how do you interpret the new regulatory rules released on May 22nd, and what will be the impact on your business? Also, could you share the mainland rental clients' share of your total client assets 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.

Thank you. First question. On May 22, this year, Hui Nian and other departments issued the relevant industry monitoring regulations. The entire company also paid great attention to them and responded actively. The policy update of this monitoring is suitable for the entire industry. and not for Tiger International. First, about the fine, this is a one-time punishment. The fine is about 4.1 billion RMB, which is about $60 million per month. Based on the company's current income and cash reserves, the fine will not have a significant impact on the core business and future development of the company. The second point is about the adjustment of industry rules and the impact on the company. The key change in this policy is the change of the management from identity review to land management. Therefore, the year-to-year curfew is not a withdrawal of accounts, but a restriction of actions in the territory. All the monitoring agreements this time are focused on the business behavior in the territory. In addition, the new rule also prohibits the purchase of to develop cross-border investment marketing in the region. At the same time, it requires the official website of the region to be shut down and the relevant applications of the local market to be downloaded. Many changes have been made. The company has completed all of them in May 2023. What needs to be emphasized is that the adjustment of this policy has not affected the users of overseas markets. Until the end of the first quarter, Comprehensive accounts, mainland retail users' client assets account for about 10% of the total client assets of the entire group, and the intake is between 20% and 25%. We have also seen the new rules come into effect so far. There is a situation where mainland retail users are in and out. We think this is a very normal short-term response and will gradually stabilize. Retail users in other overseas markets are not affected. I'll translate.

On May 22nd, 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 dollar. Given our current profitability and cash reserves, this fine will not materially affect our core operation or long-term development. Second, on the regulatory overall, 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 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 May 2023. It is important to note that policy changes have no impact on users' offshore. As of the end of the first quarter, Mainland retail investors' client assets and their 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.

The second question is about the breakdown of OMBUS retail income. In this quarter, 90% of OMBUS retail users have contributed from the mainland market. In summary, Singapore's market contribution is more than 3G.

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 one-third of the total net asset inflow Australia and New Zealand plus US combined for around another one-third. And the reminder came from Hong Kong retail users. Thanks, Peter. And operator, move on to the next question, please.

Thank you. And our next question comes from the line of Cindy Wang from China Renaissance. Please go ahead. Your line is open.

Thank you for giving me this opportunity to ask a question. I am Cindy from Huaxing, Japan. I also have two questions. The first question is, I would like to ask, because I saw the company's first quarter return, the take rate has dropped a bit, especially in the stock exchange. Could you please explain to us the reason behind this? I have two 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 increased sequentially. So what are the reasons for this? and how should we expect the effective tax rate going forward? Thank you.

Okay. Hello, Cindy. I have two questions. Okay. First of all, your first question is about the take rate. Okay. In the first quarter, whether it's the overall trading volume or the stock trading volume, the exchange rate has actually risen. But the commission income exchange rate has dropped by about 5%. The main reason is that the take rate has dropped. The main reason is that there are two reasons. One is that the share price of Hong Kong shares in the first quarter has increased. Due to the influence of Hong Kong users trading Hong Kong shares for free, the take rate of Hong Kong shares compared to U.S. shares is lower by about 2 bps. So the increase in the share price of Hong Kong shares will lower the take rate of the whole stock. The second reason is that in this quarter, Tiger America has some good quality and trading style. High-end users have raised the value of the brand in the first quarter. But since our Tiger America, according to local market conditions, is 0 yuan, it makes the overall take rate look a little bit lower. The decline in the take rate of Brandeis, in addition to the reasons for the stock price mentioned above, is that the stock price in the first quarter also increased from 6% in the fourth quarter to about 8% in the interest rate ratio. Since the trading volume of the期货 is calculated according to the notional value, it will also increase our overall trading volume, resulting in a decline in the blended commission rate. Let me translate it first. So total trading volume and equity trading volume both increased quarter over quarter, but the commission value 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 two pips lower than that of the U.S. stocks. A higher proportion of Hong Kong's trading volume would drag down the overall take rate. Another reason is Tiger U.S. onboarded some active users this quarter and saw an uptick in total trading volume. But in the U.S., we followed market practice and offered zero commissions, which further compressed the stock take rate. Beyond those two factors, revenue from futures trading rose around 6% in the first quarter to roughly 8% in the first quarter. Since future volume is calculated based on notional value, the enlarged total trading volume caused a decrease in blended commission rate. And then your second question is about the effective tax rate. First of all, the administrative fine we received recently, according to the tax law, cannot be deducted as a fee before tax. In other words, the tax benefits under the tax code, plus the amount of fine we received this time, $60 million, The main reason for the increase in the fee is due to the non-cash fee adjustment caused by employee stock rewards. To put it simply, the company gives employees stock rewards. In finance, a part of the cost of human resources will be spent in total according to the total in each quarter, including the part that has been matured and belong, as well as the part that has not yet matured. Only those who have approved the sale of a part of the mature part are not allowed to deduct the cost of the sale of the part of the mature part, so it will form a property taxed on land. When the share price of the company drops in the first quarter, the value of the stock pool of the overall non-employees will drop. The property taxed on land that was formed earlier will also drop. Therefore, in the first quarter, due to this reason, we have reduced about US$4 million of land tax assets and included the cost of income tax. In the same way, if the stock price rises in the future, new land tax assets will be formed and the current income tax cost will be reduced. We think that the impact of this type of impact on the company's reasonable effective tax rate in the future should be lower than 20% of this level. Let me translate it again. just based on tax rules. Our tax is based on pre-tax before the penalty. The primary reason of this income tax re-increase was due to a non-cash tax adjustment linked to employee stock incentives. We amortize share-based compensation expense for accounting purpose. carrying 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 asset. 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 asset for around US dollar 4 million. And this amount was recorded as an increase in income tax expense. Conversely, a future share price rebound would also boost deferred tax asset and reduce tax expense accordingly. Excluding this one-time non-cash impact, we expect our effective tax rate to stay below 20% .4. Thanks.

Thanks. Mel, move on to the next question, please.

Thank you. And our next question comes from the line of Yufan from CICC. Please go ahead. Your line is open.

Okay. Thank you, management, for giving me this opportunity to ask a question. I'm Yofan Fan, an analyst at Zhongjing. I have two questions for you. First of all, I would like to ask about the wrong rates in the second quarter, including the number of new users, the degree of transaction of customers, and the trend of customer assets. Secondly, I would like to ask about the number of new users. In the first quarter, what is the distribution according to the region? In the second quarter, the number of new users is 2890,000. Thanks management for taking my cross rings. This is Yoyo Fan from CICC. I have two cross rings. Firstly, could you share more on our run rate since Q2? What's the trend of the new funded clients, trading velocity, and the client AUM? Seven questions on the net new funded account in Q1. What's the original breakdown? And it seems that the number of the new added clients has not met the pace required for the 4-year guidance. So will you invest more in client acquisition or adjust the 4-year guidance?

The first question, looking at the second quarter, we expect the exchange rate to be stable. The major contribution market is still the Hong Kong and Singapore markets. As for the return on the exchange rate, the second quarter so far, whether it is DAT or the commission income, compared to the first quarter, it has been improved. The return on the exchange rate of the U.S. dollar has been significantly improved. The second quarter has reached the level of the whole quarter of the first quarter. As I mentioned before, in the first quarter, Mato Market North, which has generated nearly 5 billion U.S. dollars, has fully recovered since the second quarter. At the same time, the gold and gold in the second quarter is still relatively healthy. Therefore, we expect that if the market environment in June does not change significantly, there will be a good rise in customer assets.

This is the first question about our run-raise in the second quarter. For the number of new users, we expect the number to stay stable quarter-by-quarter, with Hong Kong and Singapore remaining our top contributing markets. Trading activity has picked up notably in the second quarter today. Both stars and commission income are higher than the Q1 level. U.S. stock trading activity saw the most significant improvement. With Q2 to date, U.S. cash equity trading volume already matching the full Q1 total. Regarding client assets, quarter to date, we have fully recovered the nearly $5 billion U.S. market losses recorded in the first quarter. Retail net asset inflow remained healthy so far in the second quarter. Assuming no material ships in the market condition through June, we expect total client assets to post a solid quarter-by-quarter increase.

Second question. In the first quarter, our breakdown is as follows. The contribution from the Singapore market and the Hong Kong market accounted for more than 75%. Two of these markets accounted for about half. The contribution from the Auxin market is around 20%, while the rest is from the US market. Regarding the year-round guidance, I will answer your question directly. At present, we remain unchanged. This guidance is based on an estimate of the increase brought by the internationalized industry. Therefore, the update of the 5.2 regulation does not have a real impact on the guidance of the new income of the year. In addition, since this year, the market fluctuation has had an impact on investment emotions. In the second half of the year, we expect to see an improvement in the conflict of land and inflation, which will lead to a better growth in the number of users. In addition, when we measure the cost of goods, indicators such as human resources, CSC, and RY are the most important. But based on the current strategy of the company, the priority is on the user quality, and the customer asset, that is, the KPI, which is the main KPI of user quality, Therefore, we believe that the most direct indicator of the efficiency of goods and services is the relationship between the goods and services cost and retail users' entry fees per quarter. In other words, how many US dollars of entry fees can be brought in without a dollar of goods and services cost? We see that the ratio in the first quarter of this year is about $170. In the past four quarters, it was about $150.

For new funded accounts in the first quarter, Singapore and Hong Kong together accounted for over 75% of the total, to bleed 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 22nd, 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 CAC or ROI are important, our strategic priority is user quality. With client assets and net asset inflow as our core KPIs. Therefore, we view the ratio of customer acquisition cost to quarterly retail net asset inflow as the more relevant measure of acquisition efficiency. In other words, it's just how much net asset inflow we can generate per dollar spent on the client acquisition. This ratio was at roughly $170 in the first quarter, compared to around $150 over the past four quarters, and approximately $120 in the year before that. This shows that our customer acquisition strategy is indeed effective in acquiring high-quality users. Thanks, Mel. Let's just move on to the next question.

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

Thanks. I'd like to thank everyone for joining our call today. I'm 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.

This concludes today's conference call. Thank you for participating. You may now disconnect. Speakers please stand by.