Futu (FUTU) Q2 2025: International Funded Accounts Surpass 50%, Powering 70% Revenue Upside
Futu’s Q2 marked a structural inflection as more than half of funded accounts now originate outside Hong Kong, signaling the company’s emergence as a global digital brokerage. Rapid expansion in the U.S., Singapore, Malaysia, and Japan, combined with deepening product innovation in crypto and wealth management, underpinned record asset inflows and operating leverage. Management’s confidence in full-year growth targets remains firm, with new market launches and licensing initiatives poised to further internationalize the business.
Summary
- Internationalization Accelerates: Majority of funded accounts now outside Hong Kong, diversifying growth levers.
- Product Breadth Fuels Engagement: Crypto, AI, and wealth management launches drive asset inflows and retention.
- Forward Momentum Holds: Management expects steady new account growth and robust asset inflows in H2.
Performance Analysis
Futu’s Q2 2025 results reflect a decisive pivot to global scale, with total funded accounts reaching 2.9 million, up 41% year-over-year and 8% sequentially. Critically, over half of these accounts now come from outside Hong Kong, led by strong momentum in Singapore, the U.S., Malaysia, and Japan. This broadening of the client base has been matched by record asset inflows—total client assets rose 68% year-over-year and 17% quarter-over-quarter to HK$974 billion, with net inflows nearly doubling in the first half versus last year.
Trading volumes surged, with total Q2 turnover up 121% year-over-year and 12% quarter-over-quarter, reaching HK$3.59 trillion. U.S. stock trading volumes grew 20% sequentially, while Hong Kong saw a 9% contraction, reflecting shifting client interest toward U.S. and crypto-linked equities. Wealth management assets doubled year-over-year, and the company’s margin financing balance remained stable despite April’s market volatility. Operating leverage was evident as gross margin expanded to 87.4%, and net income margin climbed nearly 10 points to 48.4%.
- International Client Mix Shift: Over 50% of funded accounts now from non-Hong Kong markets, de-risking the business model.
- Trading Activity Realignment: U.S. and crypto-related stocks led volume growth, offsetting softer Hong Kong tech trading.
- Operating Leverage Expansion: Top-line growth outpaced cost increases, driving net income margin to 48.4%.
The business delivered on both scale and profitability, with robust asset inflows and client engagement supported by new product launches and brand investments in key overseas markets.
Executive Commentary
"We've reached a key milestone in our international expansion, which is at the quarter end, over 50% of funded accounts are from clients outside of Futu Security Hong Kong. Singapore and the U.S. are our largest international markets, followed by the rapidly expanding Malaysia and Japan, while Australia and Canada show robust growth momentum."
Lee Flea, Chairman and Chief Executive Officer
"Operating margin increased to 63% from 47.3% in the second quarter of 2024, mostly due to strong top-line growth and operating leverage. Our net income increased by 113% year-over-year and 20% Q2 to $2.6 billion. Net income margin expanded to 48.4% in the second quarter as compared to 38.6% in the same quarter last year."
Arthur Chen, Chief Financial Officer
Strategic Positioning
1. Globalization of the Client Base
Futu’s internationalization strategy is yielding structural results, with funded accounts outside Hong Kong now exceeding 50% of the total. Singapore and the U.S. are primary growth engines, while Malaysia and Japan are scaling rapidly. This diversification reduces geographic risk and signals a shift from a Hong Kong-centric model to a multi-market digital brokerage platform.
2. Product Innovation and Platform Stickiness
Continuous product expansion—especially in crypto, AI, and wealth management—deepens client engagement. The rollout of cryptocurrency trading in the U.S. and Hong Kong, as well as AI-driven investment tools (MooMoo AI), has increased both trading velocity and asset retention. Wealth management AUM doubled year-over-year, and Futu became the first online broker to distribute tokenized money market funds in Hong Kong, reinforcing its digital asset leadership.
3. Brand Building and Local Market Penetration
Strategic sponsorships and localization efforts are amplifying Futu’s brand in target markets. The partnership with the New York Mets is driving U.S. awareness, while major offline events in Japan and localized products (such as Malaysian IPO financing) are building trust and attracting self-directed investors. Client retention rates remain above 98% globally, reflecting the platform’s appeal.
4. Operating Model and Margin Discipline
Futu’s scalable operating model is translating revenue growth into margin expansion. Gross margin rose to 87.4%, and operating margin reached 63%. Investments in AI and technology continue, but cost discipline in brokerage, processing, and marketing is supporting sustained profitability. The company’s ability to monetize trading, wealth management, and fund distribution is driving a diversified revenue mix.
Key Considerations
Futu’s Q2 results mark a pivotal phase in its evolution from a regional broker to a global digital financial platform. The company’s execution across geographies, product launches, and operational leverage creates a strong foundation, but also introduces new complexities and competitive dynamics.
Key Considerations:
- Global Expansion Sustainability: Maintaining new account growth and asset inflows as market penetration rises in mature and emerging regions.
- Crypto Platform Monetization: Scaling crypto trading and potential exchange licensing (VATP in Hong Kong) offer upside, but regulatory and market risks remain.
- Competitive Differentiation in Japan and U.S.: Incumbents have entrenched ecosystems; Futu’s value proposition hinges on superior tech, pricing, and engagement tools.
- Margin Resilience: Sustaining high gross and net income margins as product mix, marketing, and compliance costs evolve with new markets and regulations.
Risks
Futu faces regulatory uncertainties in its core and new markets, particularly regarding client onboarding in Hong Kong and crypto-related licensing. Competitive pressure from established brokers and fintechs in the U.S. and Japan could challenge client acquisition and retention. Market volatility and changing interest rates may impact trading activity and margin financing income, introducing earnings variability.
Forward Outlook
For Q3 2025, Futu guided to:
- Steady sequential growth in new funded accounts, with positive run rates in trading volumes and asset inflows.
- Continued expansion of crypto and wealth management product lines, with new market launches and licensing initiatives underway.
For full-year 2025, management maintained guidance for 800,000 new funded accounts, citing confidence in international market momentum and robust client engagement. Management highlighted:
- Further brand and product rollouts in the U.S., Japan, and Southeast Asia.
- Ongoing investments in AI and digital asset infrastructure to enhance platform stickiness and monetization.
Takeaways
Futu’s transition to a global platform is at an advanced stage, with diversified growth engines and a scalable operating base. Investors should monitor the pace of international account acquisition, the monetization trajectory of new products (notably crypto and wealth management), and the company’s ability to sustain margin expansion amid rising competition and regulatory scrutiny.
- International Diversification: Over half of funded accounts now ex-Hong Kong, reducing single-market risk and unlocking new growth vectors.
- Product-Led Engagement: Crypto, AI, and wealth management launches are driving higher asset inflows and client retention across markets.
- Execution Watchpoints: Sustained new account momentum, margin discipline, and regulatory navigation will be critical in the next phase.
Conclusion
Futu’s Q2 2025 results confirm its emergence as a multi-market digital brokerage, with international clients and new product verticals now driving the growth narrative. Execution on global expansion and product innovation will be decisive for sustaining its current trajectory.
Industry Read-Through
Futu’s rapid internationalization and product breadth highlight a growing investor appetite for cross-border digital platforms that combine trading, wealth management, and digital assets. Traditional brokers in Asia and Western markets face mounting pressure to match technology, cost, and engagement standards set by digital-first entrants. Crypto integration and AI-powered tools are becoming table stakes for client acquisition and retention, with regulatory clarity and licensing emerging as key differentiators. Global fintechs and incumbent brokers alike must accelerate platform innovation to capture the next wave of retail investor flows.