UP Fintech Holding Limited (NASDAQ: TIGR) (“UP Fintech” or the
“Company”), a leading online brokerage firm focusing on global
Chinese investors, today announced its unaudited financial results
for the first quarter ended March 31, 2019.
“We are pleased to report encouraging growth in
the first quarter of 2019. Apart from business growth, we have
obtained broker/dealer In-Principle Approval (“AIP”) from Monetary
Authority of Singapore, which is a great milestone to our growth
strategy,” stated Mr. Tianhua Wu, CEO of UP Fintech. “The Company's
initial public offering (“IPO”) in late March of this year was a
major milestone for the Company. We look forward to leveraging our
increased brand recognition and are committed to keep investing in
technology and talent to create a comprehensive ecosystem of
financial services that effectively serves both individual and
institutional investors as well as corporate partners. We are
confident we can deliver long term value to our shareholders.”
First Quarter
2019 Financial
Results
REVENUES
Total revenues for the first quarter of 2019
were US$9.6 million, which represented an increase of 20.1% from
US$8.0 million in the first quarter of 2018. This increase was
driven by higher financing service fees, interest income and other
revenues.
Commissions were US$6.4 million in the first
quarter of 2019, a 4.1% decrease from US$6.6 million last year.
Investors were relatively risk averse at beginning of this year
which leads to moderated trading activities and a slight decrease
in trading commission.
Financing service fees increased by 57.7% from
US$1.3 million in the first quarter of 2018 to US$2.1 million in
the first quarter of 2019, primarily due to an increase in margin
trading.
Interest income increased from nil in the first
quarter of 2018 to US$0.5 million in the first quarter of 2019. The
Company started earning margin financing interest income from
consolidated accounts since the third quarter of 2018.
Other revenues increased by 1196.4% from US$49.4
thousand in the first quarter of 2018 to US$0.6 million in the
first quarter of 2019, which include revenues from Employee Stock
Ownership Plan (“ESOP”) administration, promotional services and
IPO subscription services to our retail customers.
Interest expense increased from nil in the first
quarter of 2018 to US$0.2 million in the first quarter of 2019.
OPERATING COSTS AND EXPENSES
Total operating costs and expenses for the first
quarter of 2019 increased by 36.4% to US$14.0 million from US$10.3
million in the first quarter of 2018, primarily attributable to the
increase in employee compensation and benefits.
Employee compensation and benefits increased by
60.8% from US$4.9 million in the first quarter of 2018 to US$7.8
million in the first quarter of 2019. This increase was primarily
because the number of employees has nearly doubled, a general
increase in the compensation package offered to employees and a
significant increase of share-based compensation expense. After the
IPO, the Company has continued to make investment in talents
recruited from both the internet and financial service industries
to enhance its leading position.
Occupancy, depreciation and amortization
expenses increased by 14.5% from US$0.5 million in the first
quarter of 2018 to US$0.6 million in the first quarter of 2019, due
to an increase in office space and relevant leasehold
improvements.
Communication and market data expenses increased
by 87.4% from US$0.6 million in the first quarter of 2018 to US$1.2
million in the first quarter of 2019. This increase was caused by
rapid customer growth and expanded market data usage for our
customers.
Marketing and branding expenses decreased by
27.9% from US$2.7 million in the first quarter of 2018 to US$1.9
million in the first quarter of 2019. The Company optimized
cooperation with business partners and marketing suppliers to
enhance efficiency which led to lower costs.
General and administrative expenses increased by
39.2% from US$1.6 million in the first quarter of 2018 to US$2.2
million in the first quarter of 2019. This increase was primarily
due to additional professional expenses as a listed company, an
increase in office expenses as well as human resource management
expenses caused by the significant increase in headcount.
NET LOSS ATTRIBUTABLE TO UP FINTECH
HOLDING LIMITED
Net loss attributable to UP Fintech Holding
Limited in the first quarter of 2019 was US$2.9 million, as
compared to a net loss of US$2.0 million in the first quarter of
2018. Net loss per diluted ADS1 in the first quarter of 2019 was
US$0.06, as compared to net loss per diluted ADS of US$0.07 in the
first quarter of 2018.
Non-GAAP net loss attributable to UP Fintech
Holding Limited in the first quarter of 2019, which excluded
share-based compensation, was US$2.0 million, as compared to
non-GAAP net loss attributable to UP Fintech Holding Limited US$1.7
million in the first quarter of 2018. Non-GAAP net loss per basic
and diluted ADS in the first quarter of 2019 was US$0.04, as
compared to non-GAAP net loss per basic and diluted ADS US$0.06 in
the first quarter of 2018.
For the first quarter of 2019, the Company’s
weighted average number of ADSs used in the computation of basic
and diluted net loss per ADS was 48,896,354. As of March 31, 2019,
the Company had a total of 2,021,052,249 ordinary shares
outstanding, or the equivalent of 134,736,817
ADSs. CERTAIN BALANCE
SHEET ITEMS
As of March 31, 2019, the Company's cash and
cash equivalents and term deposits were US$167.9 million, compared
to US$64.4 million as of December 31, 2018.
On January 1, 2019, the Company adopted
Accounting Standards Updates No. 2016-02, Leases ("ASU 2016-02"),
the new lease standard, using modified retrospective transition
method, which had no impact on accumulated deficit as of January 1,
2019. Under the new lease standard, the Company recognized US$2.9
million of the right-of-use assets and US$3.1 million of current
and non-current lease liabilities as of March 31, 2019.
Conference Call Information
UP Fintech’s management will hold an earnings conference call at
8:00 AM on May 17, 2019, U.S. Eastern Time (8:00 PM on May 17, 2019
Beijing/Hong Kong Time).
Dial-in numbers for the live conference call are as follows:
|
International: |
+65-6713-5090 |
|
China: |
800-819-0121 |
|
Hong Kong: |
+852-3018-6771 |
|
United States: |
+1-845-675-0437 |
|
United Kingdom: |
+44-203-621-4779 |
|
Passcode: |
4766879 |
A telephone replay of the call will be available after the
conclusion of the conference call through May 24, 2019.
Dial-in numbers for the replay are as follows:
|
International: |
+61-2-8199-0299 |
|
Passcode: |
4766879 |
A live and archived webcast of the conference call will be
available at https://ir.itiger.com.
Use of non-GAAP Financial Measures
In evaluating our business, we consider and use
non-GAAP net loss attributable to UP Fintech Holding Limited and
non-GAAP net loss per basic and diluted ADS 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 attributable to UP Fintech Holding Limited
as net loss attributable to UP Fintech Holding Limited excluding
share-based compensation. Non-GAAP net loss per basic and diluted
ADS is non-GAAP net loss attributable to UP Fintech Holding Limited
divided by weighted average number of basic and diluted ADSs. Such
adjustments have no impact on income tax.
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
attributable to UP Fintech Holding Limited 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 facilitate 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 was
not reflected in the presentation of non-GAAP net loss attributable
to UP Fintech Holding Limited. 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 expenses, net loss attributable to UP Fintech Holding
Limited 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 Chinese 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, account 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.itiger.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 “will,” “expects,” “anticipates,” “future,”
“intends,” “plans,” “believes,” “estimates” and similar statements.
Among other statements, the business outlook and quotations from
management in this announcement, as well as the Company’s strategic
and operational plans, 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. 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 growth strategies;
trends and competition in global financial markets; changes in the
Company’s revenues and certain cost or expense accounting policies;
governmental policies relating to the Company’s industry and
general economic conditions in China and other countries. Further
information regarding these and other risks is included in the
Company’s filings with the SEC. 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. All information
provided in this press release and in the attachments is as of the
date of this press release, and the Company does not undertake any
obligation to update any forward−looking statement, except as
required under applicable law.
For investor and media inquiries please
contact:
Investor Relations ContactUP Fintech Holding
LimitedEmail: ir@itiger.com Tel: +1 (646) 308-1535
Jack WangICR, Inc.Email: tiger.ir@icrinc.com Tel: +1 (646)
308-1535
_________________________
1 “ADS” means American Depositary Share of the Company. Each ADS
represents fifteen Class A ordinary shares of the Company.
UP FINTECH HOLDING LIMITED |
|
UNAUDITED CONDENSED CONSOLIDATED BALANCE
SHEETS |
|
(All amounts in U.S. dollars ("US$"), except for share and
per share data, or otherwise noted) |
|
|
|
|
As of December 31, |
|
As of March
31, |
|
2018 |
|
2019 |
|
|
|
US$ |
|
US$ |
|
Assets: |
|
|
|
|
Cash and cash equivalents |
34,406,970 |
|
|
144,921,466 |
|
|
Cash-segregated for regulatory purpose |
6,695,436 |
|
|
11,021,177 |
|
|
Term deposits |
29,999,865 |
|
|
22,999,930 |
|
|
Receivables from customers |
353,304 |
|
|
35,823,503 |
|
|
Receivables from brokers, dealers, and clearing organizations: |
|
|
|
|
Related party |
9,619,438 |
|
|
114,116,764 |
|
|
Others |
1,073,972 |
|
|
4,262,124 |
|
|
Financial instruments held, at fair value |
6,435,241 |
|
|
8,574,180 |
|
|
Prepaid expenses and other current assets |
5,803,195 |
|
|
5,345,103 |
|
|
Amounts due from related parties |
8,518,358 |
|
|
4,622,044 |
|
|
Total current
assets |
102,905,779 |
|
|
351,686,291 |
|
|
Non-current
assets: |
|
|
|
|
Right-of-use assets* |
- |
|
|
2,907,267 |
|
|
Property, equipment and intangible assets, net |
2,330,433 |
|
|
2,497,777 |
|
|
Long-term investments |
2,386,691 |
|
|
5,505,234 |
|
|
Other non-current assets |
1,255,447 |
|
|
1,265,373 |
|
|
Deferred tax assets |
6,336,815 |
|
|
7,710,016 |
|
|
Total non-current
assets |
12,309,386 |
|
|
19,885,667 |
|
|
Total
assets |
115,215,165 |
|
|
371,571,958 |
|
|
Current
liabilities: |
|
|
|
|
Payables due to customers |
6,564,154 |
|
|
143,181,962 |
|
|
Derivative Liability-future contract, at fair value |
- |
|
|
151,298 |
|
|
Accrued expenses and other current liabilities |
10,423,107 |
|
|
11,487,688 |
|
|
Lease liabilities* |
- |
|
|
1,797,635 |
|
|
Amount due to related parties |
- |
|
|
15,418 |
|
|
Total current
liabilities |
16,987,261 |
|
|
156,634,001 |
|
|
Lease liabilities* |
- |
|
|
1,265,216 |
|
|
Total
liabilities |
16,987,261 |
|
|
157,899,217 |
|
|
Mezzanine
equity |
|
|
|
|
Series A convertible redeemable preferred shares |
16,486,780 |
|
|
- |
|
|
Series B-1 convertible redeemable preferred shares |
17,169,446 |
|
|
- |
|
|
Series B-2 convertible redeemable preferred shares |
9,593,789 |
|
|
- |
|
|
Series B-3 convertible redeemable preferred shares |
21,470,906 |
|
|
- |
|
|
Series C convertible redeemable preferred shares |
47,980,000 |
|
|
- |
|
|
Subscriptions receivable from Series C convertible redeemable
preferred shares |
(800,000 |
) |
|
- |
|
|
Series C-1 convertible redeemable preferred shares |
10,000,000 |
|
|
- |
|
|
Redeemable non-controlling interest of sponsored fund |
2,204,940 |
|
|
3,745,769 |
|
|
Total Mezzanine equity |
124,105,861 |
|
|
3,745,769 |
|
|
Shareholders’
(deficit)/equity: |
|
|
|
|
Class A ordinary shares |
2,166 |
|
|
16,835 |
|
|
Class B ordinary shares |
3,376 |
|
|
3,376 |
|
|
Series Angel convertible preferred shares |
4,197 |
|
|
- |
|
|
Additional paid-in capital |
42,520,332 |
|
|
279,530,218 |
|
|
Accumulated deficit |
(66,391,306 |
) |
|
(69,265,579 |
) |
|
Accumulated other comprehensive loss |
(544,988 |
) |
|
(357,878 |
) |
|
Total UP Fintech
Holding Limited shareholder's (deficit)/equity |
(24,406,223 |
) |
|
209,926,972 |
|
|
Non-controlling interests |
(1,471,734 |
) |
|
- |
|
Total
(deficit)/equity |
(25,877,957 |
) |
|
209,926,972 |
|
|
Total liabilities,
mezzanine equity and (deficit)/equity |
115,215,165 |
|
|
371,571,958 |
|
|
__________________________________________________________________________________________________________________________*
The Company adopted ASU 2016-02, Leases (Topic 842), beginning on
January 1, 2019. Pursuant to the guidance, the Company recognized
right-of-use assets and lease liabilities on the balance sheets as
of March 31, 2019.
UP FINTECH
HOLDING LIMITED |
UNAUDITED
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE
LOSS |
(All amounts in U.S. dollars ("US$"), except for number of
shares (or ADSs) and per share (or ADS) data) |
|
|
For the three months ended |
|
March
31, |
|
December
31, |
|
March
31, |
|
|
|
2018 |
|
|
2018 |
|
|
2019 |
|
|
|
|
US$ |
|
US$ |
|
US$ |
|
|
Revenues: |
|
|
|
|
|
|
|
Commissions |
6,624,514 |
|
|
7,081,921 |
|
|
6,354,845 |
|
|
|
Financing service fees |
1,322,633 |
|
|
1,719,361 |
|
|
2,086,130 |
|
|
|
Trading gains |
- |
|
|
339,108 |
|
|
- |
|
|
|
Interest income |
- |
|
|
52,830 |
|
|
518,808 |
|
|
|
Other revenues |
49,393 |
|
|
321,420 |
|
|
640,338 |
|
|
|
Total
revenues |
7,996,540 |
|
|
9,514,640 |
|
|
9,600,121 |
|
|
|
Interest expense |
- |
|
|
- |
|
|
(208,721 |
) |
|
|
Total Net Revenues |
7,996,540 |
|
|
9,514,640 |
|
|
9,391,400 |
|
|
|
Operating costs and
expenses: |
|
|
|
|
|
|
|
Execution and clearing |
(22,514 |
) |
|
(97,255 |
) |
|
(292,480 |
) |
|
|
Employee compensation and benefits |
(4,861,088 |
) |
|
(6,569,740 |
) |
|
(7,817,171 |
) |
|
|
Occupancy, depreciation and amortization |
(521,699 |
) |
|
(663,308 |
) |
|
(597,477 |
) |
|
|
Communication and market data |
(635,755 |
) |
|
(946,310 |
) |
|
(1,191,390 |
) |
|
|
Marketing and branding |
(2,651,245 |
) |
|
(2,308,646 |
) |
|
(1,912,507 |
) |
|
|
General and administrative |
(1,574,223 |
) |
|
(2,492,734 |
) |
|
(2,191,101 |
) |
|
|
Total operating costs
and expenses |
(10,266,524 |
) |
|
(13,077,993 |
) |
|
(14,002,126 |
) |
|
|
Other (expense)/
income: |
|
|
|
|
|
|
|
Net gain from investment activities |
- |
|
|
- |
|
|
492,931 |
|
|
|
Foreign currency exchange (loss)/gain |
(218,340 |
) |
|
33,083 |
|
|
(123,659 |
) |
|
|
Interest income from bank deposits |
22,248 |
|
|
165,040 |
|
|
195,108 |
|
|
|
Gain on disposal of a subsidiary |
- |
|
|
- |
|
|
617,500 |
|
|
|
Others, net |
(908 |
) |
|
1,273 |
|
|
44 |
|
|
|
Loss before income
tax |
(2,466,984 |
) |
|
(3,363,957 |
) |
|
(3,428,802 |
) |
|
|
Income tax benefits |
61,174 |
|
|
1,247,345 |
|
|
1,083,313 |
|
|
|
Net loss |
(2,405,810 |
) |
|
(2,116,612 |
) |
|
(2,345,489 |
) |
|
|
Less: |
|
|
|
|
|
|
|
Net income attributable to redeemable non-controlling
interests |
- |
|
|
- |
|
|
528,784 |
|
|
|
Net loss attributable to noncontrolling interests |
(403,817 |
) |
|
(152,170 |
) |
|
- |
|
|
|
Net loss attributable
to UP Fintech Holding Limited |
(2,001,993 |
) |
|
(1,964,442 |
) |
|
(2,874,273 |
) |
|
|
|
|
|
|
|
|
|
|
Other comprehensive
income/(loss), net of tax: |
|
|
|
|
|
|
|
Unrealized gain on available-for-sale investments |
- |
|
|
13,309 |
|
|
- |
|
|
|
Changes in cumulative foreign currency translation adjustment |
1,336,610 |
|
|
(144,287 |
) |
|
187,110 |
|
|
|
Total Comprehensive
loss |
(1,069,200 |
) |
|
(2,247,590 |
) |
|
(2,158,379 |
) |
|
|
|
|
|
|
|
|
|
|
Net loss per ordinary
share: |
|
|
|
|
|
|
|
Basic and diluted |
(0.00 |
) |
|
(0.00 |
) |
|
(0.00 |
) |
|
|
Net loss per ADS (1
ADS represents 15 Class A ordinary shares): |
|
|
|
|
|
|
|
Basic and diluted |
(0.07 |
) |
|
(0.05 |
) |
|
(0.06 |
) |
|
|
Weighted average
number of ordinary shares used in calculating net loss per ordinary
share: |
|
|
|
|
|
|
|
Basic and diluted |
443,814,916 |
|
|
554,158,263 |
|
|
733,445,306 |
|
|
|
Reconciliations of Non-GAAP Results of Operations Measures
to the Nearest Comparable GAAP Measures |
|
(All amounts
in U.S. dollars ("US$"), except for number of ADSs and per ADS
data) |
|
|
|
|
For the three months ended March 31, 2018 |
|
For the three months ended December 31, 2018 |
|
For the three months ended March 31, 2019 |
|
|
|
|
non-GAAP |
|
|
|
|
|
non-GAAP |
|
|
|
|
|
non-GAAP |
|
|
|
GAAP |
|
Adjustments |
|
non-GAAP |
|
GAAP |
|
Adjustments |
|
non-GAAP |
|
GAAP |
|
Adjustments |
|
non-GAAP |
|
US$ |
|
US$ |
|
US$ |
|
US$ |
|
US$ |
|
US$ |
|
US$ |
|
US$ |
|
US$ |
|
Unaudited |
|
Unaudited |
|
Unaudited |
|
Unaudited |
|
Unaudited |
|
Unaudited |
|
Unaudited |
|
Unaudited |
|
Unaudited |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss attributable
to UP Fintech Holding Limited |
(2,001,993 |
) |
|
252,515 |
(1) |
(1,749,478 |
) |
|
(1,964,442 |
) |
|
719,798 |
(1) |
(1,244,644 |
) |
|
(2,874,273 |
) |
|
878,478 |
(1) |
(1,995,795 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss per ADS—basic
and diluted |
(0.07 |
) |
|
|
|
(0.06 |
) |
|
(0.05 |
) |
|
|
|
(0.03 |
) |
|
(0.06 |
) |
|
|
|
(0.04 |
) |
Weighted average number of
ADSs used in calculating basic and diluted net loss per ADS |
29,587,661 |
|
|
|
|
29,587,661 |
|
|
36,943,884 |
|
|
|
|
36,943,884 |
|
|
48,896,354 |
|
|
|
|
48,896,354 |
|
(1) Share-based compensation |
|
Non-GAAP to GAAP reconciling items have no income tax
effect.
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