Futu : Annual Report for Fiscal Year Ending December 31, 2025 (Form 20-F)
FUTU
Published on 04/15/2026 at 06:24 am EDT
Operating and Financial Review and Prospects
You should read the following discussion and analysis of our financial condition and results of operations in conjunction with our consolidated financial statements and the related notes included elsewhere in this annual report. This discussion contains forward-looking statements that involve risks and uncertainties about our business and operations. Our actual results and the timing of selected events may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those we describe under "Item 3. Key Information-D. Risk Factors" and elsewhere in this annual report.
A.Operating Results
Key Factors Affecting Our Results of Operations
Our business and results of operations are influenced by general factors affecting the online retail brokerage industry in the regions we operate, including the overall economic, regulatory and market conditions, level of per capita disposable income in these regions, and the growth of the online brokerage and related services markets. In particular, as our securities brokerage business depends heavily on trading volume, our financial performance is highly dependent on the market conditions in which our business operates. Changes in market conditions can have a significant impact on investor sentiment and trading volume, resulting in fluctuation in brokerage commission and fee income. Our margin financing business is subject to influences from market factors such as market liquidity, interest rate as well as investor sentiment.
In addition, our business and results of operations are also affected by factors driving online brokerage demand in all markets we operate, such as the increasing number of affluent middle class residents, the growing number of retail investors having interests and needs in investing securities in global capital markets, the usage and penetration rate of the internet and mobile internet, the changing investor preferences with respect to trading and investment platforms and the competitive landscape, governmental policies and regulatory environment. Unfavorable changes in any of these general factors could negatively affect demand for our services and materially and adversely affect our results of operations.
While our business is influenced by general factors affecting our industry, our results of operations are more directly affected by certain company specific factors, including:
Brand awareness and market position
We are a market leader and a go-to brand for retail securities trading in several markets where we operate. Our ability to strengthen our brand recognition and maintain our current market position is crucial for us to build and maintain relationships with our users and business partners and revenue growth. We have proven to be a trustworthy and reliable platform for our clients, which enabled us to achieve consistent and high growth in key aspects of our operation, and in turn further solidified our leadership. In order to strengthen our brand recognition and maintain market leadership, we strive to increase the engagement and loyalty of our clients and enhance the competitiveness and attractiveness of our platform by offering superior investing experience, insightful market intelligence and social connectivity. We will continue to promote our brand name among our target client groups and enhance our appeal across different demographics.
Trading activities of our client and commission rate
Growth in the trading volume on our platform is the key driver of our revenue growth, which is in turn driven by total client asset balance and turnover of trading volume over client assets. The change of the trading volume was primarily driven by market sentiment and our total client asset balance, the latter of which significantly impacted our brokerage commission and handling charge income and interest income during the past few years. Our total client asset balance is affected by a number of factors, including, primarily, the number of our funded accounts and to a lesser extent, the level of per capita disposable income as well as the engagement and loyalty of our clients. The trading volume on our platform increased by 89.4% year-over-year in 2025 compared to 2024, primarily driven by higher client assets and improved market conditions. We plan to continue to grow our business organically by attracting new clients, retaining existing clients and increasing our total client asset balance, and to introduce new products and services on our platform and provide high-quality, reliable and convenient online brokerage and ancillary services to investors at low costs.
The table below sets forth the trading volume by product during the period presented:
Year ended December 31,
2023
2024
2025
Trading volume
Securities and options brokerage (HK$in trillion)(1)
4.23
7.75
14.68
Futures brokerage (number of contracts in million)(2)
19.1
24.6
26.6
Notes:
In addition to trading volume, our brokerage commission and handling charge income is also affected by the commission rate we charge. The brokerage commissions and handling charge income from securities and options brokerage increased from HK$3,618.7 million in 2023 to HK$5,602.1 million in 2024, and further increased to HK$9,862.0 million (US$1,267.1 billion) in 2025. The increase in 2025 was mainly due to higher trading volume that was partially offset by lower blended commission rates. The blended commission rate decreased from 9.3 bps in 2023 to 7.8 bps in 2024, decreased to 7.2 bps in 2025. During the past three years, we offered competitive commission rates to drive our growth and profitability.
Margin financing and securities lending balance and interest spread
To provide our investors with comprehensive investment services, we offer margin financing and securities lending services on our platform. Since then, our margin financing and securities lending business has benefited from our growing client base, increasingly attractive products and broader financing partners network. The margin financing and securities lending balance is affected by factors including client asset balance, expansion of international markets and our ability to continue to secure funding and securities from third parties.
The net interest income from our margin financing and securities lending businesses is affected by our margin financing and securities lending balance, as well as annualized interest rates and interest spread we earn from margin financing and securities lending. We continued to expand our margin financing and securities lending client base, which in turn strengthened our bargaining power against third-party funding and securities lenders and allowed us to optimize interest expenses. To continue to expand our margin financing and securities lending businesses, we plan to deepen our cooperation with third-party funding and securities lenders as well as allocate our own capital to increase the funds available. As a publicly listed company, we are perceived as a strong debtor by market and have received a "BBB-" credit rating from S&P Global Ratings, which will further diversify our funding sources and improve our funding terms. The market condition may change from time to time and our ability to manage our capital effectively is crucial for our margin financing and securities lending businesses. We have established liquidity policies to support the growth of our margin financing business while ensuring sufficient capital reserve is maintained to meet operational needs and comply with applicable regulatory requirements.
We have also been developing and offering innovative solutions for our clients who wish to lend their securities, such as our stock yield enhancement program. Our revenue growth will be affected by our ability to effectively execute these initiatives and increase our margin financing and securities lending balance and interest spread.
Ability to broaden service offerings and expand in various markets
Our results of operations are also affected by our ability to invest in and develop new service offerings and further penetrate our client base. We currently derive a substantial portion of our revenues from our securities brokerage and margin financing and securities lending businesses, and as a result, our profitability depends largely on the performance of these businesses. While we expect our brokerage commission and handling charge income and interest income to increase and continue to be a major source of our revenues in the future, we also expect to increase the revenue contribution from other businesses with relatively higher profit margins, such as our wealth management product distribution services and corporate services. We also intend to further broaden our financial services footprint and launch new products and services.
Our great success in the Hong Kong market laid a solid foundation for our international expansion into various markets. As of the date of this annual report, we launched Moomoo, the international version of Futubull, in the United States, Singapore, Australia, Japan, Malaysia, Canada and New Zealand.
We believe that our comprehensive offering of financial products and services and our strong technology capability in developing new products and services will allow us to capture new market opportunities. In addition, our ability to expand into various markets will enable us to respond to changes in the different markets in terms of client demand and client preferences to remain competitive.
Investment in technology and talent
Our technology is critical for us to retain and attract clients. We have made significant investments into our one-stop financial technology platform, which has evolved into a highly-automated, multi-product, multi-market, closed-loop proprietary technology infrastructure that drives every function of our business including trading, risk management, clearing, market data, news feeds and social functions. We will continue to make significant investments in research and development and technology to enhance our platform to address the diverse needs of our clients and improve operating efficiency. Aiming to transform and improve the investing experience for the upcoming generation of investors, we intend to focus on developing a comprehensive range of innovative applications, products and services aimed at providing more convenience to clients and improving our user experience, service quality and system efficiency. In addition, there is a strong demand in online retail brokerage industry for talented and experienced personnel. We must recruit, retain and motivate talented employees while controlling our personnel-related expenses, including share-based compensation expenses.
Operating leverage and operating efficiency
Our results of operations depend on our ability to manage our costs and expenses. We expect our costs and expenses to continue to increase as we grow our business and attract more clients to our platform. However, we believe our platform has significant operating leverage, which enables us to realize cost savings structurally. We have built a secure and scalable brokerage platform that is fully digitalized and supports the full transaction lifecycle from the front-end to the back-office through our proprietary cloud-based technology, which in turn allows us to efficiently manage our operating expenses. We believe our proprietary and modularized technology infrastructure has been fully funded, enabling us to bring in new products and enter new markets with moderate investment and marginal cost. As a result, the costs associated with the operation of our platform as well as our operating expenses do not increase in line with our revenues as we do not require a proportional increase in the size of our workforce to support our growth.
In addition, by leveraging the client insights we generate from our large client base, we are able to attract corporate clients to utilize our distribution solution, public relations, brand promotion services and corporate services, which in turn generates strong demand for our brokerage and margin financing services from retail clients. The scale, demographics and depth of engagement of our client base also translate to high lifetime values. As our business further grows in scale, we believe our massive scale, coupled with the network effects, will allow us to acquire clients more cost-effectively and benefit from substantial economies of scale.
Ability to effectively manage credit risk
As we continue to grow the margin financing, securities lending, stock-pledged loans and bank loans businesses, our ability to manage credit risk is of key importance in our business. Our securities and derivative trades activities are transacted on either a cash or margin basis. In margin transactions, we extend credit to the client, subject to various regulatory and internal margin requirements, collateralized by cash and securities in the client's account. Similarly, securities lending agreements are collateralized by deposits of cash or securities. Stock-pledged loans to enterprise pledged by shares are exposed to credit risk from counterparties who fail to repay the loans. We monitor the collateral level of stock-pledged loans in real time and has the right to liquidate the pledged shares once the collateral level drops below the minimum threshold required for loan repayment. Bank loans comprise financing secured by insurance policies provided by borrowers as collateral and unsecured retail loans. Bank loans are exposed to credit risk from counterparties who fail to repay the loans. We oversee the management of credit risk through formulating credit policies and procedures, overseeing the credit quality of the loan portfolio, ensuring an independent and objective assessment of credit risk, controlling exposure to selected industries, counterparties, countries and portfolio types etc. Despite these measures, in the case of market downturn or decline in the prices of the pledged securities, certain clients may inevitably encounter a greater risk of default. Our ability to effectively manage the quality of collateral and to collect loans and advances when due is critical to our business, prospects and financial conditions.
Key Components of Results of Operations
Revenues
We generate revenues primarily from our online brokerage and margin financing services. The following table sets forth the components of our revenues by amounts and percentages of our total revenues for the years presented:
For the Year Ended December 31,
2023
2024
2025
HK$
%
HK$
%
HK$
US$
%
(in thousands, except for percentages)
Revenues:
Brokerage commission and handling charge income
3,944,779
39.4
6,044,746
44.5
10,572,744
1,358,388
46.3
Interest income
5,536,422
55.3
6,666,864
49.1
10,441,585
1,341,537
45.7
Other income
527,217
5.3
878,515
6.4
1,832,569
235,449
8.0
Total revenues
10,008,418
100.0
13,590,125
100.0
22,846,898
2,935,374
100.0
Brokerage commission and handling charge income
Brokerage commission income primarily consists of commissions and execution fees from our clients for whom we act as executing and clearing brokers. We generate commissions and execution fees on securities brokerage by trading equities and equity-linked derivatives on behalf of our clients. Handling charge income primarily consists of fees from clearing and settlement services as well as subscription and dividend collection handling services.
The table below sets forth the brokerage commissions and handling charge income by product and geography during the period presented:
Year ended December 31,
2023
2024
2025
(in thousands)
HK$
HK$
HK$
US$
Major types of products
Securities and options brokerage(1)
3,618,681
5,602,144
9,862,027
1,267,075
Futures brokerage(2)
295,547
392,030
505,737
64,977
IPO brokerage(3)
12,364
22,014
166,007
21,329
Others(4)
18,187
28,558
38,973
5,007
Total
3,944,779
6,044,746
10,572,744
1,358,388
Geographic location(5)
Hong Kong(6)
3,197,605
4,721,494
7,825,932
1,005,477
Others(7)
747,174
1,323,252
2,746,812
352,911
Total
3,944,779
6,044,746
10,572,744
1,358,388
Notes:
Interest income
We earn interest income primarily from margin financing and securities lending services and deposits with banks, which are recorded on an accrual basis and are included in interest income in the consolidated statements of comprehensive income. Interest income is recognized as it is accrued over time using the effective interest method.
The table below sets forth the interest income based on the underlying interest earning assets during the period presented:
Year ended December 31,
2023
2024
2025
(in thousands)
HK$
HK$
HK$
US$
Interest income from:
Bank deposits
2,482,866
2,840,770
3,759,286
482,994
Securities lending
1,053,294
1,352,746
3,413,144
438,521
Margin financing
1,754,056
2,177,686
2,955,533
379,727
Others
246,206
295,662
313,622
40,295
Total
5,536,422
6,666,864
10,441,585
1,341,537
The table below sets forth the average asset balance outstanding and the annualized yield of our major interest earning assets during the period presented:
Year ended December 31,
2023
2024
2025
(in thousands)
HK$
HK$
HK$
US$
Average interest-earning asset balance(1)
Bank deposits
55,260,272
63,791,969
113,561,498
14,590,405
Margin financing
29,313,160
37,545,644
51,038,644
6,557,456
Annualized yields(2)
Bank deposits(3)
4.49
%
4.45
%
3.31
%
3.31
%
Margin financing(4)
5.98
%
5.80
%
5.79
%
5.79
%
Notes:
Other income
Other income primarily consists of (i) enterprise public relations service charge income, (ii) underwriting fee income, (iii) IPO subscription service charge income, (iv) funds distribution service income, (v) currency exchange service income, (vi) market information and data income, and (vii) technology service income. We generate enterprise public relations service charge income by providing institutional clients with public relations and investor relations services, including distributing company information and news and providing communication channels with retail investors. We generate underwriting fee income in our investment banking business primarily by providing equity underwriting to corporate issuers. We generate IPO subscription service charge income from provision of new share subscription services in relation to IPOs in the Hong Kong capital market. We generate funds distribution service income from our wealth management product distribution business. We generate currency exchange service income from providing currency exchange services to our clients with funded accounts. We generate market information and data income primarily by providing fee-based market data services to users and clients. We generate technology service income by providing information technology services.
Costs
The following table sets forth the components of our costs by amounts and percentages of costs for the years presented:
For the Year Ended December 31,
2023
2024
2025
HK$
%
HK$
%
HK$
US$
%
(in thousands, except for percentages)
Costs:
Brokerage commission and handling charge expenses
249,567
16.2
341,238
14.0
606,044
77,865
20.6
Interest expenses
910,759
59.3
1,617,450
66.1
1,757,852
225,849
59.7
Processing and servicing costs
375,904
24.5
486,783
19.9
578,459
74,321
19.7
Total costs
1,536,230
100.0
2,445,471
100.0
2,942,355
378,035
100.0
Brokerage commission and handling charge expenses
Brokerage commission and handling charge expenses consist of fees charged by stock exchanges or executing brokers for our use of their clearing and settlement systems and expenses charged by commercial banks or stock exchanges for providing clearing and settlement services in connection with IPO subscriptions.
Interest expenses
Interest expenses primarily consist of interest expenses of borrowings from commercial banks, other licensed financial institutions and other parties to fund our margin financing business, securities lending business, IPO and other financing business.
Processing and servicing costs
Processing and servicing costs mainly consist of market information and data fees, data transmission fees, cloud service fees and system cost paid to stock exchanges and data and other service providers.
Operating expenses
The following table sets forth the components of our operating expenses by amounts and percentages of operating expenses for the years presented:
For the Year Ended December 31,
2023
2024
2025
HK$
%
HK$
%
HK$
US$
%
(in thousands, except for percentages)
Operating expenses:
Research and development expenses
1,440,893
41.6
1,493,620
33.0
1,908,758
245,238
32.8
Selling and marketing expenses
710,348
20.5
1,409,313
31.2
1,980,486
254,453
34.0
General and administrative expenses
1,313,464
37.9
1,620,017
35.8
1,934,692
248,570
33.2
Total operating expenses
3,464,705
100.0
4,522,950
100.0
5,823,936
748,261
100.0
Research and development expenses. Research and development expenses consist of expenses related to developing service platforms, including website, mobile apps and other products, as well as payroll and welfare, rental expenses and other related expenses for our research and development professionals.
Selling and marketing expenses. Selling and marketing expenses consist primarily of advertising and promotion costs, as well as payroll, rental and related expenses for selling and marketing personnel. Advertising costs primarily consist of costs of online advertising and offline promotional events.
General and administrative expenses. General and administrative expenses consist of payroll, rental, and related expenses for employees involved in general corporate functions, including senior management, finance, legal and human resources, expenses for third-party professional agents, costs associated with use of facilities and equipment and other general corporate related expenses.
Taxation
Cayman Islands
The Cayman Islands currently levies no taxes on individuals or corporations based upon profits, income, gains or appreciation and there is no taxation in the nature of inheritance tax or estate duty. There are no other taxes likely to be material to us levied by the government of the Cayman Islands except for stamp duties which may be applicable on instruments executed in, or, after execution, brought within the jurisdiction of the Cayman Islands. In addition, the Cayman Islands does not impose withholding tax on dividend payments.
Hong Kong
Our subsidiaries incorporated in Hong Kong, such as Futu Securities (Hong Kong) Limited, Futu Financial Limited, Futu Lending Limited, Futu Network Technology Limited and Futu Securities International (Hong Kong) Limited, are subject to Hong Kong profit tax on their profits arising from their business operations carried out in Hong Kong. Hong Kong profits tax for a corporation from the year of assessment 2018/2019 onwards is generally 8.25% on assessable profits up to HK$2.0 million; and 16.5% on any part of assessable profits over HK$2.0 million. Under the Hong Kong Inland Revenue Ordinance, profits that we derive from sources outside of Hong Kong are generally not subject to Hong Kong profits tax. In addition, payments of dividends from our Hong Kong subsidiaries to us are not subject to any Hong Kong withholding tax.
The United States
The Tax Cuts and Jobs Act of 2017 significantly revised the U.S. corporate income tax law. Changes include a reduction in the federal corporate tax, changes to operating loss carry-forwards and carrybacks, and a repeal of the corporate alternative minimum tax. This legislation resulted in a reduction of the U.S. federal corporate income tax rates from a maximum of 35% to 21%, to which our subsidiaries incorporated in the United States are subject.
Singapore
Our subsidiaries incorporated in Singapore are subject to an income tax rate of 17% for taxable income earned in Singapore. Singapore does not impose a withholding tax on dividends for resident companies.
PRC
Generally, our PRC subsidiaries and the Consolidated Affiliated Entities are subject to enterprise income tax on their taxable income in China at a statutory rate of 25%. Futu Network Technology (Shenzhen) Co., Ltd. and Shenzhen Futu are recognized as "High and New Technology Enterprises" and eligible for a preferential income tax rate of 15% with a valid period of three years until 2028 and 2026, respectively. The enterprise income tax is calculated based on the entity's global income as determined under PRC tax laws and accounting standards.
We are subject to value-added tax at a rate of 6% for the income arising from providing financial technology services to our clients in China. We are also subject to surcharges on value-added tax payments in accordance with PRC laws.
Dividends paid by our wholly foreign-owned subsidiary in China to our intermediary holding company in Hong Kong will be subject to a withholding tax rate of 10%, unless the relevant Hong Kong entity is determined by the competent PRC tax authority that it satisfies all the requirements under the Arrangement between China and the Hong Kong Special Administrative Region for the Avoidance of Double Taxation and Prevention of Fiscal Evasion with respect to Taxes on Incomes. If our Hong Kong subsidiary is determined by the competent PRC tax authority that it satisfies all the requirements under the tax arrangement, then the dividends paid to the Hong Kong subsidiary would be subject to withholding tax at the standard rate of 5%. However, based on the Circular on Certain Issues with Respect to the Enforcement of Dividend Provisions in Tax Treaties, or the SAT Circular 81, issued by the SAT, if the relevant PRC tax authorities determine, in their discretions, that a company benefits from such reduced income tax rate due to a structure or arrangement that is primarily tax-driven, such PRC tax authorities may adjust the preferential tax treatment. Moreover, a Hong Kong entity is required to file an application package with the relevant tax authority, and settle the overdue taxes if the preferential tax rate of 5% is denied based on the subsequent review of the application package by the relevant tax authority.
If our holding company in the Cayman Islands or any of our subsidiaries outside of China were deemed to be a "resident enterprise" under the PRC Enterprise Income Tax Law, it would be subject to enterprise income tax on its worldwide income at a rate of 25%. See "Item 3. Key Information-D. Risk Factors-Risks Related to Our Operations in China-We may be treated as a resident enterprise for PRC tax purposes under the PRC Enterprise Income Tax Law, and we may therefore be subject to PRC income tax on our global income."
Pillar Two
The Organization of Economic Cooperation and Development has proposed a global minimum tax of 15% on a country-by-country basis ("Pillar Two"). Under the legislation, we are liable to pay a top-up tax for the difference between the Global Anti-Base Erosion Proposal ("GloBE") effective tax rate for each jurisdiction and the 15% minimum rate.
For the year ended December 31, 2025, certain of our subsidiaries are located in jurisdictions where Pillar Two legislation has been in effect, including Hong Kong, Singapore, Australia, Canada, Japan, New Zealand and Malaysia. We have effective tax rates that exceed 15% in all jurisdictions in which it operates with assessable profit, except for Hong Kong, British Virgin Islands and Mainland China. We have assessed the impact and determined that HK$321.0 million of current tax provision is required due to the implementation of Pillar Two in these jurisdictions as of December 31, 2025.
Results of Operations
The following table sets forth a summary of our consolidated results of operations for the years presented, both in absolute amount and as a percentage of our revenues for the years presented. This information should be read together with our consolidated financial statements and related notes included elsewhere in this annual report. The results of operations in any year are not necessarily indicative of our future trends.
For the Year Ended December 31,
2023
2024
2025
HK$
%
HK$
%
HK$
US$
%
(in thousands, except for percentages)
Revenues
Brokerage commission and handling charge income
3,944,779
39.4
6,044,746
44.5
10,572,744
1,358,388
46.3
Interest income
5,536,422
55.3
6,666,864
49.1
10,441,585
1,341,537
45.7
Other income
527,217
5.3
878,515
6.4
1,832,569
235,449
8.0
Total revenues
10,008,418
100.0
13,590,125
100.0
22,846,898
2,935,374
100.0
Costs
Brokerage commission and handling charge expenses
(249,567)
(2.5)
(341,238)
(2.5)
(606,044)
(77,865)
(2.7)
Interest expenses
(910,759)
(9.0)
(1,617,450)
(11.9)
(1,757,852)
(225,849)
(7.7)
Processing and servicing costs
(375,904)
(3.8)
(486,783)
(3.6)
(578,459)
(74,321)
(2.5)
Total costs
(1,536,230)
(15.3)
(2,445,471)
(18.0)
(2,942,355)
(378,035)
(12.9)
Total gross profit
8,472,188
84.7
11,144,654
82.0
19,904,543
2,557,339
87.1
Operating expenses
Research and development expenses(1)
(1,440,893)
(14.4)
(1,493,620)
(11.0)
(1,908,758)
(245,238)
(8.4)
Selling and marketing expenses(1)
(710,348)
(7.1)
(1,409,313)
(10.4)
(1,980,486)
(254,453)
(8.7)
General and administrative expenses(1)
(1,313,464)
(13.1)
(1,620,017)
(11.9)
(1,934,692)
(248,570)
(8.5)
Total operating expenses
(3,464,705)
(34.6)
(4,522,950)
(33.3)
(5,823,936)
(748,261)
(25.6)
Income from operations
5,007,483
50.1
6,621,704
48.7
14,080,607
1,809,078
61.5
Others, net
33,442
0.3
(86,372)
(0.6)
(367,448)
(47,210)
(1.6)
Income before income taxexpense and share of loss from equity method investments
5,040,925
50.4
6,535,332
48.1
13,713,159
1,761,868
59.9
Income tax expense
(748,479)
(7.5)
(998,342)
(7.3)
(2,359,633)
(303,166)
(10.3)
Share of loss from equity method investments
(13,497)
(0.1)
(103,934)
(0.8)
(51,619)
(6,632)
(0.2)
Net Income
4,278,949
42.8
5,433,056
40.0
11,301,907
1,452,070
49.4
Notes:
(1)
Share-based compensation expenses were allocated as follows:
For the Year Ended December 31,
2023
2024
2025
HK$
HK$
HK$
US$
(in thousands)
Research and development expenses
201,033
230,830
226,490
29,099
General and administrative expenses
69,560
81,966
88,091
11,318
Selling and marketing expenses
20,238
22,130
28,443
3,655
Total
290,831
334,926
343,024
44,072
Year ended December 31, 2025 compared to year ended December 31, 2024
Revenues
Total revenues were HK$22,846.9 million (US$2,935.4 million), an increase of 68.1% from HK$13,590.1 million in 2024.
Brokerage commission and handling charge income. Brokerage commission and handling charge income was HK$10,572.7 million (US$1,358.4 million), an increase of 74.9% from HK$6,044.7 million in 2024. This was mainly due to an 89.4% increase in trading volume, partially offset by lower blended commission rate. The blended commission rate decreased from 7.8 bps in 2024 to 7.2 bps in 2025. The increase in our trading volume from HK$7.75 trillion in 2024 to HK$14.68 trillion in 2025 was primarily due to strong market sentiments.
The table below sets forth the growth of our platform in terms of funded accounts, total client asset balance, and average funded account asset balance as of the dates indicated:
As of December 31,
2024
2025
Funded accounts
2,411,324
3,365,414
Total client asset balance (HK$in billion)
743.3
1,233.0
Average funded account asset balance (HK$)
308,237
366,368
Interest income. Interest income was HK$10,441.6 million (US$1,341.5 million), an increase of 56.6% from HK$6,666.9 million in 2024. Interest income derived from securities lending business increased by 152.3% from HK$1,352.7 million in 2024 to HK$3,413.1 (US$438.5 million) million in 2025, which was mainly attributable to the expansion of our securities lending business. The increase in margin loan interest income was mainly driven by higher margin financing income due to an increase in daily average margin balance and higher interest income from bank deposits.
Other income. Other income was HK$1,832.6 million (US$235.4 million), an increase of 108.6% from HK$878.5 million in 2024. The increase was primarily attributable to higher fund distribution service income and currency exchange service income.
Costs
Total costs were HK$2,942.4 million (US$378.0 million), an increase of 20.3% from HK$2,445.5 million in 2024.
Brokerage commission and handling charge expenses. Brokerage commission and handling charge expenses were HK$606.0 million (US$77.9 million), an increase of 77.6% from HK$341.2 million in 2024. This increase was roughly in line with the growth of our brokerage commission and handling charge income.
Interest expenses. Interest expenses were HK$1,757.9 million (US$225.8 million), an increase of 8.7% from HK$1,617.5 million in 2024. The increase was mainly driven by higher expenses associated with our securities borrowing and lending business, and higher margin financing interest expenses.
Processing and servicing costs. Processing and servicing costs were HK$578.5 million (US$74.3 million), an increase of 18.8% from HK$486.8 million in 2024. The increase was primarily due to higher cloud service fee as well as higher market information and data fee.
Gross profit
As a result of the foregoing, our total gross profit was HK$19,904.5 million (US$2,557.3 million), an increase of 78.6% from HK$11,144.7 million in 2024. Gross profit margin increased from 82.0% in 2024 to 87.1% in 2025.
Operating expenses
Total operating expenses were HK$5,823.9 million (US$748.3 million), an increase of 28.8% from HK$4,523.0 million in 2024. The increase was primarily due to the increase in expenses as a result of our business growth.
Research and development expenses. Research and development expenses were HK$1,908.8 million (US$245.2 million), an increase of 27.8% from HK$1,493.6 million in 2024. This increase was primarily due to increased investment in crypto and AI capabilities.
Selling and marketing expenses. Selling and marketing expenses were HK$1,980.5 million (US$254.5 million), an increase of 40.5% from HK$1,409.3 million in 2024. This was mainly driven by a 36.1% increase in net new funded accounts, while customer acquisition costs remained largely flat year-over-year.
General and administrative expenses. General and administrative expenses were HK$1,934.7 million (US$248.6 million), an increase of 19.4% from HK$1,620.0 million in 2024. The increase was primarily due to an increase in general and administrative personnel.
Income tax expense
We had income tax expense of HK$2,359.6 million (US$303.2 million) in 2025, compared to HK$998.3 million in 2024, primarily due to the increase in our income before income tax expenses and implementation of Pillar Two in 2025.
Net income
As a result of the foregoing, we had net income increased by 108.0% to HK$11,301.9 million (US$1,452.1 million) from HK$5,433.1 million in 2024.
Year ended December 31, 2024 compared to year ended December 31, 2023
Revenues
Total revenues were HK$13,590.1 million, an increase of 35.8% from HK$10,008.4 million in 2023.
Brokerage commission and handling charge income. Brokerage commission and handling charge income HK$6,044.7 million, an increase of 53.2% from HK$3,944.8 million in 2023. The increase was mainly due to an increase in trading volume, partially offset by lower blended commission rate. The blended commission rate decreased from 9.3 bps in 2023 to 7.8 bps in 2024. The increase in our trading volume from HK$4.2 trillion in 2023 to HK$7.8 trillion in 2024 was primarily due to strong market sentiments.
The table below sets forth the growth of our platform in terms of funded accounts, total client asset balance, and average funded account asset balance as of the dates indicated:
As of December 31,
2023
2024
Funded accounts
1,710,106
2,411,324
Total client asset balance (HK$ in billion)
485.6
743.3
Average funded account asset balance (HK$)
283,934
308,237
Interest income. Interest income was HK$6,666.9 million, an increase of 20.4% from HK$5,536.4 million in 2023. The increase in interest income was mainly driven by higher margin financing income due to an increase in daily average margin balance and higher interest income from bank deposits. Interest income derived from securities lending business increased by 28.4% from HK$1,053.3 million in 2023 to HK$1,352.7 million in 2024, which was mainly attributable to the expansion of our securities lending business.
Other income. Other income was HK$878.5 million, an increase of 66.6% from HK$527.2 million in 2023. The increase was primarily attributable to higher fund distribution service income and currency exchange income.
Costs
Total costs were HK$2,445.5 million, an increase of 59.2% from HK$1,536.2 million in 2023.
Brokerage commission and handling charge expenses. Brokerage commission and handling charge expenses were HK$341.2 million, an increase of 36.7% from HK$249.6 million in 2023. This was primarily attributable to higher trading volume.
Interest expenses. Interest expenses were HK$1,617.5 million, an increase of 77.6% from HK$910.8 million in 2023. The increase was mainly driven by higher expenses associated with our securities borrowing and lending business from HK$737.8 million in 2023 to HK$1,373.7 million in 2024, which was also in line with the expansion of securities lending business.
Processing and servicing costs. Processing and servicing costs were HK$486.8 million, an increase of 29.5% from HK$375.9 million in 2023. The increase was due to higher market information and data fee, and cloud service fee for new markets and products.
Gross profit
As a result of the foregoing, our total gross profit increased by 31.5% from HK$8,472.2 million in 2023 to HK$11,144.7 million in 2024. Gross profit margin declined from 84.7% in 2023 to 82.0% in 2024.
Operating expenses
Total operating expenses were HK$4,523.0 million, an increase of 30.5% from HK$3,464.7 million in 2023. The increase was primarily due to the increase in selling and marketing expenses and general and administrative expenses as a result of our business growth.
Research and development expenses. Research and development expenses were HK$1,493.6 million, an increase of 3.7% from HK$1,440.9 million in 2023. This increase was primarily due to an increase in research and development headcount to support new products and new markets.
Selling and marketing expenses. Selling and marketing expenses were HK$1,409.3 million, an increase of 98.4% from HK$710.3 million in 2023. The increase was mainly due to strong funded accounts growth, partially offset by lower customer acquisition costs.
General and administrative expenses. General and administrative expenses were HK$1,620.0 million, an increase of 23.3% from HK$1,313.5 million in 2023. The increase was primarily due to an increase in headcount for general and administrative personnel, especially in new markets.
Income tax expense
We had income tax expense of HK$998.3 million in 2024, compared to HK$748.5 million in 2023, primarily due to the 27.9% year-over-year increase in our income before income tax expenses.
Net income
As a result of the foregoing, we had net income of HK$5,433.1 million in 2024, compared to HK$4,278.9 million in 2023, an increase of 27.0%.
B. Liquidity and Capital Resources
To date, we have financed our operating and investing activities through net proceeds from our securities offerings, cash generated from operating activities, historical equity financing activities and credit facilities provided by commercial banks, other licensed financial institutions and other parties. As of December 31, 2023, 2024 and 2025, respectively, our cash and cash equivalents were HK$4,937.5 million, HK$11,688.4 million and HK$10,465.9 million (US$1,344.7 million). Our cash and cash equivalents primarily consist of demand deposits and time deposits with initial terms of less than three months placed with banks or other financial institutions, which are unrestricted for withdrawal or use, and which have original maturities of three months or less.
We believe that our current cash and cash equivalents and our anticipated cash flows from operations will be sufficient to meet our anticipated working capital requirements and material cash requirements for at least the next 12 months. In the future, we may decide to enhance our liquidity position or increase our cash reserve for future investments through additional capital and finance funding. The issuance and sale of additional equity would result in further dilution to our shareholders. The incurrence of indebtedness would result in increased fixed obligations and could result in operating covenants that would restrict our operations. We cannot assure you that financing will be available in amounts or on terms acceptable to us, if at all.
As of December 31, 2025, our cash and cash equivalents were HK$10,465.9 million (US$1,344.7 million), mainly comprising U.S. dollars of HK$8,330.1 million (US$1,070.2 million), Hong Kong dollars of HK$845.2 million (US$108.6 million), Japanese Yen of HK$628.0 million (US$80.7 million), Singapore dollars of HK$378.1 million (US$48.6 million) and Renminbi of HK$96.6 million (US$12.4 million).
We closely monitor our cash balance and future payments obligations by preparing monthly cash balance and fund requirement reports to provide a timely overview of our overall cash position and liquidity and risk control measurements. Such reports will be reviewed by our chief financial officer and our financial controller. For surplus funds, we have an internal process to determine how to deploy such funds based on a variety of factors, such as our short-term payment obligations, fund safety, liquidity and profitability. In order to maintain flexibility in anticipation of cash needs, we generally deploy our surplus funds either into short-term bank deposits or to purchase certain available-for-sale financial securities, such as low-risk financial products issued by local commercial banks.
As of December 31, 2025, 1.2% of our cash and cash equivalents were held in China, and 0.1% were held by the Consolidated Affiliated Entities. Although we consolidate the results of the Consolidated Affiliated Entities, we only have access to the assets or earnings of the Consolidated Affiliated Entities through the Contractual Arrangements. See "Item 4. Information on the Company-C. Organizational Structure-Contractual Arrangements with the VIEs and Their Shareholders." For restrictions and limitations on liquidity and capital resources as a result of our corporate structure, see "-Holding Company Structure."
In utilizing the proceeds we received from our securities offerings, we may make additional capital contributions to our PRC subsidiaries, establish new PRC subsidiaries and make capital contributions to these new PRC subsidiaries, make loans to our PRC subsidiaries, or acquire offshore entities with operations in China in offshore transactions. However, most of these uses are subject to PRC regulations. See "Item 3. Key Information-D. Risk Factors-Risks Related to Our Operations in China-PRC regulation of loans to and direct investment in PRC entities by offshore holding companies and governmental control of currency conversion may delay or prevent us from using the proceeds of our securities offerings to make loans or additional capital contributions to our PRC subsidiaries and the Consolidated Affiliated Entities".
We expect that a limited portion of our future revenues will be denominated in Renminbi. Under existing PRC foreign exchange regulations, payments of current account items, including profit distributions, interest payments and trade and service-related foreign exchange transactions, can be made in foreign currencies without prior SAFE approval as long as certain routine procedural requirements are fulfilled. Therefore, our PRC subsidiaries are allowed to pay dividends in foreign currencies to us without prior SAFE approval by following certain routine procedural requirements. However, approval from or registration with competent government authorities is required where the Renminbi is to be converted into foreign currency and remitted out of China to pay capital expenses such as the repayment of loans denominated in foreign currencies. The PRC government may at its discretion restrict access to foreign currencies for current account transactions in the future.
Regulatory Capital Requirements
Our principal broker-dealer subsidiaries, Futu Securities, Futu Clearing Inc., Moomoo Financial Singapore Pte. Ltd., Futu Malaysia Sdn. Bhd. and Moomoo Financial Inc. are subject to capital requirements determined by its respective regulators. Futu Securities International (Hong Kong) Limited, our subsidiary located in Hong Kong, is subject to the Securities and Futures (Financial Resources) Rules and the Securities and Futures Ordinance, and Futu Securities International (Hong Kong) Limited is required to maintain minimum paid-up share capital and liquid capital. Futu Clearing Inc. and Moomoo Financial Inc., our subsidiaries located in the United States, are subject to the Uniform Net Capital Rule (Rule 15c3-1) under the Exchange Act, which requires the maintenance of minimum net capital. Moomoo Financial Singapore Pte. Ltd., our subsidiary located in Singapore, is subject to the Securities and Futures (Financial and Margin Requirements for Holders of Capital Markets Services License) Regulations, which requires the maintenance of financial resource over its total risk requirement. Futu Malaysia Sdn. Bhd., our subsidiary located in Malaysia, was subject to the Capital Adequacy Requirements under the Capital Market and Services Act, which requires capital adequacy ratio is at all times more than 1.2.
The table below summarizes the net capital, the requirement and the excess capital for our principal broker-dealer subsidiaries as of December 31, 2025:
As of December 31, 2025
Net Capital/
Eligible Equity
Requirement
Excess
(HK$ in thousands)
Futu Securities
14,631,527
3,328,771
11,302,756
Futu Clearing Inc.
8,819,430
875,676
7,943,754
Moomoo Financial Singapore Pte. Ltd.
4,899,208
733,732
4,165,476
Futu Malaysia Sdn. Bhd.
491,619
91,439
400,180
Moomoo Financial Inc.
423,592
71,666
351,926
Where the relevant operating subsidiaries do not meet regulatory capital requirements, such subsidiaries may be faced with certain operational restrictions, including cessation of carrying on of business in any or all of the regulated activities permitted under their respective licenses.
As of December 31, 2025, all of the regulated operating subsidiaries were in compliance with their respective regulatory capital requirements.
Cash Flows
The following table sets forth a summary of our cash flows for the periods presented:
For the Year Ended December 31,
2023
2024
2025
HK$
HK$
HK$
US$
(in thousands)
Summary Consolidated Cash Flow Data:
Net cash (used in)/ generated from operating activities
(6,337,396)
30,996,323
40,788,133
5,240,468
Net cash (used in)/ generated from investing activities
(2,444,418)
103,932
(1,783,395)
(229,132)
Net cash generated from financing activities
2,307,957
70,851
4,296,780
552,051
Effect of exchange rate changes on cash, cash equivalents and restricted cash
66,352
(149,866)
235,916
30,311
Net (decrease)/increase in cash, cash equivalents and restricted cash
(6,407,505)
31,021,240
43,537,434
5,593,698
Cash, cash equivalents and restricted cash at beginning of the year
55,715,585
49,308,080
80,329,320
10,320,727
Cash, cash equivalents and restricted cash at end of the year
49,308,080
80,329,320
123,866,754
15,914,425
Operating activities
Net cash generated from operating activities in 2025 was HK$40.8 billion (US$5.2 billion), as compared to net income of HK$11.3 billion (US$1.5 billion) in the same year. The difference was primarily due to net increase in loans and advances of HK$13.9 billion (US$1.8 billion), net increase in accounts receivable from clients and brokers of HK$1.5 billion (US$0.2 billion), net increase in accounts receivable from clearing organizations of HK$2.2 billion (US$0.3 billion), offset by net increase in accounts payable to clients and brokers of HK$44.9 billion (US$5.8 billion) and net increase in securities sold under agreements to repurchase of HK$2.2 billion (US$0.3 billion). The increase in loans and advances was due to the expansion of our margin financing business. The increase in accounts receivable from clients, brokers and clearing organizations and accounts payable to clients and brokers was mainly driven by the increase in our clients' trading volume and cash deposits. The increase in securities sold under agreements to repurchase was mainly attributable to the increased funding demand from margin financing business. The principal non-cash items affecting the difference between our net income and our net cash used in operating activities in 2025 were HK$343.0 million (US$44.1 million) in share-based compensation expenses, HK$243.0 million (US$31.2 million) in unrealized gains from investments and HK$150.7 million (US$19.4 million) in amortization of right-of-use assets.
Net cash generated from operating activities in 2024 was HK$31.0 billion, as compared to net income of HK$5.4 billion in the same year. The difference was primarily due to net increase in loans and advances of HK$17.2 billion, net increase in accounts receivable from clients and brokers of HK$12.3 billion, offset by net increase in accounts payable to clients and brokers of HK$51.7 billion and net increase in securities sold under agreements to repurchase of HK$2.6 billion. The increase in loans and advances was due to the expansion of our margin financing business. The increase in accounts receivable from clients and brokers and accounts payable to clients and brokers was mainly driven by the increase in our clients' trading volume and cash deposits. The increase in securities sold under agreements to repurchase was mainly attributable to the increased funding demand from margin financing business. The principal non-cash items affecting the difference between our net income and our net cash used in operating activities in 2024 were HK$334.9 million in share-based compensation expenses and HK$105.6 million in amortization of right-of-use assets.
Net cash used in operating activities in 2023 was HK$6.3 billion, as compared to net income of HK$4.3 billion in the same year. The difference was primarily due to net increase in loans and advances of HK$5.9 billion and net decrease in accounts payable to clients and brokers of HK$4.6 billion. The increase in loans and advances was due to the expansion of our margin financing business. The decrease in accounts payable to clients and brokers was mainly attributable to the decline in our clients' cash deposits. The principal non-cash items affecting the difference between our net income and our net cash used in operating activities in 2023 were HK$290.8 million in share-based compensation expenses and HK$110.4 million in amortization of right-of-use assets.
Investing activities
Net cash used in investing activities in 2025 was HK$1,783.4 million (US$229.1 million), primarily due to the purchase of short-term investments of HK$3,284.0 million (US$421.9 million), partially offset by the proceeds from disposal of short-term investments of HK$1,455.0 million (US$186.9 million).
Net cash generated from investing activities in 2024 was HK$103.9 million, primarily due to the proceeds from disposal of short-term investments of HK$1,509.5 million, partially offset by purchase of short-term investments of HK$796.4 million, acquisition of long-term investments of HK$440.0 million and purchase of property and equipment and intangible assets of HK$167.5 million.
Net cash used in investing activities in 2023 was HK$2.4 billion, primarily due to purchase of short-term investments of HK$4.8 billion, partially offset by the proceeds from disposal of short-term investments of HK$2.4 billion.
Financing activities
Net cash generated from financing activities in 2025 was HK$4,296.8 million (US$552.1 million), primarily attributable to the net proceeds of HK$6,439.9 million (US$827.4 million) from other borrowings and the dividends distribution of HK$2,151.0 million (US$276.4 million).
Net cash generated from financing activities in 2024 was HK$70.9 million, primarily attributable to the net proceeds of HK$50.7 million from other borrowings and the proceeds from exercise of employee share options of HK$20.2 million.
Net cash generated from financing activities in 2023 was HK$2.3 billion, primarily attributable to proceeds of HK$79.6 billion from other borrowings, partially offset by repayment of other borrowings of HK$76.4 billion.
Short-term Borrowings
As of December 31,
2023
2024
2025
HK$
HK$
HK$
US$
(in million)
Borrowings from banks(1):
5,652
5,702
12,143
1,560
Note:
(1)
We have unused borrowing facilities of HK$17.4 billion, HK$18.2 billion and HK$13.9 billion (US$1.8 billion) from banks as of December 31, 2023, 2024 and 2025, of which HK$586.2 million, HK$582.2 million and HK$583.6 million (US$75.0 million) are committed, and the remaining are uncommitted, respectively. These bank borrowings were mainly pledged by margin clients' shares as the primary source of credit risk mitigation of the lenders, and bore floating interest rates based on various benchmarks including Hong Kong Prime Rate, Hong Kong Interbank Offered Rate, or HIBOR, CNH HIBOR, etc.
We have entered into short-term borrowings primarily to support our margin financing business in Hong Kong. Our short-term borrowings bear weighted average interest rates of 5.30%, 4.18% and 3.96% as of December 31, 2023, 2024 and 2025, respectively.
Other than the above, we did not have any significant capital and other commitments, long-term obligations, or guarantees as of December 31, 2025.
Operating Lease Commitments
The following table sets forth our operating lease commitments as of December 31, 2025:
Payment due by December 31,
Total
2026
2027
2028
2029
2030
Thereafter
(HK$ in thousands)
Operating lease commitments(1)
646,358
204,431
161,391
122,467
52,834
27,203
78,032
Note:
(1)
Operating lease commitments consist of the commitments under the lease agreements for our office premises. We lease our office facilities under non-cancellable operating leases with various expiration dates through August 2035.
Capital Expenditures
Our capital expenditures are primarily incurred for purchase of property, equipment and intangible assets. Our capital expenditures were HK$77.8 million in 2023, HK$167.5 million in 2024 and HK$54.7 million (US$7.0 million) in 2025. The capital expenditures in 2025 were primarily due to the purchase of computers and equipment and office equipment. We intend to fund our future capital expenditures with our existing cash balance and proceeds from our securities offerings. We will continue to make capital expenditures to meet the expected growth of our business.
Loans and Advances
Our loans and advances include margin loans and other advances, mainly collateralized by securities and insurance policies and are carried at the amortized cost, net of an allowance for credit losses. Revenues earned from the loans and advances are included in interest income.
Margin loans are extended to clients on a demand basis and are not committed facilities. Securities owned by the customers, which are not recorded in the consolidated balance sheets, are held as collateral for amounts due on the margin loans.
Other advances mainly consist of stock-pledged loans and bank loans. Stock-pledged loans to enterprises are mainly secured by pledged listed shares as collateral. Bank loans comprise financing secured by insurance policies provided by borrowers as collateral and unsecured retail loans.
The following table sets forth our loans and advances as of December 31, 2024 and 2025, respectively:
As of December 31,
2024
2025
(in thousands)
HK$
HK$
US$
Margin loans
47,833,365
60,976,139
7,834,227
Other advances(1)
1,966,383
4,145,503
532,615
Subtotal
49,799,748
65,121,642
8,366,842
Less: Allowance for credit losses(2)
(85,252)
(374,604)
(48,129)
Total
49,714,496
64,747,038
8,318,713
Notes:
(1)
Stock-pledged loans are included in other advances as of December 31, 2024 and 2025 with a gross amount of HK$1,907.3 million and HK$1,907.8 million (US$245.1 million), respectively.
(2)
The allowance for credit losses was HK$85.3 million and HK$374.6 million (US$48.1 million) as of December 31, 2024 and 2025, of which nil and nil relate to stock-pledged loans, respectively.
Off-Balance Sheet Arrangements
We have entered into various off-balance sheet arrangements in the ordinary course of business, primarily to meet the needs of our clients. These arrangements include the margin financing and securities lending agreements. The margin loans extended to the clients are collateralized by the cash or securities pledged in clients' accounts at a required margin level determined at our sole discretion. Securities lending transactions require us to deposit cash collateral with the lender and receive the cash collateral from the borrower. The cash collateral is generally in excess of the market value of the securities borrowed and lent. Increases in security prices may cause the fair value of the securities loaned to exceed the amount of cash received as collateral. In the event the borrower of these transactions does not return the loaned securities or provide additional cash collateral, we may be exposed to the risk of acquiring the securities at prevailing market prices in order to satisfy our obligations to return the securities. We monitor required margin and collateral level on a daily basis in compliance with regulatory and internal guidelines and control our risk exposure through risk management system. Under applicable agreements, clients are required to deposit additional collateral or reduce holding positions, when necessary to avoid forced liquidation of their positions. For more information regarding the collateralized transactions, see Note 15 to our consolidated financial statements included in this annual report.
We have not entered into any derivative contracts that are indexed to our shares and classified as shareholder's equity or that are not reflected in our consolidated financial statements. Furthermore, we do not have any retained or contingent interest in assets transferred to an unconsolidated entity that serves as credit, liquidity or market risk support to such entity. We do not have any variable interest in any unconsolidated entity that provides liquidity, capital resources, market risk support or credit support to us or engages in leasing, hedging or product development services with us.
Share Repurchase Program
In November 2021, our board of directors approved a share repurchase program to repurchase up to US$300 million worth of ADSs until December 31, 2022. As of December 31, 2022, we had repurchased US$300 million worth of ADSs in open market transactions in accordance with the authorization under this share repurchase program. In March 2022, our board of directors authorized a new share repurchase program under which our company may repurchase up to US$500 million worth of ADSs, until December 31, 2023. As of December 31, 2023, we have repurchased US$364.8 million worth of ADSs in open market transactions in accordance with the authorization under this share repurchase program. The share repurchase program expired on December 31, 2023. On March 14, 2024, our board of directors authorized a share repurchase program under which our company may repurchase up to US$500 million worth of ADSs, until December 31, 2025. As of December 31, 2025, we did not repurchase any ADSs in open market transactions or otherwise in accordance with the authorization under this share repurchase program. The share repurchase program expired on December 31, 2025.
In November 2025, our board of directors authorized a new share repurchase program under which our company may repurchase up to US$800 million worth of ADSs, until December 31, 2027. We will fund the repurchases from our existing cash balance. Under the new share repurchase program, our company may repurchase ADSs from time to time in the open market at prevailing market prices, in privately negotiated transactions, in block trades and/or through other legally permissible means, depending on market conditions and in accordance with applicable rules and regulations. Our board of directors will review the share repurchase program periodically, and may modify, suspend or terminate the share repurchase program at any time. As of the date of this annual report, we did not repurchase any ADSs in open market transactions or otherwise in accordance with the authorization under this share repurchase program.
Capital Commitment
Our capital commitments are primarily related to capital contribution obligation for certain investment funds. As of December 31, 2025, total commitments contracted but not yet reflected in the consolidated financial statements amounted to US$25.0 million.
Holding Company Structure
Futu Holdings is a holding company with no material operations of its own. We conduct our operations primarily through our subsidiaries in Hong Kong, Singapore, the United States and the PRC, as well as through the Consolidated Affiliated Entities in China. As a result, Futu Holdings' ability to pay dividends depends upon dividends paid by our subsidiaries in Hong Kong, Singapore, the United States and the PRC. If our existing Hong Kong, Singapore, U.S. and PRC subsidiaries or any newly formed ones incur debt on their own behalf in the future, the instruments governing their debt may restrict their ability to pay dividends to us. In addition, our wholly foreign-owned subsidiaries in China are permitted to pay dividends to us only out of its retained earnings, if any, as determined in accordance with PRC accounting standards and regulations. Under PRC law, each of our subsidiaries and the Consolidated Affiliated Entities in China is required to set aside at least 10% of its after-tax profits each year, if any, to fund certain statutory reserve funds until such reserve funds reach 50% of their registered capital. In addition, our wholly foreign-owned subsidiaries in China may allocate a portion of their after-tax profits based on PRC accounting standards to enterprise expansion funds and staff bonus and welfare funds at their discretion, and the VIEs may allocate a portion of its after-tax profits based on PRC accounting standards to a surplus fund at their discretion. The statutory reserve funds and the discretionary funds are not distributable as cash dividends. Remittance of dividends by a wholly foreign-owned company out of China is subject to examination by the banks designated by SAFE. Our PRC subsidiaries have not paid dividends and will not be able to pay dividends until they generate accumulated profits and meet the requirements for statutory reserve funds.
C.Research and Development, Patents and Licenses, etc.
See "Item 4. Information on the Company-B. Business Overview-Our Technology" and "Item 4. Information on the Company-B. Business Overview-Intellectual Property."
D.Trend Information
Other than as disclosed elsewhere in this annual report, we are not aware of any trends, uncertainties, demands, commitments or events for the year ended December 31, 2025 that are reasonably likely to have a material and adverse effect on our net revenues, income, profitability, liquidity or capital resources, or that would cause the disclosed financial information not necessarily to be indicative of future results of operations or financial conditions.
E.Critical Accounting Estimates
Our consolidated financial statements have been prepared in accordance with U.S. GAAP, which requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses, and related disclosures of contingent liabilities in the consolidated financial statements and accompanying notes. We base our estimates on historical experience and on various other assumptions we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Changes in the economic environment, financial markets, and any other parameters used in determining such estimates could cause actual results to differ. Our critical accounting estimates are described below. The critical accounting estimates should be read in conjunction with our risk factors as disclosed in "Item 3. Key Information-D. Risk Factors." See Note 2 to our consolidated financial statements for the year ended December 31, 2025 for more information on our significant accounting policies.
Allowance for credit losses for the stock-pledged loans
We extend stock-pledged loans to enterprises, and these loans pledged listed shares as collateral. As of December 31, 2024 and 2025, the gross amount of stock-pledged loans was HK$1,907.3 million and HK$1,907.8 million (US$245.1 million), respectively. The allowance for credit losses for the stock-pledged loans was nil and nil as of December 31, 2024 and 2025, respectively.
The estimation of allowance for current expected credit losses for stock-pledged loans are calculated using quantitative models that consider a variety of factors such as the quality of collateral, as well as an economic outlook over the life of the loans. Significant judgment is applied in determining the appropriate probability of default ("PD") and loss given default ("LGD"), using a variety of factors such as the stock price and price volatility of the collateral. The determination of LGD also involves significant judgment in considering the expected duration to foreclose the collateral. The estimation of PD and LGD further incorporates forward looking information through the use of macroeconomic scenario. In developing the macroeconomic scenario, significant judgment is also applied that take into consideration of a number of forecasted economic variables.
Provision of income tax and valuation allowance for deferred tax asset
Significant judgment is required in determining income tax expense based on tax laws in the various jurisdictions in which we operate. In calculating our effective income tax rate, estimates are required regarding the timing and amount of taxable and deductible items which will adjust the pre-tax income earned in various tax jurisdictions. Through our interpretation of local tax regulations, adjustments to pretax income for income earned in various tax jurisdictions are reflected within various tax filings. Although we believe that our estimates and judgments discussed herein are reasonable, actual results may be materially different than the estimated amounts.
We record a valuation allowance to reduce our deferred tax assets to the amount that is more likely than not to be realized. Significant judgment is required in determining the valuation allowance. In assessing the need for a valuation allowance, we consider all sources of taxable income, including projected future taxable income, reversing taxable temporary differences and ongoing tax planning strategies. If it is determined that we are able to realize deferred tax assets in excess of the net carrying value or to the extent we are unable to realize a deferred tax asset, we would adjust the valuation allowance in the period in which such a determination is made, with a corresponding increase or decrease to earnings.
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Futu Holdings Ltd. published this content on April 15, 2026, and is solely responsible for the information contained herein. Distributed via Public Technologies (PUBT), unedited and unaltered, on April 15, 2026 at 10:23 UTC.