What lessons can investors learn from TIGR's 2024 earnings?

UP Fintech Holding Ltd (TIGR) has demonstrated robust growth in its 2024 earnings, with significant increases in trading volume, revenue, and newly funded accounts, despite rising expenses and foreign exchange losses. The following are the key takeaways for investors:

1. Revenue and Trading Volume Growth: TIGR achieved record total trading volume of USD163 billion in Q3 2024, driven by an expanded client base and active market conditions. Commission income reached USD41.2 million, marking a 21% increase quarter-over-quarter and a 78% increase year-over-year. Total revenue was USD101 million for Q3 2024, a 16% increase quarter-over-quarter and a 44% increase year-over-year. This highlights the importance of market conditions and client base expansion in driving revenue growth.
2. Newly Funded Accounts and Wealth Management Growth: The company added 50,500 newly funded accounts in Q3 2024, a 3% sequential increase and a 105% increase year-over-year, with significant contributions from Singapore and Southeast Asia. The company's wealth management AUM increased over 40% quarter-over-quarter and doubled year-over-year, exceeding USD1 billion. This shows the potential for TIGR to leverage geographic expansion and product offerings to drive account growth and wealth management business.
3. Interest Income and Expense: Interest income increased by 9% quarter-over-quarter to USD48 million, while interest expense rose by 29% year-over-year to USD15.7 million. This suggests that TIGR needs to manage its interest expense as it scales, potentially impacting net profit margins.
4. Marketing and Administrative Expenses: Marketing expenses increased by 59% year-over-year to USD8.2 million, reflecting increased spending on customer acquisition and branding campaigns. General and administrative expenses increased by 27% year-over-year due to higher professional service fees and business expansion costs. This indicates the need for efficient cost management to balance growth initiatives and profitability.
5. Foreign Exchange Losses: The company experienced a foreign exchange loss of approximately USD5.1 million in Q3 2024, impacting subsidiaries that do not use the US dollar as their base currency. This highlights the importance of managing currency risks in international operations.
6. Analyst Expectations and Stock Performance: Analysts had expected revenue of $97 million for the quarter, but it rose to $124.1 million, indicating strong performance. However, the company's shares experienced a decline, which could be a point of consideration for investors on market sentiment and long-term strategy.

In conclusion, TIGR's 2024 earnings showcase the benefits of strong market conditions and strategic growth initiatives, but also highlight the need for careful cost management and risk control. Investors can learn from TIGR's success in revenue growth and market expansion, while also considering the potential challenges of managing expenses and currency risks.