Ladies and gentlemen, thank you for standing by, and welcome to the UP Fintech Holding Limited fourth quarter 2021 earnings conference call. At this time, all participants are in a listen-only mode. There will be a presentation followed by a question and answer session. I must advise you that this conference is being recorded today, Friday, March 18, 2022. I would now like to hand the conference over to your first speaker today, Mr. Clark S. Soucy. Thank you. Please go ahead.
Thank you, operator. Hello, everyone, and thank you for joining us for the call today. UP Fintech Holding Limited's fourth quarter 2021 earnings release was distributed earlier today and is available on our IR website at ir.itiger.com, as well as GlobeNewswire services. On the call today from UP Fintech are Mr. Wu Tianhua, Chairman and Chief Executive Officer, Mr. John Zeng, Chief Financial Officer, Mr. Huang Lei, CEO of US Tiger Securities, and Mr. Kenny Zhao, our Financial Controller. Mr. Wu will give an overview of our business operations and discuss corporate highlights. Mr. Zeng will then discuss our financial results. They will both be available to answer your questions during the Q&A session that follows their remarks. Now let me cover the Safe Harbor. The statements we are about to make contain forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995.
A number of factors could cause actual results to differ materially from those contained in any forward-looking statement. For more information about factors that could cause actual results to materially differ from those in the forward-looking statements, please refer to our Form 6-K, furnished today, March 18, 2022, and our annual report on Form 20-F, filed on April 28, 2021. We undertake no obligation to update any forward-looking statement except as required under applicable law. It is my pleasure to now introduce our Chairman and Chief Executive Officer, Mr. Wu. Mr. Wu will make remarks in Chinese, which will be followed by an English translation. Mr. Wu, please go ahead with your remarks.
Hello, everyone, and thank you for joining the Tiger Brokers fourth quarter 2021 earnings conference call.
Despite the difficult macroeconomic and market backdrop during the two previous quarters, by focusing on executing on our international expansion, Tiger Brokers was able to achieve notable progress during the fourth quarter. In the fourth quarter, total revenue was $62.2 million, an increase of 31.7% over the same period last year. The company is committed to further leveraging internationalization to drive growth. In the fourth quarter, the company added 61,400 accounts, of which more than 90% were from overseas markets. Total customer assets were $17.1 billion in the fourth quarter. Net customer asset inflows remained healthy and exceeded $2 billion in the quarter.
However, since some of our institutional clients experienced losses on their holdings of Hong Kong-listed equities and Chinese ADRs during the fourth quarter, total client assets declined sequentially from the third quarter. In 2021, Tiger Brokers in total added 415,000 funded accounts, exceeding our 350,000 account annual guidance. The total number of funded accounts reached 673,000. Half are from Singapore or other overseas markets, demonstrating the firm's internationalization strategy is yielding solid results. For the full year 2021, total revenues were $264.5 million, an increase of 91% on the previous year. Non-GAAP net profit attributable to UP Fintech Holding Limited was $24.5 million for the year.
In October 2021, we acquired a Hong Kong broker-dealer license, setting the stage for our firm to not only increase the future profitability of our Hong Kong securities business, but also to eventually onboard Hong Kong local residents. Including Hong Kong, our firm now holds 50 licenses and qualifications that span the United States, Australia, Singapore, New Zealand, and other jurisdictions. Holding such a rich range of licenses and qualifications sets the stage for the firm's long-term international growth. I would now like to provide investors updates on two key business initiatives at our company. Internationalization is progressing well. As stated in the fourth quarter, over 90% of our accounts were derived from overseas markets, demonstrating the appeal of our next-generation fintech platform and its value proposition in competitive international markets.
In the past year, Singapore, by both the total number of new accounts and the total number of accounts, became our company's largest market. In 2022, we are confident that we can achieve similar success in other global markets as we did in Singapore. In the first quarter of this year, we officially entered the Australian market. We view Australia as having certain similar competitive dynamics as Singapore, namely that high-commission traditional brokers have a substantial market share. Even though we face competition from many respectable online brokers in Australia, we are confident that the distinctive features of our app, such as our interactive social media community, comprehensive financial and market data, as well as our rich range of securities trading features, will distinguish us from the pack. Corporate and institutional services continue to perform well and attract new clients.
ESOP continues to expand at a fast rate, and in the fourth quarter, we added 51 new companies for a grand total of 313. Investment banking also performed well, and we participated in 22 IPOs in Hong Kong and the U.S., of which we underwrote 18. It's important to note that our firm possesses extensive capabilities to serve both new issuers, as well as listed companies across multiple markets. Following the acquisition of our Hong Kong broker-dealer license, in the fourth quarter, we underwrote the listings of a series of famous companies, including NetEase Cloud Music, SenseTime, and Beijing Airdoc. We do appreciate the trust of these issuers in our firm. I'd now like to invite our CFO, John, to go over our financials.
Thanks, Tianhua and Clark. Let me go through our financial performance for the fourth quarter. All numbers are in USD. Total revenue was $62.2 million, up 32% from the same quarter of last year. For the whole year, total revenue were $264.5 million, up 91% from last year. In the fourth quarter, commission were $29.9 million, increased 18% year-over-year, but down 11% from the third quarter. The quarter-over-quarter drop in commission was primarily due to lower trading volume, with less trading days in the fourth quarter and a weaker ADR and Hong Kong market. Also, our margin and securities lending balance was lower than third quarter due to the weaker market backdrop. We were able to generate more interest income through our self-clearing capabilities.
Interest-related income, which combines financing service fee and interest income, was $22.5 million in the fourth quarter, increased 70% year-over-year and 12% quarter-over-quarter. Factoring interest expense, net interest income increased 110% year-over-year and 18% quarter-over-quarter. Other revenue increased 12% from the same period last year to $9.8 million. Now on to the costs. Execution and clearing expense were $6.9 million, increased 65% year-over-year due to rapid user growth in 2021, but down 28% quarter-over-quarter as more trades were cleared through self-clearing. We are in the process to migrate Singapore clients to our own Singapore clearing and custodian platform, which should result in further reduction in clearing costs in the coming quarters.
Employee compensation increased 82% year-over-year to $28.4 million, as we keep adding headcounts across region to support our global expansion. In line with the headcount increase, occupancy expense increased 41% to $1.8 million. SG&A increased 76% to $8.5 million year-over-year. Marketing expense were $11.6 million in the first quarter, increased 77% year-over-year and on par with the third quarter. We have been very prudent with our marketing spending and will adjust our marketing strategy based on market conditions. Communication and market data expense were $7.7 million, an increase of 97.5% from $3.9 million in the same quarter last year due to rapid user growth. Total operating costs were $64.9 million, increased 79% from the same quarter of last year.
Non-GAAP net income, which excludes share-based compensation, was $0.1 million this quarter. Total non-GAAP net income for the year of 2021 was $24.5 million. Now I have concluded our presentation. Operator, please open line for Q&A. Thanks.
Thank you. To ask a question, you will need to press star one on your telephone. To withdraw your question, press the pound key. Please stand by while we compile the Q&A roster. Our first question comes from Han Pu with CICC. Your line is open.
Thanks, management, for taking my question. This is Han from CICC, and congrats on strong performance during such a volatile market. I have two questions. Firstly, how do we see the influence of the policy signals from last Wednesday's FSDC conference to our business? Secondly, we see the cost increased a lot quarter-over-quarter. What is the main reason behind that? And how about the user quantity in fourth quarter? And how do we see the trend of the user cost in coming quarters? Thanks.
Let me quickly translate the first question. First of all, the timing of the Financial Stability and Development Committee meeting is very crucial. The comments made by Vice Premier Liu shows senior policymakers are aware of the recent sell-off in capital markets, and they are ready to take action to reinstall market confidence. This is an encouraging first step. Hopefully, there will be more favorable concrete policy rolling out in the near future to stabilize the market and stimulate growth. At the meeting mentioned, there was good progress on PCAOB issue. Government will support qualified Chinese company to list offshore. Both will benefit Tiger's ESOP and investment banking business and drive further future user and AUM growth. Our focus at this stage is still internationalization. We are already headquartered in Singapore.
Singapore clients already account for more than 50% of our user base. We look forward to expanding to other region to replicate our success in Singapore. Tianhua, go to the second one.
四季度的时候市场环境不太好，用户主动入金的意愿会弱一些，因此人均CAC相对第三季度有所提升。我们觉得这很正常。货和跟大盘会相关，货的总投入我们从三季度开始就比较保守。我们持续关注回本周期、新增入金、客户质量、留存等指标，确保我们把钱花在刀刃上。四季度虽然CAC有所上升，但用户质量总体来说还是很不错的。以新加坡零售用户为例，四季度新用户的平均首次入金接近$7,000，高于三季度的平均首次入金水平。自从老虎2020年新加坡崭业以来，新加坡的用户在后续每个季度都是资金净流入，说明即便市场大幅波动，我们的用户体验多产品市场的交易能力还是对用户非常有吸引力，吸引他们把资产放在老虎这边。谢谢。
Market sentiment was still relatively weak in the fourth quarter, which makes it harder to acquire users. We think our uptake in CAC is very low under this kind of market sentiment. That being said, we have been very cautious with marketing spending since third quarter of last year. We pay close attention to key metrics such as payback, new customer quality, retention to make sure our marketing spending is efficient and cost effective. Even CAC had some uptick in the fourth quarter. The quality of funded accounts actually was pretty good for Singapore retail clients acquired in the fourth quarter. Their average initial deposit is close to $7,000, higher than the average initial deposit in the third quarter. For each cohort of Singapore clients acquired during a particular quarter, we see net asset inflow every quarter since their acquisition.
Shows clients are willing to allocate more assets to Tiger platform with high user stickiness.
Thanks, that's very helpful.
Thank you.
Our next question, Judy Zhang with Citigroup Global Markets. Your line is open.
嗨，管理层好，我这边是花旗的张佩文 Julia，我这边先感谢管理层给我这个提问的机会，然后我有两个问题。首先我们看到了获得的四季度的总资产规模环比有所下降。那想请教我们，一季度现在看到，客户入金、获客，还有就是交易量等等是什么情况？谢谢。然后第二个问题是想请教在澳洲市场我们会采取怎么样这样的一个打法，还有，能够给我们也说一下大力的竞争格局。
So first of all, thank you management for giving me this opportunity to ask question. Just two questions from me. First, we noticed that client asset declined Q on Q. Can management give us some guidance in terms of the first quarter to date operational data in terms of the client assets, trading volume, velocity as well as the customer growth? The second question is that we noticed Tiger has just entered the Australian market. Just wondering if management can share your thoughts on the room for growth and competitive landscape in Australia and what Tiger's key growth strategy there. Thank you.
刚才我们也提到了，我们第四季度有超过二十亿美金的资产净流入，在获客这方面还是很不错的。总资产环比下降，主要还是因为机构用户持有的ADR，包括港股受市场下降的原因产生的mark to market loss，那这个也影响到了我们总资产的余额。我们四季度的margin规模比三季度环比下滑，这也主要是子公司市值下滑驱动造成的。那今年以来，受地缘政治、中美关系的一些影响，市场情况相比去年第四季度更困难一些，交易量、总资产规模受大盘下跌都小幅下滑，我们在投放等方面也相对谨慎一点。一季度的入金人数会比四季度少，但客户的质量和留存还是很健康的。平均首次入金金额、资产净流入规模跟四季度类似，客户把更多资产放到老虎这边的趋势没有变化。
As we mentioned earlier, in the fourth quarter, we had net asset inflow over $2 billion. The quarter-over-quarter drop in total AUM is primarily due to mark to market loss of some of our institutional users. The mark to market loss also leads to a quarter-over-quarter drop in margin balance as some clients need to de-leverage. Market is healthy year-to-date, we saw small dip in trading volume and the total AUM in NY border index. We have been prudent with marketing spending. We likely will see smaller number of funded account in the fourth quarter versus the in the first quarter versus the fourth quarter. The average initial deposit, net asset inflow will be similar to fourth quarter.
第二个问题关于澳洲市场。澳洲市场也是老虎国际化战略重要市场之一。上个月我们正式进入澳洲市场，给澳洲用户提供一站式的线上证券投资服务。虽然澳洲已经有一些当地的竞争对手，但我们的app可以帮助用户投资于澳股、美股、港股交易，我们也是其中少数可以提供美股期权交易的券商之一。我相信我们的产品具备差异化的优势，而且功能相对友商更为强大。我们还有丰富的内容资讯，以及供用户交流的投资社区。投资者不仅能在Tiger Trade上面享受到流畅的交易体验，更可以跟其他投资者交流。数据显示，我们澳洲的产品上线仅一周的时间，Google Play的排名从一百多名上升到第九名，下载安装增长快速，用户不会拒绝一个好的产品。我们也有节奏地在澳洲当地做一些相关的活动推广，包括一些佣金的活动。我相信我们平台丰富的证券交易功能，加上我们创新的体验，能够很好地为澳大利亚的客户创造增量价值。我们期待在澳大利亚市场获得类似新加坡的成功。谢谢。
We entered Australian market last month. Although there are already several online brokers in Australia. We feel Tiger's comprehensive offering will set us apart from competition. Based on latest data, only one week after we launch in Australia, our ranking in terms of Google Play download has jumped to ninth place from below 100. We look forward to onboard Australian clients and provide them with unparalleled trading experience. We feel very confident we can replicate our success in Singapore to other regions like Australia. Thanks.
Thank you. Our next question is from Han Pu with CICC. Your line is open.
管理层好。我这边想就问一个问题，就想请教一下我们现在在美国的自清算的一个进展。
Can I have a follow-up question on our self-clearing progress in US markets? Thanks.
好了，谢谢。好，第四季度末，我们目前80%以上的美股正股已经通过自清算处理。随着更多资产托管在老虎美国子公司，我们的资金利用率也在不断提升。如刚才John Zeng分享的，四季度Margin规模相对三季度环比有所下降，但通过自清算，我们的利息收入反而有所提升。那大家可能会关心我们多久能够实现100%的美股的自清算。我们认为在今年还是会有小部分的正股交易通过IB清算。那主要的原因还是，有些账户里面同时拥有正股和相应的期权组合，比如那这需要同时拥有正股跟期权的清算能力。我们已经拥有了期权的自清算牌照，并开始自清算部分期权，就会有一个期权自清算逐步起量的过程。那因此，对于其中有期权加正股组合的账户，那未来一段时间我们还会通过IB和老虎两个清算通道来执行。谢谢。
Thanks for the question, Han. In terms of self-clearing, over 80% of U.S. cash equity are self-cleared by fourth quarter, by end of fourth quarter. So self-clearing also improve our capital utilization as we were able to generate more interest income quarter-over-quarter with lower margin balance. So this year, we will still use IB to clear a small portion of trades as some customer has positions like covered call, which requires both option and cash equity clearing. Tiger will already has option clearing license in the U.S., and started to self-clear options. During the transition period, we will use both Tiger and IB for customer with different option strategies.
我可以再请教一下，就是我们对于2022年的新增用户的预期是什么样的呢？Can I ask the new paying clients guidance in 2022?
我们注意到最近市场比较波动，那包括我们也进入了一些新的国家和地区，所以我们可能在未来再给出今年的指引。
Yes, as Tianhua Wu mention, right now the market has been very volatile. Okay, it's relatively hard for us to give an accurate estimates, given the market backdrop is not stabilized. In addition, we just enter a new market, so we want to, you know, let it run for a couple months so we get a feel like how we can give a better guidance to the investors. Thanks.
了解。非常感谢。Thanks。
Our next question comes from Cindy Wang with China Renaissance. Your line is open.
谢谢管理层给我这个提问的机会。我是华兴证券的分析师王莹琳。那我这边有个问题想请教，就是说我们在去年十月的时候已经拿到了香港的牌照，那目前在香港的布局以及今年的一些策略方面可不可以跟我们做个分享？我这边翻译一下我的问题。
Since you have already obtained a broker dealer license in Hong Kong in October last year, what is the current progress and what is the strategy you are going to adopt this year in Hong Kong? Thank you.
我们在香港这个策略主要分为三步。项目牌照也是整个老虎至关重要的这样的一个牌照，我们期待已久。那第一步，承销香港IPO。那我们已经在承销很多的这个香港项目，那目前也有非常多的一些项目的这个储备，那主要是目前市场有些疲软，有些香港商业项目有所延期。那第二步，我们存量的港股交易，期待通过我们自己的项目牌照来进行清算，使得能够降低我们的成本，提升我们港股的利润。那我们也在加紧建设港股的交易清算相关的系统。第三步，香港零售的这个推广。那目前受包括疫情的影响，我们在香港的招人、系统开发和调试都有所放缓，我们也期待香港疫情能够早日稳定，能够回到更好的这样的一个正常的状态。
As Tianhua mentioned, like Hong Kong has been really important for us. Traditionally like you know like we didn't have a Hong Kong license, so our ARPU per user was somewhat you know lagging behind our competitors in local Hong Kong. Right on since we got the license back in October last year, there are three steps we plan to enter Hong Kong. First of all is to be more active on Hong Kong IPO. As we mentioned earlier, we have been very active in Hong Kong IPO in the fourth quarter for lots of Chinese ADR secondary listing and Hong Kong local listings.
But for second and third step, which is to replace IB to clear Hong Kong trades and also to roll out Hong Kong retail, you know customer acquisition. We are building the infrastructure and system. But we unfortunately due to the COVID situation in Hong Kong, our hiring as well as system development and testing all have been somewhat delayed. So we hope the pandemic situation will get better soon, so we can work on the system integration for our plan two and plan three, which is self-clear Hong Kong equity trades and also roll out our Hong Kong marketing. Thanks.
Thank you, very clear.
Thank you. This concludes question and answer session. I would now like to turn the call back over to Clark S. Soucy for closing remarks.
Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect.