Ladies and gentlemen, thank you for standing by, and welcome to UP Fintech Holding Limited first quarter 2022 earnings conference call. At this time, all participants are in the listen-only mode. There will be a presentation followed by question and answer session. I must advise you that this conference is being recorded today, tenth of June, 2022. I'd now like to hand the conference over to your first speaker today, Aaron Li. Thank you. Please go ahead.
Thank you, operator. Hello, everyone, and thank you for joining us for the call today. UP Fintech Holding Limited first quarter 2022 earnings release was distributed earlier today and is available on our IR website at ir.itigerup.com, as well as GlobeNewswire. 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. John 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 statements. 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, June 10, 2022, and our annual report on Form 20-F, filed on April 28, 2022. 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. Thank you for joining the Tiger Brokers first quarter 2022 earnings conference call.
Macro environment was more difficult in the first quarter versus a year ago, which leads to a slowdown in trading commission and underwriting revenue. Total revenue in the first quarter was $52.6 million, decreased 35.2% year-over-year. Interest income stayed flat, thanks to the gradual build-up of self-clearing for U.S. securities. On a quarter-over-quarter basis, total trading volume increased 6% from fourth quarter last year, with moderate increase in trading commission. We added 30,150 funded accounts this quarter, with over 80% coming from outside of China. Our total number of funded accounts also exceeded 700,000 by the end of the first quarter, an increase of 87.1% from the same quarter last year.
Our goal is to acquire at least 100,000 new funded accounts this year. Total client assets decreased year-over-year to $15.2 billion due to mark-to-market loss. We saw strong net asset inflow of $3.5 billion this quarter, demonstrating user confidence in our platform, even with increased market uncertainty. Now, I would like to update on several key business developments at our company.
进行Level 2行情权限，并和新加坡交所合作开展投教直播，聚焦新加坡的投资机会。经过过去一年时间的发展，新加坡总部已经成为老虎国际全球市场增量用户和存量客户最大的区域。我们有信心在更多的国家和地区取得类似新加坡的成果。
Our internationalization is progressing well. In the first quarter, over 80% of newly funded users were derived from overseas markets, demonstrating the appeal of our next generation Fintech platform across regions. In the first quarter, we officially launched in Australia and are ranking ahead of competitors in the local iOS App Store. We also spend lots of efforts to localize our products. For example, in Australia, we launched option trading for cash accounts. In Singapore, we added Level 2 market data for Singapore stocks and is working with SGX to live stream investor education to promote Singapore markets. We have been in Singapore for only two years and now Singapore already becomes our company's largest market and home base. We are confident we can achieve similar results in other countries or regions.
第二，我们持续加大在研发上的投入，以提升运营效率和用户体验。今年三月，我们实现了新加坡交易所的全面资金结算和托管，使得我们在新加坡整体券商系统上拥有了更完善的机构设施和服务体系。美股方面，我们在一季度也做到了美股正股90%以上和美股期权70%以上交易的资金结算，进一步强化了我们在美股交易赛道的领先优势。同时，我们也在升级老虎香港的交易系统，争取在未来几个季度内完成港股交易清算，提升老虎在港股赛道的优势。
We continue to invest in research and development to improve operational efficiency and to enhance user experience. In March, we started to self-clearing and self-custodian Singapore equities, so we can fully leverage our self-developed brokerage infrastructure to better service Singapore users. In the U.S., by the end of the first quarter, over 90% of cash equities and 70% of options contracts are already self-cleared through our U.S. subsidiaries, further strengthening our competitive advantages in trading U.S. securities. We are also in the process to upgrade our Hong Kong trading system so we can start self-clearing Hong Kong equities in the next couple of quarters to achieve better unit economics.
第三，一季度在投行侧，老虎国际参与了乐普生物、创新奇智等多个港股上市项目。在美股方面，共参与承销了七个美国IPO项目，成为全球投行的新兴科技力量。根据第三方万得资讯数据提供的2022年一季度美国IPO承销排行榜，老虎国际2022年第一季度在多元化金融领域的募资规模排名全市场投行第五名。募资能力和资本市场经验持续得到行业认可。凭借强大的国际化能力和创新平台优势，老虎投行的业务领域非常广泛，涉及零售、智能出行、SaaS、生物医药等多个行业。
Our IPO underwriting business continued to perform even with weak market backdrop. In the first quarter, we underwrote 乐普生物 and 创新奇智 IPO in Hong Kong. In the U.S., we were underwriter for seven US IPOs, making us one of the most active U.S. underwriters, according to 万得资讯 Wind Information.
第四，在企业服务方面，Tiger Community的企业号在一季度新增十三家客户，累计达到三百家，代表客户包括阿里巴巴、WWF-Singapore等。上市公司通过企业号搭建起和投资者之间的沟通桥梁，一方面扩大了上市公司的品牌影响力，另一方面也使投资者能有更多渠道近距离了解上市公司。企业号客户的增长代表着上市公司对于老虎国际企业服务的高度认可。
In terms of corporate services, we added 13 clients on Tiger Community in the first quarter and reached 300 corporate clients in total, including clients such as Alibaba and WWF-Singapore. We are proud to be the bridge connecting issuers with investors.
最后，在ESOP即员工期权管理服务方面，老虎国际相关业务发展迅猛。2022年第一季度，老虎国际ESOP新增25家企业客户，累计服务客户已达338家，同比增长105%。老虎所提供的ESOP服务覆盖了从方案设计到数字化管理的股权激励全流程服务体系，已经成为众多A股、港股和美股上市公司以及很多发展期公司的首选服务商。
Our ESOP business continues to expand. In the first quarter, we added 25 new companies to a total of 338 ESOP clients, a year-to-year growth rate of 105%. We provide a comprehensive ESOP services from plan design to digital management, and has become the go-to choice for many startup and public companies.
现在请CFO John跟各位汇报一下财务细节。
Now I would like to invite our CFO, John, to go over our financials.
Thanks, Tianhua and Jingwen. Let me go through our financial performance first, for the first quarter. All numbers are in U.S. dollar. Total revenue were $52.6 million, down 35% year-over-year, as weaker market backdrop in the first quarter slowed down commission and underwriting revenue. In line with market sentiment, margin and securities lending balance also decreased, but we managed to increase net interest related income by 80% year-over-year, by lowering interest expense and to generate more securities lending revenue through self-clearing. As we mentioned in the earnings release, starting from this quarter, we will report our derivatives trading, mostly U.S. option and U.S. futures, using number of contracts. Cash equities will be reported on a stand-alone basis using trading volume. This change will not affect previously disclosed operating data. The goal is to help investors better understand our operation.
For this quarter, commission from cash equities was $22 million, accounting for 72% of total commission. The other 28% are mostly commissions from derivatives trading. Based on 34.7 billion equity trading volume this quarter, take rate is 6.3 basis points for cash equities. In the first quarter of last year, cash equity accounted for 76% of total commission, and the derivatives accounted for 24%. Cash equity take rate was 6.6 basis points in this first quarter last year. Now on the costs. Execution and clearing expense was $4.5 million, decreased by 45% year-over-year and 34% quarter-over-quarter, primarily due to more self-clearing of U.S. equities. Employee compensation increased 67% year-over-year to $27.5 million. Last year, we kept adding headcounts across regions to support our global expansion.
In line with the headcount increase, occupancy expense increased 69% to $2 million. SG&A increased 12% to $4.5 million year-over-year. Marketing expense for $10 million in the first quarter, decreased 22% year-over-year. We are very prudent with our marketing spending because we feel now is not the best market window to attract high quality users. We will keep a close eye on CAC and payback to adjust our marketing strategy. Communication and market data expense were $6.4 million, an increase of 61% from a year ago due to rapid user growth. Total operating costs were $55 million, increased 17.6% from the same quarter last year. Non-GAAP net loss, which excludes share-based compensation and impairment loss from the long-term investment, was $1.9 million this quarter. Now, I have concluded my remarks.
Operator, please open the line for Q&A. Thanks.
Thank you. Ladies and gentlemen, we will now begin the question and answer session. If you wish to ask a question, please press star one on your telephone and wait for your name to be announced. If you wish to withdraw your request, please press the pound or hash key. Please stand by while we compile the question and answer roster. Once again, it's star one for questions. Our first question comes from the line of Pu Han from CICC. Please ask your question.
Thanks for taking my question. This is Han from CICC. I have two questions. First of all, could you please help break down the newly paying clients in region for the first quarter? And how about the mix of our full year guidance? Secondly, we see the acquisition cost per paying client went up a lot in the first quarter. What would be the reason and how do we see the trend in the coming quarters? Thanks.
Pu Han, to your first question, in the first quarter, about 15% of the funded account came from Mainland China, including ESOP clients. 80% came from Singapore, and the rest 5% from Australia, New Zealand and the U.S. In total, 85% of the funded account this quarter is from outside of China. Our target is to acquire at least 100,000 newly funded account this year. We expect the distribution will be around 15% from Mainland China, 60% from Singapore, and the rest 25% from countries regions like Hong Kong, Australia and the U.S.
第二个问题，关于获客成本的上升，那主要的原因是今年第一季度大盘环境比较差，像回度不高情况下会影响用户的入金转化率和交易意愿，所以入金获客成本有所上升。那另外在今年第一季度，我们也进入了新的市场，澳大利亚。那刚刚进入一个市场的时候会加大品牌的投放，类似于我们刚刚进入新加坡的情况，所以我们一季度的时候，品牌投入大概占到营销费用的25%，那预计在未来几个季度可能保持类似的水平。那我们也在测试多种获客营销策略。那总的来讲，在目前的市场环境下，我们相对谨慎，总的营销费用同比、环比都会有所下降。那我们也持续关注健康的这样的一个单元用户的模型，关注获客成本、回本的周期，灵活调整我们的营销投入。
In general, when market sentiment is weak, investors prefer to stay on the sidelines, so customer account to funding account conversion rate will be lower. Thus the CAC tends to be higher versus when market is more active. In addition to the market effect, we launched our service in Australia in the first quarter. When we enter a new market similar to what we have done in Singapore, we will spend more on branding to promote our company. Branding accounted for around 25% of our marketing expenses in the first quarter. We expect branding remains a big portion of our marketing for the next few quarters. Branding expense plus trying out various marketing strategies also leads to a higher CAC when we just enter a new market. In short, we are very prudent with the marketing spending. You can see our total marketing expense decreased year-over-year and quarter-over-quarter. We keep a very close eye on CAC and payback to make sure we can have a very like healthy, you know, like a unique logging model. We will just like be very dynamic to adjust our marketing strategy. Thank you.
谢谢吴总、郑总，非常清楚。Thanks, that's very helpful.
Thank you. Your next question comes from the line of Julia Cheong from Citi. Please ask your question.
感谢管理层给我这个提问的机会，我是花旗的Julia。那我这边主要有两个问题。那首先管理层能不能分享在美国、香港和新加坡的一个资金创的一个进展，还有呃，中短期的一个目标，然后未来的一个盈利贡献。那么第二条呢，就想请教在香港这边的一个具体战略的情况，打算什么时候去进入香港这边的零售市场去获客，然后也，呃，能不能给我们展望在香港市场的一个获客成本，还有就是能不能对比一下其他市场现在的一个获客成本。那么，呃，我这边来翻译一下。Thank you for taking my question, this is Julia Cheung from Citi Research. I have two questions here. First, could you give more color on the self-clearing progress for U.S., Hong Kong and Singapore as well as the target pace in the near to midterm and the expected earning contribution?
Second, could you share the updates on Hong Kong business, especially the timelines for acquiring retail customers and the sales and marketing budget, like the client customer acquisition cost per head in Hong Kong versus other markets? Thank you.
我先回答关于香港这边的问题，清算这边交由惠兰回答。香港这边，像之前沟通，我们第一步是做这个香港港股上市的这个投行业务。那第二步我们是做港股交易的这个执行清算，提升我们在港股侧的这样的一个经济模型。那第三步是这个在香港当地的这个零售战略。那目前来看，我们的投行业务进展顺利，那一季度这个我们参与了像乐普生物、创新奇智等等多港股项目，那包括像今天开始book的这个美基因，这个老虎也是承销商，可以在招股书封面上看到老虎香港的名字。那如果港股的这个回暖的话，老虎香港相关业务会更加活跃。那港股执行和清算方面，目前我们已经跟港交所做了多轮这个测试，系统也进行了相关的升级扩容，而我们希望未来一到两个季度能够把港股交易量更多地通过老虎香港来执行，降低我们的成本。那零售业务这一侧，除了升级底层交易系统，我们也在打磨产品和这个运营的一些策略。那香港的竞品这个比较多，我们希望争取在今年年底开始零售相关的获客。那香港的这个具体的这个获客的CAC，那我们到时候可能等正式上线和推广之后，我们持续观察，我们会尝试在利用我们在各个不同区域的这样一些经验，找到合适的这样的一个策略。谢谢。
To answer your question regarding Hong Kong, as communicated before, our Hong Kong strategy will be three stage. First stage is be more active in Hong Kong IPO. Right now we are very active in Hong Kong IPO underwriting. Like in the first quarter we worked on multiple deals, and you know, the Mega Genomics, which just listed today, Tiger is also underwriter. We will keep expanding our Hong Kong underwriting business. The second step will be to use Hong Kong to clear, you know, our Hong Kong securities trading. This step was very delayed due to COVID earlier this year. Now we have completed several rounds of testing with Hong Kong Exchange, and we are upgrading the trading system to handle more volume.
We target to use Tiger Hong Kong to execute and clear Hong Kong trading in the next couple quarters. The third stage, which is the retail marketing. In addition to upgrading our trading infrastructures, we are also fine-tuning our product experience and formulating marketing strategies. Our goal is to leverage, you know, our global operation, you know, experience to help us to, you know, expand in Hong Kong. Our aim is to start retail marketing towards later this year. In terms of customer acquisition costs in Hong Kong. Right now, given we haven't launched, we don't have a firm grasp, but we understand, you know, the acquisition cost in Hong Kong among our peers is pretty high.
What we wanna do is to leverage the experience and the know-hows and also the strategies in other regions to apply to Hong Kong. Hopefully by then when we launch we can find a sustainable CAC and a payback model. Thanks. Regarding self-clearing I would just answer that in English. Overall our self-clearing progress is according to schedule. By end of first quarter we self-clear over 90% of US cash equities and over 70% of US options. The clearing expense for both product actually have decreased from close to 20% of commission from first quarter last year to single digits this quarter. Clearing expense varies based on trading volume and product mix. Use this quarter's clearing expense as an example.
Within the $4.5 million clearing expense, about $2.1 million are expenses we pay to Interactive Brokers, primarily for Hong Kong securities and U.S. option clearing. About $1.5 million are Singapore local clearing at a custodian expense. We expect the clearing expense to further go down as we started self-clearing Singapore equities in April. We'll clear more U.S. options through U.S. Tiger and use Tiger Brokers (HK) for Hong Kong execution once we finish the system upgrade. Thank you.
Thank you, management.
The next question comes from Cindy Wang from China Renaissance. Please go ahead.
Okay, I'll transfer my question. The first question is regarding to the Singapore market. Can management share some color on the customer acquisition and also the customer assets in Singapore for the first quarter and also the second quarter, as well as the competitive landscape in Singapore? The second question is for the Australia market. Since Tiger Brokers enter into Australia market in March this year, can management share some of the customer acquisition costs as well as the new customers numbers, et cetera, in the Australia market? Thank you.
Okay. First on Australia, we launched our Australian business after Chinese New Year. So far our app ranks ahead of our competitors in local App Store. Last year, at a very early stage, we are trying out different marketing strategies. For example, we sponsored a local rugby team to build our brand and wanna be more localized. So far CAC looks very high, given branding expense and the small number of funded accounts. But understand, you know, as we already mentioned earlier tonight, when we enter a new market at the very beginning, the CAC always look relatively higher. Hopefully in the next couple quarters we can improve unit economics with better understanding of the local markets. On Singapore. We have a leading position in Singapore. So far, it's our biggest market and home base.
Over 80% of the newly funded accounts are from Singapore this quarter. Client asset quality remains very good. Even with weak market sentiment in the first quarter, we saw very healthy net asset inflow from Singapore users. Average deposit for new users in the first quarter is around $7,500, improved from average first deposit of $6,500 in the fourth quarter. Users are also very sticky. US users we acquired in the first quarter last year as a cohort, for the past five quarters, we saw net asset inflow from this cohort every quarter. Net asset inflow this quarter for the company is $33.5 billion, of which $2.6 billion came from Singapore region. Thanks.
Sorry, I have one more question from Singapore market. Can management talk about the CAC in the Singapore market, as well as the competitive landscape? Thank you.
Sure. Tianhua. Okay. First of all, like in Singapore right now, based on a new survey, our registered users in Singapore account for 19% of the population above age 20. I think first of all, we are very appealing to the younger generation. Also based on the penetration stage, we feel there is still a lot of room to grow. We still have a lot of market to tap into. Compared to our peers, we feel we are still in a very leading market position in Singapore. As you can see tonight, this quarter over 80% of the funded accounts came from Singapore, which shows that we still have a very strong grasp in the local market. In terms of CAC.
The average CAC for Singapore it did increase a little bit for the past couple of quarters due to the like weaker market backdrop. The CAC for Singapore user is about spending about $250. Sorry, like $250 for the past quarter. Compared to the group's average CAC is actually lower, means our marketing strategy is more effective in Singapore and our branding is stronger in Singapore. Thank you.
Thank you.
Right. Thank you. There are no further questions. I'll turn the call back to the management team for closing remarks.
I would like to thank everyone for joining our call today. I'm now closing the call on behalf of the management team here at Tiger. We do appreciate your participation in today's call. If you have any further questions, please reach out to our investor relations team. This concludes the call, and thank you very much for your time.
Thank you.
Thank you. Ladies and gentlemen, this concludes our conference for today. Thank you for participating. You may all disconnect.