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01/11 20:04
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call summary highlights strong financial performance, with significant growth in net deposits and equity notional volumes, and an expanded margin. The Q&A session reveals positive sentiment towards crypto trading launches and marketing strategies, though management was vague about the crypto business's financial impact. The overall sentiment is positive due to strong growth metrics and optimistic guidance, suggesting a potential stock price increase.
Total Revenues $131.5 million, a 46% year-over-year increase. This growth was largely attributed to an increase in customer assets, explosive growth in equities volumes, on-time delivery of new offerings, and geographic expansion.
Adjusted Expenses $108.2 million, representing a 20% year-over-year increase. The increase was mainly driven by higher brokerage and transaction charges due to growth in transaction volumes and higher marketing spend.
Adjusted Operating Profit $23.3 million, with a year-over-year increase in adjusted operating profit margin of 18 percentage points. This reflects disciplined execution and operating leverage.
Customer Assets $15.9 billion, a 64% year-over-year increase. This growth was fueled by the market's recovery and substantial growth of net deposits, with customers making deposits of over $1.4 billion, a 37% year-over-year increase.
Equity Notional Volumes $161 billion, a 58% year-over-year growth. This was driven by market volatility in the second quarter.
Adjusted Net Income $15.4 million, a 13.4 percentage point margin expansion and a $16.9 million year-over-year increase. This demonstrates the scalability of the platform and the strength of the business model.
Interest-Related Income $36.3 million, a 14% year-over-year increase. This was largely due to higher client cash balance, increased margin activity, and the adoption of Webull Premium.
Webull Premium: Launched in March, attracted 75,000 subscribers, surpassing internal target of 100,000 subscribers by year-end. Average daily trading volumes by premium subscribers increased across all product categories.
Crypto Trading: Reintroduced crypto trading in the U.S., Brazil, and Australia. Actively exploring digital asset licenses in other markets to meet growing customer demand.
Prediction Markets: Expanded partnership with Kalshi to offer crypto hourly contract trading and Fed events trading.
Geographic Expansion: Launched Webull App in Latin America and the Netherlands, expanding presence in Latin America and European markets.
Revenue Growth: Achieved 46% year-over-year revenue growth to $131.5 million, driven by increased customer assets, equities volumes, and new offerings.
Profitability: Achieved three consecutive quarters of operating profitability with adjusted operating profit of $23.3 million and an 18 percentage point improvement in operating margin year-over-year.
Customer Assets: Customer assets grew 64% year-over-year to $15.9 billion, an all-time high, with $1.4 billion in net deposits during the quarter.
Capital Access: Raised over $200 million from BULLZ incentive warrants and secured a $1 billion standby equity purchase agreement, with $142.8 million raised to date.
Focus on Quality Accounts: Prioritized quality of accounts and growing customer AUM, leading to 10% year-over-year growth in funded accounts despite market volatility.
Market Volatility: The market experienced extreme volatility in Q2, triggered by the Liberation Day tariff announcement, which caused a sharp sell-off in the S&P 500. Such volatility could impact trading volumes and customer confidence.
Regulatory Environment: While the regulatory environment is becoming more discernible, there are still uncertainties that could affect the introduction of new asset classes like crypto and tokenized assets.
Customer Retention: Despite adding 144,000 new funded accounts, the net increase was only 10,000 due to 100,000 inactive accounts rolling off. This indicates challenges in retaining customers.
Expense Growth: Operating expenses increased by 20% year-over-year, driven by higher brokerage and transaction charges, marketing spend, and technology investments. This could pressure margins if revenue growth slows.
Geographic Expansion Risks: The company is expanding into new markets like Latin America and Europe, which could pose risks related to local regulations, market acceptance, and operational challenges.
Crypto Trading Reintroduction: Reintroducing crypto trading amidst a clearer regulatory path could still face challenges due to market volatility and evolving regulations.
Inactive Accounts: A significant number of inactive accounts established during the pandemic have rolled off, which could indicate a challenge in maintaining long-term customer engagement.
Revenue Growth: Webull anticipates continued revenue growth in Q3 2025, with July already being the highest revenue month ever for the firm. Barring major market dislocation, Q3 is expected to be another solid quarter.
Assets Under Management (AUM): AUM has surpassed $18 billion as of Q3 2025, reflecting strong growth from the previous quarter.
Product Expansion: Webull plans to continue delivering new products and expanding access to its platform globally. This includes the reintroduction of crypto trading in the U.S., Brazil, and Australia, as well as exploring digital asset licenses in other markets.
Geographic Expansion: The company is rolling out its app in new geographies, including Latin America and the Netherlands, to strengthen its global presence.
Customer Growth: Webull is focusing on attracting high-quality accounts and increasing customer assets under management (AUM). The company expects this strategy to drive margin expansion over time.
Webull Premium: The subscription-based service for active traders and long-term investors is expected to reach 100,000 subscribers by year-end 2025, with current subscribers already surpassing 75,000.
The selected topic was not discussed during the call.
The earnings call highlights strong revenue growth, record AUM, and strategic expansions in products and geography. The Q&A reveals positive sentiments towards international growth and partnerships, though there are some uncertainties regarding crypto listings and the Meritz partnership. Overall, strong financial performance and optimistic guidance, including a focus on customer growth and margin expansion, suggest a positive market reaction.
The earnings call summary highlights strong financial performance, with significant growth in net deposits and equity notional volumes, and an expanded margin. The Q&A session reveals positive sentiment towards crypto trading launches and marketing strategies, though management was vague about the crypto business's financial impact. The overall sentiment is positive due to strong growth metrics and optimistic guidance, suggesting a potential stock price increase.
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