Webull Corporation (BULL) Q3 2025 Earnings Call Transcript

Access earnings results, analyst expectations, report, slides, earnings call, and transcript.

Overview

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.

Key Financial Performance

Revenue $156.9 million, representing 55% growth year-over-year. The growth was driven by customer assets reaching an all-time high, equity trading volumes surging, new product offerings, and geographic expansion.

Customer Assets $21.2 billion, an 84% increase year-over-year. This includes $1.2 billion in assets from the acquisition of Webull Pay. Growth was driven by favorable market dynamics and robust deposit activity.

Equity Trading Volumes $204 billion, a 71% increase year-over-year. Growth was attributed to favorable market conditions and increased user activity.

Adjusted Operating Expenses $120.2 million, a 13% increase year-over-year. The increase was mainly due to higher brokerage and transaction expenses, as well as higher general and administrative expenses driven by headcount growth and bonus accruals. This was partially offset by lower marketing spend.

Adjusted Operating Profit $36.7 million, representing a 28.7 point increase in adjusted operating margin year-over-year to 23.4%. This reflects disciplined cost management and revenue growth.

Adjusted Net Income $32.9 million, up $38.6 million year-over-year. Adjusted net profit margin improved 26.5% year-over-year, reaching 20.9% of revenue.

Trading-Related Revenues Increased 64% year-over-year, driven by higher trading volumes across all asset classes and improved monetization, particularly in options.

Interest-Related Income $43.4 million, a 32% increase year-over-year. Growth was driven by higher interest-earning balances across corporate cash, client cash, margin lending, and stock lending activities.

Funded Accounts 4.93 million, a 9% increase year-over-year. Growth was driven by the acquisition of Webull Pay and new product offerings.

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Operating Highlights

Reintroduction of Crypto: Crypto trading was reintroduced to the Webull platform, including crypto futures trading. Over 50% of new funded accounts are trading crypto.

Launch of Vega: Introduced Vega, an AI-powered decision-making partner providing personalized insights and analysis for trading decisions.

Sports Prediction Markets: Launched sports prediction markets in partnership with Kalshi, covering NFL, NBA, NASCAR, F1, and college football events.

Corporate Bonds: Introduced corporate bonds, providing low-risk investment opportunities and facilitating asset transfers from traditional brokerages.

Geographic Expansion: Launched Webull platform in the EU, starting with the Netherlands, and expanded to other European markets. Entered a strategic partnership with Meritz Financial Group in South Korea. Level 3 options trading launched in Singapore and Hong Kong, with plans for Japan.

International Growth: Webull Canada reached $1 billion in assets under management, becoming the first non-U.S. brokerage in the group to achieve this milestone.

Revenue Growth: Achieved $156.9 million in revenue, a 55% year-over-year increase.

Customer Assets: Customer assets reached $21.2 billion, an 84% year-over-year increase.

Trading Volumes: Equity trading volumes surged 71% year-over-year, totaling $204 billion.

Funded Accounts: Added 200,000 new funded accounts, bringing the total to 4.93 million, a 9% year-over-year increase.

Public Float Increase: Expiration of all shareholder lockup restrictions on October 8 increased public float and market liquidity.

Subscription Growth: Webull Premium subscribers grew to 90,000, a 20% increase from the previous quarter.

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Risk or Challenges

Increased Operating Expenses: The company reported a 13% year-over-year increase in operating expenses, driven by higher brokerage and transaction costs due to increased trading volumes, as well as higher general and administrative expenses from headcount growth and bonus accruals. This could pressure margins if revenue growth slows.

Regulatory and Compliance Risks: The company is actively exploring digital asset licenses in multiple markets to expand crypto offerings. Regulatory hurdles and compliance requirements in these markets could delay or limit expansion plans.

Market Dependency: The company’s growth is heavily reliant on favorable market conditions, such as strong corporate earnings, interest rate reductions, and rallies in technology and AI stocks. A downturn in these conditions could adversely impact performance.

Product Diversification Risks: While the company is expanding its product offerings, including crypto futures and sports prediction markets, the success of these new products is uncertain and could impact ROI if adoption rates fall short of expectations.

International Expansion Challenges: The company is expanding into new geographies, including the EU and Asia. However, entering new markets involves risks such as cultural differences, local competition, and regulatory challenges, which could impact the success of these initiatives.

Retention and Engagement Risks: Although the company reported a high retention rate of 97.7%, maintaining this rate as the user base grows and as new products are introduced could become challenging.

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Guidance & Outlook

Revenue Growth: Webull projects continued revenue growth, supported by new product offerings, geographic expansion, and increased trading volumes. October 2025 is already on track to be the best month for customer deposits, trading volumes, and revenues.

Product Expansion: The company plans to expand its crypto offerings to additional geographies and is actively pursuing digital asset licenses in new markets. Additionally, Webull will continue to enhance its AI-powered Vega tool and expand its prediction markets and corporate bond offerings.

Geographic Expansion: Webull is expanding its platform in the EU, starting with the Netherlands, and plans to launch in additional European markets in the coming months. It is also scaling operations in Asia, with Level 3 options trading set to launch in Japan imminently.

Customer Growth: Webull aims to reach 100,000 subscribers for its Webull Premium service by year-end 2025, up from 90,000 currently. The company is also targeting further growth in funded accounts and registered users globally.

Market Trends: The company expects favorable market conditions, including strong corporate earnings, interest rate reductions, and rallies in technology and AI stocks, to continue driving growth.

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Shareholder Return Plan

The selected topic was not discussed during the call.

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Key Q&A

Q:What is the revenue opportunity for Webull from the prediction markets offering, and what are the economics with Kalshi?

A:Webull has partnered with Kalshi since the beginning of the year and recently entered the sports prediction markets. The sports numbers have shown significant growth, with over 30 million contracts in October and month-on-month growth exceeding 100%. Webull charges a $0.01 commission per contract and receives an exchange rebate from Kalshi, with a blended revenue rate of $1.25 to $1.50 per contract. The prediction markets are reengaging dormant accounts and attracting new customers, expanding Webull's addressable market.

Q:What is driving the strong net deposits and AUM growth for Webull?

A:Webull's global platform, with 14 broker-dealers worldwide, is a key driver. The U.S. remains the largest market, but international expansion, such as in Canada, Australia, and Thailand, has contributed significantly. Marketing strategies like incentive transfer programs and asset matching promotions have also been successful. In Q3, Webull saw $2.1 billion in net deposits, with Canada alone nearing $1 billion in AUM.

Q:What is the sustainability of Webull's incremental margins, and why not increase marketing spend given strong momentum?

A:Webull has maintained an adjusted operating margin of around 20% for the last four quarters. The company is optimizing expenses, including shifting marketing strategies from free stock giveaways to asset matching promotions, which provide more predictable expenses. While marketing spend is reviewed on a market-by-market basis, Webull remains disciplined to ensure sustainable margin expansion while driving growth.

Q:How is Webull approaching its crypto strategy after relaunching in the U.S.?

A:Webull relaunched its crypto offering in August, targeting active and sophisticated traders. The company plans to aggressively lower take rates to attract users, with current rates at approximately 100 basis points. Webull aims to expand its crypto product offerings to match competitors and attract active traders. The timeline for significant growth in this business is expected by early 2026.

Q:What is the significance of the Meritz partnership for Webull, and are there other similar opportunities?

A:The Meritz partnership marks Webull's entry into the institutional B2B business, allowing access to South Korean retail without a local brokerage license. Webull is focusing on similar partnerships globally, targeting geographies where it doesn't operate a broker-dealer. The Meritz partnership is live, and revenues will be reflected in transaction volumes, contributing to Webull's growth.

Q:What is Webull's strategy for funded account growth, especially outside the U.S.?

A:Webull is seeing equal growth in funded accounts from the U.S. and international markets, with 50% of new accounts now coming from outside the U.S. The company is focusing on low-cost customer acquisition in international markets and enhancing the quality of U.S. customers. International brokerages, such as those in Hong Kong and Singapore, are in hyperscale mode, driving growth.

Q:How does Webull plan to integrate crypto and prediction markets into its metrics and revenues?

A:Crypto and prediction markets will start contributing to Webull's consolidated group results in Q4. These transactions will be included in metrics like DARTs and trading revenues, reflecting their growing impact on the platform.

Q:What is the impact of Vega AI on Webull's platform, and are there ongoing expenses for it?

A:Vega AI, developed in-house, provides portfolio analysis and trading insights, enhancing user engagement. It has seen tens of millions of engagements, with users returning regularly. Since it was developed internally, there are no additional expenses, and it is expected to revolutionize retail investing.

Q:What is Webull's strategy for future crypto listings?

A:Webull aims to offer as many crypto tokens as possible, targeting 100 by year-end, though this is contingent on regulatory dynamics. The focus is on providing a comprehensive trading experience to attract and retain customers.

Q:What localized features is Webull offering in international markets, and how is it addressing regulatory challenges?

A:Webull tailors its offerings to local markets, such as tax wrappers and local securities trading, while ensuring U.S. product availability. Regulatory challenges, like in Indonesia, are being addressed to expand product offerings. The exportation of the U.S. retail trading experience is a key growth driver.

Q:How is Webull positioned to handle market volatility?

A:Webull's platform is well-suited for volatile markets, with features like short selling and options trading. The company has seen increased trading volumes during recent market volatility, demonstrating its resilience and appeal to sophisticated traders.

Q:Review of Unclear Management Responses

A:Management avoided providing specific guidance on the timeline for achieving 100 crypto token listings, citing regulatory dynamics. Additionally, they did not disclose detailed financial projections for the Meritz partnership or the exact impact of Vega AI on revenues.

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Earnings Word Cloud

The most frequently occurring keywords in this quarter's earning call

BULL Transcript

Webull Corporation (BULL) Q3 2025 Earnings Call Transcript

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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.

BULL Slides

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BULL Report

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