Webull Corp Aktie

Good day, and welcome to the Webull Corporation Second Quarter 2026 Earnings Conference Call. [Operator Instructions] Please note, this event is being recorded.

I would now like to turn the conference over to Carlos Questell, Head of Investor Relations for Webull. Please go ahead.

Good morning, good afternoon and good evening, everyone. Welcome to Webull's Second Quarter 2026 Conference Call. Earlier today, we issued a press release detailing our second quarter financial results. A copy of the release can be found on our IR website at webullcorp.com under the Investor Relations tab. Please note that this call is being recorded and will be available for replay via our IR website.

This call will include forward-looking statements about the company's performance and business outlook. These statements are based on how we see things today and contain elements of uncertainty. For information concerning the factors that can cause actual results to differ materially, please refer to the cautionary statement and risk factors contained in our filings with the Securities and Exchange Commission and press release both of which can be accessed via our website.

Today's presentation will include a discussion on adjusted operating expenses, adjusted operating profit and adjusted net income, all non-GAAP financial measures. Reconciliation of these non-GAAP financial measures to their most directly comparative GAAP measures are included in the press release that we issued today. It's important to note that although we believe that these non-GAAP measures provide useful information about our operating results, this should not be considered in isolation or construed as an alternative to their directly comparative GAAP measures. Furthermore, other companies may calculate similarly titled measures differently, limiting their usefulness as comparative measures to our data. We encourage our investors and others to review our financial information in its entirety and not rely on a single financial measure.

With me today is our Group President and U.S. CEO, Anthony Denier; and our Group CFO, H. C. Wang. We will begin with prepared remarks and then take questions at the end. With that, I'd like to now turn it over to Anthony.

Thank you, Carlos, and hello, everyone. Thanks for joining us today. Before I walk through our second quarter results, I want to share an update on the SEC's elimination of the Pattern Day Trader Rule, or PDT rule that became effective on June 4. Last quarter, we highlighted our expectation that the elimination of the PDT rule would be a strong tailwind for our active traders and noted that our engineering team was busy ensuring our systems were ready for the change. Today, I am pleased to share that we successfully navigated the changes in the market resulting from the removal of the PDT rule. From the moment the rule change took effect Webull's advanced technology platform enabled every qualified customer to place unlimited day trades with the full benefit of our 0 commission model behind them. Executing on this rule change was our defining event for the quarter and contributed to a significant increase in trading volumes and record quarterly results.

Turning now to Slide 2. In Q2, we delivered record revenue of $198.8 million, up 51% year-over-year driven by continued asset growth and strong trading activity across all our core asset classes with options and equities being particularly strong on the back of the PDT rule change. Customer assets reached $28.5 billion, representing 79% year-over-year growth. While we continue to aggressively invest in organic growth initiatives and remain committed to building this business for long-term category leadership, the Q2 results also demonstrate the operating leverage in our business model as revenue growth significantly outpaced the growth in adjusted operating expenses. As a result, we delivered record adjusted operating profit of $62.6 million, up 169% year-over-year, representing an adjusted operating margin of 31.5%.

Now turning to Slide 3, which highlights key developments in Q2 towards executing on our 2026 strategic road map. Webull's focus remains centered on our 3 core growth pillars first, establishing Webull as a platform of choice for active traders. Second, expanding our global footprint by exploiting the U.S. retail experience worldwide and third, building our institutional business. As we have highlighted over the past year, AI remains core to everything we are building. For active traders, we continue to roll out AI-powered tools that further enhance the Webull user experience.

Vega, our AI-powered intelligence system continues to see very good traction with our active trader base. We added approximately 160,000 new Vega users in Q2, and bringing the total number of active Vega users to 480,000, an increase of 12% quarter-over-quarter. Active traders remain the heaviest Vega users with engagement up approximately 23% quarter-over-quarter.

During the quarter, we further enhanced our position within the Agentic stack with our MCP server being connected to leading AI models, enabling users to use natural language to conduct a research build tools and execute trades through the Webull platform. This is an important step forward in Agentic Trading and further establishes Webull's infrastructure as a differentiator in Agentic Trading. We also significantly upgraded our paper trading offering, establishing parity with our live trading capabilities across asset classes and giving users an increasingly comprehensive environment to test and refine their trading strategies. We believe this is a unique offering, empowering our users to create realistic simulations and gain invaluable experience in a [ novos ] environment.

Turning to our international expansion efforts. We now have approximately 810,000 international funded accounts. We are licensed across 35 markets globally and operate trading activities in 18 markets following the Q2 launches in Spain, Argentina and Colombia. We continue to leverage our global infrastructure, compliance expertise and product depth to scale the U.S. trading experience globally.

In APAC, our customer assets have grown to over $5 billion. We recently announced the acquisition of Thai Securities in Thailand, which is expected to close at the end of August. This acquisition will increase our AUM in the region significantly and positions us for further growth in Thailand as we combine PI's expertise in the local market with our best-in-class technology platform. In Latin America, we continue to expand our product offering, including in Argentina, where we completed our first customer-initiated tokenized equity trade an important milestone as we continue to expand our product capabilities across the region.

Finally, turning to our institutional business. We continue to make progress building out this business with institutional AUM exceeding $1.4 billion as our customer base continues to grow, accounting for approximately 5% of our total AUM. The large majority of institutional clients are located outside of the U.S. Within the U.S., having received our clearing license from [ FINRA ] in April, our team is busy building the platform of our future, even though we are not currently clearing and do not anticipate clearing trades for some time.

In addition to offering execution and custody services, we also expanded our institutional product offering to include access to futures and prediction markets. We further announced our partnership with Monarch markets, to provide accredited investors with access to late-stage private companies through special purpose vehicles, further broadening the investment opportunities available through the Webull ecosystem.

On Slide 4, I'll discuss our continued user and funded account growth. Our targeted marketing continues to drive adoption as we added approximately 600,000 registered users during the quarter bringing our total to $28.2 million, up 13% from $24.9 million at the end of the second quarter of 2025. As a reminder, Webull has a considerable number of registered users that still take advantage of our data offerings in markets where our trading platform is not yet available. We remain committed to providing access to industry-leading market data and information to all users regardless of their ability to currently invest on the platform.

On the right side of the slide, you can see funded account metrics, which showed steady growth. For context, funded accounts are defined as accounts where customers have made an initial deposit and the balance has remained above 0 for 45 consecutive calendar days as of the record date. Funded accounts reached $5.13 million in the quarter, an 8% year-over-year increase. Growth in gross funded accounts was approximately $132,000, while net new funded accounts increased by approximately 20,000 users as we continue to actively address dormant accounts. Our quarterly retention rate was 97.3%.

Turning now to Slide 5. Customer assets increased 79% on a year-over-year basis to $28.5 billion. I would note that our average customer account has nearly doubled to over $5,500 over this period. As you can see on the right-hand side of the slide, net customer deposits in the quarter were $1.6 billion, up over 7% on a year-over-year basis.

On Slide 6, you will find trading volumes for the quarter. As mentioned in my earlier remarks, our successful navigation of the PDT rule change drove meaningful share gains, helping us reach a top 5 position among all retail brokers in options for the first time in our history and driving record volume in both equities and options during the quarter. Equity notional volume totaled $279 billion, up 73% year-over-year and 7% sequentially while options contract volume reached 213 million contracts, up 68% year-over-year and 34% sequentially.

With that, I will pass the call over to H. C. for a closer look at our financial results for the quarter.

Thank you, Anthony, and thanks to everyone for joining the call today. The second quarter was the strongest we've delivered as a public company and it showed across our financial results. Total quarterly revenue reached a record $198.8 million, up 51% year-over-year and an acceleration from the growth rate we posted in the first quarter. This strong performance was driven by continued strength across both trading and interest-related revenue streams, which I will walk through in more detail shortly.

On the expense side, adjusted operating expenses were $136.2 million up 26% year-over-year, primarily due to higher trading-related activity and investment in new products, a meaningfully slower growth rate than our revenue which is the operating leverage story I want to spend a minute on.

Turning to profitability on Slide 8. Q2 was our most profitable quarter to date. Adjusted operating profit was $62.6 million, representing a 31.5% operating profit margin. Adjusted net income was $43.2 million representing a net profit margin of 21.7%. We remain disciplined on our marketing spend, which started to normalize as a percentage of revenue during the quarter. As a technology-driven platform, we see significant operating leverage in our business model and expect that will continue to be reflected in our operating margins as our revenue continues to scale.

Turning to Slide 9. We had another quarter of record trading volumes across our core asset classes. Trading-related revenues increased 66% year-over-year to $147.7 million and were up 33% quarter-over-quarter. Our [ DARTs ] also increased 62% year-over-year to $1.64 million and/or up 25% from the first quarter of 2026. These results demonstrate that our platform continues to meet the needs of our active traders and we believe we are well positioned for continued sustainable growth in trading revenues over time.

Turning to Slide 10. In the second quarter, interest-related income grew 18% year-over-year to $42.8 million, mainly driven by higher AUM as well as growth in margin loans and client cash balances. This line item has been relatively stable in the last few quarters and continues to provide a durable complement to our trading revenue.

Now turning to expenses on Slide 11. Adjusted operating expenses increased 26% year-over-year to $136.2 million, primarily driven by brokerage and transaction costs associated with higher trading activity. I also want to highlight that adjusted operating expenses declined 6% sequentially from $145.1 million in the first quarter, primarily reflecting the normalization of our marketing spend. Excluding marketing, our operating profit margin has remained above 40% every quarter since the third quarter of 2024, underscoring the strength of our underlying platform economics even as we continue to invest. We remain focused on disciplined expense management as we continue to scale the business.

Lastly, this quarter, we began publishing our monthly operating metrics. We believe this level of disclosure provides our investors and analysts additional transparency into the business. You can find the monthly metrics on the Investor Relations tab of our website at webullcorp.com.

With that, I'll turn the call back to Anthony before we open the line for questions.

Thanks, H.C. To summarize, we are pleased to deliver another record-breaking quarter for Webull, including record revenue and operating profit. We continued executing on our 3 key priorities while focusing on responsibly growing our AUM. I want to personally thank our global team members for a fantastic first half of the year as your dedication continues to be evident in our solid results. We are encouraged by our progress and excited about our growth prospects going forward. We look forward to engaging with you at our forthcoming investor events this quarter.

And on that note, we welcome any questions you may have, either here on the call or one-on-one. Thank you.

[Operator Instructions] The first question will come from [ Devin Ryan ] with Citizens Bank.

This is [ Noah Katz ] on for Devin. First, I want to touch on the PDT removal. It clearly contributed to a strong increase in activity this quarter. You've described Webull is benefiting from account consolidation across the industry as well. So from what you've seen so far, is the bigger opportunity customers trading more actively within their accounts or more so transferring assets and then consolidating activity from several brokers? And also, what will show you that this is a durable benefit rather than an initial bump in activity following the rule change?

Noah, thanks for the question. Yes, we've been -- I feel like I've been talking about PDT for the past year. So it's great to finally have the first kind of earnings print that show all the work that we've been putting in ahead of this huge kind of industry-changing event, especially for platforms like Webull, where the average account size is well below that 25,000 PDT limit.

So to give some perspective, it comes from both sides, right? So we were very, very active in targeting accounts where we look at different cohorts of accounts and accounts that were very active, let's say, show up on Monday, day trade, 3 times on Monday, and then we don't see them again until next Monday, right? You have to go in and assume that those active accounts have multiple accounts are fractionize their kind of brokerage accounts across the industry to skirt those PDT rules. So we kind of aggressively targeted a lot of those types of accounts with e-mail campaigns and reach out attempts.

Now it is difficult. I will admit to put together like a hard case with numbers on exactly how many assets that we brought in from those accounts because typically, we use [ ACAP ] data for those and we're talking about day traders. So at the end of the day, typically, they have no securities on -- no securities to transfer and [ ACAT ] process, as most probably know on this call is extremely cumbersome, takes several days up to sometimes pass a week. So we're not going to see much data on these types of active trader accounts through that. But what we did see is a considerable amount of deposits, new deposits from those types of accounts, meaning the ones that would trade on Monday, we wouldn't see them again until the next Monday.

In terms of in terms of sustainable or sustainability or durability of these levels, when we put out our July figures only last week, you can clearly see that the options volume was pretty steady. We did see a little bit of softness on the equity side compared to June. But kind of comparatively, when you think of June, there was a couple of events, I think, most importantly, for the equities business with SpaceX. That was just a huge retail event. There was a lot of interest and a lot of eyes on the space during June. And August so far, is kind of trending just along where we saw June as well. So August is look even stronger than July. I truly believe that removal of PDT is the standard going forward. It will not revert or volumes will not revert to pre-PDT levels.

We actually see the behavior of a lot of those active traders change as well. Meaning when customers knew they only had a set amount of day trades that they can make in a week, their behavior has changed when that restriction was removed. We're now seeing a significant amount of smaller day trades happening. Customers are taking -- at least the day trading customers are taking kind of smaller scalps on their position, getting in and out kind of at a lower P&L threshold levels which, from a take rate perspective is actually much healthier for our business as well, right? So not only has the volume risen, but the amount of actual trades within that volume has risen significantly as well, which also raises our take rates or the amount of payment for order flow that we receive on those orders. So it's kind of a double positive there. I hope that answers your question.

Yes, that's great. That's great detail there. That's very helpful. And then -- so no more PDT questions. But if I can switch gears a sec and looking at your APAC activity this quarter with customer assets now around $5 billion and your recent acquisition of [ Pi ] Securities, further expanding your presence in the region. We also saw a stronger institutional trading activity across Asian markets this quarter. So can you speak about what you're seeing in retail trading activity and then product usage relative to other regions?

And then on the acquisition, how are you thinking about the opportunity to bring your trading technology to an establish local customer base?

Sure. So we've always been very aggressive on growing our business outside of the U.S. It's one of our core pillars of growth that we've had for several years now. Operating, we have 35 licenses, operating now in 18 different markets. And the kind of the largest APAC markets are the most mature markets that we have ex the U.S. Hong Kong, Singapore, they are pretty much the largest markets in APAC across the board. We've seen significant kind of evolution in customer trading behavior across APAC, specifically Hong Kong, Singapore, where I've said this before, and I hope I don't sound like a broken record too much but as the world kind of de-globalizes over the last several years, the retail investors have truly globalized, right?

And you see retail investors outside of the U.S. kind of reacting and positioning themselves alongside the traders that we have here domestically in the U.S., and they're looking very, very similar in terms of the products they use. I think options is the best example of the adoption of U.S. options trading outside of the U.S. has completely taken off. And I think we're still only in the early innings of that.

In terms of in terms of the [ Pie ] Security acquisition, that is a strategic opportunity that we saw in Thailand. We do have a small but aggressively growing business organically in Thailand and looking at this opportunity with [ Pie ] Securities, not only is it immediately accretive for us in terms of growing our APAC AUM, but it also introduces us to a significant amount of high-quality active trading funded accounts for a very low customer acquisition cost that we normally would have to pay a high price for that quality of account, and it would take a very long time to organically grow that over time. So it's like a little boost of, I guess, some of the [indiscernible] so a little testosterone replacement therapy for us in -- I guess, in a casual way to say it.

H. C. you have any comments on [indiscernible]?

Yes. I think Asia is one of our strategic markets. So we look at Asia collectively as a whole and not so much like individual markets like Hong Kong, Singapore and Thailand, where there's a lot of synergies actually between these markets. So we have -- for example, we have our institutional business in Hong Kong is serving broker-dealers from Thailand, trading U.S. stops, and we have a high net worth clients from one market that may want to open offshore accounts in other market. And the fact that we are on the ground in all these different markets and operating as one is really a key differentiation factor for Webull. And that's how we're able to grow so fast so quickly.

The next question will come from Ed Engel with Compass Point.

Congrats on the quarter here. Can you elaborate on what you mean on addressing dormant accounts, I recall, something about [indiscernible] accounts kind of being pruned out, but I just kind of wanted to plating on that? And then, I guess, any kind of clarity of when that kind of starts to roll off towards the end of the year?

Sure. So every platform has dormant accounts. It's just kind of a nature of the brokerage business in general. Typically, when you kind of use words like a shipment, it's really a compliance function. But if anyone on this call doesn't know what a shipment is we deal in the U.S., we deal, obviously, with 50 different states. Every state has their own kind of rules and regs surrounding on what qualifies as a dormant account, whether it's account hasn't logged in for 2 years. Some states have got as far as 5 years. But typically, when an account is deemed dormant, it is an operational function required by broker dealers in the U.S. where we actually have to liquidate the positions in those accounts and then transfer the funds from those accounts over to the state, whether it's a controller office or the treasury office, right?

And this is obviously an operational lift for us. It is -- it does cost us money. It is an operational function, and we do have to pay a fee to the state for every account that we do "seat". So that is like when we roll promotions, especially on most of these promotions -- excuse me, most of these accounts that have been deemed dormant that we are rolling off, which is why we separated the gross new accounts and the net new funded accounts to specifically show that we are growing significantly funded accounts. A lot of these were accounts that came on during kind of the [ GameStop Frenzy ] right after the [ GameStop Frenzy ], and we're running a lot of kind of small deposit promotions, deposit anything, deposit dollar and get a free share of stock.

At the end of the day, these are accounts that had very low AUM. On average, we're talking like $10 to $15 of total AUM that did not trade. That did not invest. These are accounts that signed up specifically to hopefully get an expensive share of stock only to get an expensive share of stock and not to be an investor. So this actually cleans up our account base on its own. And it's a very healthy thing for our business. So as we focus right now on just quality accounts, especially the way we use our promotions and our marketing, we are replacing a lot of these non-revenue-producing drain accounts, removing them and replacing them with high quality, which is one of the factors in us gaining our average account size so quickly this quarter.

Great. And then it looks like marketing costs were down quite a bit Q-on-Q, and I think it was actually pretty far below the implied guidance you gave just kind in of sales. Do you mind to provide any kind of directional commentary of kind of how this should shape out the rest of the year? And I guess, were there any lumpy items in 4Q and 1Q related to maybe prior quarter incentives that are maybe normalizing now?

Yes. We spoke about the normalization of marketing expense. So like last year, we actually ran very aggressive asset match promotions. So for example, we had 3.5% match for IRA deposits. So -- and those -- as I talked about in -- on the call the last couple of quarters, those promotions because we require customers to keep their AUM on the platform for about -- usually for about 12 months, sometimes longer than a year. So the expenses are actually amortized over a period of time.

So in Q1, our marketing also in Q2. So actually, our marketing spend included the effects of amortization from last year's promotions. So they're not just marketing spend for this year. So the results of those asset management promotions that you saw last year was primarily reflected in the net deposits in Q4 but the spend was still being amortized well into 2026. So we've actually reduced the level of asset match promotions starting in Q1. So we've kind of -- for example, we've reduced the 3.5% match to like 1% match, and we've cut off or stopped those promotions in some markets. And so you're seeing -- so you'll start to see our marketing spend like normalizing more over the next couple of quarters as the effect from last year's aggressive asset match promotions rolls off.

Great. And then just lastly, I guess, maybe a little bit too excited to get excited about crypto. But I guess with the recent kind of rally here, can you kind of remind us of where your crypto product stands today in terms of just number of coins offered and then maybe anything about coin in, coin out.

Sure. I mean I think I don't know, maybe it's kismet, right Crypto -- Crypto rallying, we see bitcoin up like 10 -- almost 10% today on our earnings day. The last several quarters, one of the probably more disappointing businesses across the industry, not just Webull-specific has been crypto. And even this quarter, Crypto represents -- what we do about $2.25 million we did in crypto revenue for Q2 right? That's just over 1% of our total Q2 revenue stream. So any uptick in our crypto business will be immediately accretive, right, to our business. And we've been talking about consolidation on the margins in the crypto business and building a crypto product that is attractive for active crypto and semi-institutional crypto type of platforms and traders.

So where are we now? We are in the process of gray scaling coin in coin out, which is perfect timing given kind of the new spotlight put on the asset class. So for the first time, probably in the last 9 months, I am starting to see the cloud start to park in the crypto business. And that is a very positive thing. The direction we're seeing a lot of the commentary. And listen, I look at the odds on [ Clarity ] to pass on [ Poly ] and [indiscernible] as well. But I think now there is some sun that's starting to shine, and that will be a nice step forward in our business.

The next question will come from Chris Brendler with Rosenblatt Securities.

Congratulations guys on a fantastic quarter. Good to see. [indiscernible] question on July. Obviously, things slowed down market the [indiscernible] trade took a step back in July, but your results in the options business, in particular, were fairly strong, and I'm getting questions from folks. Is your business sort of not as market-sensitive today? Or is that just the PDT sort of helping support July volumes in the option of business? Can you give us any color there on how we should think about market volatility as it relates to Webull's growth prospects right now?

Yes. I mean I think comparatively, I think Webull stands out as a little bit more insulated than some of our peers, I think, particularly because of our high concentration of active traders and active investors, right? So when there's volatility, when there's a weak market, we see sometimes even a spike in volume in the initial days. It's now spread out over the course of long term in a bear market, eventually going to see volumes dry out. But in the short term, like when we see a slow month or slow several months, we actually see a little change in behavior of our customers, which, from a revenue perspective, can be a little bit of a headwind because instead of trading more single stock, they trade a bit more kind of broad index ETF, whether it's [ Hughes or SPS ].

So we're not completely immune, but I think we are a bit more insulated. I mean when you talk about kind of how our customer demographic looks, over the course of the last 6 years, we've had to close over 1 million active trading and funded accounts because of the PDT rule, right? And trust we reached out to every one of them. On June 4, for example, we abated more than 50,000 margin calls as a result of the PDT rule meeting abated, we removed those calls. And yes, we read out to every one of those 50,000 active funded accounts on the platform. So those are the types of traders that when there is volatility, when the [ VIX ] is rising, they're getting involved, right? They're trading the momentum. So our numbers tend to be pretty steady through kind of the downturns. And I think that's something we've always concentrated on, and that's something we're really proud to have built over the years.

That's fantastic clarity. And then ask a PDT question, if you don't mind. I was very interested to hear about the sort of multiple trades occurring smaller trades because that makes total sense if you're limited to 5 or whatever the old rules were that you wouldn't -- you would be very careful about which trade you're going to pay because you going to place a handful of week. Was that something that was anticipated? Because I remember your guidance was at least 20% over the medium term? And are we already through the medium term? Or do you think this is like sort of a 6- to 12-month process of folks getting used to the new rules?

Well, I think -- Chris, I think it was you then asking the question on our Q1. What's my forecast for the additional volume kind of in a post-PTD world, and I think I said 20% of you. There might have been a little sandbagging in that.

Not in coincidence.

Just to kind of protect myself a little, but this is the new -- this is the new environment for trading, right? And we're seeing it across multiple asset classes. You look at the different products and crypto has never had a PDT rule, right? These new event contracts or prediction markets never had a PDT rule yet we're seeing basically 70% Q-on-Q increase in our volume on prediction markets, right? So when you kind of flow gets [indiscernible], is something we've always been saying in this industry for the last 25 years. And this momentum, I think, is very sustainable.

So in the medium term, I think we are in the medium term now, right? PDT removed in June, in the beginning of June. We now had almost a full month of June, which kind of took everyone by surprise. I don't understand why, but it did. July showed that it's sustainable. And here we are in almost towards the end of August. And it's we're still seeing that same sustained level of activity. And obviously, with the last few sessions with the AI trade coming back on and back in vogue, volumes have been -- have been really, really healthy. So I'm very optimistic for this to continue on.

The next question will come from Eli Abboud with Bank of America.

I wanted to drill down further on your new Agentic AI offering. First, can you highlight what you view as the main points of differentiation between your offering and the Agentic trading capabilities of your peers like Robinhood and IBKR? And then how much volume was attributable to Agentic trading is there any disproportionate amount of flow coming from one asset class would be other?

No, I'm not an expert in, but any of my peers are doing in this space. I am an expert what we're doing. So if my explanation on what my competitors are doing in the spot on, I apologize [indiscernible]. But in terms of we're looking -- and our MCP relationship, we're working with all of the large AI agentic platforms. We are putting a lot of emphasis on education and walking new customers and new clients through the process of how to utilize this new technology. And I think it comes in different phases. Right now, we are very, very early in Phase I, where most of the interactions with our MCP server is based around portfolio building, research and trade analysis. It's not so much built on algorithmic execution strategies where maybe some of my peers are focusing on that.

And I think there's reasons to do things in kind of a proper step fashion. It does take time kind of to normalize the experience that is completely new for how retail is going to engage with their trading platform. And we want to make sure that we do it in a very responsible and very transparent way. I can use a perfect real-time example that I just looked at the other day with my MCP connection. I was trying to figure out, obviously, Webull as a sponsor of the [ Camparis, RAs ] are not doing that, first place, best league in the American League. I was trying to figure out which event contract was the most active for MLB games.

Now I can take a spreadsheet and I can block out about 4 hours and go through every single contract that's trading to come to that conclusion or I connected with my MCP through a cloud interface. And I asked the question in natural language, and it came back in less than 30 seconds with an analysis on what is the most active in terms of price band movements of event contracts for MLB, right? That's kind of one perfect use case scenario on kind of the beginning phases on how you can use this technology to your advantage.

I think towards the end of the year, you'll start to see a lot more product rollout that will deal more on the execution side but it will take time to get there. And that's been our strategy on rolling out AI. I've been very, very vocal on talking about how AI interfaces. And I don't want to spoil yet, but there's going to be a lot of really exciting announcements on our Vega product suite that will go more into the trade execution side of the AI product suite and what it can do.

Got it. And if I can maybe switch gears and ask kind of about your margin balances for a second. It looks like they stepped down a bit in July. Would it be possible to give any color on how those margin balances are trending in month to date in August? And how would you -- bigger picture just characterize your clients' risk appetite at this moment.

I think margin balances they typically tend to fluctuate with the -- I mean, with the overall AUM level. So like July was a very choppy, like very difficult month. So I think it's -- there's a lot of deleveraging probably because of the leverage that has been built up until July. So we saw that in our customer trading behavior as well. But overall, if you look at a longer time horizon, the margin balance of our customers have been steadily increasing and that's a result of our actually best-in-class margin rates for our premium customers. And so we are seeing more usage of margin. We're seeing greater trade flow. And I think longer term, you'll continue to see that going up. I think July is more of a kind of one-off. So overall, like as our AUM continues to grow, and we expect our margin balances will continue to grow as well.

Yes. And I would also add that Again, I've said multiple times on this call, August has been a very healthy trading month for our customers. It seems that risk on is back on, so to speak. And I'm seeing like real time, our margin debit balances are trending to get to all-time highs, if they're not there today.

The next question will come from Mike Grondahl with Northland Securities.

Congrats on the quarter. First off, I just want to circle back on the marketing spend in the quarter. I was surprised it dropped $15 million sequentially from about $50 million to $35 million. H. C., can you quantify how much maybe 1Q and 2Q had in it related to 2025. And when you said marketing spend is still normalized, do you mean that will drop in 3Q and 4Q kind of the reported number? I'm just trying to figure if there's some more leverage there.

Sure. I think it's about 40% the marketing expense in Q1 and to a lesser extent, in Q2 is related to last year. So when we say normalizing, we just mean that the marketing spend will be more reflective of the actual marketing promotions that we're doing as opposed to having a lag -- being a lagged indicator from last year. So I think going forward, for the remainder of the year, we can expect marketing spend -- I mean, absent of significant changes in the market, we kind of expect marketing spend to be probably similar in quantum to the first half. So that means that we are -- we'll continue to invest and acquire new customers. We'll continue to invest in acquiring AUM. So it will not be lower for the -- compared to the Q2 levels, but we also don't expect it to be higher than the Q1 level. So I hope that answers your question.

Got it. And then just related to that, what are the marketing priorities right now? What are you kind of out there promoting or pushing today with the spend?

So focusing on brand building, focusing on quality account acquisition and focusing on international growth. And so obviously, the majority of our marketing spend still sits in the U.S., but that's just because of the scale of the market here. But if you were to look at proportionately in the smaller markets outside of the U.S., we are aggressively reaching new customers and onboarding new funded accounts. The -- we look at kind of [ TAC ] and payback rates all over the world, and we kind of put our foot down on the gas in markets where we see kind of the most return on investments. So right now, again, it's branding in the U.S. It is quality customer acquisition outside the U.S.

Got it. And then your institutional strategy overseas. A couple of quarters ago, you talked about merits. Anthony, how is that going? Is that where you thought it would be August of '26. Kind of an update there would be helpful.

No, I -- is it where I thought it would be? No, it's taken longer than I had expected. That being said, we are ready to fight on all cylinders hopefully by the end of this month, the end of August, especially with several of the kind of large Korean platforms that we partnered with. The onboarding process and the ability to build that institutional pipeline is a lot easier outside of the U.S., specifically because of our differentiation of kind of having so many options outside the U.S.

If you just think of trade execution as an institutional business. We operate right now in 18 different markets, we can execute trades in 16 of those 18, right? That is -- that's a huge differentiator for us. That's obviously an easier product to sell to platforms that are outside of the U.S. where the appetite for global trading is higher than it is here?

Got it. Hey, lastly, I would just ask on the crypto, you gave us that number. I think it was $2.5 million or close to that of revenue. Do you have a number of revenue you generated in the quarter tied to prediction markets?

I don't think we break it down in the quarter, but I don't think we have it in the sheet, but I absolutely know what the number is. And happy to say that sequentially our prediction markets are up 71% quarter-over-quarter. I'm sometimes a little hesitant to put out like a specific number because it is a growing business and it's not as robust as some of our peers. But we're probably doing anywhere between $5 million and $6 million per quarter right now in prediction markets, and that number grows significantly month-over-month.

The next question will come from Brian Vieten with Siebert.

Great. I know we've covered this a bit. But in the PDT rule went -- first went into effect, it is early 2000's, can you just speak again to how broad-based you're seeing this within your customers? And I know you said there's a little bit of a ramp, but just one more time as far as -- is this something that only a handful of folks are really driving a lot of this increase. Does that ramp throughout the year?

And then just one more on just the adoption curve there. And then just one more on competitive dynamics. I know everybody is using a different exchange and the exchanges, I understand, implement this over the next months 15 months or so, 15, 18 months, something like that. Is there a first-mover advantage? I know you guys have this platform that -- and customer base, it's very digitally native that allowed you to be very first mover. Is there much of a competitive advantage here? Or is it just kind of a rising tide of sell bus dynamic?

Brian so on the PDT stuff, not to beat a dead horse too much. I think it's when you're dealing with -- if you think about customer demographic customer age, right, and maybe this isn't widely known, but average customer age on Webull sits at still, it's actually been for probably the last year sits at 34 years old is our average customer age. A lot of our newer users of the platform are significantly younger than that, right? And so having them come on board now without even knowing what PDT means, not having any cares of what PDT means, it changes the dynamic, whereas, I would say, a year ago, I'm just using broad numbers, but a year ago, you would see clients specifically avoiding our low AUM clients, specifically avoiding certain asset classes, meaning options and equities because of that limitation. And oftentimes, they go to products like prediction markets, they go to products like crypto trading, so they can scalp, they can trade in and out of names, they can play momentum and had to basically go around the PDT rule.

And I talked about fractionalization of brokerage accounts, like that's cumbersome. It's really a pain in the neck. It's an inconvenience to the client. So sometimes they would just trade other products. Like that restriction is completely gone, right? And the idea that someone just starting their trading -- they're kind of trading life, right, their interest in trading markets. Now the options market is kind of #1 product they're looking at now because they're not having to deal with any restrictions on how many times they can actually get in and out of a position. This is, I think, a huge change for us, whereas, again, going back to account size.

If you talk about some of the bigger players or the more traditional platforms that have been around for the last 20 years or so, that's not the customer that excites them. They're looking for that big asset transfer. They're looking for someone to grow their asset management business, so they can add another T on their AUM. This is our core, right? This is how we build and become that platform in 20 years where we have trillions under AUM. So we're focused on these clients, and it's really paid off in terms of seeing our engagement levels grow in terms of seeing the amount of interest we're seeing in actively trading their accounts on a daily basis instead of on a onetime a week basis. So that ramp, I think, will continue as trading behavior evolves and changes were long having PDT as being an obstacle to either get around or avoid completely.

And then the second part of your question asking about the exchange, I didn't fully understand it. Would you mind kind of just drilling down a bit more?

Just-- I know you guys were one of the first ones to implement. So I was just curious if there is much of a first mover advantage or if it's I think it's more exchange specific, but I was just curious if you guys are getting maybe incremental adds because you guys added this first or if it's not really of an impact there?

Sorry, my bad. Brian, I thought you said exchange, not to change. So I think -- in terms of our share of voice, meaning how much press we received during the PDT rule change it was actually the biggest kind of momentum that we've ever seen in terms of I believe, I mean, these numbers may be a little off because my marketing team likes to show off. But if you -- like if you take every article that was published that talks about the removal of the PDT rule, Webull was mentioned in almost 90% of them, right? And we have never had an event like that.

And so the amount of exposure that we've gotten by making sure that we were well ahead of this change, both from a media standpoint as well from reaching out to different outlets. I was educating reporters kind of in the background behind the scenes. Obviously, aggressive kind of customer awareness and customer education ahead of the rule. So yes, I mean, I'd love to take that credit, if you're willing to give it, that first-mover advantage is going to help us. But it definitely lives -- it leaves all tides, right? So even like I mentioned earlier in the first part of your question, if I'm opening up an account at one of my peer platforms that doesn't even care about PDT or is really not targeting a 25-year-old that wants to trade a $2,500 account, they're still going to get the added benefit of that customer trading more, right? But first mover advantage, I'll take the one.

This will conclude our question-and-answer session as well as conference call. Thank you all for attending today's presentation. You may now disconnect.

Good day, and welcome to the Webull Corporation First Quarter 2026 Earnings Conference Call. [Operator Instructions] Please note, this event is being recorded.

I would now like to turn the conference over to Carlos Questell, Head of Investor Relations for Webull. Please go ahead.

Good morning, good afternoon, and good evening, everyone. Welcome to Webull's first quarter 2026 conference call. Earlier today, we issued a press release detailing our first quarter financial results. A copy of the release can be found on our IR website at webullcorp.com under the Investor Relations tab. Please note that this call is being recorded and will be available for replay via our IR website.

During the call, we'll be making forward-looking statements about the company's performance and business outlook. These statements are based on how we see things today and contain elements of uncertainty. For additional information concerning the factors that can cause actual results to differ materially please refer to the cautionary statement and risk factors contained in our filings with the Securities and Exchange Commission and press release, both of which can be accessed via our website.

Today's presentation will include a discussion on adjusted operating expenses, adjusted operating profit and adjusted net income, all non-GAAP financial measures. Reconciliation of these non-GAAP financial measures to their most directly comparative GAAP measures are included in the press release that we issued today. It is important to note that although we believe that these non-GAAP measures provide useful information about our operating results, this should not be considered in isolation or construed as an alternative to their directly comparative GAAP measures. Furthermore, other companies may calculate similarly titled measures differently, limiting their usefulness as comparative measures to our data. We encourage our investors and others to review our financial information in its entirety and not rely on a single financial measure.

With me today is our Group President and U.S. CEO, Anthony Denier; and our Group CFO, H. C. Wang. We will begin with prepared remarks and then take questions at the end. With that, I'd like to now turn it over to Anthony.

Thank you, Carlos, and hello, everyone. Thanks for joining us today. Before I walk through our first quarter results, I want to step back and share how I think about the moment that our industry finds itself in and the direction it is heading. I believe we are living through a genuine inflection point in financial services. For the past decade, the defining competition in retail brokerage was fought on user interface, who have the cleanest app, the most intuitive UI, the strongest brand. This healthy competition is certainly not over, but a new channel has opened, and we are at its beginning.

Increasingly, the question is not how a human interaction with the trading platform, but how an AI agent does. The interface of the future is not a screen on a smartphone. It is an API and the brokerage platform best positioned for the future is the one with the most complete, multi-liable and most developer-friendly execution and custody infrastructure. That is the platform we are deliberately building to position Webull as the industry leader. This is not a distant aspiration. It is informing decisions we are making today in our API architecture, in our AI product road map and in our B2B infrastructure design, and it is why I believe the results we're reporting today not only signal another strong quarter but confirm that Webull is executing on the right long-term strategy.

Webull's first quarter results represent a strong start to 2026, our second year as a public company. Revenue grew 36% year-over-year to $160 million. Customer assets reached $24 billion, up 90% year-over-year. And importantly, order flow from our institutional business, which we highlighted last year as a new area of growth reached 9.5% of total platform equity volumes in the first quarter, a testament to the strength of our institutional product offerings. Since our listing just over a year ago, we have continued to execute on our ambitious plan to elevate, expand and scale the business across three dimensions: Enhancing the trading experience for active traders, expanding our global reach and extending the platform into B2B and institutional markets.

That execution has put us on a path of solid business growth and balance sheet strength, which is why we recently announced a share repurchase program of up to $100 million of our Class A ordinary shares. This program reflects our confidence in Webull's long-term value and our commitment to disciplined capital allocation. We are a company that invests for long-term growth and also returns capital to shareholders when appropriate. I am very proud of what the Webull team has achieved and extremely excited from what we plan to deliver to our customers and our shareholders.

With that, let me now walk you through the highlights of this past quarter in more detail. Turning now to Slide 2 to summarize our first quarter highlights. We recorded revenue of $159.9 million, up 36% year-over-year, driven by high trading volumes across all core asset classes. Customer assets decreased slightly from the beginning of the year to $24 billion due to market volatility, but still represent a 90% increase year-over-year. Equity notional volume increased by 104% year-over-year to $261 billion, and option volume rose by more than 31% to 159 million contracts. Our additional offerings, including futures, prediction markets and crypto, all contributed to our growth this quarter.

Futures, in particular, is seeing excellent growth, 84% on a year-over-year basis and 27% growth sequentially, that growth was driven by huge interest in commodities futures, especially oil futures, showcasing the breadth of our offerings and the variety of instruments we offer investors in times of geopolitical and market uncertainty. While we have now been public for over a year, we're still in an early and high conviction phase of our growth journey, and we will continue to aggressively invest in targeted opportunities that will power long-term growth. That investment is reflected in our adjusted operating expenses of $141.1 million, representing an increase of 64% on a year-over-year basis. We are not managing this business to increase short-term margins. We are building for long-term category leadership.

Now turning to Slide 3 and on our 2026 priorities. AI sits at the center of everything we are building. Our product road map this year reflects three the sync, but reinforcing priorities, deepening the experience for self-directed active traders, expanding our global footprint, and building the infrastructure that powers our institutional and B2B platform. For active traders, we are rolling out three initiatives that materially expand the self-directed investment experience at Webull. First is Vega Analyst, which builds upon our industry-leading AI capabilities to revolutionize their research experience or self-directed active traders. For the first time, in near minutes, retail investors will have access to comprehensive nuanced and personalized research akin to sell-side research available to institutions. Subscribers to Vega Analysts can request research reports on any company at any time, enhancing their ability to make informed real-time decisions. We're currently data testing this new feature with a select group of customers, but look forward to rolling it out across the U.S. and globally in 2026.

The second initiative is Portfolio Blueprint, which enables one click portfolio construction and execution, including comp trading. Portfolio Blueprint will give active traders the ability to act on conviction with the speed and sophistication our platform is known for. Lastly, later this year, we plan to add AI portfolio, enabling a genetic portfolio construction and trading for our customers. bringing the power of AI-driven decision-making directly into the hands of active investors. The SEC's elimination of the Pattern Day Trader rule is a structural tailwind for everything we are building for our active traders. When the rule becomes effective on June 4, Webull will be ready to support our customers on day 1. Our engineering team moved quickly to update our systems and implement the rule change ahead of the effective date demonstrating the agility and technical capability that distinguishes level from legacy brokers.

Every legal customer that qualifies for intraday margin will be able to place unlimited day trades from the moment the rule change takes effect with the full benefit of our zero commission model and product depth behind them. On international expansion, expanding global access remains a key pillar of our growth strategy, and we've taken some truly exciting steps in the first quarter. We received permission to operate in 22 additional markets in the European economic area during Q1, and are now approved to expand across all of Europe. Currently, we operate in 15 total markets and have expanded our zero-commission offerings to 7 markets beyond the United States, namely Hong Kong, Singapore, Canada, the U.K., Australia, Brazil and Mexico. We recently launched operations in Germany and will continue our rollout into additional European markets through the year.

In APAC, our customer assets have grown to $4 billion, and we now have over 790,000 funded accounts outside the U.S. Our ability to export the U.S. retail trading experience at scale, thanks to our global infrastructure, compliance capabilities and product depth remains a genuine competitive differentiator. For our institutional and B2B platform, this quarter, we received approval for our U.S. self-clearing license, a significant status for our B2B business and the evolution of our platform. This gives us the ability to clear trades and custody securities entirely in-house, strengthening the operational backbone of our B2B business and creating meaningful synergies and operating leverage as the institutional business scales.

On the technology front, we recently released our MCP server, enabling AI agents to interact with Webull's platform neighboring, positioning Webull as a preferred execution and custody layer in the emerging agentic stack. As AI-driven investing becomes mainstream, we believe broker infrastructure quality will be as important a competitive differentiator as user experience is today, and we are investing accordingly. Institutional flow accounted for 9.5% of our equity notional volume during Q1, reflecting meaningful traction in a business we are in the early stages of scaling.

In Australia, we launched Webull Connect, a tech-enabled portfolio management and execution platform purpose-built for financial advisers. In Hong Kong, we launched Trust [indiscernible], a system designed specifically for trustees, enabling them to manage segregated investment portfolios for individual trust clients. Together, these launches reflect our commitment to building B2B infrastructure that serves the full spectrum of professional and institutional clients across our key markets.

On Slide 4, I'll discuss our continued user and funded account growth. Our investments in marketing continue to drive adoption. And during the first quarter, we added approximately 800,000 registered users. Over the past year, we added more than 3 million registered users, a 15% increase compared to the first quarter of 2025. And bringing the platform to a total of 27.6 million registered users. You may know we will originated as a global market data platform before evolving to become the leading digital investment platform we are today. As a result, we have a considerable number of registered users that still take advantage of our data offerings in countries where our trading platform is not yet available. We are committed to providing access to best-in-class market data and information to all users irrespective of geography and their ability to invest on the platform.

On the right side of the slide, you can see funded account metrics. Funded accounts defined as accounts where customers have made an initial deposit and the balance has remained above zero for 45 consecutive calendar days as of the record date showed steady growth. We added approximately 80,000 new funded accounts this quarter, bringing the total number to 5.11 million, an 8% year-over-year increase. As we continue to innovate and enhance our offerings, we're also happy to report that our quarterly retention rate was at a record high at 98.4%.

Turning now to Slide 5. Customer assets increased by over 90% on a year-over-year basis to $24 billion and customer net deposits in the quarter were $2.1 billion, also up over 90% year-over-year. Sequentially, both metrics declined, reflecting a challenging macro backdrop in Q1 as a software sector selloff and escalating geopolitical tensions drove equity market volatility, while rising energy prices and inflation concerns weighed on investor sentiment. This was an industry-wide dynamic, what the numbers demonstrate, however, is that our customers remain engaged and continue to make meaningful deposits into the Webull platform during the quarter, a testament to the trust they place in us.

On Slide 6, you will find trading volumes for the quarter. We continue to see growth in prediction markets and crypto, but equities and options trading remain at the heart of our business and equity and option volumes continue to increase. In the first quarter, equity notional volumes surpassed $261 billion, up 104% year-over-year and up 9.2% sequentially. Options contract volume totaled 159 million contracts for this quarter, up 31% year-over-year and up 3.2% sequentially. These results reflect an all-time high for Webull and highlight our commitment to providing the first choice platform for active traders, both here in the U.S. and increasingly globally. Our user base trades consistently across all assets, reflecting a grounded approach fueled by disciplined and forward-looking commitment rather than a short-term gain and momentum chasing behavior.

With that, I'll pass the call over to H.C. for a closer look at our financial results for the quarter.

Thank you, Anthony, and thanks to everyone for joining us today. In the first quarter, Webull generated total revenue of $159.9 million, representing a 36% increase on a year-over-year basis. This strong performance reflects continued strength across both trading and interest-related income streams, which I will walk through in more detail shortly. On the expense side, adjusted operating expenses were $145.1 million, up 64% year-over-year, primarily driven by increased marketing and branding investments. In the quarter, we continued our successful asset matching programs in a number of our global markets, driving $2.1 billion of net deposits in the quarter despite a very challenging market environment. We also launched awareness campaigns to promote our dural commission offerings in international markets such as Hong Kong, Canada and Australia.

On the branding side, we became the first official jersey patch sponsor of the Tampa Bay race and remain their official online brokerage. This has deepened our presence in the Tampa Bay area, giving us a mark platform to engage sports fans and create a meaningful brand visibility in the priority market. We are pleased with the returns we're seeing on these investments, and marketing will remain a priority for us as we continue to invest in customer acquisition and AUM growth.

I will now walk through profitability and then the key components of revenues and expenses in more detail. Turning now to Slide 8. Q1 marks our sixth consecutive quarter of operating profitability. Adjusted operating profit was $14.8 million, representing a 9.3% operating profit margin and adjusted net income came in at $9.2 million, or 5.8% of revenue. Both are lower compared to prior quarters, primarily reflecting the step-up in marketing investments I just discussed. We remain confident that as revenue scales, marketing as a percentage of revenue will continue to come down and margins will improve accordingly.

Turning to Slide 9. Our trading-related revenues continue to grow as we witnessed another quarter of record trading volume across asset classes. Trading-related revenues increased 36% year-over-year to $110.9 million and starts increased to $1.31 million in the first quarter. We are seeing broad-based activity across our core equities and options products as well as newer products such as futures, crypto and prediction markets. Once again, our results demonstrate that our active traders remained engaged and traded through what was a fairly choppy macro environment in Q1. We're seeing a strong rebound in trading activities in April and May as the market recovers and reaches all-time highs. This positions us well for sustainable growth in trading revenues over time.

Turning to Slide 10. In the first quarter, interest-related income grew 29% year-over-year to $40.1 million, mainly driven by growth in our margin loan and client cash balances. This line item has been relatively stable in the last few quarters. The sequential decline was primarily attributable to a decrease in fully paid stock lending revenue, which was an industry-wide dynamic tied to market conditions, which we expect to normalize as the market activities pick back up.

Finally, let's turn to Slide 11 for a closer look at operating expenses. Adjusted operating expenses increased 64% year-over-year, again, mostly driven by marketing and branding investments. Excluding those expenses, our cost base remains well managed. As our operating profit margin ex marketing has remained at 40% or higher every quarter since Q3 of 2024. As revenue continues to grow, we are confident that we will be able to scale expenses at a lower rate over time.

Lastly, many of you have asked, and I am excited to share that starting this month, we will be publishing monthly operating metrics. You will find them under the Investor Relations tab of webullcorp.com. We believe more frequent data points will give investors and analysts a better view of our business performance between quarters.

With that, I'll turn the call back to Anthony before we open the line for questions.

Thanks, H.C. Q1 was a strong start to our second year as a public company. We delivered record trading volumes and solid growth in revenue in AUM, while making real progress across all three of our priorities, deepening the experience for active traders, expanding globally and growing our B2B and institutional business. I am energized to continue the hard work of this quarter alongside our global team as we are committed to enhancing, expanding and extending our business to cement Webull as a leader in an increasingly popular and evolving industry. We look forward to engaging with you at our forthcoming investor events this quarter.

And on that note, we welcome any questions you may have, either here on the call or one-on-one. Thank you.

[Operator Instructions] The first question comes from Karim Assef with BofA, Bank of America.

I appreciate the update and congrats on a strong quarter, strong results. My first question is on the Pattern Day Trader rule. How do you think about the impact of that change on your client base, both in terms of trading activity and cohort expansion? And how meaningful could this be for Webull as a structural driver of engagement and monetization in the future?

Hi, Karim, thanks for the question. So we've been preparing for PDT, it seems like now for almost a year, happy to make it very clear, like we just announced, we will be ready on day 1, which is now June 4. I think there will only be several of our peers that maybe will be ready on June 4, but the legacy brokers, in my opinion, will not not only because they have a much bigger ship to turn, especially with the legacy systems that they've had in place, combining with acquisitions and older systems, a lot of Band-Aids to kind of remove. Also, it's not the top priority, right? And if you look at kind of the AUM of customers on neo brokers and Fintech significantly lower than on kind of legacy web-based platforms, the Schwabs of the world, and eTrades of the world. So their customer PDT was not as big of an issue for their active trader client base. The average account size at Webull as of our end-of-quarter AUM sits just below $5,000 per account. So are the biggest cohort of clients that we have on the Webull platform are directly impacted by this rule change. And we have several different models that we put together, whether you want to call them kind of a bear or neutral in a bull case, my expectations, and of course, this is speculation, but my expectations on the low end is an increase of 20% on the low end in terms of transaction increase we're going to see with the removal of PDT. This is not going to happen on day 1 on June 4, but I believe this will happen over time. Also, the removal of PDT presents a very unique opportunity for account consolidation across the industry. You may be aware, you may not be aware, but it is quite common for active smaller AUM clients to have multiple brokerage accounts. And because of that PDT rule, they'll they trade 3 times on 1 platform, and then they have to wait 5 whole calendar days to day trade again, and you'll see them go to a different platform, engage max out their PDT there, so on, so on and so on. So the removal of the PVC and being a first mover is, I think, really significant for us to do a consolidation of a lot of those fine assets into their Webull account. And we have a marketing plan already laid out, and we are going to start going live as we get closer to the date to make sure that there's one education of the rule change, what it exactly means obviously, awareness that we are ready to not limit the amount of day trades and also possibly offer incentives to consolidate those accounts over to Webull. So it's -- this is a very big event for us, and we're making sure that we're taking full advantage of it.

Got it. That was very comprehensive. My second question is on volumes, and you guys touched on that a little bit in your prepared remarks. We've kind of, I think, in 1Q versus 4Q, we've kind of seen a broad sequential decline in equity and options volume at some of your peers, but yours were very strong and accelerated quarter-over-quarter. I appreciate that part of the increase in the equity volumes and 1Q was driven by the institutional opportunity or the institutional volumes. So could you maybe like speak about that a little bit, how meaningful or how big of a contributor do you see that institutional opportunity for Web over time, especially in periods when there is like a pullback from the retail cohort of clients.

Well, first off, I appreciate you very much pointing out the fact that our volumes increased in Q1 versus a lot of our competitors decreasing in Q1. So thank you for that. I would attribute our continued acceleration in volumes across equities and options, having to do with multiple factors. I think one is the core client base that we that we concentrate on, and that's obviously the active client base. Times of volatility when you see a rising VIX, there's a lot of momentum and a lot of opportunity where a casual retail trader will often kind of sit on the sidelines and wait for things to kind of normalize and calm down. We see often the opposite effect, especially with our cohort of active traders where it's actually a moment to be more engaged in the market and take advantage of those big swings. I think the second factor in our increase in volume has been our international growth. We've seen huge increases in equities and options volume trading coming from our broker dealers that are outside of the U.S. In fact, Hong Kong, in particular, now is doing is doing a belief we have a Hong Kong broker-dealers equity flow is now a very close second to all 13 of the others combined. Meaning that one broker dealer, then I'll tell you why it's getting so high. But that one broker-dealer internationally is contributing so much order flow because of its concentration on institutional and B2B accounts outside of the U.S. And so that's the third factor. We did separate institutional order flow in this quarter's earnings because we've been talking about the buildup and the energy we're putting behind building our B2B infrastructure, and we wanted to put some context behind it in Q1 on this earnings call so we can actually display exactly how much how much positive reinforcement that institutional and B2B business is bringing to our order flow represented almost 10% now of our order flow is coming from non-retail. And we only expect that number to go up and accelerate very, very, very quickly and very aggressively.

Next question comes from Chris Brendler with Rosenblatt.

Congratulations on the results. I want to dig a little deeper into the PDT rules, and just how we should think about the opportunities you consolidate customers who have multiple brokerage accounts. It seems to us that this would be a significant part of the opportunity for Webull, just given your platform and the advanced training tools that you offer. Any early color on how you guys are thinking about that opportunity as more customers can concentrate their trades at -- just a couple of venues instead of spinning it around?

Chris, for a moment, you dropped off, I don't know if I heard the whole question. So I am going to apologize. So I heard, are there any tools or differentiation in the platform that will help us in PDT? Was that the question?

Just like just as you think about the competitive landscape and Webull's competitive positioning among active traders, I would think this would be a pretty significant opportunity for Webull to consolidate when clients start consolidating their trades at a fewer venues because they don't need to spread trades around, I would think it would be a pretty significant opportunity for Webull just given your competitive positioning and your focus on active traders, but I was not sure how to think about that yet. I'm just wondering if you had any early thoughts.

Yes. No. I mean, hit it right on the head. Webull from day 1 has been built for the active retail trader, right? It's -- we didn't bolt this on if they're operating for 5, 6, 7 years. We've always been focused on active traders. So this represents a great opportunity, I think, specifically for the customer that we've always catered to, the one that I think we speak their language in terms of the way that we offer and the way we prioritize execution quality, the way we prioritize the ability to navigate the app and quickly be able to make decisions. Also, I want to counter with our AI integration into the platform is also going to be specifically focused on making active traders better at taking advantage of opportunities as they come up in real time. And so as we've rolled out the AI Vega product, we have seen that our active traders, so we kind of drop them into three distinct cohorts. We have our active traders, our kind of investor class of traders and then we have the beginners. And the active traders are using our Vega platform on average about 16 to 17x per month. And 20% of those bonds are at there making a trade after they engage with Vega. And the majority of those inquiries are on an in-depth stock analysis and then they're making a trade. So all the tools that we're building are leading towards this removal of PDT to take the restrictions off of our customer base on how they can generate an idea and an opportunity in real time.

Great. A quick follow-up there. Do you think from an education standpoint, how quickly will we see this play out? Will it take a couple of quarters, a year? Would we see an inflection in June? How should we think about the implementation on June 4?

So we're trying to maximize on the immediate impact with a lot of our marketing plans that we have put together. Like I mentioned earlier, we're going to be using incentives to bring a lot of our consolidating our active trader base, so they're moving their balances from our competitors over to Web specifically. One, we're built for them. Number two, we're ready to go on day 1. And number three, we're going to continue to bring out products that cater to active traders. And we are, again, positioned perfectly in my opinion, to take advantage of this immediately. Now that being said, at the end of -- on our Q2 call in several months, I'll have at least almost 1 month of data to share with you, but expectations that this is probably going to be a bigger Q3 impact rather than the 1 month that's going to exist but we are combined and prepared to take advantage.

Okay. Great. Last question for me would be on the prediction markets. A lot of momentum in the fourth quarter. Can you give us a little more color on how friction markets trended in the first quarter? Because I think it's like blended with the features business. Obviously, a nice bump up in the revenues there, but just would love to see or to hear how production markets trended in the first quarter? If you can give us any color there.

Prediction markets through Q1 kind of stayed on the same trajectory path as we saw in Q4. To be fair, I don't think we have not fully tapped the opportunity that exists in prediction markets. You guys have heard me talk about this before, but prediction markets, I think, is the greatest school for new customer acquisition and reengagement of dormant customers. It's a very easy product to market. It expands our addressable market, I think by magnitude of multiples. So that's where the value is and continues to be for us. In terms of volume and prediction markets, we're kind of averaging around 100 million contracts a month to put a number on it. But from an overall revenue percentage, prediction market revenue still represents a small amount of quarterly revenues, I would say, an approximation where around 2% of our total revenue is coming from prediction markets, and we are still very focused on equities and options at that core.

The next question comes from Steven Chubak with Wolfe Research.

So maybe to start, Anthony, you outlined the future trading with more customers leveraging agentic tools the expectation among most investors that we've engaged with on this topic is that this could spur a meaningful uptick in trading activity, but there's also concerns around the risk of third-party agentic tools gaining access to the platform. And I wanted to get your perspective on how you might protect against things like rogue behavior or the potential risk of hallucinations in a world where these genetic tools are leveraged more readily.

So like I mentioned on the call in the beginning, I believe that access and being the infrastructure for these new AI agentic platforms that seem like they're popping up. I mean, every day, I'm hearing of several new ones. There's a lot of safety measures that we need to be aware of. I readily agree with that. I think one of the priorities that we always have this platform is security is safety and is, of course, compliance. We are a very heavily regulated business. We're here for customer protection if the customers do not succeed, Webull does not succeed. So although we are fully embracing our investment in our new MCT server, investments in the different API infrastructures there also is a lot of concentration on building out new risk controls and products and making sure that, one, education, disclaimer as well as notification and making sure that customers understand what this AI agent is doing for them and within their accounts. That's going to be a top priority. And in fact, I mean, since this is such a kind of new area, we're working hand in hand with regulators kind of as we speak on building out what proper framework what the proper control should be for this new way of trading. But regardless of however those conversations come out, this is going to be a structural change of this business over the next 2 to 3 years, where the idea of competing simply on a user interface on a smartphone is no longer going to be a battleground. It's going to be on access to products, pricing, execution, quality and having the best integration with these AI agent platforms.

I appreciate that perspective, Anthony. And for my follow-up, just a question on the margin outlook. And I was hoping you can offer some perspective on how you're balancing investment spend and revenue growth you noted that you're not going to sacrifice near-term margin for the long-term upside, but it might be helpful if you can outline how you expect OpEx to traject based on your current investment plans as well as your marketing budget? And how that informs incremental margins as some of these investments begin to bear fruit.

Sure. I think I'll take this question. So as you can see that we've -- since we've been a public company, we have been profitable every single quarter on an adjusted non-GAAP basis. And also, we have been kind of managing towards around a 40% profit margin, excluding marketing. While the 40% margin, excluding marketing is not a hard and fast rule, but I think it demonstrates our commitment to really be a profitable company and be disciplined around our operating expenses. Of course, marketing has been and will likely continue to be for a period of time, a significant portion of our revenue. It's been around 20% in the last two quarters. I think Anthony had mentioned that we have prepared marketing plans around the PDT rule. There's also going to be we have been doing marketing promotions around our zero-commission offerings outside the U.S. There's also a number of events coming up later this year around new products. So we'll continue to invest in these strategic initiatives and opportunities for customer acquisition, AUM growth. But over the course of the next year or 2, I think we fully expect revenue to to really pick up, especially with these tailwinds that we're seeing. And we should expect to see a narrowing of the marketing spend as a percentage of revenue even if the absolute amount does not decrease, and then we'll see expansion in operating margins over time.

Our next question comes from Mike Grondahl with Northland Securities.

Anthony, could you talk a little bit about how Merit is ramping how many stocks now are traded on your platform? And just give us a flavor for that.

Hi, there, Mike. So yes, I mean, Merit is progressing very, very well. In fact, part of that, almost 10% institutional flow, a big part of that is that a little apprehensive to disclose exactly the amount of flow that they're sending us because that is driver for them. But we've expanded the amount of symbols that they're sending us. A lot of the order flow is not just the overnight order flow, but it's a regular session order flow, which is much more profitable for us in a take rate scenario. So very healthy growth there. But outside of merits, which I definitely want to highlight, I mean I know I mentioned on previous calls, that it takes a long time to onboard these institutional clients, these BAB clients. We're nearing 200 institutional clients now that are onboarded on our platform. And yes, Merit is the one that we press released because it's the largest in the first that we've onboarded in South Korea. But like I've mentioned before, the pipeline is extremely strong, and it's only getting stronger. And all the investment that we put into building out this BAB infrastructure through 2025, is now starting to bear fruit. And this is only Q1, which to be fair, was a very difficult market for trading volumes. And I think the proof is in the results, and we're going to continue to see that international allocation expand in terms of our total trade volume.

That's great. 200 is a big number. Maybe second for H.C. Can you state what you said about April and May, again, especially maybe in relation to March, February and January, how were April and May?

Sure. Actually, thanks for asking. In fact, we -- starting this quarter, we have started to release monthly metrics. So this is actually on our presentation in the appendix section, first slide in the appendix section, actually. So you can see our trading volumes are at all-time high in April. Our market share is an all-time high. And we see that trend continuing and actually accelerating into May. So we -- and we will be releasing these monthly metrics, probably just a couple of weeks after the end of the month. So now you guys would not need to wait until the next earnings call to find out how we're trending.

Got it. And maybe just lastly for Anthony. Crypto, are you -- you kind of said prediction markets was maybe 2% of revenue. Is crypto anywhere on that scale?

So in the past, I've laid out very clearly that crypto has a huge opportunity for us. If you look across our peers, Crypto represents anywhere from 15% to 25% of revenue contribution in terms of products. Crypto for us as of Q1 was, call it, almost 2%. So again, very similar in terms of revenue attribution. But again, that is the opportunity there. And I had plans to have a March rollout of 2 different important products that will level us on the playing field in crypto. And that's simply point in point out capability, so we will customers can have their own wallet. It's going to fee out in [ Fia Altinerio, ] which it currently is. And secondly is staking. Those actual products were pushed back on a time line. We have not released them yet, specifically because we diverted resources to make sure that we put in place or agentic MCT server to take advantage of this new evolution of a genic AI trading platforms. So it was pushed back a little bit on time line, but in retrospect, it's still a very difficult time for crypto. So I think it was the right kind of focus on prioritizing product rollout. We also expected in to roll out the point in point out and the staking products for crypto which will then give us, again, that opportunity to squeeze the sheet in terms of margin -- in terms of margin compression, in terms of pricing crypto product, serving an active crypto trading clientele. And I think one anecdote that's really important to understand is all the new accounts that we've opened year-to-date, about 20% of those, the first trade that they made after funding was an actual trade in crypto, which tells me that our customer base is still very much engaged. If 20% of my new accounts are treating crypto at their first engagement on the platform, that is a huge opportunity to take our representative of approximately 2% of revenue currently to take that up closer to 20% and in a short amount of time, like the customer is there, we just got to have to get the photo there. So I am very optimistic still on crypto even though it is a relatively small product in terms of revenue.

[Operator Instructions] The next question comes from Jose Valcourt with Compass Point Research & Trading.

This is Jose on for Engel. You guys were approved for self-clearing. And so now that you ARPU, how would self-clearing help improve competitiveness for the B2B2C business? And how long will it take to start seeing benefits from those cost savings.

Yes. Thank you for the question. First off, becoming a -- or being granted a self-clearing license in the United States is, one, no easy feat. It actually has taken us multiple years to finally get over the line and get approval from our regulator. But the journey is not over. There are still 2 different institutions that we need to get -- I'm using [ in boats ] to get approved for and onboard with. And that's DTCC for the equities element as well as the OCC for the option settlement. So I don't expect the self-clearing business to be operational until the end of the year, meaning clearing our own equity trades and clearing our own options trades probably until Q4 of this year. But having said that, having the ability to sell clear our own trades now for U.S. products is a huge game changer for our business. Not only does it streamline the ability of being able to manage our own cost better. Think about every single trade, the millions and millions of trades we do every day, we have to pay fee to our clearing firm to clear those trades and to custody those trades. So it not only will decrease our costs, our transaction costs significantly, but we can also pass those reduced transaction costs to our customers, making us much more competitive on the pricing side to win more business, especially on the B2B side.

Got it. No, that's very helpful. And then as a -- just another quick question to ask. You guys highlighted your international expansion opportunity very well in the 2026 road map slide. How should we think about the rollout in Europe? Are you seeing similar B2B2C opportunities here like you are in Asia?

I think it's still early to tell. We only launched our first European broker-dealer, which was our Dutch broker dealer back in September of '25. So it's still a relatively new operation. It's not well staffed yet, to be honest, and we're just starting to roll out into Greater Europe. So the focus now for B2B is clearly on the APAC region, where we use Hong Kong as our hub for that business. And here in the U.S., where we have our same [indiscernible] office for the hub for that business. Those are the two core B2B onboarding, one for the Western Hemisphere, one for the Eastern Hemisphere. I think most of the onboarding from European potential partnerships are actually going to come through the U.S. So again, still a very new business. I'll have more updates as we get a bit more mature.

This concludes our question-and-answer session and today's conference call. Thank you for attending today's presentation. You may now disconnect.

Good afternoon and welcome to the Webull Corporation Fourth Quarter and Full Year 2025 Earnings Conference Call. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Carlos Questell, Head of Investor Relations. Please go ahead.

Good morning, good afternoon, and good evening, everyone. Welcome to Webull's Fourth Quarter and Full Year 2025 Conference Call. Earlier today, we issued a press release detailing our fourth quarter and full year results. A copy of the release can be found on our IR website at webullcorp.com under the Investor Relations tab.

Please note that this call is being recorded and will be available for replay via our IR website. During the call, we'll be making forward-looking statements about the company's performance and business outlook. These statements are based on how we see things today and contain elements of uncertainty. For additional information concerning the factors that can cause actual results to differ materially, please refer to the cautionary statement and risk factors contained in our filings with the Securities and Exchange Commission and press release, both of which can be accessed via our website.

Today's presentation will include a discussion on adjusted operating expenses, adjusted operating profit and adjusted net income, all non-GAAP financial measures. Reconciliation of these non-GAAP financial measures to their most directly comparative GAAP measures are included in the press release that we issued today. It is important to note that although we believe that these non-GAAP measures provide useful information about operating results, they should not be considered in isolation or construed as an alternative to their directly comparative GAAP measures.

Furthermore, other companies may calculate similarly titled measures differently, limiting their usefulness as comparative measures to our data. We encourage investors and others to review our financial information in its entirety and not rely on a single financial measure.

With me today is our Group President and U.S. CEO, Anthony Denier; and our Group CFO, H.C. Wang. We will begin with prepared remarks and then take questions at the end. With that, I would now like to turn it over to Anthony.

Thank you, Carlos, and hello, everyone. Thanks for joining us today. Webull's fourth quarter and full year results show strong progress in returns for our first full year as a public company.

Our full year results reflect our success as we continue to enhance our offerings for our growing base of active traders and investors expand our client base globally and extend our capabilities to new markets including institutional investors. Following our public listing in April of last year, we have been executing on an ambitious plan to address the growing requirements of our user base of sophisticated active investors looking for autonomy from traditional brokerages.

We're proud to report that we offer that platform today, and it provides our users with a one-stop shop for securities trading as well as offering in crypto, futures, prediction markets and more. And what's more interesting is it's all enhanced by AI. AI is dramatically changing the investing industry, and we at Webull are on the forefront of many of those changes. We're proud to be shaping the future of active self-directed trading through the integration of AI via Vega, our AI assistant for trading and platform guidance, delivering real-time insights and AI-generated trading ideas, launched at the end of last year, Vega is already integral to our continued growth providing our users with market data, information and associated analysis as well as real-time portfolio monitoring with user controlled management of positions and risk preferences.

Since launching just a few months ago, Vega currently assists 1.2 million global users each week with 10% of weekly active users deploying the tool to answer over 10 million questions since creation. AI deployment across our platform also extends within our organization with AI implementation across customer service, R&D and internal operations. We're looking to integrate AI into every aspect of our internal business to optimize and scale a global business that provides a differentiated, sophisticated, regulatory compliant trading platform to users across markets.

I'm proud of the Webull team for a strong first year as a public company. I'm also proud of our leadership in the development of our AI capabilities over the past year. As we establish Webull as a leading investment platform for active traders, I want to be sure you understand how important the scale we have achieved is to our strategies going forward. We are poised to bring our solutions to brokerage firms, high net worth individuals, family offices and wealth advisers.

I look forward to chatting with all of you about B2B opportunities in 2026. With that, let me now walk you through the key highlights from 2025 in more detail. Here on Slides 2, 3 and 4, I'll walk you through our 2025 highlights. We are proud of our performance in 2025, delivering record revenue and a solid operating profit margin improvement from the prior year. We recorded revenue of $571 million, representing 46% growth from 2024, driven by record trading volumes across all asset categories.

First, Customer assets reached $24.6 billion, inclusive of approximately $1 billion in assets from the acquisition of Webull Pay, representing an 81% increase from 2024. Second, equity trading volume increased by 59% year-over-year to $732 billion, while option volume rose by 19% to 550 million contracts and our newer products, including futures, prediction markets and crypto all delivered strong growth during 2025.

We recorded an elevated but disciplined increase in adjusted operating expenses of $460.7 million representing an annual increase of 24% as we continue to invest in strategic product offerings and market expansion to support long-term growth. Operating profitability was strong with a 14.6 percentage point increase in adjusted operating profit margin on an annual basis to 19.3%, representing an adjusted operating profit of $110.3 million for the year. As our industry undergoes structural changes, we will continue to invest proactively to capture outsized share over time.

Turning now to Slide 5 and our 2025 road map. I'm really pleased with this progress. Webull Premium, our subscription-based service for active traders and long-term investors has reached 102,000 subscribers by year-end, surpassing the 100,000 target we set for ourselves. Our premium subscribers contribute 30% of our AUM, 60% of overall margin debit balances and our most active customers. Looking ahead, we aim to double our premium subscriber base in the coming year while continuing to enhance the product with additional features, making it the best value product for active traders.

One of our proudest moments of 2025 was the introduction of Vega, our AI tool that combines news, earnings and technical data to deliver a focused, intuitive experience that helps both new and seasoned investors navigate modern trading and make smarter decisions. Since its release, approximately 1 in 8 users have used the assistant before trading and Vega continues to play a role in not only bringing people to our platform but keeping them there as reflected in the 1.2 million users a week who utilize this exciting technology.

We also launched BlackRock model portfolios, which provide a robo-adviser offering and allow users to access a range of diversified portfolios across various asset classes, including alternative and digital assets. In line with expanded digital asset offerings, 2025 marked the reintroduction of crypto trading for our U.S. customers with the acquisition of Webull Pay and the launch of crypto trading in Australia and Brazil. We are also actively exploring digital asset licenses in a number of other markets and expect to bring them online in the coming year.

The introduction of prediction markets to our asset classes has also been an exciting innovation this year. This offering provides an engaging and accessible trading experience that lowers barriers to entry for users. This quarter, more than 152 million prediction contracts were traded with 81 million in December alone. We're excited to continue the momentum around prediction market with the introduction of sports prediction markets across all the major sports leagues. And while Webull has always been a global player, 2025 has been a year of further global expansion. We now have more than 760,000 funded accounts outside the U.S. APAC customer assets have surpassed $3 billion and our partnership with Merit Financial Group has increased access to the U.S. market for Korean investors.

Canada is also on track to soon reach $1.5 billion in customer assets, fast on the heels of surpassing $1 billion only 4 months ago. Additionally, we launched our platform in the Netherlands and are now licensed in 4 additional EU markets, Germany, Italy, Spain and Portugal. We prioritize delivering U.S. products to international markets from the start and it is just good business to have diversified revenue streams globally.

Looking ahead to 2026. On Slide 6, you'll see that we have identified 3 main priorities for the year. First, we will sustain and grow our elite offerings for active traders, leveraging AI tools that enhance the trading experience and allow us to maintain price leadership across the market. Second, we will continue growing our global business by cementing our position in existing markets and continuing to add to our localized product offerings.

Finally, as I noted earlier, we will be building on last year's partnership with Meritz to expand our B2B platform. On Slide 7, I'll discuss our growth in both users and funded accounts for Q4. During the fourth quarter, we added roughly 1 million registered users, bringing the platform to a total of 26.8 million registered users. We saw steady sequential growth throughout the year, posting a more than 3 million user increase year-over-year and representing a 15% increase. Our investments in marketing are yielding results and are indicative of a strong fit between our offerings and market demand.

As previously mentioned, Webull roots as a global market data platform, I mean there is a significant number of registered users in geographies where our trading platform is not yet available. We continue to offer best-in-class market data and information to all users regardless of their brokerage status, a feature of our platform has only been bolstered by the introduction of Vega to all Webull accounts.

On the right side of the slide, you can see funded account metrics. Funded accounts, defined as accounts where customers have made an initial deposit that has remained above 0 for 45 consecutive calendar days as of the record date, showed steady growth. We added approximately 100,000 new funded accounts this quarter, bringing the total number of funded accounts to $5.03 million, an 8% year-over-year increase. As we continue to innovate and enhance our offerings, we're also happy to report that our quarterly retention rate remained high at approximately 97%.

Turning to Slide 8. Webull customer assets reached an all-time high of $24.6 billion in the fourth quarter, representing an 81% increase on a year-over-year basis and a $3.4 billion sequential increase. You all know that trading volumes were high in the fourth quarter. Our growth in customer assets reflects this. Customers deposited over $3.9 billion during the quarter, an incredible 225% increase year-over-year and a sequential increase of $1.8 billion, bringing cumulative net deposits for the full year to $8.6 billion.

Lastly, on Slide 9, you'll see trading volumes for the quarter. While we saw strong growth in our new products, particularly prediction markets and crypto, equity and options remain our core offerings and trading volumes continue to grow. Equity notional volume reached $239 billion, up 87% year-over-year and 17% sequentially, while Options contract volume totaled $154 million this quarter, up 38% year-over-year and up 5% sequentially.

These results underscore the strength and resilience of our active trader base, which remains highly engaged through periods of market volatility. Our customers continue to trade consistently across 4 asset classes, reflecting a disciplined long-term approach rather than short-term momentum-driven behavior.

With that, I'll pass the call over to H.C for a closer look at our financial results for the quarter.

Thank you, Anthony, and thanks to everyone for joining us today. In the fourth quarter, Webull generated total revenue of $165.2 million, representing 50% year-over-year growth. This strong performance reflects continued strength across both trading and interest-related income streams.

On the expense side, adjusted operating expenses were $143.6 million, up 62% year-over-year, primarily driven by increased marketing and branding investments. Let me take a moment to frame this clearly. The increase in marketing spend is intentional and strategic. We are capitalizing on a strong equity market backdrop, multiple industry catalysts and the branding tailwind from our recent listing to accelerate customer acquisition, AUM growth and international expansion.

Over time, we remain confident in our ability to scale revenues ahead of the expenses supported by the operating leverage in our model. I will now walk through profitability and then the key components of revenues and expenses in more detail.

Turning to Slide 11. We continue to demonstrate consistent profitability. Webull has now delivered 5 consecutive quarters of operating profitability with each quarter generating over $20 million in adjusted operating profit. In Q4, adjusted operating profit was $21.6 million, representing a 13% adjusted operating profit margin. Adjusted net income was $14.6 million or 8.8% of revenue. For the full year, we generated $84 million in adjusted net income in our first year as a public company. As we look ahead, our approach remains consistent. We will continue to balance disciplined execution, profitability with targeted investments to capture long-term growth.

Turning to Slide 12. Our trading-related revenues continue to grow, supported by momentum from the third quarter and strong trading activity across asset classes. Trading-related revenues increased 56% year-over-year to $112.5 million and DARTs increased to $1.2 million in the fourth quarter. We are seeing broad-based engagement across equities options, future crypto and prediction markets.

Importantly, our users continue to trade consistently across market conditions. This reflects the base of active traders who remain engaged through volatility rather than being driven by short-term momentum-based behavior. We believe this positions us well for sustained growth on trading revenues over time.

Turning to Slide 13. Interest-related income continues to scale along with client assets. In the fourth quarter, interest-related income grew 31% year-over-year to $43.5 million primarily driven by higher interest earned on client cash, margin lending and corporate cash. Specifically, customer margin balances increased 43% year-over-year to $689 million at the end of Q4, reflecting higher utilization from our premium customers. Sequentially, interest-related income was roughly flat as declines in fully paid stock lending revenues offset increases [indiscernible] These investments are focused on accelerating customer acquisition and AUM growth, and we are already seeing strong early returns as reflected in our record $3.9 billion of net deposits in the quarter.

It's also important to note that excluding marketing, our cost base remains well controlled. We achieved our highest operating profit margin ex marketing in the fourth quarter at 45%, demonstrating the strong operating leverage of our platform. We expect that our margins should continue to improve as we further scale and diversify our revenue base, which will give us the flexibility we need to invest opportunistically in customers and AUM growth, particularly during periods of market expansion.

Now thank you, everyone. With that, I'll turn the call back to Anthony before we open the line for questions.

Thanks, H.C. Q4 was another record-breaking quarter for Webull on multiple fronts as we focus on growing revenue, growing AUM, all while maintaining fiscal responsibility. This is now our fourth reporting quarter as a publicly listed company and Webull have delivered growth and profitability every quarter.

As we mark a monumental milestone for the platform, I want to recognize our global team for an outstanding year. It's clear that the team's dedication has been central to the progress we've made as a company and will continue as we look forward for the next year of supporting our user base of active securities traders, expanding our platform for investors across existing and new markets and continually looking to expand our client base including the B2B offerings.

We look forward to engaging with you with several upcoming industry and investor conferences. On that note, we welcome any questions you may have, either here on the call or one-on-one.

[Operator Instructions] Our first question is from Chris Brendler with Rosenblatt.

Congratulations on the strong results. Could I ask the most obvious question first, which is just maybe dive into the marketing spend in the fourth quarter a little bit in terms of the sequential increase. How much of that went to new customer acquisition? How much of that went to incentives on folks bringing over balances? And if you could comment at all about the run rate from here if we think about 2026. Do you expect this elevated level to continue, that would be great.

Chris, Anthony here. Thanks for the question. So the Q4 marketing expense was certainly higher, and that is -- that's actually illustrated in the success in the AUM growth we've had. The majority of the marketing spend we do, you don't see Webull on Super Bowl Sunday. You don't see us on billboards around town. We focus a lot of our marketing spend on where it's most impactful for the customers that we are focused on acquiring and those are high net worth active trading customers, right? And that's reflected in the net deposits we received in Q4, right? So record net deposits, $8.6 billion over the course of the whole year, $3.9 billion over the course of just Q4 alone. And that a successful marketing campaign is the main driver for the higher marketing costs we see in Q4.

Now going forward, we're going to be very conscious on maintaining a strong operating margin. So I do not expect that the marketing cost will be as high going forward. But again, we're opportunistic where we have an opportunity to grow and to invest in growth, we will take that opportunity. So Q1 is looking much lighter than Q4 was, but that was a lot because of the success of Q4.

Chris, just something to add on top of Anthony. So if you look at our marketing expense, as a percentage of revenue, it was about 35% in 2024. And that as a percentage of revenue has actually come down to about 23%, 24% in 2025. So as we continue into the new year, we will continue to obviously invest in customer acquisition and AUM growth but we will also be keeping an eye on this ratio percentage of revenue [indiscernible] marketing. An important point, I think Anthony had alluded to is that we are -- the majority of our marketing spend is actually performance-based. So these are for successful deposits for successful account openings, these that we can track. These are not fixed branding investments that are committed early in the year. So we have a lot of flexibility to dynamically calibrate and adjust the marketing spend as we see where the market is going.

Makes total sense. H.C I appreciate that color. Since we're already in March and markets have changed a little bit since last year, certainly seeing a lot of trading volume, but also some volatility. Can you comment at all about 2026 year-to-date in terms of the trends in in DARTs and equity versus option that would be great.

Yes. No, no problem. I think I think the market is setting itself up for an interesting rest of the year. But looking back, we're almost at the end of the first quarter already. And I could say confidently now that, I mean, January was probably the second best month we've ever had as a company since inception.

So Q1 is certainly looking strong. When there is volatility, especially with our customer base, there's a lot of activity and a lot of trading. When the markets start getting harder to read, whether there's geopolitical headlines that we're reading multiple times a day now that could change the direction of the market anytime. We see a lot more concentration in our options business and the the margin in our options business is quite higher than our equities business. So that's actually a net positive for us. And I think in a volatile tape, which seems like it is going to be in the foreseeable future, I think we're extremely well positioned with just our core customer base, right?

You see a lot of our competitors looking to target active traders. We have only targeted active traders since day 1. That is our core. That is our flywheel, right? And it will constantly help us when there is volatility in the market and the activity between a casual retail trader and an active retail trader is very different. So the second part, I think that where we have an advantage is our global distribution, right? We're now operating in 14 different countries around the world, and it's great to have diversity of revenue streams with different product types with a volatile market and a questionable outcome of which direction the market is going to go.

And then lastly is our B2B business, which has done nothing but [ spam ] since we made our first announcement only 3 months ago. We'll continue to build on those partnerships. It is a long-term and slow-growing business when you're dealing with B2B relationships, but they are consistent through different changing markets over time.

That's great color. One last one, if I don't mind, is the prediction markets. Super exciting to see the success after late in the year launch, certainly get ramped very quickly. How should we think about production markets and contributing to earnings and profitability in 2026?

So prediction markets are exciting for our business. I think it opens up our TAM to a completely new demographic of customer. It is a great reengagement tool for customers that have gone dormant or have slowed their activity on the platform. It's a great calling card to come back and rediscover investing in trading. I do not believe that prediction markets are going to be any part of our core business going forward.

I think our core business is in the active securities trader. And I think the prediction markets are a great tool that we can use to engage and keep clients engage with and keep clients engaged with their portfolio, allowing them to speculate, to hedge and allowing them to have access to new tools and a new on-ramp to gather a new customer base.

The next question is from Mike Grondahl with Northland Securities.

I wanted to follow up on the $3.9 billion in net new deposits. You guys really called out the marketing spend and we know what you've done there for people moving balances. But I didn't hear you mentioned crypto that new offering for merits that rollout. Do you want to attribute any of that big growth to crypto or merits or I guess, drill down a little bit deeper there, Anthony.

Yes. So firstly, any of the B2B relationships that we've onboarded, they're not attributable to net deposits. Those net deposits are purely coming from retail. Crypto however, is included because our crypto business is only attributed to retail right now. To give you a little bit of color on how Meritz is going. We've been obviously quiet in terms of the revenue attributed to this new partnership because we still are growing it, and it's still very early. But we have, to date, traded north of $1 billion notional in equity for Korean customers through our relationship with Meritz.

That number is growing on a week-to-week basis, and we expect them to be a very important partner for our B2B business in the longer term. On the crypto side, and I think we talked about this before. The availability and the opportunity for us for crypto is a wide open field. And I'm extremely excited about the ability to be best-in-class for active crypto trading. But it's still too early. The amount of trading that we're doing on crypto versus our security business is still de minimis. We are still waiting to roll out a couple of key products towards the end of this quarter. And I think there will be much more material conversations to have for Q2 in terms of crypto revenue contribution.

Got it. And just going back to Meritz, how ramped up is that relationship? Is it still early innings, middle innings? And then what does the pipeline look like for other international partnerships or opportunities.

So for the Merit relationship, again, a very key one for one of the largest active trading regions in Korea. Very, very early innings. I mean we're still not even out of the second inning yet. First inning was getting them onboarded. Second inning is where we are is we're still testing. And some of that test phase, we are working out the different trade flows that they want to send to us, and that number has been growing on a steady basis. I expect to be 10x at the end of this year where we are today to give some context. And pipeline for B2B, that's where the B2B gets really exciting. As you guys know, onboarding institutional investors is not as quick as onboarding a retail customer. So these relationships do take time to build. But the pipeline is primed and ready. We have multiple businesses that are looking to connect with us on multiple reasons. We're beating our competition and price. We're beating our competition and technology we're beating our competition on having boots on the ground where these B2B relationships are, and we're beating them on product diversification.

There's very few competitors that we have in this space that can match us on all those fronts. So I expect the B2B business to be equal, if not greater, over the next several years than our current retail business.

The next question is from Karim Assef with Bank of America.

Congrats on a strong quarter. My first question is on capital priorities and M&A. So could you give us an update about your capital priorities for this year? And what are some of the key focus areas for M&A in terms of science and target markets.

I'll take this one. I think our answer hasn't really changed. We'll continue to be very focused on investing in growth, that means customer acquisition, AUM acquisition and continue to invest in technology, especially AI, right, to make us the best-in-class platform for active traders, and also in geographical expansion where we're currently operating.

So I would say it's primarily in organic growth as we see a lot of opportunities in our current space where we are gaining share across a number of markets. In terms of the M&A opportunities, I think it's something I think we'll be opportunistic. We don't have a strategy necessarily saying that we have to grow through acquisitions. But if something interesting that does come along will obviously evaluate it from a risk-reward perspective.

And then for my follow-up, I wanted to know if there are any plans to publish monthly metrics such as DARTs, account growth, net deposits similar to what some of your peers provide. And if so, could you share the timing or the context around when you might start?

Thanks for the suggestion. I think we are listening, we are evaluating and also balancing with, I guess, where we are in terms of the maturity of the business. So if you noted, we've actually disclosed more granular data in terms of DARTs and also the interest earning asset balances in this quarterly presentation.

So we want to be transparent and give more information to our investors and research analysts. So when we're ready, we'll be releasing data probably on a more regular cadence. So thank you.

Next question is from Ed Engel with Compass Point.

I wanted to kind of drill down some of the success you're seeing on the performance marketing side. Is there any specific segment or segments that are kind of driving a lot of the growth there, whether it's U.S., international or kind of these new products like like crypto in prediction markets?

So what I've been most impressed with, especially over the course of '25 was the growth of the international contribution, meaning our non-U.S. broker-dealers that are contributing into our U.S. product flow, mainly in the form of equities and options business. We have more than doubled the amount of incoming flow over the course of '25. So a doubling effect, which I am very confident that, that trend will continue into '26 as we continue to export kind of the U.S. retail experience to retail investors outside the U.S. to all of our broker-dealer affiliates in the Webull Corporation umbrella.

Looking at things like a retail customer sitting in another country is still reading the same investment laws are still looking at the same redid channels talking about using options to trade volatility or ahead of an earnings cycle, right? but that customer usually does not have access to that U.S. product where they live. And if they do have access to it, usually, they have to be some ultra high net worth customer or they're going to pay some ridiculously high fees or a very bad user experience. We are bringing that U.S. experience outside of the U.S. and been extremely successful in doing so. We're continuing to push that agenda. We are the first true zero commission platform in Hong Kong. And when we went to zero commission in Hong Kong, I believe it was -- I believe it was November of 2025.

Our Hong Kong customer order flow nearly doubled immediately. We will continue to push pricing, price compression and better user experience everywhere globally. So that international cohort is really important for us. And then when we look at product types, you mentioned crypto of course, crypto is extremely important for our demographic of customer. Like I mentioned earlier, we will be focusing on targeting active crypto traders with price compression here in the U.S. We have licenses in our offering crypto currently in Brazil and Australia. And I believe that we will have -- I want to be careful. I don't want to make too many promises but we will have probably 2 more licenses that trade crypto before the next earnings call and continue to expand on that for expanding our user base for the products that we offer.

And then lastly, I think prediction markets as a new product is something that's extremely interesting for our B2B business. In order to offer predictive markets, you have to have multiple licenses and you have to have the ability to offer technology on a quick delivery schedule that you can then offer these products to other platforms that do not have the proper licenses and do not have the proper technology to offer it.

So there's a huge view of clients that we're building that will also expand our prediction market business that expands outside of retail alone.

Great. Appreciate all that color. And then just kind of get into the trading revenue segment within the platform and trading fees line item, a pretty big sequential increase in that. We can kind of back into prediction market revenue, just given the volume you gave us, and it's some of that, but not really all of it. So just curious, of that kind of platform and trading line item like what really drove that sequential increase.

Well, there's -- it's actually a number of days. So outside of our core products, equities and options, all the other asset classes are the trading-related revenues go into the platform and trading fees. So that includes futures crypto and prediction markets as well as the commissions that we do collect on some of our foreign affiliates. Yes, so -- in Q4, there's a big jump, I think, for several reasons.

One is our -- like our futures business actually continues to grow. And also, we had consolidated. We will pay the crypto business at the end of Q3. So Q4 was really the first time that we had ever presented crypto revenue in any of our results as well as prediction markets. So as you can see, we -- like Q4 was a big quarter for prediction markets. And so for us, that also is a significant contributor to the results in Q4.

Great. And then just one last housekeeping one. I saw on the balance sheet that you -- looks like the emissary balance declined, was that you paying this down...

Yes, we paid, that's correct. We had $100 million of promissory note on our balance sheet at the beginning of Q4. And then we paid off $35 million of the principal of the promissory note in Q4.

Okay. And I guess the interest payment steps up, correct in about a month. Is it fair to assume that you would try to take it down relatively quick? Or are you okay with it out there?

I think we're -- again, we're evaluating. We have time to pay down the promissory note, so there's flexibility on when to pay it off. So I think it depends on the -- our cash flow and our balance sheet and also our strategic priorities in the coming quarters. So there is the wheel -- the goal is to eventually pay it off. So you can -- we are -- we like to maintain a healthy balance sheet and not to take on too much debt. And so the goal is definitely to pay down over time. And then so hopefully, to save on the interest costs.

The next question is from Brian Vieten with Seaberg.

Just a question on, I guess, the customer funnel, kind of driving new ads and [indiscernible] people engaged. Can you just talk about prediction markets versus crypto? Like what's been, I guess, a more compelling funnel for you and how you see that looking in '26? And then separately, just on price, it seems like for a number of products, the pricing is very competitive, but I do wonder if maybe you could come out at sort of a healthier price level. And then the customer could kind of opt out versus you kind of immediately cut the price. And then it's hard to maybe raise it down the road.

Have you guys run through any of these analyses where maybe you do just have the normal fee structure and you could always sort of cut it down over time and kind of delight the customer from that standpoint. Is that an exercise you guys have worked through with prediction markets crypto to your newer markets.

Brian, so I think one of the big differences, though, when we talk about price compression for crypto, I think the biggest differentiator between our business and any of our competitor business in terms of trading of crypto and the spreads that are built in the pricing is that we're not reliant on any crypto revenue currently. So any revenue that we add, whether it's from a pricing spread that's 1/4 of the margin of our next competitor, that's still accretive revenue for us. And if any of our competitors were to match our pricing, they'd have to be cutting their crypto revenue significantly.

So we think that, that puts us in a very good position. It almost reminds me when I launched the platform in 2018, where there was us and 2 or 3 other digital platforms that we're only offering zero commission, right, for equities. And the largest players, they were very, very slow to adapt and change because it was so cannibalistic to a very important revenue stream that they depended on. I see this is the same exact opportunity for us. And to get more detailed about your question, when I don't think we would have it across the board pricing compression for all clients because the majority of crypto investors are long-term investors, right?

They're buying it to add to their portfolio. So the entry cost is not that important to them. We're targeting the active crypto traders, right? People that are day trading crypto multiple times a day, every day. That is the majority of our customer base with active traders, and we want to cater our products specifically for them.

So we do have a couple of different models in mind, and I will give you more details as we get closer to a launch date.

Okay. Great. And okay, perfect. And I guess just from a fee capture standpoint, it sounds like near term, it's more about getting volume out there and driving more engagement and getting new customer adds? Is it -- are we right to think there's probably not a big revenue number coming from crypto production markets in '26. I might have missed that if you covered it earlier, but can we just walk through the fee structure a little bit for this year?

So for our traditional markets, we charge $0.01 commission per contract. We also do receive exchange rebates on top of that as part of the revenue stream for prediction markets. We did run an offering around the Super Bowl, where we announced no commission for prediction markets for anything related to the Super Bowl game winner point spread, MVP, things like that. And that actually drove a significant amount of traffic without us actually having to advertise or pay for expensive advertising during the Super Bowl cycle, a very successful program for us.

I think there's very little compression that's available for prediction markets. I think the prediction market game is strictly about volume and size at this point and that can be run in a couple of ways. It could be a targeted audience, which, again, I'm not convinced that that's our audience. I think our audience are the active securities traders not the pure spec traders, but that can change.

It's still kind of waiting to see some data and waiting to see which direction a lot of the kind of regulatory and political cultural oversight in which direction that wind is blowing before I want to commit to doubling down on a specific product. And obviously, crypto on ramp is a natural progression for our demographic, and we'll continue to pursue the right product suite as we roll out, like I mentioned, as we roll out the offering and get aggressive into Q2.

Okay. Great. And then just lastly, I think for some of your competitors, 1 of them has 10, 11 businesses, I think, that are $100 million or more in revenues, prediction markets was the fastest growing -- I'm sorry, the fastest to $100 million of all 11 businesses. And it's funny. We looked at a couple of years back. A lot of them didn't -- they launched 5 years ago. But even if you haircut the prediction market number by 80%, it's still the fastest to $100 million. And so I guess from my standpoint, I'm still a little bit, I guess, just confused why we wouldn't just have the the full capture in such a sort of fast-growing market was kind of wide open. But I hear your side as well.

So Brian, I mean, we do have the full suite of prediction markets that all of our competitors have. It's not that we don't offer them. We absolutely do offer them. However, we don't put our prediction markets front and center in our customer experience, right? And I think that's a great metric you mentioned, but another great metric is you look at our traditional traditional securities products were probably 115 in terms of AUM of the competitor you mentioned, yet we do 130 amount of equity business they do on any given day. We do probably 20% to 25% of the options business that they do in any given day.

So we understand who our core customer is and we build our platform and we develop it around our core customer.

This concludes our question-and-answer session, and the conference has also now concluded. Thank you for attending today's presentation. You may now disconnect.

Good evening, and welcome to Webull's Third Quarter 2025 Conference Call. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Carlos Questell, Webull's Head of Investor Relations. Please go ahead.

Good morning, good afternoon, and good evening, everyone. Welcome to Webull's Third Quarter 2025 Conference Call. Earlier today, we issued a press release detailing our third quarter financial results. A copy of the release can be found on our IR website at webullcorp.com under the Investor Relations tab.

Please note that this call is being recorded and will be available for replay via our IR website. During the call, we'll be making forward-looking statements about the company's performance and business outlook. These statements are based on how we see things today and contain elements of uncertainty. For additional information concerning the factors that can cause actual results to differ materially, please refer to the cautionary statement and risk factors contained in our filings with the Securities and Exchange Commission and press release, both of which can be accessed via our website.

Today's presentation will include a discussion on adjusted operating expenses, adjusted operating profit and adjusted net income, all non-GAAP financial measures. Reconciliation of these non-GAAP financial measures to their most directly comparative GAAP measures are included in the press release that we issued today. It's important to note that although we believe that these non-GAAP measures provide useful information about our operating results, they should not be considered in isolation or construed as an alternative to their directly comparative GAAP measures.

Furthermore, other companies may calculate similarly titled measures differently, limiting their usefulness as comparative measures to our data. We encourage investors and others to review our financial information in its entirety and not rely on a single financial measure.

With me today is our Group President and U.S. CEO, Anthony Denier; and our Group CFO, H.C. Wang. We will begin with prepared remarks and then take questions at the end. With that, I would like to turn it over to Anthony.

Thank you, Carlos, and hello, everyone. Thanks for joining us today. Webull's third quarter results demonstrate continued momentum and growth in what remains a highly favorable market environment for our business. Our Q3 results reflect this environment, but also our global team's continued ability to achieve our goals, which drove strong results across almost every metric.

Strong corporate earnings, interest rate reductions and rallies in technology and AI stocks have driven robust market conditions with the S&P maintaining near-record levels throughout the quarter. This backdrop, combined with our ongoing technological innovation, product expansion and increased access across geographies continues to create significant opportunities for our customers worldwide.

Webull is exceptionally well positioned to continue to capitalize on the global consumer shift towards mobile-first trading. We're executing well against this favorable backdrop, this quarter marked significant milestones in product diversification and geographic expansion as we continue to see high growth across our platform on the heels of our public listing.

We successfully reintroduced Crypto back to the Webull App and expanded our offerings in this space to include crypto futures trading. We also introduced sports prediction markets through our partnership with Kalshi and are on track to achieve a major international milestone as Webull Canada will soon become the first non-U.S. brokerage in our group to reach $1 billion in assets under management.

And just last week, we launched Vega, the latest evolution of our AI-powered decision-making partner which will enhance the investor experience by providing personalized insights and analysis to inform trading decisions for our users. These offerings are already leading to meaningful ROI. We're seeing strong adoption among both new and existing customers as the platform successfully reengages dormant accounts through compelling new products.

During the quarter, we brought crypto trading back to the Webull platform and brought Webull Pay back into our group which added $1.2 billion in AUM and over 140,000 funded accounts. Now over 50% of new funded accounts are trading crypto. We will continue to meet investors where they are and increase our share of wallet by introducing them to our expanded products and solutions over time.

Our differentiated offerings, including direct deposit enablement and the launch of corporate bonds continue to set Webull apart from competitors. With each new product, we continue to strive to be the one-stop platform for traders looking to get the most personalized and agile investment opportunities on the market. I'm proud of the Webull team for the innovation and execution they've demonstrated in reaching these milestones, we reached another important milestone in our journey as a public company with the expiration of all shareholder lockup restrictions on October 8 which significantly increased our public float, further enhancing our market liquidity.

With that, let me now walk you through the key highlights from the quarter in more detail. Here on Slide 2, I'll walk you through our third quarter highlights. We delivered another strong quarter for Webull shareholders with the year-over-year revenue growth significantly outpacing increasing operating expenses, driving solid margin expansion for another quarter. We recorded top line revenue of $156.9 million, representing 55% growth year-over-year driven by 4 key factors.

First, customer assets reached an all-time high of $21.2 billion, inclusive of the $1.2 billion in assets from the acquisition of Webull Pay, marking the third consecutive quarter of AUM growth. Second, equity trading volumes surged for the third straight quarter, up 71% year-over-year. Third, our on-time delivery of new product offerings, including crypto futures and prediction markets, enhance stickiness and new user growth. And fourth, we continue to broaden access to our leading platform across new and varied geographies.

We recorded adjusted expenses for the quarter of $120 million (sic) [ $120.2 million ], representing a year-over-year increase of just 13%. Our increase in expenses was mainly driven by increased brokerage and transaction expenses, reflecting higher trading volume as well as higher general and administrative expenses driven by increased compensation and bonus accruals, reflecting headcount growth and stronger-than-expected performance.

The increase in G&A expenses was partially offset by a lower marketing spend. Lastly, we delivered a fourth straight quarter of operating profitability with a strong 28.7 point increase in adjusted operating margin on a year-over-year basis to 23.4% representing adjusted operating profit of $36.7 million for the third quarter. We continue to focus on execution and margin expansion, reflecting our commitment to delivering sustainable growth and value for our shareholders.

Turning now to Slide 3 and our 2025 road map. We continue to enhance our existing product offering while executing against the ambitious road map we outlined in Q2 to support our growing customer base and expand market share through new offerings and geographies. We're particularly excited about the launch of Vega. Vega is an AI tool that combines news, earnings and technical data to deliver a focused intuitive experience that helps both new and seasoned investors navigate modern trading and make smarter decisions.

Other key features of Vega include statistical insights for options trading that showcase investment opportunities and voice commands for placing trades as we continue to enable accessibility on our platform. As we continue to broaden our offerings to solidify our position as a one-stop investment platform for retail and sophisticated investors Vega will play a crucial role in enabling further consolidation as investors gain powerful insights across their portfolio of equities, bonds, crypto and more.

Webull Premium, our subscription-based service for active traders and long-term investors has now reached 90,000 subscribers, a 20% increase from just last quarter and is tracking well ahead of our internal target of 100,000 subscribers by year-end. Our premium offerings have been further bolstered by the introduction of corporate bonds during Q3 and Corporate bonds provide customers with low-risk investment opportunities and steady yields while also facilitating asset transfers from traditional brokerages positioning Webull as the one-stop platform for sophisticated investors. I'm excited to discuss the launch of prediction markets on our platform.

Through our partnership with Kalshi, we've introduced sports prediction markets covering NFL, NBA, NASCAR, F1 and college football events, this offering provides an engaging and accessible trading experience that lowers barriers to entry. The results have been exceptional. More than 30 million prediction contracts replaced in October nearly twice as many as were placed in September, over half of which were sports contracts.

As I stated previously, the return of crypto to our platform has delivered instant results and has become a significant driver of funded account growth. While we currently offer crypto trading to our customers in the U.S., Brazil and Australia, we will continue expanding crypto offerings across geographies and are actively exploring digital asset licenses in numerous other markets.

Finally, our expansion of products available internationally continues to progress. During the quarter, we launched our Webull platform in the EU beginning in the Netherlands and anticipate launching in additional European markets over the coming months. We also entered into a strategic partnership with Meritz Financial Group to offer U.S. market access to Meritz's customers in South Korea.

In addition, Level 3 options trading is now live in Singapore and Hong Kong and is set to launch in Japan imminently. And we're excited to continue to scale and reach even more global customers as our product offerings continue to grow. We have now over 700,000 funded accounts outside the U.S., and we continue to prioritize delivering U.S. products to international markets and building diversified revenue streams globally.

On Slide 4, I'll discuss our growth in both the users and funded accounts. During the third quarter, we added roughly 1 million registered users, bringing the platform to a total of 25.9 million registered users, a more than 3 million increase from the third quarter of last year, representing a 17% increase. Importantly, that 1 million increase also represents a large sequential increase showcasing that our product and geographic expansion is driving robust user growth.

Webull was originally launched as a global market data platform before evolving to become the leading digital investment platform we are today. As a result, we have a significant number of registered users in geographies where our trading platform is not yet available. We are committed to offering access to best-in-class market data and information to everyone, whether or not they currently have a brokerage account with us.

On the right side of the slide, you can see funded account metrics, funded accounts, defined as accounts where customers have made an initial deposit that has remained above 0 for 45 consecutive calendar days as of the record date, showed healthy growth. We added approximately 200,000 new funded accounts this quarter, inclusive of accounts onboarded through our acquisition of Webull Pay, bringing the total number of funded accounts to 4.93 million a 9% year-over-year increase. As we continue to innovate and enhance our offering, we're also happy to report that our quarterly retention rate remained high and grew slightly on a sequential basis to 97.7%.

Turning to Slide 5. As I previously mentioned, Webull customer assets reached an all-time high of $21.2 billion, inclusive of $1.2 billion in assets from the acquisition of Webull Pay, representing an 84% increase on a year-over-year basis and a $5.3 billion sequential increase. The growth in customer assets reflect strong momentum driven by favorable market dynamics and robust deposit activity. Our customers deposited over $2.1 billion during the quarter, a 31% increase year-over-year, bringing our cumulative net deposits over the last 12 months to $5.9 billion.

On Slide 6, I'll provide an overview of trading volumes for the quarter. While we are always looking to expand and enhance our product offerings, growth in our core products also continue to accelerate. Our equity volume increased by 71% on a year-over-year basis and 26.7% sequentially totaling $204 billion. Our options contract volume was $147 million in the third quarter. The associated revenue continues to outpace contract volume growth after implementing a new pricing model in the second half of last year, and we are pleased to see the continued results of that initiative with a steady increase in the monetization of our options business.

We are now midway through Q4 and are on pace for further growth. October was our best month ever in terms of customer deposits, trading volumes and revenues, and our new products are driving increases in market share and the consolidation of users' portfolio onto the Webull App. With that, I'll pass the call over to H.C. for a closer look at our financial results for the quarter.

Thank you, Anthony, and thanks to everyone for joining us today. Slide 7 shows that in the third quarter, Webull generated revenue of $156.9 million up 55% year-over-year. Adjusted operating expenses for the quarter came in at $120.2 million, an increase of 13% from a year ago. We continue to take a disciplined approach to balancing execution costs and operating efficiency as we continue to scale the business, and we are pleased with our continued margin expansion and profitability.

On the following slides, I will walk through the components of revenues and expenses in more detail. Now turning to Slide 8 on our profitability performance. As Anthony mentioned earlier, Webull has now recorded its fourth consecutive quarter of operating profitability. In Q3, adjusted operating profit reached $36.7 million our most profitable quarter ever, representing a 28.7% improvement in adjusted operating profit margin year-over-year. Adjusted net income for the quarter was $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.

Turning to Slide 9. Our trading-related revenues continue to accelerate, supported by higher trading volumes across all asset classes and improved monetization, particularly in options. Momentum from the second quarter carried through to Q3. Daily average revenue trades increased 56% year-over-year, driving a 64% rise in trading-related revenues. On a per trade basis, revenue increased to $1.53.

Turning to Slide 10, our interest-related income. This category includes interest earned on client and corporate cash as well as revenues from margin financing and stock lending activities. In the third quarter, interest-related income grew 32% year-over-year to $43.4 million, driven by higher interest-earning balances across all categories. Corporate cash, client cash, margin lending and fully paid stock lending, reflecting the continued growth of our client assets.

Finally, let's turn to Slide 11 for a closer look at operating expenses. As a high-growth business with meaningful operating leverage, we expect operating expenses to increase as we scale but at a much slower pace compared to revenue growth. In the third quarter, operating expenses grew 13% year-over-year, primarily due to higher brokerage and transaction costs associated with rapid growth in trading volumes and product expansion. General and administrative expenses also increased, reflecting headcount growth and higher bonus accruals tied to stronger-than-expected performance. These increases were partially offset by lower marketing spend as we continue to optimize our marketing and branding strategy.

We remain committed to maintaining expense discipline while continuing to invest strategically in innovation customer acquisition and wallet share expansion to capture sustainable long-term growth opportunities. Now thank you, everyone. With that, I will turn the call back to Anthony before we open the line for questions.

Thanks, H.C.. This was a record quarter for Webull on many metrics, including revenue and funded account growth, marking an exciting new chapter for our platform as we successfully unveiled innovative product offerings including crypto futures, sports predictive markets and our AI-powered decision partner, Vega. We remain energized as we continue to deliver our product road map for U.S. and global investors. I want to recognize the global Webull team for their continued dedication as we continue to grow our platform following our public listing in early 2025.

We look forward to engaging with you at several upcoming industry and investor conferences. On that note, we welcome any questions you may have, either here on the call or one-on-one.

[Operator Instructions] And your first question today will come from Karim Assef with Bank of America Securities.

Can you hear me okay?

Loud and clear.

Perfect. Okay. Well, congrats on a great quarter. My first question is on prediction markets. It was very nice to see you guys added sports contracts to the offering. So Anthony, I was wondering if you could maybe help size the revenue opportunity for Webull from the prediction markets offering as well as like maybe share some of the -- any of the economics that you have with Kalshi.

Sure. Happy to, Karim. So yes, so -- many people don't know this, but we've been partnering with Kalshi since the very beginning of the year. We just recently got into the sports prediction markets at the beginning of the NFL season, late August, I believe, for Thursday Night Football.

The prediction market pre sports has seen some really nice growth as we did, like SPY, hourlies, NBX some major Fed events. But the sports numbers have been completely blowing us away, right? And we've all seen the headlines and how much growth we've seen from Kalshi and Polymarket on a notional value. We're seeing that lockstep.

And the value of offering these sports predictive contracts are multifold the way I look at it, right? And we announced 30 million contracts in October. We're already now halfway into Q4 on the 20th of November. And that number is completely gone. We're blowing that number away already in November, right? And I wouldn't be surprised if we see a month-on-month growth at over 100% on a pretty consistent level.

Now the opportunity from a monetary standpoint is different with every partner that Kalshi has. So we do charge a $0.01 commission to our clients that are trading per contract, and we also get an exchange rebate from Kalshi. And the blended rate comes in anywhere between $1.25 to $1.50 per contract on the revenue side. That being said, I don't think it's merely a revenue catalyst for our business. These sports prediction markets are reengaging dormant accounts, right?

And it's also addressing a completely new TAM of customer. And so if we have customers that might have came on the platform in 2021 during GameStop, the world opened up, they got quiet, right? Life gotten the way and they weren't actively trading, now they're back because of these sports prediction markets in a big way. And it's a great way to reengage customers that have gone dormant. It's a great way to address a whole new addressable market of clients. So very exciting time for our industry. And I do think prediction markets are going to be something that's going to continue to push us not only on new customer acquisition, but product expansion.

Got it. That was very helpful. And then for my follow-up. So obviously, it was very nice to see. I believe you called it in your prepared remarks. Net deposits in October were very strong. It was the best, I believe, like the best months for Webull. But when I look at net deposits and in 3Q, very strong also at $2.1 billion, which I believe, like when I look at it as a percentage of your AUA or AUC, it's like almost 53% annualized. So I was wondering if you could maybe like help unpack that a little bit for us? Where are you seeing that strength coming from? If you could maybe unpack it by geography, that would be very helpful.

Absolutely. So one of the great advantages we have versus a lot of our peers is the fact that we are truly a global platform. We have 14 broker-dealers that are currently operating around the world. The U.S. is the largest and the oldest but we just opened up the Netherlands in September, went live in 2025, and we continue to look to expand. That expansion and us taking significant market share not only in the U.S. but outside the U.S. is one of the great drivers for that AUM growth. right? So we took in $2.1 billion of net deposits in Q3 alone. That's not including the acquisition of Webull Pay and the money we received as part of the AUM in that acquisition. And I would put it on 2 different catalysts for that impressive net new money coming in.

One is the evolution of our marketing style. So we have been evolving our marketing over time, and we've seen a lot of success and great ROI on our incentive transfer programs. So offering like sticky money to roll over 401(k)s into Webull where we're offering matching deposits. extremely successful in bringing new AUM into the platform and then back to the geographic expansion. We're seeing huge growth in markets like Canada that we did announce is about to cross $1 billion in AUM alone in that market. That's only, call it, 20 months old at this point.

We have other locations that we're seeing huge amounts of growth like Australia, of all places, Thailand is growing in the -- doubling on a quarter-over-quarter basis in terms of what we're seeing in transaction. And that's a recurring theme that we're seeing outside of the U.S. as the U.S. -- as we start expanding on U.S. products outside to the non-U.S. entities, we're seeing the customer demand for increase -- for U.S. products really push new customer acquisition and new AUM coming into the platform.

Next question will come from Steven Chubak with Wolfe Research.

So I wanted to ask a multiparter just on expenses and margins. So we saw really good expense discipline in the quarter. Total revenues were up 55%, adjusted expense up 13%, so an impressive incremental margin just north of 75%. I wanted to understand the sustainability of those incremental margins, just given myriad opportunities to lean in on the investment side?

And then for the second part, given the comments you just made, Anthony, around the marketing strategy, why not choose to lean in a little bit more in terms of marketing spend, just given the strong momentum in 3Q in October? I recognize the high ROI is -- that was the 1 bucket that actually saw declines year-on-year. So I wanted to better understand how you're thinking about the opportunity to lean in there as well.

Sure. No, happy to pick that up. So when we look at our customers being able to transfer assets in, we're constantly improving on the product and the rails for them to do so easily. And when we think of margin expansion, we are very cognizant that we are in an extreme growth phase of our business. So right where we are now in the mid kind of 20s of margin, I think, is extremely healthy for a growth company, and we're going to continue to deliver on that. I can hand it over to H.C. for a little more detail on the actual margin and the expenses side.

Sure. Thanks, Anthony, and thank you for the question. Yes. So for us, as you can see that we've consistently maintained our adjusted operating margin around 20% for the last 4 quarters. And so we are constantly optimizing and adjusting how we are approaching expenses, for example, marketing. I think you asked about why not overinvest in marketing when the market is good. I think in a certain sense, we are very opportunistic. We actually do a lot of work and review on a market-by-market basis to see where we get the highest ROIs in terms of our marketing dollars.

But we also want to be smart about investing in the forms of different promotions that we take. And so we have, over time, shifted more from giving away free stocks to customers to more of these like asset matching promotions. And as a result of that, we are seeing significant increases in net deposits and AUM growth. Another result of that is there's greater amortization of marketing expenses. So it's not just given away immediately when the customer fund their accounts.

The customer would have to deposit AUM and maintain their AUM for a number of months before they accrue and earn the whole marketing spend. So actually, that helps us in managing expenses to make the marketing expense more predictable quarter-over-quarter, which I think is a good thing in terms of managing the P&L.

And also for the G&A expense, I think a lot of it is just proportionate to our headcount growth and to our continued investment in R&D as we continue to enter into new geographies and expand products. So we'll continue to remain disciplined and manage our expenses to make sure that we continue on the right path of margin expansion and continue to capitalize on this market environment and continue to drive growth.

That's great color. And for my follow-up, I did want to ask given the relaunch of crypto in the U.S. how your crypto strategy might evolve now that you're getting that second at bat? And specifically, I wanted to better understand where the crypto pricing is today, do you see an opportunity to potentially be more aggressive in terms of take rates to attract more users and how you see that pricing evolving over time as competition intensifies in the space?

Yes. No, I appreciate that question. Extremely excited about the relaunch of crypto, and I appreciate you mentioning, it's kind of our second at bat, we obviously -- we had crypto -- we launched Crypto back in 2019 through the process of trying to get our company listed previous administration, we spun it out to Webull Pay. We brought -- we brought that crypto back to the brokerage platform, the main brokerage platform back in August, kind of like a light speed project, if you will. And so I look at it exactly like that.

This is our second opportunity to really knock it out of the park. What does that mean for us, right? So we're still in the early innings of crypto, at least for -- at least crypto offering on our platform. I think we lean into the sophisticated fact of our active trading user base. And so right now, we have approximately 100 basis points, coin-based retail is about 150 basis points. I know some of our competitors use a variable model based on the actual token itself for pricing. And we are going to aggressively lean in to squeezing those take rates to attract active crypto traders.

Now time line on that business is probably going to be early in '26, I have to be careful on guidance. But when I think about it, we have an amazing opportunity to relaunch our crypto product with a whole new vigor that attracts the customers that call Webull home, sophisticated, experienced and active retail traders we are going to cater our crypto trading product specifically to them as we roll out especially new products in the crypto world.

I don't want to give up too much on this call. we'll be announcing a lot of major new additions to our crypto offering to get us on the same level playing field as all of our competitors. Once we are on that playing field, we're going to aggressively take those active traders from our comps.

The next question will come from Mike Grondahl with Northland Securities.

Anthony, can you talk a little bit about the Meritz announcement and kind of the opportunity you have there globally. And is Meritz the first? Do you have other customers internationally, you're helping like that?

So Meritz is the first publicly announced but not the first. And when we say Meritz, we're talking about institutional customer bases or B2B business, which is a completely new line of business for us we have been 100% focused on retail since we launched in 2018. Now we're spending a significant amount of internal resources and a significant amount of focus on targeting partnerships in geographies where we don't currently operate a broker-dealer. We're even talking to BNB partnerships to institutional type partners in places where we actually do have retail a retail platform.

Having said that, none of this revenue is yet even factored in to our current models and our current growth. And so the future -- so Meritz is an example of getting access to South Korean retail without having to have a South Korean retail brokerage license. We're going to continue to focus on opportunities like that. And in my opinion, the institutional side of our business, which is just beginning, Meritz is the first announcement on a very long list of clients that are in the pipeline that's going to be a huge boom for our -- not only for our market share, but for our top and bottom lines.

And when would you expect Meritz to go live? Has it started? What does that time line look like to ramp up?

So typically, institutional onboarding takes much longer than retail onboarding, right? We can open up a retail account in minutes, and our retail customers can typically trade within 5 minutes of downloading the app. It's very different for institutional. There is a lot more checks, there's a lot more approval, sometimes even up at the Board level. That being said, we are currently live with Meritz. We are currently trading on behalf of their clients' orders. And as we continue to grow the relationships that -- the amount of flow that we receive from Meritz will continue to grow over time.

Got it. And then just lastly, related to that, where will that revenue show up? Is that other revenues or in the equity in options line?

So this is actually 1 of the fun parts. So the revenues actually show up in our transaction volumes. So even if we see a slowdown in U.S. retail trading volumes. Our trading volumes will continue to tick up because we're onboarding a lot of these B2B relationships. So it's going to be baked into the transaction revenue mix in the equities and hopefully, in the next several months options. Currently, we're trading equities only with Meritz.

Next question will come from Chris Brendler with Rosenblatt.

Congratulations on the strong results here. I'd like to ask about the funded accounts, which picked up -- I know even if you back out the crypto, you did see a tick up there. I know there's been a little bit of a refocus of your marketing strategy towards assets over accounts but given the gap between registered and funding, I'd love to see that close a little bit. So how are you thinking about funded account growth as you head into 2026?

Sure. Chris, well, funded account growth, in my opinion, we're going to see -- so we're going to start seeing a lot more attribution coming from outside of the U.S., like we mentioned on the call earlier, we have more than 700,000 funded accounts now that are outside the U.S. And we've seen the momentum in onboarding of funded accounts outside of the U.S., basically, for the last 6 months, it was about 55%, 50%, right? 55% of new funded accounts coming from the U.S. broker, about 45% coming from outside. That number is now completely equalizing and we're at about 50-50.

And in fact, I wouldn't be surprised if we start seeing new funded account growth outpace new fund -- outside of the U.S. outpaced funded account growth in the U.S. I believe that's going to be the continued driver as the 13 broker dealers that we operate outside the U.S. start to really mature. If you remember, the first brokerage outside of the U.S., we opened was Hong Kong in Q3 of '21. The second one wasn't until Q2 of 2022, which is Singapore, we just opened our latest one in the Netherlands in September of '25. So these are all relatively young businesses that are in hyperscale mode. And so we're going to see a lot of low cost, low customer acquisition costs, new funded accounts really being driven from outside the U.S., and in the U.S., we're going to continue to focus on quality of our customers.

I wanted to add a quick follow-up on numbers. Does crypto or prediction markets have any impact on third quarter metrics like DARTs or trading revenues? And will those kind of transactions show up in those metrics in the fourth quarter?

H.C., do you want to take this?

Yes, sure. So we actually closed the Webull Pay transaction at the very end of the third quarter. So what the third quarter metrics includes the AUM and funded accounts that we -- that were consolidated as part of the transaction. What's not included is the revenues, the transaction volumes and the DARTs because those take place over the course of the quarter. But the transaction did not close until the very end, but they will start to be included and presented as part of the consolidated group results starting in Q4.

Okay. Great. That's helpful. And then I just have 1 more quick one which is on Vega. It seems like this is a product that would help attract folks to your platform and potentially stay there longer. Any insights on the initial impact of Vega? And on the expense side, is it -- is there an ongoing expense for running this AI, that you're outsourcing? Or is it all developed in-house there won't be much additional expense?

Yes. So the Vega AI launch is not only not only a huge thing for Webull. This is the future of investing, right? There is so much news flow, so much information at all investors' fingertips. Often, it's like drinking out of the firehose. Now we've created in-house as of that question, in-house, we've created our Vega AI trading assistant, not only analyzes your portfolio, but can advise you on high levels of risk and give you insights into implied volatility in some of your options positions, right?

This is a game changer for the industry. And so because we developed it all in-house, there is no increased cost and the user engagement has been phenomenal, we're seeing tens of millions of engagements of Vega, whether it's for actionable trading through the Vega AI trade assistant or just analysis of earnings or consolidation of news. And every day, we're seeing more and more engagements and we're seeing regular engagements, meaning we're seeing users come back to Vega regularly.

And I believe that this is now the beginning of a whole new way that retail engages in their own portfolio and accesses market information and market opportunity.

The next question will come from Brian Vieten with Siebert.

Great. Thanks. Anthony, so nice pickup in funded accounts this quarter. I think you said 50% of new accounts are trading crypto. Does that include the Webull Pay folks? And then -- looking ahead, could you speak to the opportunity in converting existing Webull funded accounts. Just curious on that as I know your customer demographic is younger and digitally native.

Yes, exactly right. So the average Webull customer is in the young 30s, so very, very crypto-native, and it really pains me back in September '23 when we had to strip out our crypto offering from our brokerage platform. Our customers were not happy with it. So bringing it back was imperative. Now that we have it back, and we have the opportunity not only to knock it out of the park with a better offering of crypto, especially for our customer type.

We've been seeing great engagement for crypto-native customers either coming back to Webull or discovering Webull for the first time. So like you mentioned, 50% of new funded accounts, 50% of them, the first trade they made was with cryptocurrency on the Webull platform. Those are not customers coming over from Webull Pay. Those are new customers to Webull in and of itself simply because we now offer crypto. So we're going to continue to lean in to that type of customer. And like I mentioned before, make sure we give the tightest spreads and the best trading experience for the customer that calls us home, and that's the active sophisticated type.

Very good. And then just 1 more, if I may. Just on the future listings. I think at 1 point, the plan is to get to 100 by year-end. I'm not sure if maybe there's some -- it's a little contingent on some of the regulatory dynamics which you alluded to. But just the complexion of those future listings, are you envisioning more so listing established crypto protocols or kind of newer tokenized assets where you might be more differentiated. Just any commentary on the listing strategy would be great.

Yes. So I mean 1 of the fundamentals that we've always held here, whether it's crypto, it's equities, it's options, again, prediction markets. We want to give our customers the availability to trade as much as we possibly can offer. If that means -- so you mentioned 100 as a number I don't want to go on record and say we're going to have 100 different tokens available to trade by year-end but that certainly is our goal.

Having said that, when we look at -- when we look at the opportunity for crypto, it's more than just offering new product types. It's offering a better experience to do so. So yes, the short answer is yes. We plan to have as many different opportunities and as many different offerings on the platform as we possibly can bring, and we plan to really lean into making sure our customers feel that this is the best place. Webull is the best place to trade.

Congrats on a great quarter.

Next question will come from Edward Engel with Compass Point.

I appreciate some of the color you gave about funded accounts outside the U.S. Just kind of wanted to get a better sense on maybe some of the localized features that you're offering in some of these markets and kind of where the road map is, whether it's tax wrappers or savings accounts or local banking connectivity.

Sure. So it really depends on the region. We've always had a single mentality here. We have 1 global vision but we make sure that we execute locally. What does that mean? Simply every Webull broker dealer that we have, 14 around the world as a local team. It's not an American, that's sitting in London. We have a Brit sitting in London, running the office there. There's a reason for that. Not only do they have a better feel for what that customer needs, they also have a better opportunity for local marketing, how to differentiate.

That being said, a lot of those businesses are still relatively young, and we're constantly adding new products, things like tax wrappers, for example. IRA in the U.S. or ISAs in the U.K. -- maybe too much. But as soon as we have the regulatory approval to add those products, we always do. And for the most part, there are 2 or 3 exceptions, but for the most part, every Webull entity will trade the local security in that country as well as give customers the ability to trade U.S. products. The 1 example I can think of is Indonesia.

There is no license yet in Indonesia for our customers or Indonesian customers to trade U.S. securities. However, hopefully, that will change by year-end. That all being said, we see the majority of transactions happening in our non-U.S. entities the transactions are happening in U.S. products. And that goes back to things I've been talking about for the last year and change. The exportation of the U.S. retail trading experience is one of the largest growth factors that I believe we're going to see in the next year, 1.5 years, right, especially when it comes to retail out of the U.S.

We have seen the adoption of not only obviously ETF trading outside the U.S., but options trading specifically. For example, customers sitting in New York City has a position in NVIDIA yesterday coming out with earnings at the close. And we have a customer sitting in Japan. Also, with a position in NVIDIA. If they're looking at the same news flows, they're listening to the same podcasts. They're listening to -- they're watching the same Reddit feeds, they're reading the same comments on the Webull Community, yet a lot of times, they're not able to trade the same products.

We're changing that. Now our customers in Japan can trade calendar spreads can put on a Condor, right? That doesn't exist for the most part outside of the U.S. and we are working very hard to make sure that we export that U.S. retail investor experience everywhere outside the U.S., which is 1 of the main reasons why we're seeing such amazing growth in our non-U.S. brokerages.

Great. I appreciate that color. And then, I mean, I guess, quarter-to-date, we have seen a bit of volatility in the U.S. energy market. Curious if you're able to provide any color on, I guess, how your users are kind of holding up through some of that.

Sure. I think uniquely, Webull, we are extremely well positioned for a rising VIX. Our customers I mean, we've been offering the ability to short sell since the first day that we launched the platform in 2018, right? Our customers, again, I keep saying this word, sophisticated. I keep saying this word experience. When there's volatility our customers are trading more. And so just the past couple of weeks, we've seen explosive volume due to volatility, and I think Webull is probably uniquely positioned to weather volatile markets are a lot better than our peers.

That, of course, being said, long-term volatility is never amazing for a cyclical business, but I believe as a platform we are accelerating into this volatility in the short term.

Congrats on another recent progress.

We'll conclude our question-and-answer session as well conference call. Thank you all for attending today's presentation. You may now disconnect.

Good evening, and welcome to Webull's Second Quarter 2025 Conference Call. [Operator Instructions] Please note this event is being recorded.

I would now like to turn the conference over to Carlos Questell, Webull's Head of Investor Relations. Please go ahead.

Good morning, good afternoon and good evening, everyone. Welcome to Webull's Second Quarter 2025 Conference Call. Earlier today, we issued a press release detailing our second quarter financial results. A copy of the release can be found on our IR website at webullcorp.com under the Investor Relations tab. Please note that this call is being recorded and will be available for replay via our IR website.

During the call, we will be making forward-looking statements about the company's performance and business outlook. These statements are based on how we see things today and contain elements of uncertainty. For additional information concerning the factors that can cause actual results to differ materially, please refer to the cautionary statements and risk factors contained in our filings with the Securities and Exchange Commission and press release, both of which can be accessed via our website.

Today's presentation will include a discussion on adjusted operating expenses, adjusted operating profit and adjusted net income, all non-GAAP financial measures. Reconciliation of these non-GAAP financial measures to their most directly comparative GAAP measures are included in the press release that we issued today. It is important to note that although we believe that these non-GAAP measures provide useful information about our operating results, they should not be considered in isolation or construed as an alternative to their directly comparative GAAP measures.

Furthermore, other companies may calculate similarly titled measures differently, limiting their usefulness as comparative measures to our data. We encourage investors and others to review our financial information in its entirety and not rely on a single financial measure.

With me today is our Group President and U.S. CEO, Anthony Denier; and our Group CFO, H.C. Wang. We will begin with prepared remarks and then take questions at the end. With that, I'd like to now turn it over to Anthony.

Thank you, Carlos, and hello, everyone. Thank you for joining our second earnings conference call as a public company. As you all know, the market experienced extreme volatility in the second quarter, beginning with the sharp sell-off triggered by the Liberation Day tariff announcement. The S&P 500 dropped over 12% in early April, but quickly rebounded after the most severe tariffs were paused. Strong corporate earnings, pain inflation data and speculative rallies in tech and AI stocks have fueled a full recovery, with the S&P 500 reaching an all-time high by the end of the quarter.

As a result, the environment for retail self-directed trading is the most favorable we have seen since February of 2021. The market is undergoing a technology-induced tectonic shift that only happens once every several years. One major shift came in the late '90s and early 2000s when trading moved from brick-and-mortar branches to online platforms, then almost 20 years later, transitioned from PC to mobile-first trading launched the next shift, which was accelerated by the widespread acceptance of zero commission and pandemic lockdowns where trading became increasingly social.

We are now in a new era spurred by a more discernible regulatory environment, 1 that empowers fintech innovations and broaden access to products that were once out of reach for retail investors. This evolution is opening the door to entirely new asset classes, enabling investors to trade everything from equities and bonds to crypto, prediction markets and tokenized real-world assets all within a single platform. Today's new generation of retail investors demands direct control over their financial futures, and Webull is uniquely positioned to meet that demand, not only as a trading platform offering the products they want, but also as a trusted source of market data and insights and as a community of like-minded investors seeking to learn, share and grow together.

I am happy to report that Webull is very well capitalized. Access to capital is critical to our ability to innovate and compete on the cutting edge. As you know, we completed our [indiscernible] to become a public company in the second quarter, raising over $200 million from the exercise and redemption of the BULLZ incentive warrants. In addition, in July, we entered into a standby equity purchase agreement, allowing us to access up to $1 billion of capital over the next 3 years at our discretion. To date, we have raised $142.8 million through this facility. We will continue to draw on these funds strategically, deploying capital as market conditions and business opportunities warrant.

This will put us in a position to continue delivering new products and enabling broader access to our differentiated platform globally.

Now Slide 2 summarizes our second quarter highlights. We delivered another strong quarter for Webull shareholders with year-over-year revenue growth outpacing growth in operating expenses, allowing another quarter of solid profits. Our total revenues grew 46% year-over-year to $131.5 million, largely attributed to an increase in customer assets, which reached an all-time high, explosive growth in equities volumes, on-time delivery of new offerings and geographic expansion.

We recorded adjusted expenses for the quarter of $108.2 million, representing a year-over-year increase of 20%. Our increase in expenses were mainly driven by higher brokerage and transaction charges attributable to growth in transaction volumes and higher marketing spend. Even so, this growth was far outpaced by our revenue expansion. Notably, a standout result and one that I'm incredibly proud to announce here today that Webull has now achieved 3 straight quarters of operating profitability. We posted a year-over-year increase in adjusted operating profit margin of 18 percentage points, bringing our total adjusted operating profit for the second quarter to $23.3 million. This achievement underscores the strength of our strategy and execution and reflects our dedication to delivering value to our shareholders.

Of course, our financial performance is a function of the quality of our offerings. So let's move to Slide 3. We continue to scale our existing products while delivering against our road map for new offerings. Our resources are focused on initiatives designed to continue expanding our customer base and customer assets while increasing our wallet share. Webull Premium, our subscription-based service for active traders and long-term investors was launched in March, and to date, has attracted 75,000 subscribers, well ahead of our internal target of 100,000 subscribers by year-end.

We are seeing steady demand for Webull Premium with average daily trading volumes by premium subscribers up across all product categories. We also expanded our partnership with Kalshi during the second quarter to begin offering crypto hourly contract trading and Fed events trading to our prediction market customers. Prediction markets provide an engaging and accessible way to trade, lower barriers of entry and offer precise tools for all experienced levels.

On the last earnings call, I mentioned that we'll be bringing back crypto trading to the Webull platform, and we have delivered on that promise. Starting this week, Webull customers in the U.S. can trade crypto again through the Webull App. We have also launched crypto trading in Brazil and Australia and are actively exploring digital asset licenses in several other markets.

We are introducing crypto to meet growing customer demand amidst a clearer regulatory path in the U.S. and globally. Today's investors are more sophisticated than ever and expect flexibility, control and access to alternative investment classes. Crypto is now a vital part of that mix. By reintroducing it, we are aligning with our users' evolving needs and delivering the frictionless investing experience they expect.

Finally, we are capitalizing on our technology infrastructure to seamlessly roll out the Webull App to new geographies. Expanding access globally, we launched our Latin American Webull App in Q2, and we have begun rolling out the Webull App in the Netherlands, giving us a strong foothold across Latin America and European markets.

Turning now to Slide 4. Here, you can see our registered users and funded account growth. In the second quarter, we added roughly 800,000 users, bringing the platform to a total of 24.9 million registered users, which translates to 18% year-over-year growth. Webull was originally launched as a global market data platform before evolving to become the leading digital investment platform we are today. As a result, we have a significant number of registered users in geographies where our trading platform is not yet available. We are committed to offering access to best-in-class market data and information to everyone, whether or not they currently have a brokerage account with us.

On the right side, you can see that the number of funded accounts is holding steady. Funded accounts are Webull brokerage accounts where the customer has made an initial deposit and the account balance has remained above 0 for 45 consecutive calendar days as of the record date. [indiscernible] with other platforms, we count each customer only once, regardless of the number of funded accounts they hold.

We saw nearly 10% growth year-over-year, and despite the extreme market volatility in the quarter, we added roughly 144,000 new funded accounts. However, the net funded accounts only increased by about 10,000 to 4.73 million, as a result of about 100,000 inactive accounts, many of which were established during the pandemic rolling off in the quarter.

We are absolutely marketing to attract new customers, but we are prioritizing the quality of accounts and growing customer AUM. We believe concentrating our efforts on the long-tail customer engagement and tenure drove sophisticated retail investors to migrate to our platform and can drive margin expansion over time.

This brings us to the strong growth we saw in customer assets for the quarter. On Slide 5, you see that our customer assets grew 64% year-over-year to $15.9 billion at all-time high for assets held in Webull brokerage accounts net of margin balances. This is a $3.3 billion jump sequentially. As I noted, this excellent performance was fueled by the market recovery, which drove substantial growth of net deposits. Our customers made deposits of over $1.4 billion, a 37% increase year-over-year, bringing our cumulative deposit total over the last 12 months to USD 5.4 billion.

Turning now to Slide 6 and our trading volumes for the quarter. We're seeing some shifts here. We reported 58% year-over-year growth in equity notional volumes of 1.61 billion. This was up roughly 26% sequentially. As I mentioned before, the market volatility in the second quarter drove strong trading volumes. Our options contract volume is holding steady. The associated revenue is outpacing contract volume as we implemented a new pricing model in the second half of last year, and we are pleased to see the results of that initiative with a steady increase in the monetization of our options business.

We are now more than midway through Q3, and we're on pace for continued growth. Our AUM has now surpassed USD 18 billion and July was our highest revenue month ever as a firm. Barring major market dislocation, we anticipate Q3 will be another solid quarter.

With that, I'll pass the call over to H.C. for a closer look at our results for the quarter.

Thank you, Anthony, and thanks to everyone for joining us today. Let's start with Slide 7 and our revenues and expenses for the quarter. In the second quarter, Webull generated total revenues of $131.5 million, up 46% year-over-year. Adjusted expenses for the quarter came in at $108.2 million, an increase of 20% from a year ago. What's important here is that revenue growth once again outpaced expense growth by a wide margin. That reflects our disciplined execution and the operating leverage we continue to build into the business.

On the following slides, I will walk through the components of revenues and expenses in more detail. Now turning to Slide 8 on profitability. We are very proud that Webull has now achieved 3 consecutive quarters of operating profitability. In Q2, adjusted operating profit was $23.3 million. Sequentially, this was down about $5.4 million, but year-over-year, it represents an 18 percentage point improvement in operating margin and a $23.6 million increase in operating profit in absolute dollar terms.

Adjusted net income for the quarter was $15.4 million. That's a 13.4 percentage point margin expansion and a $16.9 million year-over-year increase. These results show the scalability of our platform and the strength of our business model.

Let's move to Slide 9 and take a closer look at trading-related revenues. Momentum from the first quarter carried through to Q2. Daily average revenue trades or DARTs increased 56% year-over-year and trading-related revenues rose 63%. Both volume growth and improved monetization contributed to these results.

On a per trade basis, revenue increased to $1.42 from $1.34 a year ago.

Turning to Slide 10 and interest-related income. This category includes interest earned on client and corporate cash, margin financing and fully paid stock lending revenues. Despite headwinds from the interest rate cycle, our business remains resilient. In the second quarter, interest rate income grew 14% year-over-year to $36.3 million, largely attributable to higher client cash balance, increased margin activity and importantly, the successful adoption of Webull Premium.

Finally, let's turn to Slide 11 for a closer look at operating expenses. Operating expenses increased both sequentially and year-over-year. The primary drivers were higher activity on the platform, including brokerage and transaction costs as well as payment fees on customer deposits made through a debit card, a new feature we introduced in the second quarter. We also stepped up our marketing spend during this period. We saw some growth in technology and development expenses as well, mainly related to head count and infrastructure investments, but this was offset by a reduction in general and administrative expenses.

Overall, we remain disciplined in managing our expenses. At the same time, we're investing in innovation, customer growth and wallet share expansion, ensuring we balance near-term discipline with long-term opportunity. Thank you, everyone. With that, I'll turn the call back to Anthony before we open the line for questions.

Thanks, H.C. and thank you, everyone, for joining us today for our second quarter earnings conference call. This was Webull's best quarter ever in terms of revenues as we continue to focus on our core growth drivers, namely new product delivery, the addition of new asset classes and geographic expansion. There's real energy behind what's coming next, and our team is hyperfocused on delivering on the product road map we have shared. I'm very happy with our trajectory and want to thank the Webull team for the hard work and innovation mindset they bring to work every day.

This is an exciting time for our business. We'll be at a number of industry and investor conferences this fall and look forward to engaging with you. On that note, we welcome any questions you may have, either here on the call or one-on-one.

[Operator Instructions] And your first question comes from Craig Siegenthaler with Bank of America.

This is [ Eli ] filling in for Craig. I was hoping you could dig a little bit deeper into your organic growth in the quarter. What were net new assets? And which geographies and demographic groups are you seeing outsized growth?

Thanks for the question. This is Anthony. So in terms of net deposits, up $1.5 billion, right? That's net deposits of fresh cash coming in. That's up 37% year-on-year. We see a bunch of different drivers behind that. I think I would highlight the focus on premium customers or Webull Premium subscription customers, delivering large amounts of capital into their Webull accounts after subscribing.

I would also highlight brand confidence following our Q2 public listing. And I would also like to highlight a great market backdrop. So we continue to see tailwinds in terms of new customer AUM growth. And also, the focus, like we mentioned on the script was looking towards high-quality customers and making sure that we can meet them to be long-term Webull investors. And we've been really successful in our promotion strategy of bringing over large asset transfers from traditional brokers over to Webull which is a great new cohort of client that we traditionally never reached. So we're really happy with that outcome.

And then the second part of your question was geographics?

Yes.

So we do operate in 14 different broker-dealers currently. There are a lot of bright lights that are shining. To put a pin on some highlights, I would highlight, we launched our Canadian broker-dealer business back in January of 2024. We are now regularly considered one of the top trading platforms in Canada in that short amount of time with AUM accelerating at a very, very fast rate, again, with promotions of brand recognition and asset transfers from the traditional brokers that existed up north.

We're seeing a lot of momentum in our Latin American businesses, not only do we operate in Brazil and Mexico City. There is a young demographic in those locations, and we're seeing a lot of interest in trading digital assets in those regions. And we've been really pleased with the momentum even over the past -- it's only been 4 weeks since we launched crypto in Brazil. We're very pleased with seeing the momentum of local Brazilians accessing crypto through the Webull LatAm app out of Sao Paulo.

And your next question comes from Mike Grondahl with Northland Securities.

And maybe just following up on the crypto trading that was started in the Brazil, U.S. and Australia. Anthony, how is that going so far? And can you talk about the incremental opportunity you see there?

So I've said this many times, the incremental opportunities are almost infinite at this point. Like we mentioned on the script, we are in a position in this industry of not only a huge shift in the products that we're able to deliver to retail customers, both in the U.S. and internationally that are based on Web3 technology. And we're all in when it comes to bringing Webull to innovate and bring those products directly to our clients.

So when I think of our U.S. launch, which is only Monday, so we're only 4 days in. When I think of our Brazilian launch, which is still very, very new, less than a month in and Australia, which I believe we launched only 2 days ago. This is Phase 1. This is the low-hanging fruit for us. This is where we say, hey, we're back in crypto, which we actually had a great crypto business earlier. We tried to go public in early several years ago and different regulatory environments.

So we moved away from crypto to appease the regulatory regime that was in place. But this is a different time for our business. The regulators are supportive. There's very strong framework that's being built not only in the U.S., but globally. And we're utilizing that framework to deliver innovation to our clients on a global scale.

In terms of the growth that we've seen, I think it's still a little early doors, but we have very high expectations because our customer demographic expects to trade crypto, expects the whole digital assets alongside equities options, futures, fixed income. It's almost an afterthought, and it does pain me that over the years, we haven't been able to because of regulatory pressure.

So this is a huge opportunity, not only for Webull, but for the industry as a whole to lead from the front end and create innovative products that I believe retail customers will really enjoy.

Got it. And the last couple of years, your marketing strategy has evolved a couple several years ago, it was open an account, get a share, fund an account, get a share. And now it's much more of kind of a matching kind of rewards-based strategy. Can you just kind of talk about that evolution and how it's going?

Yes. So I think the AUM kind of speaks for the success of the evolution of that strategy. But I would like to point out that out of the 14 broker-dealers we operate around the world, each broker-dealer has their own individual strategy. And we still utilize a lot of the open-end account, get free share promotions outside of the U.S. We have matured as a platform along with our clientele in the U.S. So it makes sense for us given the market backdrop, given the tailwind environment we're in, as retail investors are excited about the market. And it's been working very, very well for us in the U.S., and we see great success in building a large account base and outside of the U.S. that doesn't utilize the promotions that we use in the U.S., that reward balance transfers.

Got it. And then maybe just lastly. Some of the new products from earlier in the year, the Kalshi offering, Premium, the BlackRock models, anything else to call out with those or anything else related to those?

So Kalshi in predictive markets, I think, presents an opportunity to touch a lot of different sectors of our economy. We've been very conservative with our strategy on the products that we offer through our partnership with Kalshi on the predictive market space. We'll continue to, again, innovate and look for opportunities listening for customer feedback and grow that business as the whole industry grows, it's still very new, by the way.

In terms of adding new products, and yes, in the beginning of the year so far, we had a lot of great wins. I think we're going to see even more wins, and I would -- I'm going to hold my tongue in announcing anything here, but we have a lot of things still in the pipeline that we're very excited in rolling out. Again, this is a very new time for our industry where I think it's easy to ask for forgiveness instead of asking for permission in a lot of cases. And also the fact that we have this large geographic footprint also allows us to export these products everywhere around the world.

The U.S. retail trading experience, in my opinion, is by far the most convenient, the most user-friendly and the lower cost of barriers for entry anywhere in the world. And we are using our market share, our success in the U.S. to then export that experience everywhere else around the world. And so the products are going to keep rolling out, and I'm really excited about what the rest of the year brings.

And your next question comes from [ Chris Brendler ] with Rosenblatt Securities.

I wanted to start with a follow-up on the crypto side. Any way to dimensionalize the impact there? I'm not looking for guidance, but just how big that business currently is or could be? And any way to think about the impact on the outlook from [indiscernible] we launched in the U.S.

So first off, I think our crypto business is perfectly positioned to be accretive to our top line very, very quickly. Many of our Webull customers in the U.S. actually have previously traded crypto on our platform. They remain clients of ours even when we remove crypto. So the readoption and the reimplementation of digital asset trading right next to your securities, right next our securities products, I think, is going to be a very, very seamless and easy transition for our clients.

I'm trying to be careful and not overspeculate, but it's hard for me to mute my excitement about bringing it back. When we took crypto off of the Webull Financial platform in September of 2023, it was not an insignificant portion of our business. And we expect the acceleration of crypto accounts, we expect the adoption of crypto AUM, and we believe that the trading revenue from the activity of clients coming to Webull to trade their digital assets is going to be something we're going to reap the benefits of quite quickly.

Can tell you, it's a pretty exciting stuff. I just want to wait and see how meaningful it is in this year and then obviously, probably a lot bigger next year. That sounds great.

Another question on the core business and the results. Looking at starts per account or per funded account, it's cut up substantially on a year-over-year basis. Can you give us any insight on to what's driving your increased traction with your existing customer base? I mean I feel like it's probably you're turning over that customer base, as you mentioned, getting more active users on the platform. But any other color would be great on just how you're driving engagement.

Yes. I mean the easiest answer for that is going to be great market volatility and a very friendly retail investor market right now. I think the longer-term drivers of that growth is the adoption of Webull Premium. Webull Premium has some of the lowest margin financing rates on the street. So we're seeing active traders, either moving more money over to Webull and trading more on our platform or only using Webull as a result of those best-in-class margin financing rates.

And then thirdly, a huge influx of new AUM that we brought on in the last -- in Q2. And like we mentioned on the script, continues to roll in. Right now, we're over $18 billion in AUM. So when you have substantial AUM growth of more than 70% year-over-year, you're going to have a lot more trading activity. So we see no indication of that slowing.

Great. And then another follow-up actually for me would be on the marketing side. I just want to appreciate the change in strategy there. The marketing expenses were a little higher second quarter versus first quarter, but still down year-over-year. So how do I think about the effectiveness of your new marketing? And is this $30 million level a good run rate? Or do you start to continue to lean into the opportunity from here?

I mean we're planning on leaning into this opportunity. We are taking a significant amount of AUM. Yes, our marketing costs were higher this quarter when they were in Q1, but that's simply because of the uptick of clients utilizing these promotions to move assets from a lot of our traditional broker-dealer counterparts.

Now that we have, obviously, access to capital, and we've raised quite a bit capital with the BULLZ warrants. We've raised some capital with the SEPA program, we are extremely well capitalized to continue to take AUM and continue to grow our market share in the U.S.

And your next question comes from [ Edward Engel ] with Compass Point.

Congrats on all the updates. A couple of questions on the crypto side. Can you talk about the strategy outside the U.S.? I recognize that you just launched it in the U.S. and recently in Brazil, but curious if you see the product getting launched into most of the jurisdictions you're in. And I guess on top of that, quite a bit of cash to the balance sheet, especially after some of the recent actions in the second quarter. Curious how you guys are thinking about M&A, whether it's for international expansion or product expansion.

Yes. No, great questions. So in terms of crypto, crypto takeup outside of the U.S., we are dedicated to making sure that we have the ability for clients at every Webull platform around the world to be able to get access to digital products. That is a standing statement where different regulatory regimes in different countries have different qualifications, different requirements and different time horizons to get approval, and we are working with every regulatory body where we have a current broker-dealer, making sure that we do so legally and responsibly.

But absolutely, we will be looking to add crypto and digital asset trading to our -- outside of U.S. broker dealers. We had Brazil as the first release. U.S. came in a close second and Australia right thereafter. We will be having more announcements as we go through the year.

And then on your second question about the cash balance sheet and potential M&A opportunities, I just wanted to mention that we are operational in 14 different markets. And actually, our markets outside of the U.S. have only just began operations in the last 2 to 3 years. There are still significant organic opportunities for us to continue to grow customers and AUM both in the U.S. as well as outside of the U.S.

So for the near term, we'll continue to focus on acquiring customers, acquiring assets organically. But having said that, there are good inorganic opportunities that come along. We'll always be opportunistic and we'll always evaluate the risk reward of such acquisitions.

Your next question comes from Bill Katz with TD Cowen.

This is [ Robin Holly ] on for Bill Katz. We were wondering if you could maybe expand a little bit on the crypto offering in terms of number of crypto assets that you'll be offering when the offering does go live? And will you allow staking? And any other key differentiators on the crypto strategy over the near to medium term?

Crypto is a popular question today. I appreciate it. So every region is going to have its own due diligence on what digital assets constitute or do not constitute a security. In Brazil, we launched 240 coins in the U.S. on the U.S. launch just earlier this week on Monday, we began with 50 digital asset coins that are available to trade. That number will grow. You asked about other products like staking, I'm assuming also coin in, coin out, and there's a whole bunch of other opportunities for our customers to enjoy. And the easy answer is absolutely. We are leaning in to digital assets in a very big way here at Webull. This is -- and the launch that we did on Monday in the U.S. is Phase 1 of what are going to be multiple phases of having the best crypto trading experience in the world. That is our goal. And I think we are well positioned as a platform. Our customer base is the ideal customer base to not only have an ideal platform to invest in crypto long term, but also to trade crypto by utilizing some of the tightest spreads that are available on the market as we started attracting more active crypto trading customers, which we've done with the success of our Webull Premium product, which we will be expanding upon.

This concludes our question-and-answer session and today's conference call. Thank you for attending today's presentation. You may now disconnect.