Prepared remarks
Good day, and welcome to the Webull Corporation First Quarter 2026 Earnings Conference Call. The operator provided 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 the 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 had 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 interacts 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-asset 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 roadmap 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 about 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% year-over-year and 27% 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% year-over-year. 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 roadmap this year reflects three 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 research for self-directed active traders. For the first time, in near real time, retail investors will have access to comprehensive, nuanced and personalized research akin to sell-side research available to institutions. Subscribers to Vega Analyst 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 copy 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 agentic 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 one. 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 Webull 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 seven 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 milestone 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, 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 TrustLink, 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. 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, bringing the platform to a total of 27.6 million registered users. You may know we 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 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 year-over-year. 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 zero-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 Rays and remain their official online brokerage. This has deepened our presence in the Tampa Bay area, giving us a marketing platform to engage sports fans and create meaningful brand visibility in a 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 market activity picks 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. Our operating profit margin excluding 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 and 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.
Questions and answers
The first question comes from Karim Assef with 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. We've been preparing for the PDT change for almost a year and we will be ready on day one, June 4. I think only a few of our peers will be ready on that date; many legacy brokers, in my opinion, will not be ready—not only because they have a much bigger ship to turn with legacy systems and acquisitions, but also because this was not a top priority for them. The average account size at Webull as of our end-of-quarter AUM sits just below $5,000 per account. The largest cohort of clients on the Webull platform are directly impacted by this rule change. We have several different models that we put together—whether you want to call them bear, neutral or bull cases—my expectation on the low end is an increase of about 20% in transaction activity over time from the removal of PDT. This will not all happen on day one, but it will happen over time. The removal of PDT also presents an opportunity for account consolidation across the industry. It's common for active smaller-AUM clients to have multiple brokerage accounts because of PDT constraints; they trade up to the limit on one platform, then they wait and trade on another platform. Being a first mover here is significant for us to consolidate many of those assets into Webull accounts. We have a marketing plan already laid out and will start going live as we get closer to the date to educate customers about the rule change, to highlight that we will not limit their number of day trades, and to potentially offer incentives to consolidate accounts to Webull. 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 touched on that a little bit in your prepared remarks. In 1Q versus 4Q, we've 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 in 1Q was driven by the institutional opportunity. Could you speak about how meaningful or how big of a contributor you see that institutional opportunity for Webull over time, especially in periods when there is a pullback from the retail cohort of clients?
I appreciate you noting that our volumes increased in Q1 while some competitors saw declines. I would attribute our continued acceleration in equities and options volumes to multiple factors. One is our core client base: active traders. In times of volatility, many casual retail traders sit on the sidelines, but our active traders often see volatility as an opportunity to be more engaged. A second factor is our international growth. We've seen substantial increases in equities and options volume coming from our broker-dealers outside the U.S. In particular, Hong Kong has grown meaningfully and is now a major contributor. A third factor is our institutional and B2B business. We separated institutional order flow in this quarter's reporting because we have been investing heavily in B2B infrastructure and wanted to show the early results. Institutional and B2B business now represents almost 10% of our order flow, and we expect that number to increase and accelerate aggressively as we continue to scale.
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 to consolidate customers who have multiple brokerage accounts. It seems this would be a significant part of the opportunity for Webull, given your platform and the advanced trading tools that you offer. Any early color on how you guys are thinking about that opportunity as more customers can concentrate their trades at fewer venues instead of spinning trades around?
Chris, you hit it right on the head. Webull from day one has been built for the active retail trader; we didn't bolt this on later. This change represents a great opportunity specifically for the customers we've always catered to: those who value execution quality, quick navigation, and the ability to make rapid decisions. Our AI integration is also focused on making active traders better at taking advantage of real-time opportunities. As we've rolled out Vega, we've seen our active traders use it on average about 16 to 17 times per month, and roughly 20% of those interactions lead to a trade. The majority of those inquiries are in-depth stock analyses followed by a trade. All the tools we are building lead toward enabling active traders to execute without PDT restrictions.
Great. A quick follow-up: from an education standpoint, how quickly will 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?
We're trying to maximize the immediate impact with our marketing plans around PDT. As I mentioned, we will use incentives to encourage consolidation of active trader balances from competitors to Webull. One, we're built for them; two, we'll be ready on day one; and three, we'll continue to bring products that cater to active traders. I expect some immediate impact, but the larger effect will likely be more visible in Q3 rather than in the single month after implementation. On our Q2 call, we'll have at least one month of data to share, but the meaningful inflection should become clearer over the following quarters.
Okay. Last question for me would be on prediction markets. There was a lot of momentum in the fourth quarter. Can you give us more color on how prediction markets trended in the first quarter? I think it's blended with the futures business. Obviously, there was a nice bump, but I'd love to hear how prediction markets trended in Q1.
Prediction markets through Q1 stayed on the same trajectory as we saw in Q4. To be fair, we have not fully tapped the opportunity that exists in prediction markets. Prediction markets are a great vehicle for new customer acquisition and for reengaging dormant customers. It's an easy product to market and expands our addressable market significantly. In terms of volume, we're averaging around 100 million contracts a month. From an overall revenue perspective, prediction market revenue still represents a small amount of quarterly revenue—approximately 2% of total revenue—and we remain focused on equities and options as our core.
Next question comes from Steven Chubak with Wolfe Research.
Anthony, you outlined the potential that more customers leveraging agentic tools could spur meaningful upticks in trading activity, but there's also concern around the risk of third-party agentic tools gaining access to the platform. I wanted to get your perspective on how you might protect against things like rogue behavior or hallucinations in a world where these agentic tools are leveraged more readily.
I agree that as agentic tools proliferate, safety measures are critical. Security, safety and compliance are top priorities for us. We're a heavily regulated business and customer protection is essential. While we are embracing our MCP server and API infrastructure to enable agentic access, we are simultaneously building robust risk controls and customer protections. This includes education, clear disclaimers, notification systems and controls that ensure customers understand what an AI agent is doing in their accounts. We're also working with regulators as these frameworks develop to determine appropriate controls. Regardless of how regulation evolves, this is a structural change in the business over the next two to three years: the competitive battleground will shift toward access to products, pricing, execution quality and integration with AI agentic platforms, not just the smartphone UI.
I appreciate that perspective, Anthony. For my follow-up, could you offer some perspective on the margin outlook? How are you balancing investment spend and revenue growth? You noted you're not sacrificing near-term margin for long-term upside, but could you outline how you expect OpEx to trend based on current investment plans and marketing budget, and how that informs incremental margins as investments begin to pay off?
Sure, I'll take that question. Since we've been public, we've been profitable every quarter on an adjusted non-GAAP basis, and we have been managing toward around a 40% operating margin excluding marketing. While that 40% margin excluding marketing is not a hard and fast rule, it demonstrates our commitment to being a profitable and disciplined company. Marketing has been and will likely remain, for a period, a significant portion of our spending—around 20% in the last two quarters. We have prepared marketing plans around the PDT rule, promotion of zero-commission offerings outside the U.S., and a number of events and new product launches later this year. Over the next one to two years, we expect revenue to pick up with the tailwinds we are seeing, and we expect to see marketing spend as a percentage of revenue narrow even if the absolute amount does not decrease, leading to expansion in operating margins over time.
Next question comes from Mike Grondahl with Northland Securities.
Anthony, could you talk a little bit about how Merit is ramping? How many stocks are now being handled on your platform? Just give us a flavor for that.
Hi Mike. Merit is progressing very well and is a meaningful contributor to our institutional flow. We've expanded the amount of symbols being routed through Merit, and a lot of the order flow is regular session flow, which is more profitable for us. Outside of Merit, we are nearing 200 institutional clients that are onboarded on our platform. Merit was our first large onboarding in South Korea and was highlighted because of its size, but the pipeline across institutional and B2B is extremely strong and continues to grow. The investments we made in B2B infrastructure through 2024 and 2025 are starting to bear fruit, and we expect international allocation of our total trade volume to continue expanding.
That's great. 200 is a big number. Maybe second for H.C., can you restate what you said about April and May, especially relative to March, February and January? How were April and May trending?
Sure. Starting this quarter, we have begun releasing monthly metrics, which are available in the appendix section of our presentation and under the Investor Relations tab. Our trading volumes hit all-time highs in April, and that trend continued and actually accelerated into May. We plan to release these monthly metrics a couple of weeks after the end of each month, so you won't need to wait until the next earnings call to see how we are trending.
Got it. And maybe just lastly for Anthony: Crypto—you said prediction markets might be around 2% of revenue. Is crypto anywhere on that scale?
In the past, I've said crypto is a huge opportunity for us. Among peers, crypto can represent 15% to 25% of product revenue. For Webull in Q1, crypto was roughly 2% of revenue, so similar to prediction markets at this time. We had planned a March rollout of important crypto products—coin in/coin out wallet capabilities and staking—but those were pushed back as we diverted resources to build our agentic MCP server to position for AI-driven trading. Given the difficult market environment for crypto, that was the right prioritization, but those products remain a priority because they will materially expand our crypto offering and allow us to serve active crypto traders more effectively. One anecdote: about 20% of the new accounts opened year-to-date had crypto as their first trade after funding, which demonstrates strong interest in crypto among new customers. If we deliver the wallet and staking products, we believe we can grow crypto's revenue mix substantially.
Next question comes from Jose Valcourt with Compass Point Research & Trading.
This is Jose on for Ed Engel. You guys were approved for self-clearing. 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?
Becoming approved for U.S. self-clearing is a major milestone and it took multiple years to achieve. The journey isn't finished: we still need approvals and onboarding with two institutions—the DTCC for equity settlement and the OCC for options settlement. I do not expect full self-clearing operations for U.S. products until the end of the year, likely Q4. However, having the license is a game changer. Clearing and custodial fees are a meaningful cost element—every trade carries costs from clearing firms. By self-clearing, we can significantly reduce transaction costs and custody fees, which improves our unit economics. Those cost savings will make us more competitive on pricing and help us win business, especially on the B2B side, while also improving our margin profile as volume scales.
Got it, that's helpful. As a quick follow-up: you highlighted international expansion in Europe in your 2026 roadmap. How should we think about the rollout in Europe? Are you seeing similar B2B2C opportunities like you are in Asia?
It's still early for Europe. We launched our first European broker-dealer, our Dutch broker-dealer, in September 2025, so the operation is new and still being staffed. The focus for B2B remains APAC—using Hong Kong as our hub—and the U.S., with our St. Petersburg office as the hub for the Western Hemisphere. Those are the two core onboarding hubs for B2B. Most European partnership opportunities may come through the U.S. as well. I'll have more updates as the European business matures.
This concludes our question-and-answer session and today's conference call. Thank you for attending today's presentation. You may now disconnect.