Why did Webull's volumes accelerate in Q1 while peers saw declines, and how significant is the institutional opportunity?

Volume acceleration is attributed to Webull's focus on active traders who engage during volatility, international growth (especially Hong Kong), and the increasing contribution from institutional and B2B business, which now accounts for 9.5% of equity notional volume. “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.”

How will Webull protect against risks like rogue behavior or hallucinations from third-party AI agentic tools accessing the platform?

Webull prioritizes security, safety, and compliance, working with regulators to build proper frameworks and controls for AI trading. While embracing AI, the focus is on education, disclaimers, and notifications to ensure customers understand AI agent actions within their accounts. “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.”

How is Webull balancing investment spend and revenue growth, and what is the expected trajectory for OpEx and incremental margins?

Webull aims for profitability, maintaining a 40% operating profit margin excluding marketing. Marketing spend, around 20% of revenue, will remain a priority for strategic initiatives. Management expects marketing as a percentage of revenue to narrow as revenue scales, leading to operating margin expansion over time. “we have been kind of managing towards around a 40% profit margin, excluding marketing... 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.”

BULL

Webull (BULL) Q1 FY26 earnings call: guidance and Q&A

Earnings call· Mar 2026 (Q1 FY26)· Financials· May 21, 2026

Source: earnings call transcript

Executive summary

Webull Q1 FY26 — Strong Growth Driven by Active Traders, Institutional Traction, and AI Focus

Webull delivered a strong Q1 FY26, driven by robust trading volumes from active traders and significant traction in its institutional business, which now contributes 9.5% of equity volumes. The company is strategically investing in AI-driven product development and global expansion, positioning itself as a leader in the evolving financial services landscape. While increased marketing spend impacted short-term profitability, management remains focused on long-term category leadership and capital returns, including a $100 million share repurchase program.

Highlights

Revenue grew 36% year-over-year to $159.9 million.
Customer assets reached $24 billion, up 90% year-over-year.
Equity notional volume increased 104% year-over-year to $261 billion.
Quarterly retention rate reached a record high of 98.4%.
Received U.S. self-clearing license approval, expected to be operational by Q4 2026.

Concerns

Adjusted operating expenses increased 64% year-over-year to $141.1 million, impacting profitability.
Adjusted operating profit margin declined to 9.3% and adjusted net income margin to 5.8% due to increased marketing investments.
Customer assets and net deposits declined sequentially due to market volatility and challenging macro backdrop in Q1.
Sequential decline in interest-related income due to an industry-wide decrease in fully paid stock lending revenue.

Guidance & targets

Category	Target	Timeline	Confidence
Share Repurchase Program	up to $100 million high materiality	Open-ended	High
Self-clearing operational status	Operational by Q4 2026 high materiality	Q4 · FY26	High
Monthly operating metrics publication	Publishing monthly operating metrics low materiality	Q2 · FY26	High

BULL operating KPIs by quarter

BULL operating KPIs stated on its earnings calls, by fiscal quarter
KPI	Dec 2025 Q4 FY25	This call Mar 2026 Q1 FY26	Jun 2026 Q2 FY26	Change vs prior quarter
Funded customers Outside the US	760K+ We now have more than 760,000 funded accounts outside the US APAC customer assets have surpassed $3 billion, and our partnership with Meritz Financial Group has increased access to the US market for Korean investors. Source: earnings call transcript	790K+ In APAC, our customer assets have grown to $4 billion, and we now have over 790,000 funded accounts outside the US Our ability to export the US retail trading experience at scale, thanks to our global infrastructure, compliance capabilities and product depth remains a genuine competitive differentiator. Source: earnings call transcript	~810K We now have approximately 810,000 international funded accounts. Source: earnings call transcript	—
Assets under custody (AUC) APAC	$3B+ We now have more than 760,000 funded accounts outside the US APAC customer assets have surpassed $3 billion, and our partnership with Meritz Financial Group has increased access to the US market for Korean investors. Source: earnings call transcript	$4B In APAC, our customer assets have grown to $4 billion, and we now have over 790,000 funded accounts outside the US Our ability to export the US retail trading experience at scale, thanks to our global infrastructure, compliance capabilities and product depth remains a genuine competitive differentiator. Source: earnings call transcript	$5B+ In APAC, our customer assets have grown to over $5 billion. Source: earnings call transcript	—
Registered users	26.8M During the fourth quarter, we added roughly 1 million registered users, bringing the platform to a total of 26.8 million registered users. Source: earnings call transcript	27.6M And bringing the platform to a total of 27.6 million registered users. Source: earnings call transcript	28.2M 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. Source: earnings call transcript	+2.2%
Funded customers	5.03M 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. Source: earnings call transcript	5.11M We added approximately 80,000 new funded accounts this quarter, bringing the total number to 5.11 million, an 8% year-over-year increase. Source: earnings call transcript	5.13M Funded accounts reached $5.13 million in the quarter, an 8% year-over-year increase. Source: earnings call transcript	+0.4%
Retention rate	~97% 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%. Source: earnings call transcript	98.4% 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%. Source: earnings call transcript	97.3% Our quarterly retention rate was 97.3%. Source: earnings call transcript	-1.1 pt
Assets under custody (AUC)	$24.6B Legal 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. Source: earnings call transcript	$24B Customer assets reached $24 billion, up 90% year-over-year. Source: earnings call transcript	$28.5B Customer assets reached $28.5 billion, representing 79% year-over-year growth. Source: earnings call transcript	+18.8%

Operating figures the company stated on at least two of the calls shown, checked against each call's transcript. Click a figure to read the sentence. A dash means it was not stated that quarter.

Product announcements

Product	Type	Timeline
Vega Analyst	launch	rolling out across U.S. and globally in 2026
Portfolio Blueprint	launch	later this year
AI Portfolio	launch	later this year
MCP server	launch	recently released
Webull Connect	launch	—
TrustLink	launch	—

Deals & partnerships

Tampa Bay Rays Official jersey patch sponsor and official online brokerage.

Launched awareness campaigns to promote offerings.

Merit Institutional client sending order flow.

Largest institutional client onboarded in South Korea.

Risks & headwinds

Market volatility and challenging macro backdrop Q1 FY26

Customer assets decreased slightly from beginning of year; sequential decline in customer net deposits.

Mitigation:Focus on active traders who engage during volatility; continued investment in customer acquisition and AUM growth.

Increased operating expenses due to marketing investments Q1 FY26

Adjusted operating expenses up 64% YoY to $141.1 million; adjusted operating profit margin 9.3%, adjusted net income margin 5.8% (lower than prior quarters).

Mitigation:Expect marketing as a percentage of revenue to narrow as revenue scales, leading to margin expansion over time; maintaining 40% operating profit margin ex-marketing.

Decline in fully paid stock lending revenue Q1 FY26

Sequential decline in interest-related income ($40.1 million, up 29% YoY, but sequentially down).

Mitigation:Expects to normalize as market activities pick back up.

Risks associated with third-party AI agentic tools Future (next 2-3 years)

null

Mitigation:Prioritizing security, safety, and compliance; working with regulators to build proper frameworks; focusing on education, disclaimers, and notifications for customers.

Delays in crypto product rollout Q1 FY26 (originally planned for March rollout)

Coin in/out capabilities and staking products pushed back from March rollout.

Mitigation:Diverted resources to AI agentic platforms; still very optimistic on crypto's long-term opportunity (20% of new accounts' first trade is crypto).

What to watch in Q2 FY26

PDT rule impact on transaction volumes

Q2 FY26 (1 month of data by next call)

Current Webull ready on June 4; low-end expectation of 20% transaction increase over time.

Target Initial signs of increased transaction activity and account consolidation.

Why it matters

Significant structural tailwind for Webull's active trader base, potential for substantial volume growth and market share gains.

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.

Find out whether BULL delivers this. Inve re-checks your case every morning.

Q&A highlights

How will the PDT rule change impact Webull's client base, trading activity, and cohort expansion, and its significance as a structural driver?

Webull is ready for the June 4 PDT rule change, expecting a low-end 20% increase in transaction volume over time. The rule change presents a unique opportunity for account consolidation from other brokers, especially for active traders with smaller AUM, a key cohort for Webull.

“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.”

asked by Karim Assef · answered by Anthony Michael Denier

2 min read 7 chapters

Detailed narrative

Strategic Focus on AI and Infrastructure

Webull is positioning itself for an inflection point in financial services, shifting competition from UI to AI agent interaction and robust B2B infrastructure. The company is building a complete, multi-liable, and developer-friendly execution and custody infrastructure, informing current decisions in API architecture, AI product roadmap, and B2B infrastructure design. This strategy aims to establish Webull as an industry leader in the emerging agentic stack.

Q1 FY26 Financial and Operational Highlights

Webull reported strong Q1 FY26 results with revenue of $159.9 million, up 36% YoY. Customer assets grew 90% YoY to $24 billion, despite a sequential decline due to market volatility. Equity notional volume surged 104% YoY to $261 billion, and option volume rose 31% to 159 million contracts, both reaching all-time highs.

The company achieved its sixth consecutive quarter of operating profitability, with adjusted operating profit at $14.8 million.

Product Innovation for Active Traders

Webull's product roadmap for 2026 includes three key initiatives for active traders: Vega Analyst, an AI-powered research tool providing comprehensive, personalized reports; Portfolio Blueprint, enabling one-click portfolio construction and execution; and AI Portfolio, for agentic portfolio construction and trading. These tools are designed to enhance the self-directed investment experience and leverage AI-driven decision-making.

Global Expansion and Market Penetration

International expansion remains a core growth pillar. Webull received permission to operate in 22 additional markets in the European Economic Area during Q1, now approved across all of Europe, and recently launched operations in Germany. In APAC, customer assets reached $4 billion, with over 790,000 funded accounts outside the U.S., demonstrating the company's ability to export its retail trading experience globally.

Institutional and B2B Platform Development

A significant milestone was achieved with the approval of Webull's U.S. self-clearing license, strengthening its operational backbone and creating synergies for the B2B business. The company also released its MCP server to enable AI agents to interact with its platform, positioning Webull as a preferred execution and custody layer.

Institutional flow accounted for 9.5% of equity notional volume in Q1, reflecting early traction in this scaling business.

Impact of Pattern Day Trader (PDT) Rule Elimination

The SEC's elimination of the PDT rule, effective June 4, is seen as a structural tailwind for Webull's active trader focus. The company has updated its systems and will be ready on day one to support unlimited day trades for qualifying customers.

Management anticipates a low-end increase of 20% in transaction volume over time due to this change, alongside opportunities for account consolidation from other platforms.

Capital Allocation and Share Repurchase

Webull announced a share repurchase program of up to $100 million of its Class A ordinary shares, reflecting confidence in its long-term value and commitment to disciplined capital allocation. This move signals the company's strategy to both invest for growth and return capital to shareholders when appropriate, balancing aggressive investment with financial prudence.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.