Webull Q2 FY26 earnings call BULL

The SEC's elimination of the Pattern Day Trader (PDT) Rule on June 4th was a pivotal event for Webull, significantly boosting trading volumes and contributing to record quarterly results. The company's advanced technology platform enabled qualified customers to place unlimited day trades with a 0% commission model. Management observed a shift in trader behavior towards more frequent, smaller day trades, which positively impacted Webull's take rates from payment for order flow. This change is expected to be a durable benefit, not a temporary bump, as trading behavior adapts to the new unrestricted environment.

Webull continues to embed AI across its platform, with its Vega intelligence system gaining significant traction, adding 160,000 new users in Q2 to reach 480,000 total active users. Engagement among active traders increased by 23% quarter-over-quarter. The company enhanced its Agentic stack by connecting its MCP server to leading AI models, enabling users to conduct research, build tools, and execute trades using natural language. This strategic move establishes Webull as a differentiator in Agentic Trading, with further product rollouts focused on execution anticipated by year-end.

Webull aggressively expanded its global presence, now licensed in 35 markets and operating trading activities in 18, including recent launches in Spain, Argentina, and Colombia. International funded accounts reached 810,000. The APAC region demonstrated strong growth, with customer assets exceeding $5 billion. The announced acquisition of Thai Securities, expected to close by the end of August, is projected to significantly increase AUM in the region and provide access to a high-quality active trading customer base at a low acquisition cost.

The institutional business made progress, with AUM surpassing $1.4 billion, representing approximately 5% of Webull's total AUM, predominantly from non-U.S. clients. Following the receipt of a FINRA clearing license in April, the company is actively building its clearing platform. Webull expanded its institutional product offering to include access to futures and prediction markets and formed a partnership with Monarch Markets to provide accredited investors with access to late-stage private companies through special purpose vehicles.

Webull reported 28.2 million registered users, a 13% year-over-year increase. Funded accounts grew 8% year-over-year to 5.13 million. While gross funded accounts added were 132,000, net new funded accounts increased by 20,000 due to active management of dormant accounts. The quarterly retention rate stood at 97.3%. Management clarified that the dormant account cleanup involves removing low-AUM, non-revenue-producing accounts, a process deemed healthy for improving the overall quality and average size of the account base.

Adjusted operating expenses increased 26% year-over-year to $136.2 million but declined 6% sequentially, primarily due to the normalization of marketing spend. Marketing expenses in Q1 and Q2 included amortization from aggressive asset match promotions from the prior year (e.g., 3.5% for IRA deposits). Webull has since reduced the intensity of these promotions. The company maintains an operating profit margin (excluding marketing) above 40% since Q3 2024, highlighting the underlying platform economics and operating leverage.