NOAH HOLDINGS Q1 FY26 earnings call NOAH

Noah Holdings achieved a significant improvement in its profitability structure in Q1 FY26, with operating profit increasing 27.1% year-over-year to RMB 236 million and operating margin reaching 37.8%. This was attributed to disciplined cost control, organizational streamlining, and expense management, with AI increasingly serving as a structural driver of efficiency. The company noted this quarter's margin performance benefited from continued optimization in business mix and further release of additional organizational efficiency.

The domestic business is regaining momentum, with active clients growing 21.8% year-over-year to 10,742 and transaction value increasing 44.8% year-over-year to RMB 23.3 billion. This growth was driven by a 131% year-over-year increase in RMB-denominated mutual fund products and a 61% year-over-year rise in RMB-denominated private secondary products. This indicates a structural improvement as resources refocus on products and investment capabilities with genuine long-term value, particularly in the secondary market and asset allocation.

The overseas business continues its strategic advancement, with overseas AUA growing 5.9% year-over-year to USD 9.6 billion. The company officially commenced operations at its Japan office on May 4 and completed the final approval process for its U.S. broker-dealer license, with key team members joining in June. This expansion signifies a move from license deployment to operational execution, aiming to serve global Chinese clients across multiple jurisdictions and proactively adjust the revenue mix.

Noah is fundamentally integrating AI into its operations, redefining the front office structure from a single RM model to a collaborative model involving AI-enhanced RMs, an AI wealth management department, and an AI plus Ecosystem. This strategy has led to an 11% headcount reduction in 2025 and a further 3% quarter-over-quarter decline in Q1 FY26, while maintaining stable net revenues. This demonstrates direct returns on AI investments, with the AI RM platform already live and integrated across booking centers.

The company maintains a strong balance sheet with RMB 5.13 billion in cash, cash equivalents, and short-term investments, and zero interest-bearing debt. The Board announced a dividend proposal for approval at the shareholders meeting, bringing the total payout to 100% of full-year 2025 non-GAAP net income for the third consecutive year. Alongside ongoing share repurchases, these actions reflect management's confidence in the company's intrinsic value and commitment to enhancing long-term shareholder returns.

Noah's strategic vision for 2025-2026 is to evolve from a traditional wealth management institution into an AI-driven global platform serving Chinese high-net-worth families worldwide. This involves expanding the overseas client base, further growing global asset allocation capabilities, optimizing the revenue structure of Olive (its asset management business), and deepening AI applications in core operating processes within a compliant framework. The first quarter is seen as a starting point for validating this new operating model.