What are the Q2 operating trends, client investment sentiment for domestic/overseas products, and full-year guidance for headcount growth and operating expenses given strong Q1 cost control?

Management noted improved investment sentiment in 2025-2026 but emphasized promoting diversified wealth management and asset allocation. For overseas, AI-related products are key. AI supports RMs with client risk analysis and product selection, enhancing selling efficiency. On costs, there's no set target for frontline headcount, but declines are performance-driven. Mid-back office efficiency is targeted with AI, leading to consolidation. No huge headcount expansion is expected, but key fulfillments in global markets and continued AI/tech investment will occur. “We are now trying to be more focused and more accurate in picking products to certain clients. So we've been able to distinguish a high level of clients so that will be more efficient in terms of suggesting products to our clients and allocate the resources that we have on hand.”

Why did overseas transaction value, active clients, and RM numbers decline sequentially, what's the growth outlook now that it's operational, and how does AI help RMs develop business, especially given Singapore's success?

The sequential drop in overseas performance is seen as normal quarterly fluctuation, with year-over-year growth still present. AI enhances RMs by enabling more focused and accurate product picking for clients, distinguishing high-level clients, and optimizing resource allocation. A new rewarding system also focuses on high-quality clients. Singapore's AI-driven model showed 192% AUA growth and 8.5x revenue generation per capita, demonstrating AI's ability to elevate service capacity without expanding RM headcount. This model will be applied to other overseas markets. “Singapore is the first fully developed testing ground for this model. Over the past quarter, AUA in Singapore grew by approximately 192% year-over-year and revenue generation per capita reached 8.5x.”

NOAH

Noah Holdings (NOAH) Q1 FY26 earnings call: guidance and Q&A

Earnings call· Mar 2026 (Q1 FY26)· Financials· May 28, 2026

Source: earnings call transcript

Executive summary

Noah Holdings Limited Q1 FY26 — Profitability Improves with AI-Driven Efficiency

Noah Holdings delivered strong Q1 FY26 operating profit and margin, driven by disciplined cost control and AI-driven efficiency gains, despite a sequential revenue decline from insurance and seasonal performance fees. The company is advancing its global footprint and AI strategy, aiming to transform into an AI-driven global wealth management platform serving Chinese families worldwide, while maintaining a strong balance sheet and committing to shareholder returns.

Highlights

Operating margin reached 37.8%, marking one of the highest quarterly levels in recent years.
Operating profit increased 27.1% year-over-year to RMB 236 million.
Domestic business active clients grew 21.8% year-over-year to 10,742.
Domestic business transaction value increased 44.8% year-over-year to RMB 23.3 billion.
Noah Upright net revenues grew 63% year-over-year to RMB 208 million.
Overseas AUA grew 5.9% year-over-year to USD 9.6 billion.

Concerns

Net revenues declined 14.7% quarter-over-quarter to RMB 626 million, mainly due to decreased insurance contribution and seasonal performance fees.
Recurring management fees decreased 3.4% year-over-year and 2.5% quarter-over-quarter to RMB 379 million.
Reported non-GAAP net income was RMB 134 million, affected by RMB 65 million in share of losses from equity affiliates due to mark-to-market adjustments.

Guidance & targets

Category	Target	Timeline	Confidence
Full year operating margin	above 30% high materiality	FY26 · 2026	High

Segment performance

Segment	Revenue	YoY	QoQ	Margin
Domestic Business Regaining momentum in core investment and asset allocation, driven by structural opportunities in the A-share market and recovery in private secondary fundraising. Active clients: 10,742Active clients YoY growth: 21.8%Transaction value: RMB 23.3 billionTransaction value YoY growth: 44.8%RMB-denominated mutual fund products transaction value: RMB 9.9 billionRMB-denominated mutual fund products transaction value YoY growth: 131%RMB-denominated private secondary products transaction value: RMB 5.3 billionRMB-denominated private secondary products transaction value YoY growth: 61%	—	—	—	—
Noah Upright (Domestic) Driven by doubling in public fund transaction volume and rapid recovery in RMB-denominated private secondary fundraising.	RMB 208 million	63%	—	—
Overseas Business Continues to advance in line with strategy of proactively adjusting revenue mix, with new operating model driven by globalization and AI taking shape. Client base and AUA continue to grow steadily. Registered clients: 20,373Registered clients YoY growth: 11.9%AUA: USD 9.6 billionAUA YoY growth: 5.9%U.S. dollar-denominated products transaction value: USD 1.15 billionU.S. dollar-denominated products transaction value YoY growth: broadly flat	—	—	—	—
Singapore (Overseas) First fully developed testing ground for the AI wealth management department model, showing significant growth without materially expanding RM numbers. AUA YoY growth: 192%Revenue generation per capita: 8.5x	—	—	—	—

NOAH operating KPIs by quarter

NOAH operating KPIs stated on its earnings calls, by fiscal quarter
KPI	This call Mar 2026 Q1 FY26	Jun 2026 Q2 FY26	Change vs prior quarter
Overseas registered clients	20.373K As of March 31, overseas registered clients reached 20,373, up 11.9% year-over-year. Source: earnings call transcript	21.059K As of end June, registered overseas clients reached 21,059, up 11% year-over-year. Source: earnings call transcript	+3.4%
Diamond and Black Card clients Overseas	1,781 Overseas, Diamond and Black Card clients reached 1,781, up 3.8% quarter-over-quarter, reflecting continued traction in overseas markets. Source: earnings call transcript	1,791 Overseas diamond and black card clients reached 1,791, up 8.9%. Source: earnings call transcript	+0.6%

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	Details
AI RM platform	launch	Q3 last year (2025)

Risks & headwinds

Tightened regulations on cross-border brokerage businesses in China Current

Security business contributes less than 1% of total revenue.

Mitigation:Noah is fully compliant with legal requirements across all jurisdictions (Hong Kong, Singapore, USA). All overseas accounts are opened under KYC requirements, and money transfers originate from legitimate overseas financial institutions, not China banks. The iARK system and employees are based overseas. Management is reviewing referral requirements.

Short-term pressure points during business transformation Short-term

The short-term pressure points are visible

Mitigation:Continued investment in globalization and AI capabilities, maintaining financial discipline, and focusing on the long-term operating model.

Q&A highlights

What is management's view on evolving cross-border brokerage regulations, potential impact on Noah's domestic market business, and compliance risk given recent actions against offshore brokers?

Management confirmed awareness of the regulations, stating they are a reinforcement of existing rules. Noah is fully compliant across all jurisdictions (Hong Kong, Singapore, USA) and its business model for global Chinese high-net-worth clients differs from online platforms. The security business contributes less than 1% of total revenue, and all funds transferred to investment accounts originate from overseas banks, not China. The iARK system and employees are overseas. Management is reviewing referral requirements and sees potential opportunity due to their compliance.

“all of our operations under different jurisdiction has been always complied to the legal requirement.”

asked by Calvin Leung · answered by Zhe Yin

2 min read 6 chapters

Detailed narrative

Profitability and Efficiency Improvement

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.

Domestic Business Momentum

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.

Overseas Expansion and Revenue Mix Adjustment

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.

AI-Driven Transformation

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.

Shareholder Returns and Balance Sheet Strength

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.

Strategic Vision for Global Platform

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.

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