BULL — Q2 2026 Financial Report Analysis

Webull's second quarter of 2026 (April to June) was its biggest yet. Revenue rose 51% from a year earlier to $198.8 million, and the company swung from a $28.3 million net loss to a $24.4 million net profit. Almost all of the growth came from customers trading more: stock trading volume rose 73% and options contracts traded rose 68%. The one-off push came in June, when US regulators scrapped the "Pattern Day Trader" rule, which had required anyone making four or more same-day round-trip trades within five business days in a margin account to keep at least $25,000 in it. Webull's costs rose only 13%, so most of the extra revenue went straight to profit.

At a glance

• Revenue $198.8M, +51% year on year and +24% on Q1. Trading-related revenue (payments from market makers plus trading fees) rose 66% to $147.7M and is now about three-quarters of the total.
• Operating margin 22.9%, up from −2.8% a year ago. Operating margin is the share of revenue left after running the business, before interest, other items and tax. Costs grew 13% while revenue grew 51%, which is why profit rose so sharply.
• Customer assets $28.5B, +79%, while funded accounts grew only 8% to 5.13M. The money held on the platform is growing far faster than the number of customers, so each customer holds more and trades more.

Results vs a year ago

n/m = not meaningful, because the prior-year figure is a loss. The release gives operating figures (customer assets, accounts, volumes) only as growth rates for the year-ago quarter, not as absolute numbers. Q2 2025 diluted EPS of −$1.20 was distorted by one-off accounting charges tied to the April 2025 listing (see below).

Where the money came from

Webull makes money in three main ways, and the quarter shows how far it now leans on the first:

• Equity and option order flow rebates: $113.0M (+64%). When a Webull customer buys a stock or option, Webull sends the order to a wholesale market maker, which pays Webull a small fee for the business. This is known as "payment for order flow." It scales directly with how much customers trade, so the 73% jump in stock dollar volume and 68% rise in options contracts fed straight into this line.
• Handling charge income: $34.8M (+73%). These are fees charged per trade, mostly on options. Handling charges grew fastest of any revenue line, even though promotional give-backs to customers were netted against this line (see the next section).
• Interest-related income: $42.8M (+18%). This is interest earned on customer cash and on margin loans (money customers borrow from Webull to trade). It grew much more slowly than trading, so its share of revenue fell from 27.6% to 21.5%.

Revenue rose 24% from Q1 ($159.9M) to Q2. Options volume grew 34% between the two quarters but stock dollar volume grew only 7%, so options did most of the quarter-on-quarter lifting. The rule change took effect on June 4, so only about four weeks of the quarter were trading under the new rules.

Why profit rose so much faster than revenue

Total operating expenses grew $18.2M while revenue grew $67.3M. Line by line:

• Brokerage and transaction costs (clearing and execution fees that rise with volume) grew 27% to $44.3M. That is well below revenue growth, so they fell from 26.5% of revenue to 22.3%.
• Marketing rose 16% year on year to $35.0M but fell sharply from Q1's $49.4M (Q1 is the six-month total minus Q2).
• General and administrative costs were almost flat at $51.8M vs $51.0M.
• Share-based compensation (pay given as company stock instead of cash) fell from $27.0M to $17.1M. Webull itself says this lower stock pay helped hold down total cost growth. Excluding stock pay, operating costs rose 26%, so the cost discipline is real but less dramatic than the 13% headline.

The result is that adjusted operating profit (which excludes stock pay and "other" items) went from 17.7% of revenue to 31.5%.

Takeaway: Webull now earns most of its money when customers trade, so the 51% revenue jump came mostly from trading volumes (helped in June by a rule change), not from more customers (+8%). That makes profits much more sensitive to market activity than the headline growth suggests, in both directions. Q1 2026 itself showed a $21.7M net loss on $159.9M of revenue.

What the headline numbers hide

• The year-ago comparison is unusually easy. The Q2 2025 net loss included $11.0M of equity offering costs and $5.7M of foreign-exchange losses. The −$1.20 EPS also absorbed accounting charges tied to the listing: $513.1M for shares issued to former preferred shareholders and $15.6M of warrants, partly offset by a $38.1M credit. None of that affected cash, but it makes the per-share comparison meaningless.
• Q2 looks much better than the rest of the half-year. Subtracting Q2 from the six-month totals gives Q1 2026 revenue of $159.9M, a pre-tax loss of $12.8M, a net loss of $21.7M and an adjusted operating margin of 9.3%. For the first half as a whole, net income is just $2.6M. One strong quarter does not yet prove that the business is consistently profitable.
• The gap between GAAP and adjusted profit is $18.8M. GAAP is the standard accounting rulebook; "adjusted" figures are the company's own version, with some costs removed. Adjusted net income ($43.2M) adds back $17.1M of stock pay and $3.9M of currency losses, then subtracts a $2.2M deferred-tax item. Stock pay is a real cost to shareholders because it dilutes their stake, so the GAAP $24.4M is the cleaner number. Adjusted operating profit also leaves out $10.8M of "other expense, net." The release does not explain what that line contains beyond the $3.9M of currency losses.
• Promotional payments are rising faster than revenue. Some sign-up and transfer incentives are booked as a reduction in revenue ("contra revenue"). These rose 144%, from $5.1M to $12.4M ($26.1M for the half-year vs $7.9M a year ago). Reported revenue is already net of these payments, but their growth shows how much Webull is paying to win and keep active customers.
• Margin lending is growing quickly. Receivables from customers (mostly margin loans) rose 43% in six months, from $708.8M at December 31 to $1.01B at June 30. That supports interest income, but it also means more customer borrowing to watch if markets fall sharply.
• The tax rate is high. Income tax was $10.3M on $34.7M of pre-tax income, a rate of 29.8%. For the half-year, tax ($19.3M) took almost all of the $21.9M pre-tax profit, which is why first-half net income was so small.
• No cash flow statement. The release contains no cash flow statement, so whether these profits turned into cash can't be checked until the full interim filing.
• The buyback is small. Webull bought back and cancelled 1.82M shares at an average of $6.03, about $11.0M. That is roughly 0.3% of the ~531M weighted-average basic shares, so it barely affects per-share figures. The authorised program allows up to $100M.

Debt and capital

Shareholders' equity was $1.04B at June 30, with $701.6M of the company's own cash (customer money is held separately). Borrowings are modest: $50M of unsecured notes, which now fall due within a year (down from $65M at year-end), plus $17.6M drawn on a revolving credit line.

Outlook

Webull gave no numerical guidance. CFO H.C. Wang pointed to "the potential for further margin expansion," and management listed three priorities: features for active traders, international expansion, and its institutional (B2B) business. During the quarter:

• International: launches in Spain, Argentina and Colombia. Webull is now licensed in 35 markets and trading in 18, with about 810,000 funded accounts outside the US (roughly 16% of the total). It also announced the acquisition of Pi Securities in Thailand. Customer assets in Asia-Pacific now exceed $5B.
• Product: about 480,000 active users on its Vega AI tools (160,000 added in the quarter). It also added futures and prediction-market access for B2B partners and a private-company investing partnership with Monark Markets.

Our read: Q3 (July to September) will be the first full quarter under the new day-trading rules, so trading volumes, and with them order-flow and handling-charge revenue, have a structural tailwind beyond Q2's four weeks. The risk is that this tailwind depends on market activity. Q1's loss shows how quickly profit turns when volumes slow and marketing rises. Three things to watch in Q3:

• whether costs stay near Q2 levels as volumes rise, or marketing climbs back toward Q1's $49M;
• whether promotional give-backs (contra revenue) keep growing faster than revenue;
• how much of the profit is turning into cash, once a cash flow statement is available.

If Webull keeps its usual timing (Q2 results came about seven weeks after quarter-end), Q3 results should arrive around mid-to-late November. That date is our estimate, not one the company has given.