Webull Corporation Class A Ordinary Shares (BULL)

Executive Summary / Key Takeaways

• Webull is executing a deliberate pivot from mobile-first trading app to global financial superapp, with 14 international broker-dealers, AI-powered decision tools, and diversified product offerings creating multiple growth vectors beyond pure commission revenue.
• The crypto reintroduction represents an immediate and material catalyst: 50% of new funded accounts now trade crypto, management plans to "aggressively lean into squeezing take rates" in early 2026, and the Webull Pay acquisition instantly added $1.2 billion in assets and 140,000 accounts.
• International expansion is the stealth compounding engine: 700,000+ funded accounts outside the U.S. are growing rapidly with low customer acquisition costs, while Canada approaches $1 billion in AUM, demonstrating the scalability of exporting the U.S. retail trading experience.
• Operational leverage is emerging powerfully: 55% revenue growth in Q3 2025 paired with just 13% expense growth drove adjusted operating margins to 23.4%, proving the business model can scale efficiently as customer assets surge 84% year-over-year to $21.2 billion.
• The risk/reward equation hinges on execution: trading at 8.87x sales with 20.6% operating margins, Webull offers reasonable valuation for a 55% grower, but faces intense competition from better-capitalized rivals and remains vulnerable to trading volume volatility that could compress margins.

Setting the Scene: The Retail Trading Experience Goes Global

Webull Corporation, founded in 2016 as a market data platform before evolving into a digital investment platform, has spent nine years building what management calls "the exportation of the U.S. retail trading experience." This phrase encapsulates the core strategy: take the mobile-first, feature-rich, low-cost trading model that resonated with U.S. millennials and Gen Z, and replicate it across 14 international broker-dealers with local execution. This transforms Webull from a single-market brokerage dependent on U.S. trading volumes into a global financial services network with diversified regulatory risk, multiple currency exposures, and a vastly larger addressable market.

The company makes money through three primary levers: trading-related revenues (commissions, payment for order flow), interest-related income (margin lending, stock lending, cash balances), and increasingly, subscription services through Webull Premium. This mix provides resilience because pure trading revenues are notoriously cyclical—spiking during volatility and collapsing during quiet markets. By layering interest income and subscriptions, Webull is building a more resilient revenue base that can generate cash flow even when retail trading activity moderates.

Webull's place in the industry structure reveals both opportunity and vulnerability. The digital brokerage market is dominated by Charles Schwab (SCHW) with 25-30% of U.S. retail assets, followed by entrenched players like Interactive Brokers (IBKR) and Fidelity. Newer entrants like Robinhood (HOOD) captured the meme stock generation with gamified interfaces, while SoFi (SOFI) bundles trading with banking and lending. Webull occupies a middle ground: more sophisticated than Robinhood's beginner-friendly app, more accessible than Interactive Brokers' professional-grade platform, and more trading-focused than SoFi's financial supermarket. This positioning creates a defensible niche among active retail traders who want advanced charting, options strategies, and now AI-powered insights without the complexity of institutional platforms.

The industry is undergoing what management calls a "technology-induced tectonic shift" driven by zero-commission trading, smartphone ubiquity, and social networks pushing retail participation mainstream. Webull's mobile-first architecture, launched in 2018 with short-selling capabilities and expanded in 2019 with crypto trading, positioned it perfectly for this shift. The recent regulatory clarity around cryptocurrencies—both in the U.S. and internationally—provided the opening to reintroduce crypto trading in June 2025 (Brazil), August 2025 (U.S. and Australia), and integrate Webull Pay back into the group in Q3 2025. This timing coincides with a new crypto bull cycle, allowing Webull to capture asset inflows when customer acquisition costs are lowest.

Technology, Products, and Strategic Differentiation: Building the Superapp Stack

Webull's product diversification strategy is creating a financial superapp ecosystem where each new offering reinforces customer stickiness and increases lifetime value. The launch of Webull Premium in March 2025, which quickly reached 90,000 subscribers by Q3, demonstrates demand for enhanced features and lower margin rates. Subscription revenue is recurring, high-margin, and fundamentally changes Webull's valuation multiple from a cyclical brokerage to a SaaS-like financial platform. Management notes Premium subscribers show higher trading volumes across all product categories, creating a virtuous cycle where paying customers become more engaged and profitable.

The reintroduction of crypto trading is not merely a feature addition—it's a strategic recentering of the customer acquisition funnel. With 50% of new funded accounts making their first trade in crypto, Webull is tapping into a crypto-native demographic in their "young 30s" who view digital assets as a primary investment category. The Webull Pay acquisition instantly added $1.2 billion in assets and 140,000 funded accounts, but the real value lies in management's stated intent to "aggressively lean into squeezing take rates" in early 2026. This is a direct assault on competitors like Coinbase (COIN) and Robinhood, signaling Webull will sacrifice near-term crypto revenue for market share, betting that crypto traders will eventually migrate to equities, options, and other higher-margin products. The platform launched with 50 coins in the U.S. and 240 in Brazil, with plans to expand toward 100 tokens globally, creating a unified crypto experience that could become a key differentiator.

Prediction markets, launched through the Kalshi partnership, represent an entirely new TAM. With over 30 million contracts placed in October 2025—nearly double September's volume and over half in sports—Webull is reengaging dormant accounts and attracting a demographic that doesn't traditionally trade stocks. Management expects "month-on-month growth at over 100% on a pretty consistent level." Prediction market revenue, while currently small at 1.25-1.5 cents per contract, has zero customer acquisition cost when cross-sold to existing users. This is pure margin expansion potential.

Vega, the AI-powered decision partner launched in November 2025, could be the most underappreciated product in Webull's arsenal. Developed in-house with no increased cost, Vega combines news, earnings, and technical data to provide personalized insights and voice-command trading. Management calls it "the future of investing" and a "game changer," citing "tens of millions of engagements" and regular user returns. AI-driven engagement directly correlates with trading frequency and asset consolidation. If Vega can convince users to move their 401(k) rollovers or transfer accounts from traditional brokers—a strategy Webull is actively pursuing with "asset matching promotions"—it drives both AUM growth and higher-margin interest income. The fact that it's built in-house means the R&D cost is already absorbed, so any revenue uplift flows directly to operating leverage.

Corporate bonds, introduced in Q3 2025, further bolster the superapp thesis by attracting large asset transfers from traditional brokerages. These low-risk, steady-yield products appeal to Webull Premium subscribers and facilitate the "greater amortization of marketing expenses" management highlights, making customer acquisition costs more predictable quarter-over-quarter.

Financial Performance & Segment Dynamics: The Leverage Story

Webull's Q3 2025 results provide compelling evidence that the superapp strategy is working. Total revenue of $156.9 million grew 55% year-over-year, but the composition reveals the underlying health. Trading-related revenues, while still the majority, are growing not just from volume but from improved monetization. Daily Average Revenue Trades (DARTs) increased 56% year-over-year, but revenue per trade actually rose to $1.53 from $1.42 in Q2, indicating customers are trading higher-margin products like options and crypto. Equity trading volume surged 71% to $24 billion, the third straight quarter of acceleration, while options contract volume reached 147 million. This shows Webull isn't just benefiting from market volatility—it's taking market share and improving its revenue capture per transaction.

Interest-related income grew 32% to $43.4 million, driven by higher balances across corporate cash, client cash, margin lending, and fully paid stock lending. This growth reflects the 84% year-over-year increase in customer assets to $21.2 billion, including $1.2 billion from Webull Pay. The key insight is that interest income scales with AUM regardless of trading activity, providing a natural hedge against volume slowdowns. As Webull attracts larger asset transfers through Premium and corporate bonds, this revenue stream should compound faster than trading revenues.

The margin story is where Webull's execution becomes undeniable. Adjusted operating expenses rose just 13% year-over-year to $120 million, despite 55% revenue growth, driven by higher brokerage and transaction expenses that scale with volume, offset by lower marketing spend. This discipline produced $36.7 million in adjusted operating profit, expanding margins 28.7% year-over-year to 23.4%. Adjusted net income of $32.9 million yielded a 20.9% net margin. Webull has crossed an inflection point where incremental revenue flows disproportionately to the bottom line. For a company in "hyperscale mode" with 14 relatively young international businesses, maintaining 20%+ operating margins while growing 55% demonstrates exceptional operational control.

Customer acquisition efficiency is improving dramatically. Management shifted from "giving away free stocks" to "asset matching promotions" and 401(k) rollover incentives, resulting in "significant increases in net deposits in AUM growth" and "greater amortization of marketing expenses." Net deposits hit $2.1 billion in Q3, up 31% year-over-year, with cumulative net deposits over the last twelve months reaching $5.9 billion. October 2025 became the firm's best month ever for deposits, trading volumes, and revenues, suggesting the momentum is accelerating into Q4.

The international segment's performance validates the exportation strategy. Over 700,000 funded accounts outside the U.S. are growing rapidly, with Canada soon to become the first non-U.S. brokerage to reach $1 billion in AUM. The majority of transactions in non-U.S. entities involve U.S. products, creating a low-cost revenue stream that leverages existing infrastructure. The Merits Financial Group partnership in South Korea represents a new B2B line that management calls a "huge boom" for market share, with revenue "not yet even factored in to our current models." This institutional onboarding takes longer than retail but provides sticky, high-volume trading flow.

Outlook, Management Guidance, and Execution Risk

Management's commentary reveals a clear roadmap for sustained growth. Midway through Q4, Webull is "on pace for further growth" with October setting records across all key metrics. The crypto strategy is particularly aggressive: management will "cater our crypto trading products specifically to sophisticated, experienced and active retail traders" and "aggressively take those active traders from our comps" by optimizing take rates in early 2026. This is a direct competitive assault that could pressure margins short-term but drive massive market share gains long-term. The plan to expand from 50 to 100+ coins across geographies suggests crypto could become a 15-20% revenue contributor within 18 months, up from its current nascent level.

Prediction markets are expected to grow "at over 100% on a pretty consistent level." This product addresses a completely new TAM beyond traditional traders. Sports contracts already represent over half of October's 30 million+ contracts, reengaging dormant accounts at near-zero marginal cost. If this growth trajectory holds, prediction markets could contribute meaningfully to 2026 revenues while providing a unique differentiator that competitors like Schwab and Interactive Brokers don't offer.

International expansion remains the primary growth driver. Management emphasizes that the 13 broker-dealers outside the U.S. are "relatively young businesses that are in hyperscale mode," driving "low cost, low customer acquisition costs" for new funded accounts. The Netherlands launch in September 2025, Latin American app rollout, and imminent Japan launch for Level 3 options create a geographic diversification that reduces dependence on U.S. market conditions. The "exportation of the U.S. retail trading experience" is identified as "one of the largest growth factors that I believe we're going to see in the next year, year and a half."

The Vega AI rollout could be a stealth game-changer. With "tens of millions of engagements" and regular user returns in just its first week, Vega's ability to consolidate portfolios and drive trading decisions may accelerate AUM growth beyond current models. Since it was developed in-house with "no increased cost," any revenue or retention benefit flows directly to margin expansion.

Execution risks center on three areas. First, the crypto take-rate compression strategy could backfire if competitors match pricing, turning a growth driver into a margin headwind. Second, international regulatory complexity could slow the 14-market rollout, particularly in Europe where crypto licensing remains fragmented. Third, the business remains vulnerable to trading volume volatility—management admits "long-term volatility is never amazing for a cyclical business," even if Webull is "uniquely positioned to weather volatile markets" due to its sophisticated customer base.

Risks and Asymmetries: What Could Break the Thesis

The most material risk is competitive pressure from better-capitalized rivals. Robinhood's 100% revenue growth and $119.75 billion market cap give it firepower to match Webull's crypto pricing and prediction market features. Schwab's 25-30% market share and $169.63 billion market cap provide scale advantages in interest-earning assets and regulatory lobbying. Interactive Brokers' 79.2% operating margin and global institutional presence create a low-cost competitor that could undercut Webull's pricing. Webull's 20.6% operating margin, while impressive for its scale, is vulnerable to a price war in crypto or options that could compress margins to the mid-teens.

Regulatory risk remains acute. The September 2023 removal of crypto from the main platform due to regulatory pressure shows how quickly product lines can be disrupted. While management is "excited about the evolution of the financial services industry as it begins to adopt blockchain technology," any SEC or international crackdown on crypto, prediction markets, or PFOF could eliminate key growth drivers. The expiration of all shareholder lockup restrictions on October 8, 2025, increased the public float and may create near-term selling pressure, though it also enhances liquidity.

Market concentration risk is real. Despite diversification efforts, trading-related revenues still dominate and are tied to retail participation. A prolonged market downturn or volatility collapse could reduce DARTs and compress revenue per trade, hitting the core business before newer products scale. Management's comment that "long-term volatility is never amazing for a cyclical business" acknowledges this vulnerability, even if Webull's sophisticated customers trade more during volatility.

The asymmetry lies in execution. If Webull successfully scales international operations, drives Premium adoption beyond 100,000 subscribers, and makes crypto a material revenue contributor while maintaining 20%+ operating margins, the stock could re-rate toward 12-15x sales, implying 35-50% upside. If competitive pressure forces margin compression or regulatory issues stall crypto expansion, the multiple could contract to 6-8x sales, implying 25-30% downside. The key variable is whether Webull can maintain its growth trajectory while defending margins.

Valuation Context: Reasonable Price for a Transformative Story

At $9.05 per share, Webull trades at an 8.87 price-to-sales ratio on TTM revenue of $390.23 million and a market capitalization of $4.56 billion. The enterprise value of $2.62 billion represents 5.10x revenue, reflecting net cash on the balance sheet. For a company growing revenue 55% with 20.6% operating margins and 6.31% net margins, the valuation sits at a discount to high-growth SaaS peers but at a premium to traditional brokerages.

Comparing to direct competitors provides context. Robinhood trades at 28.49x sales with 51.8% operating margins and 52.19% net margins, commanding a premium for its larger scale and crypto dominance. Schwab trades at 7.40x sales with 49.24% operating margins, reflecting its mature, interest-rate-sensitive business model. Interactive Brokers trades at 11.13x sales with 79.22% operating margins, showing how global scale and low-cost structure drive valuation. SoFi trades at 10.76x sales with 15.6% operating margins, illustrating the discount applied to less profitable fintech bundling.

Webull's 3.66% ROE and 1.10% ROA lag all major competitors, reflecting its smaller scale and recent de-SPAC status. However, its 0.11 debt-to-equity ratio and $1 billion SEPA facility provide ample capital to fund growth without dilution. The 24.92 price-to-free-cash-flow ratio is reasonable for a 55% grower, especially since free cash flow should accelerate as operating leverage compounds.

The valuation question hinges on whether Webull deserves a Robinhood-like multiple (28x sales) or a Schwab-like multiple (7x sales). The answer likely lies in the middle: if Webull can sustain 30-40% revenue growth through 2027 while expanding operating margins toward 25-30%, a 12-15x sales multiple would be justified, implying significant upside. If growth decelerates to 20% or margins compress due to competition, the current 8.87x multiple may be fair, limiting near-term returns.

Conclusion: The Execution Story That Will Define BULL

Webull Corporation is not merely a beneficiary of the retail trading boom; it is architecting a global financial superapp that exports the U.S. retail experience while layering on high-margin subscriptions, AI-powered engagement, and diversified asset classes. The Q3 2025 results provide compelling evidence that this strategy is working: 55% revenue growth, 23.4% operating margins, $21.2 billion in customer assets, and 700,000+ international accounts growing at low acquisition costs.

The near-term catalysts are clear. Crypto reintroduction is driving 50% of new account growth, with take-rate optimization coming in early 2026 to aggressively capture market share. Prediction markets are growing over 100% month-on-month, reengaging dormant users at near-zero marginal cost. Vega AI is generating "tens of millions of engagements" with no incremental R&D expense, potentially accelerating AUM consolidation. International expansion is creating a geographic diversification that reduces U.S. market dependence.

The long-term thesis depends on execution. Can Webull scale 14 international broker-dealers while maintaining local compliance and low customer acquisition costs? Can it grow Webull Premium beyond 100,000 subscribers and make subscriptions a material revenue driver? Can it defend 20%+ operating margins while competing with Robinhood's scale and Schwab's brand? These are the variables that will determine whether BULL trades at 8x sales or 15x sales.

For investors, the risk/reward is asymmetric but not without peril. The stock offers reasonable valuation for a 55% grower with emerging operational leverage, but faces intense competition, regulatory uncertainty, and inherent cyclicality in trading revenues. The key monitorables are crypto take-rate implementation in Q1 2026, international AUM growth rates, and Premium subscriber churn. If Webull executes on its superapp vision, it could become the next-generation brokerage that captures the global retail trading wave. If execution falters, it risks being squeezed between low-cost giants and feature-rich incumbents. The next two quarters will reveal whether this is a transformative growth story or a well-positioned niche player—and the stock's 40-50% upside potential makes it a compelling watchlist candidate for growth-oriented investors.