Webull Q3 2025 Earnings Report: 55% Revenue Surge, First Profitable Quarter, $21.2B in Assets, and the Real Race Against Robinhood

#Revenue Surge: Trading Volumes Fuel the Fire

The top line tells a triumphant tale: $156.9 million in revenues, up 55% from $101.1 million in Q3 2024. Drilling down, equity and option order flow rebates led the charge at $83.7 million, a 63% increase year-over-year, underscoring how Webull's payment for order flow model is thriving in a high-volume environment. Interest-related income wasn't far behind, rising 31% to $43.4 million, thanks to elevated rates and ballooning customer assets, while handling charge income surged 70% to $23.3 million on expanded trading activity.

Other revenues more than doubled to $6.6 million, potentially from premium features and partnerships, adding a layer of diversification. An underappreciated detail lies in the contra revenue of $3.7 million — up from $0.7 million — stemming from promotions to qualifying customers, which signals aggressive user retention tactics but also nibbles at gross margins, rising from under 1% to about 2.3% of revenues.

These figures reflect Webull capitalizing on market exuberance, with options contracts volume at 147 million (up 24% YoY and 15.7% QoQ) and equity notional volume at $204 billion (up 71% YoY and 26.7% QoQ). Such metrics aren't mere footnotes; they demonstrate a platform engineered for active traders, fostering stickiness that could sustain revenues even in softer markets. However, the heavy tilt toward trading-related income (64% YoY growth) mirrors a high-stakes wager on volatility — thrilling in bull runs, but vulnerable to downturns where volumes could plummet 20-30% as seen in past cycles.

#Profitability Pivot: From Red to Respectable Black

Profitability metrics reveal a stark turnaround: income before taxes at $38.9 million versus a $9.2 million loss last year, a $48.1 million improvement. Net income attributable to Webull hit $21.7 million, flipping from a $33.5 million deficit, though last year's basic EPS of $4.52 benefited from a one-time non-cash gain on preferred shares, now irrelevant after the April 2025 conversion.

Adjusted operating profit reached $36.7 million with a 28.7% margin (from a loss), and adjusted net income swung to $32.9 million. These exclude $4.5 million in share-based compensation, currency impacts, and one-offs like the $7.9 million Webull Pay distributions offset by a $15.5 million acquisition gain. For the nine months, adjusted operating profit stood at $88.7 million, a dramatic shift from a $3.4 million loss.

Operating expenses grew modestly at 18% to $132.5 million, outstripped by revenue gains, driven by a 39% marketing cut to $29.4 million — freeing up capital for growth. Yet brokerage costs spiked 79% to $35.6 million on volumes, and G&A rose 64% to $45.0 million from headcount investments. Adjusted opex increased just 13% to $120.1 million, showcasing efficiency that's rare in fintech. This discipline positions Webull for scalable profits, but the G&A uptick suggests talent bets that must yield returns; otherwise, it risks margin compression in leaner times.

In essence, Webull has matured into profitability, posting basic EPS of $0.08 and diluted $0.07 — tangible proof of operational leverage. Humorously, it's as if the company traded flashy ads for fiscal wisdom, a move that could compound shareholder value if sustained.

#User Growth and Assets: The Real Engagement Story

Customer assets swelled to a record $21.2 billion, up 84% YoY, propelled by market gains and net deposits that grew 31% YoY — indicative of genuine user inflows rather than just appreciation. Funded accounts rose 9% to 4.93 million, while registered users climbed 17% to 25.9 million, highlighting acquisition strength but a conversion gap that warrants attention.

The funded account definition — initial deposit with no zero balance for 45 days, unique per user — ties directly to monetization, making its growth a core KPI. Engagement shines through options volume (147 million contracts) and equity notional ($204 billion), with sequential accelerations signaling building momentum. Over nine months, these trends amplified revenues by 45%, underscoring user activity as a revenue multiplier.

1. Customer Assets Growth

   84% YoY to $21.2 billion — drives interest and fees, but its mark-to-market nature implies vulnerability; a 20% market drop could erase half the gains.

2. Net Deposits

   31% YoY growth — crucial for organic expansion, reflecting trust and reducing reliance on volatile markets.

3. Volume Metrics

   Options up 24% to 147 million; equity up 71% to $204 billion — directly boost PFOF, but cyclicality demands diversification to mitigate risks.

Webull excels in cultivating an active user base, yet the funded growth lagging registrations points to monetization hurdles in a saturated app ecosystem. Addressing this could unlock exponential value, turning more of those 25.9 million registrants into revenue engines.

#Expansions and Innovations: Betting on Global and Tech

Strategic initiatives abound: U.S. and Australia crypto relaunches (240 coins via Coinbase), EU brokerage debut in the Netherlands with equities, ETFs, and options, plus Level 3 options in Canada, Singapore, and Hong Kong. Post-quarter additions include corporate bonds, Vega AI for real-time insights, and a Meritz tie-up for South Korean U.S. equity access.

Spanning 14 markets, these efforts diversify from U.S. retail, with Vega AI enhancing trader retention through personalized analysis. Intangible assets leaped to $56.3 million from $19.4 million, largely from Webull Pay, hinting at M&A as a accelerator. Nine-month other (income) expense netted $4.2 million, including currency losses, but underscores global operational complexities.

This sprawl showcases Webull's agility, outmaneuvering slower rivals with timely innovations. Regulatory flags in forward-looking statements, however, highlight risks in geopolitically sensitive areas — bold expansions that could amplify growth or strain resources if integration falters.

#Balance Sheet Strength: Cash-Rich and Debt-Light

The balance sheet exudes robustness: cash and equivalents surged 142% to $655 million, total assets to $3.5 billion from $2.1 billion. Customer receivables net $546 million (up 81%), aligning with asset expansion, while payables to customers rose 65% to $2.3 billion — a liability tied to deposit booms.

Shareholders' equity turned positive at $999 million from a $2.3 billion deficit, post-preferred conversion. New $100 million unsecured notes introduce modest debt, manageable against cash reserves, but deferred tax liabilities at $13.8 million foreshadow tax pressures from profits. Customer-held fractional shares at $155 million (up 44%) spotlight operational intricacies.

This fortified position arms Webull for acquisitions and expansions without immediate dilution worries. Yet, the asset-liability mismatch in a volatile sector could test liquidity in stress scenarios, emphasizing the need for prudent capital management.

#Stacking Up Against Competitors: A Tale of Scale and Agility

Compared to archrival Robinhood, Webull operates on a smaller canvas but with competitive vigor. Robinhood's Q3 2025 revenues hit $1.3 billion (up 100% YoY), dwarfing Webull's $156.9 million, while its net income soared to $556 million (up 271%) against Webull's $21.7 million. User bases diverge sharply: Robinhood's 26.8 million funded customers (up 10% YoY) eclipse Webull's 4.93 million, and its $333 billion in assets (up 119%) tower over $21.2 billion.

Trading volumes tell a similar story — Robinhood's equity notional up 126%, options 38%, and crypto 458% — outpacing Webull's gains, fueled by scale and features like prediction markets. Yet Webull's 55% revenue growth, while lower, comes on disciplined expenses (18% up vs. Robinhood's 35% adjusted opex rise), yielding a 28.7% adjusted margin close to Robinhood's 58% on a fraction of the base.

Webull shines in global reach, operating in 14 markets versus Robinhood's U.S.-centric model with nascent EU/UK/APAC forays via Bitstamp. Innovations like Vega AI parallel Robinhood's Cortex, but Webull's crypto relaunch and bond additions target diversification faster. Webull's underdog status fosters nimbleness, potentially closing gaps through M&A and AI, but Robinhood's sheer size and 11+ revenue streams (> $100 million each annualized) provide a moat — Webull must accelerate user conversion to compete long-term.

#Struggles and Shadows: Not All Sunshine

Challenges lurk beneath the surface: marketing reductions to $29.4 million may curb future user inflows, while tech expenses at $22.5 million (up 37%) reflect necessary but costly cybersecurity investments. PFOF dependency invites regulatory bans, and global exposure amplifies trade and China-related scrutiny.

Contra revenue's rise to $3.7 million subtly pressures margins, and nine-month tax provisions at $15.7 million (up from $4.4 million) signal growing fiscal burdens. Webull resembles a savvy partygoer thriving in booms but needing backup plans for lulls, where volume drops could halve trading revenues.

#Future Outlook: Poised for More, But Watch the Waves

Webull's path forward appears promising, with Vega AI and global expansions poised to differentiate in crowded markets, bolstering $21.2 billion in assets and locked-in profitability. Sustaining 45-55% revenue growth while capping opex could propel it toward fintech prominence.

Versus Robinhood, Webull's future hinges on leveraging agility for catch-up — its international footprint and AI edge could erode Robinhood's lead, especially if regulatory winds favor smaller players. Yet markets' fickleness looms; a downturn might contract assets rapidly, testing resilience. The intrigue: Webull's data-savvy approach suggests a bet worth taking, potentially outpacing peers through disciplined innovation.