Webull Corporation Warrants Q2 FY2025 earnings call

• Market Dynamics: The second quarter had extreme market volatility with S&P 500 sell-off and rebound, creating a favorable retail self-directed trading environment. - Fintech Evolution: Webull is in a new era of fintech innovation, offering new asset classes like crypto, prediction markets, and tokenized real-world assets. - Product Launches: Webull Premium launched in March with 75,000 subscribers; crypto trading reintroduced in US, Brazil, and Australia; Latin American and Netherlands Webull Apps launched. - User Growth: Registered users reached 24.9 million with an 18% year-over-year growth, and funded accounts saw nearly 10% year-over-year growth. - Customer Assets: Customer assets grew 64% year-over-year to $15.9 billion, an all-time high, with AUM surpassing $18 billion in July.

In the second quarter, Webull's total revenues grew 46% year-over-year to $131.5 million. Adjusted expenses for the quarter were $108.2 million, a year-over-year increase of 20%. Webull achieved 3 consecutive quarters of operating profitability, with adjusted operating profit for the second quarter at $23.3 million. Trading-related revenues saw a 63% increase, driven by a 56% year-over-year growth in daily average revenue trades (DARTs). Interest-related income grew 14% year-over-year to $36.3 million. Revenue contribution breakdown: Total revenues from various segments with trading-related and interest-related income being key components. For example, trading-related revenues contributed significantly due to volume growth and improved monetization, while interest-related income was boosted by higher client cash balance and margin activity.

Barring major market dislocation, Webull anticipates Q3 will be another solid quarter. The company will continue to draw on the standby equity purchase agreement to deploy capital strategically for new product delivery and geographic expansion, such as rolling out the Webull App to new geographies and introducing new asset classes.

• Uncertainty in forward-looking statements due to elements of uncertainty in market conditions and business outlook. - Differences in non-GAAP measure calculations by other companies, limiting the usefulness of such measures as comparative to Webull's data.

Q: Dig deeper into organic growth in the quarter, including net new assets and geographies/demographics with outsized growth A: Net deposits were up $1.5 billion, a 37% year-on-year increase. Highlights include Canadian broker-dealer launched in Jan 2024 with accelerating AUM, momentum in Latin American businesses with interest in crypto, and expansion in the Netherlands.

Q: Incremental opportunity with crypto trading relaunched in US, Brazil, Australia A: Crypto reintroduction is well-positioned to be accretive to the top line quickly. U.S. launch is in its early days, Brazil and Australia launches are new, and there's strong regulatory support globally, expecting quick benefits from client activity.

Q: Marketing strategy evolution and drivers of increased traction with existing customer base A: Marketing strategy varies by broker-dealer; longer-term drivers of DARTs growth include adoption of Webull Premium with low margin financing rates and substantial AUM growth leading to more trading activity.

Q: Crypto strategy outside US and thoughts on M&A A: Plan to add crypto to outside US broker-dealers, working with regulators in different jurisdictions. Near term focuses on organic growth but remains opportunistic on M&A for inorganic opportunities.

Q: Details on crypto offering, including number of assets, staking A: Brazil launched 240 coins, US launched 50 coins initially with plans to expand. Staking and other features are planned, with goal to provide the best crypto trading experience globally.