Webull (CGEN) Q3 2025: Operating Margin Expands 28.7 Points as Product and Global Scale Drive Leverage
Webull delivered a breakout quarter as product innovation and global expansion fueled record profitability, with operating margin up sharply year over year. The relaunch of crypto, prediction markets, and AI-powered tools drove both new user growth and reengagement of dormant accounts. With international funded accounts now matching U.S. growth and new B2B channels emerging, Webull is positioned for continued margin leverage and diversified revenue streams heading into 2026.
Summary
- Margin Expansion Surges: Operating leverage accelerated as revenue growth far outpaced expenses.
- Product and Geographic Diversification: New offerings and international launches are driving user and funded account growth.
- AI and B2B Initiatives: Vega launch and institutional partnerships open new avenues for future scale and monetization.
Performance Analysis
Webull’s Q3 2025 results underscore a high-growth, high-leverage business model, with revenue up 55% year over year and expenses contained at a 13% increase. This dynamic delivered a record adjusted operating margin of 23.4%, up 28.7 points from the prior year, and the company’s most profitable quarter to date. The robust top-line was propelled by all-time high customer assets, surging equity trading volume, and rapid adoption of new products including crypto futures and prediction markets. Adjusted net income also reached a new high, reflecting the company’s ability to translate volume growth into bottom-line gains.
Trading-related revenues grew 64%, outpacing volume growth due to improved monetization, particularly in options where a revised pricing model continues to yield results. Interest-related income also rose 32%, benefiting from higher margin lending and stock lending activity as client assets scaled. The disciplined cost structure was aided by lower marketing spend, with the company shifting to asset-matching promotions that amortize over time and drive higher ROI. General and administrative costs increased, reflecting headcount growth and performance-linked bonuses, but these were more than offset by revenue gains and operational efficiency.
- Equity Volume Acceleration: Equity trading surged 71% year over year, sustaining momentum from prior quarters.
- Funded Account Growth: Total funded accounts rose 9% to 4.93 million, with international accounts now matching U.S. additions.
- Deposit Momentum: Net deposits reached $2.1 billion, a 31% YoY increase, reflecting effective marketing and product expansion.
October performance set new highs for deposits, trading volumes, and revenues, signaling that Q4 is on track for continued breakout growth as new products and geographies contribute incrementally.
Executive Commentary
"This quarter marks significant milestones in product diversification and geographic expansion as we continue to see high growth across our platform on the heels of our public listing. We successfully reintroduced crypto back to the Webull app and expanded our offerings in the space to include crypto futures trading. We also introduced sports prediction markets through our partnership with Kalshi and are on track to achieve a major international milestone as Webull Canada will soon become the first non-U.S. brokerage in our group to reach $1 billion in assets under management."
Anthony Denier, Group President and U.S. CEO
"We continue to take a disciplined approach to balancing execution costs and operating efficiency as we continue to scale the business. And we are pleased with our continued margin expansion and profitability."
H.C. Wang, Group CFO
Strategic Positioning
1. Global Expansion and User Base Diversification
Webull’s international strategy is moving from experiment to scale, with 700,000 funded accounts now outside the U.S. and new launches in the EU, Canada, and Asia. The company’s approach of localizing teams and product features for each market is enabling rapid adoption, with Canada nearing $1 billion in assets under management and other markets such as Australia and Thailand posting strong sequential growth. The export of U.S.-style trading tools, including advanced options, is unlocking new demand and stickiness among global users.
2. Product Innovation as a Growth Engine
Product velocity is accelerating, with the relaunch of crypto trading, the introduction of crypto futures, and the debut of sports prediction markets via Kalshi. These offerings are not only driving new funded account growth—over 50% of new accounts are trading crypto—but also reactivating dormant users, expanding the total addressable market (TAM), and increasing wallet share. The launch of Vega, an AI-powered trading assistant, is already seeing tens of millions of engagements, with user feedback indicating higher retention and satisfaction. The company’s ability to quickly deploy and monetize new product lines sets it apart from slower-moving competitors.
3. B2B and Institutional Channel Emergence
Webull is moving beyond its retail-only roots, with the Merits partnership in South Korea marking its first major foray into B2B and institutional flows. This channel enables Webull to participate in markets where it does not have a direct retail presence, tapping new revenue streams that are not yet reflected in current models. As more institutional partnerships come online, transaction volumes and revenue mix will diversify, providing an additional buffer against cyclical retail trading swings.
4. Marketing ROI and Customer Acquisition Efficiency
The shift from broad-based promotions to asset-matching incentives is yielding higher ROI, driving both deposit growth and improved cost predictability. Marketing expenses are now amortized over time as customers maintain balances, aligning costs with longer-term engagement and reducing volatility in the P&L. This disciplined approach allows Webull to scale efficiently while maintaining the flexibility to opportunistically invest in high-return channels as market conditions evolve.
Key Considerations
Webull’s Q3 performance reflects a business in transition from high-growth disruptor to scaled, multi-product platform with global reach. The company’s ability to balance aggressive expansion with margin discipline is a central theme, as is its willingness to experiment with new business lines and geographies.
Key Considerations:
- International Funded Account Momentum: Non-U.S. funded accounts now equal U.S. growth, signaling a new phase of global scale.
- AI and Advanced Tools Drive Engagement: Vega’s in-house AI capabilities are seeing rapid adoption and have no incremental cost, supporting user retention and trading activity.
- Crypto Relaunch Reinvigorates Platform: The return of crypto has led to a surge in new accounts and engagement, with plans to expand token availability and tighten spreads to compete for active traders.
- B2B Partnerships Expand TAM: Institutional deals like Merits are just beginning to contribute, with a pipeline that could materially impact volumes and revenue mix over time.
- Expense Discipline Sustains Margin: Marketing and G&A costs are tightly managed, with growth investments focused on high-ROI initiatives and scalable infrastructure.
Risks
Webull faces inherent risks from market volatility, regulatory changes, and intensifying competition, particularly as it expands crypto and prediction markets. Execution risk is elevated as the company juggles rapid global launches, new product verticals, and the transition to B2B channels. Sustaining growth in funded accounts and trading volumes as market conditions evolve, while maintaining expense discipline, is essential to preserving recent margin gains. Regulatory hurdles in new jurisdictions and the risk of adverse crypto market events could also impact future performance.
Forward Outlook
For Q4 2025, Webull management indicated:
- October set new records for deposits, trading volumes, and revenues, suggesting continued sequential growth into year-end.
- New product launches and international expansion are expected to drive further increases in funded accounts and assets under management.
For full-year 2025, management maintained a focus on:
- Margin expansion through disciplined expense management and operating leverage.
- Continued rollout of new products, including expanded crypto offerings and AI features.
Management highlighted the potential for B2B revenue to become material in 2026, as institutional partnerships ramp, and reinforced a commitment to scaling international operations and product breadth.
- Look for further updates on crypto product expansion and international launches.
- Watch for early signals of B2B contribution to transaction volumes and revenue.
Takeaways
Webull’s Q3 marks a pivotal inflection as the business achieves both scale and profitability, leveraging global reach and product innovation to drive margin expansion and user growth.
- Margin Leverage Is Real: The combination of high revenue growth and disciplined cost management delivered a step-function increase in profitability, validating the scalability of the business model.
- Product and Geographic Breadth Underpin Growth: New offerings and international expansion are not only driving user acquisition but also diversifying revenue sources and reducing reliance on U.S. retail trading cycles.
- Future Growth Hinges on Execution: Investors should monitor the pace of B2B ramp, the effectiveness of AI and crypto initiatives in sustaining engagement, and the company’s ability to maintain expense discipline as it scales globally.
Conclusion
Webull’s Q3 2025 results demonstrate a company rapidly evolving beyond its retail trading roots, achieving record profitability through a blend of product innovation, international expansion, and operational rigor. The foundation is set for further scale, but sustained execution across multiple fronts will be crucial as new competitive and regulatory challenges emerge.
Industry Read-Through
Webull’s performance and strategy highlight several key trends for the broader digital brokerage and fintech sector. First, the ability to scale profitably through product and geographic diversification is now a critical differentiator, as legacy platforms face margin compression. Second, AI-powered tools and alternative asset classes like crypto and prediction markets are becoming essential for user engagement and retention. Finally, the emergence of B2B and institutional channels signals a new phase of competition, with platforms seeking to monetize infrastructure and access beyond direct retail. Peers should watch for similar moves as the battle for global wallet share intensifies.