Shares of Webull Corp. ended Friday at $6.18, down 6.5% for the session and roughly 12.5% below the prior week's close, as investors digested a first-quarter earnings report that showed a return to losses despite strong revenue growth. Trading volume exceeded 27 million shares, highlighting heightened interest in the stock following the May 21 earnings release.
U.S. equity and options markets will be closed on Monday, May 25, for Memorial Day, with trading resuming on Tuesday. That session will mark the first full opportunity for investors to react to Webull's quarterly results and the company's latest strategic commentary.
Webull reported first-quarter revenue of $159.9 million, a 36% year-over-year increase. However, total operating expenses surged 68%, driven by higher marketing costs, brokerage and transaction expenses, expansion initiatives, and stock-based compensation. The company recorded a pretax loss of $12.8 million, compared with a pretax profit of $19.5 million in the same period last year. On a net basis, the loss came in at $21.7 million.
Despite the bottom-line disappointment, several operating metrics showed strong momentum. Customer assets reached $24 billion, up 90% year over year. Registered users grew 15% to 27.6 million. Equity notional volume doubled to $261 billion, while options contracts rose 31% to 159 million. Daily average revenue trades (DARTs) increased 42% to 1.3 million.
Management emphasized that on an adjusted basis, the company achieved its sixth consecutive quarter of profitability. Adjusted operating profit was $14.8 million, down from $28.7 million a year ago, and adjusted net income fell to $9.2 million. The company cautioned against relying solely on these non-GAAP metrics.
Looking ahead, a regulatory change could impact trading activity. The Financial Industry Regulatory Authority's new intraday margin rules take effect on June 4, replacing the pattern day trader framework with a real-time risk assessment model. Analysts at Northland, led by Mike Grondahl, believe the change could benefit retail brokerages like Webull and Robinhood by lowering barriers for active traders and potentially increasing order volume.
Webull continues to compete fiercely with Robinhood and eToro for younger, mobile-first investors, a battle that has pressured traditional firms such as Charles Schwab and Morgan Stanley's E*Trade. The competitive landscape remains intense, and the company cautioned that options volume can be volatile, making revenue unpredictable in periods of low market volatility.
To support its stock, Webull's board has authorized a $100 million share buyback program. The pace and size of repurchases will depend on capital availability, liquidity, the stock's trading price, regulatory conditions, and other factors, with no minimum obligation.
As markets reopen Tuesday, the key question is whether Friday's decline represents a one-time earnings adjustment or signals deeper concerns about profitability and rising costs. With strong user growth and a new regulatory tailwind, Webull's story remains a tug-of-war between top-line expansion and bottom-line discipline.