Webull CEO's Most Surprising Admission: ‘I Expect B2B to Match or Exceed Our Retail Business'

Webull reported Q4 revenue of $165.2M, up 53% YoY and full-year 2025 revenue of $571M, up 46% YoY; customer assets reached $24.6B (up 81% YoY) and Q4 net deposits were $3.9B (up 225% YoY). Reported EPS was $0.01 versus a $0.05 estimate, driven by marketing spend rising to $53.25M (marketing as a % of revenue fell from ~35% to ~23–24% per the CFO). Management is pivoting toward B2B—expecting the B2B business to match or exceed retail—with the Meritz Korea partnership already trading >$1B notional and management forecasting tenfold growth by year-end; AI product Vega shows 1.2M weekly users with ~1-in-8 pre-trade consultations. CEO flagged a strong Q1 start and said volatility benefits options activity, while the stock remains down ~30% YTD and analysts have trimmed targets but kept positive ratings.

Analysis

Webull’s explicit shift toward B2B transforms the business from a pure demand-creation play into one where platform economics and balance-sheet plumbing matter as much as user growth. Institutional relationships impose lumpy onboarding costs, higher fixed compliance/settlement capacity and counterparty concentration; if management can capture net interest, clearing fees and API-based execution spreads, gross margins should migrate higher over a 12–36 month window, but only after a meaningful upfront investment cycle. AI-driven pre-trade guidance is a behavioral moat: embedding model outputs into trade flow increases retention and cross-sell odds, but also creates margin and legal risk if models materially influence execution choices or introduce herding that worsens liquidity during stress. Finally, the decision to deprioritize prediction markets signals management prefers higher-ASP revenue lines; the near-term trade-off is lower headline engagement but cleaner unit economics—market re-rating depends on demonstrable stickiness in the new institutional cohorts and a clear path to higher contribution margins from options-centric flow.

Key Decisions for Investors

• Long BULL equity or Jan-2028 LEAP calls (buy BULL Jan-28 $XX calls) — hold 12–24 months. Rationale: asymmetric upside from B2B re-rate and embedded AI-led retention; risk: execution/partner concentration. Size as a directional 2–3% portfolio position; trim if BULL underperforms HOOD or guidance disappoints. Suggested stop: -35% from entry.
• Pair trade: Long BULL / Short HOOD (equal notional) — 6–12 month horizon. Rationale: BULL’s platform pivot benefits differentiate it from consumer-first peers; trade captures relative re-rating if B2B monetizes. Target 25–50% relative outperformance; unwind if differential narrows or both names move >30% in same direction.
• Long CBOE (CBOE) or ICE (ICE) — 3–9 months. Rationale: sustained options flow benefits exchange/clearing economics regardless of which retail broker originates trades. Position size 1–2% of portfolio; target 15–30% upside tied to persistent elevated options ADV; stop -20%.
• Event-driven: Buy BULL short-dated put protection (3–6 month) around next earnings/partner cadence when initiating size. Rationale: caps drawdown from adverse guidance or partner/market volatility while retaining upside exposure to a multi-year re-rate. Cost should be treated as insurance; layer into LEAP exposure.