Waton Financial Limited Reports Unaudited Financial Results for the First Six Months of Fiscal Year 2026
Rhea-AI Summary
Waton Financial (NASDAQ: WTF) reported unaudited results for the six months ended Sept 30, 2025. Revenues rose 106.3% to $6.10M, led by brokerage income. However, operating loss widened to $8.45M and net loss to $8.37M due largely to $6.10M in share-based compensation. Cash plus segregated balances increased to $29.88M, reflecting IPO proceeds.
Positive
- Total revenue +106.3% to $6.10 million
- Brokerage and commission income +223.1% to $4.17 million
- Cash and regulatory segregated cash +115.0% to $29.88 million
Negative
- Operating loss widened to $8.45 million for the six months
- Net loss increased to $8.37 million, or $0.17 per share
- Share-based compensation expense of $6.10 million materially raised costs
News Market Reaction
On the day this news was published, WTF declined 1.49%, reflecting a mild negative market reaction. Argus tracked a trough of -9.2% from its starting point during tracking. Our momentum scanner triggered 7 alerts that day, indicating moderate trading interest and price volatility. This price movement removed approximately $3M from the company's valuation, bringing the market cap to $168M at that time.
Data tracked by StockTitan Argus on the day of publication.
Key Figures
Market Reality Check
Peers on Argus
WTF slipped 1.49% while peers were mixed: EIC up 0.72%, ARDC, HFRO, HPF and PPT modestly down. Moves do not indicate a unified sector trend.
Historical Context
| Date | Event | Sentiment | Move | Catalyst |
|---|---|---|---|---|
| Nov 26 | AI product launch | Positive | +9.6% | Launch of TradingWTF AI-powered investment and trading app. |
| Nov 24 | AI partnership | Positive | +9.9% | Expanded strategic partnership with Panda AI for AI trading services. |
| Nov 20 | AI competition launch | Positive | -12.2% | Partnership with Panda AI to launch global AI trading agent competition. |
| Nov 06 | AI IR deployment | Positive | -4.7% | Delivery of tokenized AI investor relations agent to MOG Digitech. |
| Oct 27 | AI strategy update | Positive | +3.0% | Revamped website highlighting shift toward AI and digital asset focus. |
Recent AI and partnership announcements have produced mixed reactions, with both strong rallies and notable selloffs.
Over the past few months, Waton has focused on AI-driven trading and platform innovation. Launches of its TradingWTF app and a revamped AI-centric corporate website, plus multiple partnerships with Panda AI, aimed to commercialize its DePearl™ technology and expand institutional and retail engagement. Market reactions were mixed, with some AI milestones gaining over 9% and others seeing double-digit declines. Today’s earnings update follows this innovation cycle and adds concrete financial performance to the earlier strategic announcements.
Market Pulse Summary
This announcement combines rapid revenue expansion with significantly higher losses. Total revenues grew to $6.10 million, led by brokerage and interest income, while operating loss and net loss widened to $8.45 million and $8.37 million, largely from compensation, share-based awards of $6.10 million, and IPO-related costs. Cash and segregated balances increased to $29.88 million, aided by $19.79 million of financing inflows. Against a backdrop of prior AI and platform launches, investors may watch future periods for operating leverage and trends in adjusted net loss of $2.26 million.
Key Terms
margin financing financial
initial public offering financial
global equity incentive plan financial
equity method investment financial
net asset value financial
form 20-f regulatory
AI-generated analysis. Not financial advice.
HONG KONG, Jan. 28, 2026 (GLOBE NEWSWIRE) -- Waton Financial Limited (NASDAQ: WTF) (“Waton” or the “Company”), a provider of securities brokerage and financial technology services, today announced its unaudited financial results for the first six months ended September 30, 2025, representing the first half of fiscal year 2026.
Management Commentary
“We are pleased with our revenue growth in the first half of fiscal 2026, particularly in our core brokerage operations, which benefited from investor interest in the Hong Kong market,” said ZHOU Kai, Chairman of the Board and Chief Technology Officer of the Company. “While we continue to invest in talent, technology, and compliance to support our and long-term expansion, including potential enhancements in virtual assets and AI-driven services as outlined in our recent Form 20-F filing, we remain focused on driving sustainable profitability and shareholder value amid evolving market dynamics.”
First Six Months of Fiscal Year 2026 Financial Highlights
- Total Revenues: Increased by
106.3% to$6.10 million for the six months ended September 30, 2025, from$2.96 million for the six months ended September 30, 2024, driven primarily by growth in brokerage and commission income.
- Brokerage and Commission Income (including related parties’ portion): Increased by
223.1% to$4.17 million for the six months ended September 30, 2025, from$1.29 million for the six months ended September 30, 2024, reflecting increased trading volumes and customer engagement.
- Interest Income (including related parties’ portion): Increased by
83.8% to$0.96 million for the six months ended September 30, 2025, from$0.52 million for the six months ended September 30, 2024, supported by expanded margin financing to customers.
- Operating Loss: Increased to
$8.45 million for the six months ended September 30, 2025, from$0.92 million for the six months ended September 30, 2024, primarily due to an increase in staff compensation and benefits in share-based compensation as a result of our business expansion, our research and development initiatives and professional fees for our initial public offering we closed on April 1, 2025 (the “IPO”), all of which were recognized during the six months ended September 30, 2025 (2024: nil).
- Net Loss: Increased to
$8.37 million for the six months ended September 30, 2025, or$0.17 per basic and diluted share, as compared to$1.15 million , or$0.03 per basic and diluted share for the six months ended September 30, 2024.
- Adjusted Net Loss: Being net loss excluding share-based compensation expenses of
$6.10 million and its corresponding tax effects. Approximately$2.26 million for the six months ended September 30, 2025, as compared to$1.15 million for the six months ended September 30, 2024.
- Cash Position: Cash and cash equivalents plus cash segregated under regulatory requirements increased by
115.0% to$29.88 million as of September 30, 2025, from$13.90 million as of March 31, 2025, primarily attributable to the closing of the IPO.
- Total Assets: Increased to
$68.98 million as of September 30, 2025, from$30.72 million as of March 31, 2025, reflecting our business expansion during the period.
First Six Months of Fiscal Year 2026 Financial Results
Revenue
Revenue increased by
- Revenue from brokerage and commission income, including the related parties’ portion, increased to
$4.17 million for the six months ended September 30, 2025, from$1.29 million for the six months ended September 30, 2024, primarily attributable to the increase in security brokerage income resulting from the increased trading activity amid enthusiasm in the Hong Kong stock market during the period.
- Interest income, including the related parties’ portion, increased by
83.8% to$0.96 million for the six months ended September 30, 2025, from$0.52 million for the six months ended September 30, 2024. The increase was primarily due to an increase in margin loan extended to margin customers during the six months ended September 30, 2025 in comparison with the six months ended September 30, 2024.
- Revenue from software licensing (including subscription-based licenses) and related support services income, including the related parties’ portion, decreased by
42.3% to$0.66 million for the six months ended September 30, 2025, from$1.15 million for the six months ended September 30, 2024. The decrease was mainly due to the decrease in the number of software licensing and related support services customers for the six months ended September 30, 2025 in comparison with the six months ended September 30, 2024.
Operating Costs and Expenses
Total operating costs and expenses increased to
- Compensation and benefits increased to
$8.23 million for the six months ended September 30, 2025, from$1.47 million for the six months ended September 30, 2024. Primarily as a result of i) an increase in number of employees as well as average salary level, as a result of our business expansion; and ii) increase in share-based compensation expenses of$6.10 million for the six months ended September 30, 2025, from nil for the six months ended September 30, 2024, resulting from the granting of restricted share units following its 2024 Global Equity Incentive Plan adopted in November 2024.
- Professional service fee increased to
$1.01 million for the six months ended September 30, 2025, from$0.77 million for the six months ended September 30, 2024, primarily resulting from the effort for listing of the Company’s share on Nasdaq and ongoing compliance costs as a listed company during the period.
- Commissions and brokerage fees increased to
$1.64 million for the six months ended September 30, 2025, from$0.17 million for the six months ended September 30, 2024, and interest expenses increased to$0.35 million from$0.09 million during the period were primarily in line with our business expansion.
Loss from Operations
Loss from operations increased to
Other Expense
The total other expense, net increased to
Net Income (Loss)
Net loss increased to
Adjusted Net Loss
Our adjusted net loss, which excludes share-based compensation expenses of
Basic and Diluted Loss per Share
Basic and diluted loss per share increased to
Financial Condition
As of September 30, 2025, cash and cash equivalents, plus cash segregated under regulatory requirements, increased by
- Net cash used in operating activities was
$1.44 million for the six months ended September 30, 2025, compared to$2.55 million for the six months ended September 30, 2024, primarily attributable to a slight increase in outstanding payments to suppliers during such period.
- Net cash used in investing activities was
$2.38 million for the six months ended September 30, 2025, compared to net cash used in investing activities of$0.01 million for the six months ended September 30, 2024, attributable to the subscriptions in certain investment funds during such period.
- Net cash provided by financing activities increased to
$19.79 million for the six months ended September 30, 2025, compared to net cash used in financing activities of$1.90 million for the six months ended September 30, 2024, primarily attributable to the proceeds of our IPO share issuances during such period.
Non-GAAP Financial Measures and Forward-Looking Statements
This press release contains certain non-GAAP financial measures, including Adjusted Net Loss, that are used by management to evaluate our operating performance and to provide investors with additional insight into the Company’s underlying results. These non-GAAP measures should not be considered in isolation, as a substitute for, or superior to financial information prepared in accordance with U.S. GAAP. They may differ from similarly titled measures used by other companies.
We believe the presentation of these non-GAAP measures provides useful supplemental information for investors by facilitating period-to-period comparisons of our operating performance. A reconciliation of each non-GAAP measure to the most directly comparable GAAP measure is included in the accompanying financial tables. To the extent that forward-looking non-GAAP measures are provided, such measures are presented without reconciliation to the most directly comparable GAAP measures because such reconciliations are not available without unreasonable efforts.
This press release also contains certain “forward-looking statements” within the meaning of federal securities laws, including, but not limited to statements regarding plans, objectives, strategies, future events, performance, and underlying assumptions and other statements that are not historical facts. These forward-looking statements involve known and unknown risks and uncertainties and are based on the Company's current expectations and projections about future events, which may affect the Company's financial condition, operating results, business strategy, and capital needs. Investors can identify these forward-looking statements by words such as “believe,” “plan,” “expect,” “intend,” “should,” “seek,” “estimate,” “will,” “target,” “anticipate,” or similar expressions. Except as required by law, the Company does not undertake any obligation to publicly update or revise any forward-looking statements to reflect subsequent events or circumstances or changes in its expectations. While the Company believes the expectations reflected in these forward-looking statements are reasonable, it cannot guarantee these expectations will prove correct and cautions investors that actual results may differ materially from anticipated results, and encourages investors to review the Company’s registration statements and other filings with the U.S. Securities and Exchange Commission for additional factors that could affect its future performance.
CONTACTS
Media Inquiries
pr@waton.com
Investor Relations
ir@waton.com
Waton Financial Limited
| WATON FINANCIAL LIMITED UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (Amount in U.S. dollars, except for number of shares) | ||||||||
| As of | ||||||||
| September 30, 2025 | March 31, 2025 | |||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 14,347,536 | $ | 7,717,087 | ||||
| Cash segregated under regulatory requirements | 15,535,468 | 6,183,232 | ||||||
| Receivables from: | ||||||||
| Clients | 20,238,873 | 1,729,408 | ||||||
| Clients − related parties | 3,188 | 4,826,387 | ||||||
| Broker-dealers and clearing organization | 9,220,122 | 1,739,276 | ||||||
| Software licensing (including subscription based) and related support services − related party | 1,800,000 | 600,000 | ||||||
| Contract assets | 230,845 | — | ||||||
| Contract assets − related party | 400,000 | 1,200,000 | ||||||
| Due from ST MA Ltd | 447,570 | 449,877 | ||||||
| Investment securities, at net asset value (“NAV”) | 358,536 | — | ||||||
| Investment securities, at NAV − related party | 1,000,000 | — | ||||||
| Prepaid expenses and other current assets | 1,319,774 | 893,051 | ||||||
| Total current assets | 64,901,912 | 25,338,318 | ||||||
| Property and equipment, net | 330,162 | 123,297 | ||||||
| Operating lease right-of-use assets | 199,252 | 467,016 | ||||||
| Investments, cost | 2,878,575 | 2,878,575 | ||||||
| Equity method investment | — | 189,932 | ||||||
| Other assets | 666,186 | 1,726,837 | ||||||
| TOTAL ASSETS | $ | 68,976,087 | $ | 30,723,975 | ||||
| Liabilities and Shareholders’ Equity | ||||||||
| Current liabilities: | ||||||||
| Payables to: | ||||||||
| Clients | $ | 23,783,079 | $ | 6,163,171 | ||||
| Clients − related party | 40,745 | 1,417,153 | ||||||
| Broker-dealers and clearing organization | 12,327,285 | 7,335,535 | ||||||
| Bank overdrafts | 1,580,583 | — | ||||||
| Accrued expenses and other current liabilities | 801,265 | 748,918 | ||||||
| Amounts due to related parties | 2,540,810 | 1,797,774 | ||||||
| Operating lease liabilities, current | 211,186 | 463,120 | ||||||
| Total current liabilities | 41,284,953 | 17,925,671 | ||||||
| Operating lease liabilities, non-current | — | 30,561 | ||||||
| TOTAL LIABILITIES | 41,284,953 | 17,956,232 | ||||||
| Commitments and contingencies | — | — | ||||||
| Shareholders’ equity: | ||||||||
| Ordinary shares, unlimited shares authorized; no par value; 48,237,472 shares and 43,206,222 shares issued and outstanding as of September 30, 2025 and March 31, 2025, respectively | — | — | ||||||
| Additional paid-in capital | 45,097,848 | 21,817,729 | ||||||
| Accumulated deficit | (17,473,787 | ) | (9,107,145 | ) | ||||
| Accumulated other comprehensive income | 67,073 | 57,159 | ||||||
| TOTAL SHAREHOLDERS’ EQUITY | 27,691,134 | 12,767,743 | ||||||
| TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ | 68,976,087 | $ | 30,723,975 | ||||
| WATON FINANCIAL LIMITED UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (Amount in U.S. dollars, except for number of shares) | ||||||||
| For the six months ended September 30, | ||||||||
| 2025 | 2024 | |||||||
| Revenues | ||||||||
| Brokerage and commission income | $ | 2,774,888 | $ | 396,547 | ||||
| Brokerage and commission income − related parties | 1,390,497 | 892,837 | ||||||
| Principal transactions and proprietary trading | 315,337 | — | ||||||
| Interest income | 507,872 | 2,562 | ||||||
| Interest income − related parties | 452,808 | 520,183 | ||||||
| Software licensing (including subscription based) and related support services income | 261,498 | 546,134 | ||||||
| Software licensing (including subscription based) and related support services income − related party | 400,000 | 600,000 | ||||||
| Total revenues | 6,102,900 | 2,958,263 | ||||||
| Operating costs and expenses | ||||||||
| Commissions and brokerage fees | 1,639,072 | 172,712 | ||||||
| Software licensing (including subscription based) and related support outsourcing cost − related party | 487,860 | 507,822 | ||||||
| Interest expenses | 353,587 | 85,657 | ||||||
| Compensation and benefits | 2,123,489 | 1,471,937 | ||||||
| Share-based compensation expenses | 6,104,672 | — | ||||||
| Research and development expenses | 387,425 | — | ||||||
| Professional service fees | 1,011,754 | 771,165 | ||||||
| Market information | 412,158 | 332,094 | ||||||
| Lease costs | 325,960 | 315,013 | ||||||
| Other general and administrative expenses | 967,079 | 224,117 | ||||||
| Total operating costs and expenses | 13,813,056 | 3,880,517 | ||||||
| Operating loss | (7,710,156 | ) | (922,254 | ) | ||||
| Other income (expense): | ||||||||
| Income from foreign currency spread | 180,236 | 28,340 | ||||||
| Loss from equity method investment | (31,603 | ) | (341,428 | ) | ||||
| Changes in NAV of investment securities | (741,482 | ) | — | |||||
| Others | (63,637 | ) | 9,949 | |||||
| Total other expense, net | (656,486 | ) | (303,139 | ) | ||||
| Loss before income tax expenses | (8,366,642 | ) | (1,225,393 | ) | ||||
| Income tax benefit | — | 77,138 | ||||||
| Net loss | $ | (8,366,642 | ) | $ | (1,148,255 | ) | ||
| Net loss per ordinary share | ||||||||
| Basic and diluted | $ | (0.17 | ) | $ | (0.03 | ) | ||
| Weighted average ordinary shares outstanding | ||||||||
| Basic and diluted | 48,209,979 | 40,980,000 | ||||||
| Net loss: | $ | (8,366,642 | ) | $ | (1,148,255 | ) | ||
| Other comprehensive income, net of tax: | ||||||||
| Foreign currency translation adjustment | 9,914 | 68,477 | ||||||
| Total comprehensive loss | $ | (8,356,728 | ) | $ | (1,079,778 | ) | ||
FAQ
What drove Waton Financial (WTF) revenue growth for the six months ended Sept 30, 2025?
Why did Waton Financial (WTF) report a larger operating loss in H1 FY2026?
How did Waton Financial's (WTF) cash position change as of Sept 30, 2025?
What is Waton Financial's (WTF) adjusted net loss for the six months ended Sept 30, 2025?
How did software licensing revenue for Waton Financial (WTF) perform in H1 FY2026?
