Waton Financial (NASDAQ: WTF) doubles revenue but posts larger loss

Rhea-AI Filing Summary

Waton Financial Limited reported rapid growth but wider losses for the first half of fiscal 2026. Revenue for the six months ended September 30, 2025 rose 106.3% to $6.10 million from $2.96 million a year earlier, mainly from higher brokerage and commission income.

Costs grew much faster than revenue. Total operating costs and expenses increased to $13.81 million from $3.88 million, driven largely by $6.10 million of share-based compensation and higher staff costs, pushing operating loss to $7.71 million versus $0.92 million.

Net loss expanded significantly. Net loss was $8.37 million compared with $1.15 million, while adjusted net loss excluding share-based compensation was $2.26 million versus $1.15 million. Cash and cash equivalents plus segregated cash increased to $29.88 million as of September 30, 2025, from $13.90 million as of March 31, 2025.

Positive

• Revenue more than doubled to $6.10 million for the six months ended September 30, 2025, from $2.96 million a year earlier, driven mainly by increased brokerage and commission income.
• Liquidity strengthened as cash and cash equivalents plus cash segregated under regulatory requirements rose to $29.88 million as of September 30, 2025, from $13.90 million as of March 31, 2025.

Negative

• Net loss widened sharply to $8.37 million for the six months ended September 30, 2025, compared with a net loss of $1.15 million for the prior-year period.
• Operating costs surged, with total operating costs and expenses increasing to $13.81 million from $3.88 million, including $6.10 million of share-based compensation expenses introduced in the current period.

Insights

Equity analyst

Waton doubled revenue but absorbed heavy share-based costs, leading to a much larger net loss.

Waton Financial showed strong top-line momentum, with total revenues rising to $6.10 million, up 106.3% year over year. Growth came mainly from brokerage and commission income, including related-party business, plus new contributions from principal transactions and higher interest income.

The cost base expanded even faster. Operating costs and expenses climbed to $13.81 million, with share-based compensation of $6.10 million a major new item. This pushed operating loss to $7.71 million and net loss to $8.37 million, although adjusted net loss excluding share-based compensation was a smaller $2.26 million.

The balance sheet scaled up alongside activity. Total assets increased to $68.98 million as of September 30, 2025, driven by higher client receivables and segregated cash balances. Total liabilities rose to $41.28 million, reflecting larger payables to clients and broker-dealers as the brokerage business grew.

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16

UNDER THE SECURITIES EXCHANGE ACT OF 1934

For the month of January 2026

Commission File Number: 001-42573

Waton Financial Limited

Suites 3605-06, 36^th Floor

Tower 6, The Gateway

Harbour City, Tsim Sha Tsui

Kowloon, Hong Kong

 (Address of principal executive office)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:

Form 20-F ☒        Form 40-F ☐

Exhibit Index

Exhibit No.		Description
99.1		Waton Financial Limited Announces Unaudited Financial Results for the First Half of Fiscal Year 2026

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	Waton Financial Limited
Date: January 29, 2026	By:	/s/ WEN Huaxin
	Name:	WEN Huaxin
	Title:	Chief Financial Officer

Exhibit 99.1

Waton Financial Limited Reports Unaudited Financial Results for the First Six Months of Fiscal Year 2026

Hong Kong, January 28, 2026 (Globe Newswire) --  Waton Financial Limited (NASDAQ: WTF) (“Waton,” “we” 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 $7.71 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 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. The increase in revenue was mainly driven by the increase in brokerage and commission income:

■ 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 $13.81 million for the six months ended September 30, 2025, from $3.88 million for the six months ended September 30, 2024. The increase was mainly due to an increase in staff compensation and benefits (including share-based compensation) as a result of our business expansion.

■ 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 $7.71 million for the six months ended September 30, 2025, from $0.92 million for the six months ended September 30, 2024, primarily attributable to the increase in operating costs and expenses described above.

Other Expense

The total other expense, net increased to $0.66 million during the six months ended September 30, 2025, from total other expense, net of $0.30 million for the six months ended September 30, 2024, which was primarily attributable to the decrease in loss from the equity method investment to $0.03 million and an increase from changes in net asset value, or NAV, of investment securities to $0.74 million during the period.

Net Income (Loss)

Net loss increased to $8.37 million for the six months ended September 30, 2025, from the net loss of $1.15 million for the six months ended September 30, 2024, due to the above-referenced reasons.

Adjusted Net Loss

Our adjusted net loss, which excludes share-based compensation expenses of $6.10 million and its related income tax effects for the six months ended September 30, 2025 (2024: nil), was approximately $2.26 million for the six months ended September 30, 2025, as compared to the adjusted net loss of approximately $1.15 million for the six months ended September 30, 2024.

Basic and Diluted Loss per Share

Basic and diluted loss per share increased to $0.17 for the six months ended September 30, 2025, from loss per share of $0.03 for the six months ended September 30, 2024 due to the above-referenced reasons.

Financial Condition

As of September 30, 2025, 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.

■ 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

How did Waton Financial (WTF) perform financially in the first half of fiscal 2026?

Waton Financial reported strong revenue growth but a larger loss. Revenue rose 106.3% to $6.10 million, while net loss increased to $8.37 million from $1.15 million, reflecting sharply higher operating costs, including significant share-based compensation.

What drove Waton Financial’s (WTF) revenue growth for the six months ended September 30, 2025?

Revenue growth at Waton Financial was mainly driven by higher brokerage and commission income. Total revenues reached $6.10 million, up from $2.96 million, aided by both third-party and related-party brokerage activity, as well as increased interest income and principal transactions.

Why did Waton Financial’s (WTF) net loss increase despite higher revenue?

Net loss rose primarily because operating costs grew faster than revenue. Total operating costs and expenses climbed to $13.81 million, including $6.10 million of share-based compensation, pushing net loss to $8.37 million despite the 106.3% revenue increase.

What is Waton Financial’s (WTF) adjusted net loss for the first half of fiscal 2026?

Adjusted net loss, which excludes share-based compensation and related tax effects, was approximately $2.26 million for the six months ended September 30, 2025. This compares with an adjusted net loss of approximately $1.15 million for the same period in 2024.

How did Waton Financial’s (WTF) balance sheet change by September 30, 2025?

Total assets increased to $68.98 million as of September 30, 2025, from $30.72 million as of March 31, 2025. This was driven by higher client receivables and cash balances, while total liabilities rose to $41.28 million, mainly from increased payables.

What were Waton Financial’s (WTF) cash and segregated cash balances as of September 30, 2025?

As of September 30, 2025, cash and cash equivalents were $14.35 million, and cash segregated under regulatory requirements was $15.54 million. Combined, these balances totaled $29.88 million, up from $13.90 million as of March 31, 2025.

How did Waton Financial’s (WTF) loss per share change year over year?

Basic and diluted loss per ordinary share increased to $0.17 for the six months ended September 30, 2025, compared with a loss per share of $0.03 for the same period in 2024, reflecting the significantly higher net loss in the current period.