Noah Q2 Earnings Call Highlights

Key Points

• Profitability improved despite slightly lower revenue: Q2 net revenue fell 1.5% year over year to RMB 620 million, but operating income rose 34% and non-GAAP net income increased 25.9% to RMB 238 million. Lower costs, including a 17% headcount reduction, lifted the operating margin to 34.8%.
• Carry income offset pressure in legacy businesses: Performance-based income rose sharply to RMB 138 million in Q2, while insurance commissions and recurring management fees declined as Noah continued shifting away from legacy products and channels.
• AI-driven wealth management showed early traction: Singapore AUM grew from below $100 million to more than $400 million since the model launched, reaching monthly profitability in July. Noah plans to expand the model to Hong Kong and Japan, followed by additional international markets.

Noah NYSE: NOAH reported second-quarter 2026 net revenue of RMB 620 million, down 1.5% from a year earlier, while operating income rose 34% to RMB 216 million as the wealth manager reduced costs and expanded its operating margin.

Non-GAAP net income attributable to Noah reached RMB 238 million, up 25.9% year over year and 77.8% sequentially. The company’s operating margin was 34.8%, compared with 25.6% in the prior-year quarter. For the first half, operating income increased 30.3% to RMB 452 million, producing a 36.3% operating margin.

Chief Financial Officer Grant Pan said the quarter reflected “the quality of our profitability rather than pure growth in revenue,” citing lower compensation, selling expenses and overall headcount. Total operating costs and expenses declined 13.7% year over year during the quarter, while total headcount was reduced by about 17%.

Carry Income Offsets Legacy Revenue Pressure

The company said its revenue mix continued to shift away from legacy insurance, referral channels and RMB private-equity-related business. Second-quarter one-time commissions fell 44.1% year over year to RMB 87 million, including a 58.2% decline in insurance commissions. Recurring management fees decreased 10.8% to RMB 360 million, which Pan attributed to the runoff of legacy RMB private equity assets.

Performance-based income, or carry, was a major contributor to results. Carry totaled RMB 138 million in the second quarter and RMB 238 million in the first half, up 364% from the prior-year first half. Management said it views carry as supported by a portfolio spanning multiple fund vintages, although it cautioned that alternative-investment realizations are cyclical and cannot be expected to be linear from quarter to quarter.

Investment income was RMB 42 million in the second quarter, compared with a RMB 14 million loss a year earlier. On a GAAP basis, net income attributable to shareholders was RMB 232 million, up 30% year over year.

Pan said Noah maintains its expectation for a full-year operating margin above 30%, while noting that quarterly performance may fluctuate based on product mix and expense timing.

AI Model Shows Early Singapore Results

Management focused much of the call on its AI-enabled wealth-management model, which combines centralized digital client services, licensed professionals and ecosystem partners. Chief Executive Officer Zander Yin said the company is seeking to reduce its historical dependence on expanding relationship-manager headcount to generate client and asset growth.

U.S. dollar-denominated assets under management rose 11.7% year over year to $6.5 billion as of June 30, while overseas relationship-manager headcount declined 36.2%. U.S. dollar-denominated assets under advisement increased 7.5% to $9.78 billion.

Singapore was the company’s first full test market for its AI Wealth Management Department model. Management said Singapore AUM increased from less than $100 million at the model’s launch in the fourth quarter of 2025 to more than $400 million by the second quarter. The business achieved monthly profitability in July.

According to Noah, 92% of Singapore clients are now covered by the AI-enabled service model for day-to-day engagement, while licensed staff handle regulated activities, professional judgment and compliance. Ecosystem and external partners accounted for 42% of new AUM in Singapore. The market raised $158 million in the first half, up 126% year over year.

Chairlady Jingbo Wang said that in Singapore, six people have been able to cover about 500 clients, an arrangement she said would have been difficult under the company’s previous operating model. Noah plans to replicate the approach in Hong Kong and Japan before gradually expanding into Canada, Australia, the U.K. and Europe.

China and International Business Trends

In Mainland China, second-quarter net revenue was RMB 384 million. First-half Mainland China revenue totaled RMB 776 million, up about 20.7% year over year. Noah Upright, which focuses on standardized investment products, raised RMB 8.27 billion in the first half and generated RMB 414 million in revenue, up 59.8%.

The company said its Mainland China product shelf is centered on defensive strategies, including market-neutral quantitative strategies and commodity trading advisors. Noah also said it is moving away from traditional high-commission protection insurance products toward family succession and inheritance-planning services.

International segment revenue was RMB 469 million in the first half, down 21.9% year over year and representing 37.7% of group revenue. Management said nearly 90% of the decline stemmed from its intentional insurance contraction and exit from legacy referral channels. Excluding those factors, revenue from U.S. dollar-denominated investment products was broadly flat, according to the company.

Registered overseas clients increased 11% to 21,059, while overseas diamond and black-card clients rose 8.9% to 1,791. Active overseas clients reached 3,494 in the second quarter, up 8.5% sequentially.

Balance Sheet, Camsing Progress and Shareholder Returns

Noah ended the quarter with approximately RMB 5 billion in cash equivalents and short-term investments and no interest-bearing debt. Shareholders’ equity was RMB 9.8 billion, and the current ratio was 4.3 times.

Deputy CFO Jason Wu said more than 80% of clients affected by the legacy Camsing matter had accepted the company’s settlement plan as of the call. Contingent liabilities fell to RMB 455 million at June 30 from RMB 505 million at March 31. Wu said the company will adjust provisions based on settlement progress but could not predict future reversals.

Pan said Noah completed its 2025 dividend distribution in July, marking its third consecutive year with a 100% net-income payout ratio. Since 2022, cumulative dividends have totaled roughly RMB 2.4 billion. The company had also repurchased more than 3.2 million ADSs for over $34 million under its share-repurchase program.

About Noah (NYSE:NOAH)

Noah Holdings Limited is a China-based wealth management and asset management firm specializing in tailored advisory services for high-net-worth individuals, family offices and select institutional clients. The company offers a broad range of investment solutions that draw on its deep market research and partner network to provide access to both onshore and offshore products. Noah's business model centers on delivering structured investment products, portfolio management services and family wealth planning solutions designed to meet the evolving needs of affluent clients in China and beyond.

Noah's main service lines include discretionary portfolio management, fund distribution, private equity and venture capital fund platforms, and alternative investment strategies such as real estate and insurance-linked products.

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