Noah Holdings Limited

Second-quarter net revenue was RMB 620 million, down 1.5% year over year and 0.9% sequentially. Operating income was RMB 216 million, up 34% year over year, with operating margin of 34.8%, up 9.2 percentage points from 25.6% a year ago. Non-GAAP net income attributable to Noah was RMB 238 million, up 25.9% year over year and 77.8% sequentially; GAAP net income attributable to shareholders was RMB 232 million, up 30% year over year and 86.2% sequentially. For the first half, net revenue was RMB 1.25 billion, broadly flat year over year. Operating income reached RMB 452 million, up 30.3% year over year, with a record operating margin of 36.3%; non-GAAP net income was RMB 372 million, up 3.9% year over year. Performance-based income/carry was RMB 138 million in Q2 and RMB 238 million in the first half, up 364% year over year in the first half. Total fundraising in the first half was RMB 40.5 billion, up 22.4% year over year; U.S.-dollar product fundraising was USD 2.45 billion, up 8.4% year over year. As of June 30, group AUM was RMB 140.9 billion, U.S.-dollar AUM was USD 6.5 billion, and U.S.-dollar AUA was USD 9.78 billion. Cash, cash equivalents and short-term investments were about RMB 5 billion, with no interest-bearing debt. Management kept the full-year operating margin outlook above 30%.

The CEO framed the quarter as a validation step for Noah’s new operating model, saying legacy revenue is being phased out while the AI-enabled front office is beginning to produce revenue, asset growth and profit. He repeatedly emphasized that AI is not just a cost tool but a way to reorganize wealth management around centralized service, licensed professionals and ecosystem partners, with Singapore as the first meaningful proof point. He was upbeat but careful not to call the transition complete. He said the company is still in the middle of transformation, but that operating data now supports confidence that the model can be replicated across markets such as Hong Kong and Japan.

The CFO focused on margin expansion, cost discipline and balance sheet strength. He said second-quarter operating profit was RMB 216 million, up 34% year over year, with a 34.8% margin, and that first-half operating profit reached RMB 452 million with a 36.3% margin; he also cited Q2 non-GAAP net income of RMB 238 million and first-half non-GAAP net income of RMB 372 million. He highlighted a leaner cost base, with operating costs down 13.7% year over year in Q2 and 11.6% in the first half, total headcount down about 17%, and overseas RM headcount down 36.2% while U.S.-dollar AUM rose 11.7%. He also noted RMB 5.0 billion in cash and short-term investments, no interest-bearing debt, a current ratio of 4.3x, contingent liabilities of RMB 455 million at June 30 versus RMB 505 million at March 31, and continued shareholder returns through dividends and buybacks.

Analysts asked how long the AI transition may take, what metrics to track, whether there are longer-term AI targets, and how KPIs for relationship managers are changing under the new model. Management said the transition pace is hard to forecast because AI changes can happen quickly, but pointed investors to Singapore-style proof points such as AUM growth, client coverage, profitability and the ability to serve more clients with fewer RMs. On profitability and product economics, management said Singapore had grown from about RMB 86 million of AUM at launch to more than RMB 400 million and reached monthly profitability in July, with 92% of clients covered by the AI-enabled service model and 42% of new AUM contributed by ecosystem partners. On the Camsing litigation, management said more than 80% of affected clients had accepted the new settlement plan and legacy risk had declined substantially, but they would not predict further provision reversals.