Noah Holdings' Q3 2025 Earnings Call: Contradictions Emerge in Investment Product Sales, AI Integration, and Overseas Expansion Strategies

Date of Call: November 25, 2025

Financials Results

• Revenue: RMB 633 million, down 7.4% YOY, up sequentially (second consecutive quarter of sequential growth)
• Operating Margin: 27.2% in Q3; 27.6% for first 9 months of 2025, up from 25.5% a year ago

Guidance:

• Q4 may see moderation in results as market conditions evolve.
• Strategic AI investments to scale from 2026 to boost client acquisition, RM efficiency and operations.
• U.S. booking center will require infrastructure buildout in 2026 (mid/back-office for broker-dealer) but is not expected to be a material incremental operating-expense burden.
• Management expects continued shift toward investment-product revenue and AUM/AUA growth as key metrics to track.

Business Commentary:

• **Revenue Mix and Investment Products:
• Noah Holding Limited reported net revenues of RMB 633 million for Q3 2025, down slightly year-on-year but up sequentially.
• Investment products accounted for approximately 28% of revenues during the quarter, compared to 18% a year ago.

• The shift towards investment products was driven by client sentiment and a broader range of quality global investment solutions.

• **Operational and Financial Performance:

• Noah's non-GAAP net income increased by over 50% year-on-year to RMB 229 million in Q3 2025.
• Overseas net revenues remained robust at RMB 311 million, contributing 49.1% of total net revenues.

• The improvement in non-GAAP net income was supported by prudent investment decisions and disciplined cost management.

• **AI Initiatives and Heading Center Expansion:

• Noah launched its AI RM, Noah, providing clients with deeper engagement and interaction.
• The company established four overseas booking centers to lay the foundation for a global operational system.

• These initiatives are part of Noah's strategic approach to enhance operational efficiency and integrate AI into its organizational DNA.

• **Client and Asset Growth:

• Noah's overseas assets under management (AUM) reached USD 5.9 billion, up 5.3% year-on-year.
• The number of registered clients grew by 13.1% year-on-year, with over 1,000 new golden clients acquired by the end of Q3.
• Growth in AUM and client base reflects successful strategies in capturing offshore investment demand and global market expansion.
  

  Sentiment Analysis:

  Overall Tone: Positive

  • Management highlighted non-GAAP net income up 52.2% YOY to RMB 229 million and margin expansion; investment-product revenue rose to ~28% of revenue vs 18% a year ago; overseas AUA/AUM growth (AUA USD 9.3bn, AUM USD 5.9bn) and establishment of 4 overseas booking centers and a U.S. broker-dealer license support a constructive outlook.

Q&A:

• Question from Peter Zhang (JPMorgan): What are the expected financial impacts of AI and booking centers (cost savings vs revenue uplift); will U.S. booking center require significant upfront 2026 investment; what metrics should investors track; reasons for changes in overseas RM headcount and domestic coverage cities?
  Response: Track share of revenue from investment products and accumulation of investment-related AUM/AUA; AI is a strategic, structural investment (to be scaled from 2026) aimed at client acquisition, productivity and business-model upgrade; U.S. booking center needs some infrastructure but not a material OPEX increase in 2026; RM headcount changes reflect internal optimization and AI-assisted capacity rather than a shift away from overseas focus.

• Question from Calvin Wang (Citi): What specific measures drove robust investment-product sales this quarter and what is the Q4 strategy and product focus across domestic and overseas markets?
  Response: Noah leverages global product sourcing, platform units (Ark, Olive, Glory) and expanded hedge/secondary offerings; focus is on meeting client demand rather than a single product — emphasis on tech/AI-related and overseas products, prudent stance on RMB products; strategy is AUM-driven, using platform and commission-based models to scale sales.

• Question from Jin Jiang Yan (CICC): What drove investment income and equity-affiliate income that boosted net profit, and what explains active-client growth and implications for Q4?
  Response: Investment gains mainly reflect prior GP investments and exits/valuation gains; active-client growth stems from stronger investment-product engagement and repeat buying, which supports recurring and onetime fee expansion going forward.

• Question from Heqing Li (UBS): How will AI support overseas client acquisition given RM headcount decline; does this signal a strategic shift away from expanding local client acquisition; which RM roles were reduced; any change to target of 300 overseas RMs?
  Response: AI acts as an assistant to RMs and a new AI-RM business line to increase capacity and accelerate client conversion (example: onboarding in days vs months); headcount reductions were internal adjustments and efficiency-driven, not a strategic retreat from overseas expansion; management expects AI to augment, not replace, front-office growth ambitions.

Contradiction Point 1

Investment Product Sales and Strategy

It involves changes in the company's strategy for investment product sales, which directly impacts revenue and client acquisition efforts.

What steps has Noah taken to drive investment product sales growth, and what is the Q4 strategy? - Unknown Analyst (Citi)

2025Q3: We have enhanced our product range through our relationships in the U.S., so we have introduced investment products like crypto products and onshore and offshore alternatives. - [Zhe Yin](CEO)

Can you discuss Noah’s third-quarter operating trends, including investment sentiment and wealth management product transaction volume? - Peter Zhao (Unidentified Company)

2025Q2: We've observed strong interest from clients in investment products due to the Asian market and U.S. interest rate environment. Clients are showing more interest in diversified products provided through our global connections. - [Zhe Yin](CEO)

Contradiction Point 2

AI Integration Progress and Impact

It involves the pace and impact of AI integration on the company's operations and client acquisition, which affects operational efficiency and client growth.

Are there specific metrics to track Noah's progress in AI integration and booking center development? - Peter Zhang (JPMorgan Chase & Co, Research Division)

2025Q3: AI investment aims to improve client acquisition and business model upgrade. - [Qing Pan](CFO)

How will AI support client acquisition in overseas markets? - Heqing Li (UBS Investment Bank, Research Division)

2025Q2: AI enhances client acquisition efficiency with existing client base and is key to operational efficiency. - [Jingbo Wang](COO)

Contradiction Point 3

Overseas Expansion Strategy

It involves the strategy and focus of the company's overseas expansion, impacting client acquisition and revenue growth.

Why has the number of overseas RMs declined despite increased domestic coverage cities? - Peter Zhang (JPMorgan Chase & Co, Research Division)

2025Q3: We believe AI RM to be very critical to support the existing RMs or supplement the existing RMs and support our long-term capacity plan. - [Zhe Yin](CEO)

What is the progress of your overseas expansion into the U.S., Canada, and Japan, and when will these markets meaningfully contribute to client growth and revenue? - Peter Zhao (Unidentified Company)

2025Q2: Our focus remains on developing the overseas market despite RM adjustments. AI RM enhances capacity and efficiency, while domestic expansion is through client relationship improvements. - [Zhe Yin](CEO)

Contradiction Point 4

AI Integration and Client Acquisition Strategy

It highlights a shift in the company's focus on AI integration and client acquisition strategy, potentially impacting future business growth and operations.

How will AI support overseas client acquisition? Has the strategy shifted to focus on serving existing clients' investment needs instead of local client acquisition? - Heqing Li (UBS Investment Bank, Research Division)

2025Q3: AI enhances client acquisition efficiency with existing client base and is key to operational efficiency. - [Jingbo Wang](Co-Founder & Chairwoman)

Has the household investment segment improved this year compared to 2021 and 2022? - Peter (JPMorgan)

2022Q4: Sentiment remains conservative, despite the reopening, especially towards RMB products. There's a desire to diversify product mix. - [Qin Pan](CFO)

Contradiction Point 5

Expansion Strategy in Overseas Markets

It reflects differences in the company's expansion strategy in overseas markets, which could impact international growth and client acquisition.

What metrics track Noah's progress in AI integration and booking center development? Why has the overseas RM count dropped as domestic coverage cities rose? - Peter Zhang (JPMorgan Chase & Co, Research Division)

2025Q3: Focus remains on developing the overseas market despite RM adjustments. AI RM enhances capacity and efficiency, while domestic expansion is through client relationship improvements. - [Zhe Yin](CEO)

How does Noah differentiate from leading Chinese banks in strategy and products? How does Noah benefit from China's excess savings release? How is Noah positioning for 2023 volatility? - Unidentified Analyst (Morgan Stanley)

2022Q4: Noah doesn't offer HG1 or Gopher-related products due to their small scale in US dollar and offshore products. Noah plans to increase the number of relationship managers in Hong Kong and Singapore. - [Qin Pan](CFO)