Bullish Stock

Thank you for standing by, and welcome to Bullish Second Quarter 2026 Earnings Conference Call. [Operator Instructions] I would now like to hand the call over to Michael Fedele, Vice President of Finance. Please go ahead.

Good morning and welcome to our second quarter earnings call. I'm Michael Fedele and I'm joined on today's call by our Chief Executive Officer, Tom Farley, Chief Financial Officer, David Bonanno and Director of Corporate Development, Liam Foley.

This call will contain forward-looking statements, including those relating to our expected performance and business opportunities, our proposed acquisition of Equiniti Group, the anticipated benefits and strategic rationale of the transaction, expected timing and closing conditions, and business opportunities following the transaction. These statements are not assurances of future performance and are subject to risks and uncertainties that could cause actual results to differ materially. Such risks include, among others, the possibility that the Equiniti transaction may not be completed, failure to obtain required regulatory approvals, the possibility of that anticipated benefits may not be realized and the risks related to the integration of Equiniti's business.

For more details on these and other risks, please refer to today's earnings press release and our SEC filings including our 20-F dated March 9, 2026. We undertake no obligation to update or revise any forward-looking statements. This call will also include a discussion of non-IFRS financial measures A reconciliation to the most directly comparable IFRS metrics can be found in our earnings press release and presentation, which also contain additional information regarding non-IFRS financial measures and key performance indicators.

I'll now turn the call over to Tom.

Thanks, Mike. Good morning, everyone. Thanks for joining. I'm Tom Farley, Chairman and CEO of bullish. A year ago today, Bullish went public on the New York Stock Exchange. Thank you for following us and supporting us as a public company. A year ago today, our old school certificated shares began changing hands. A year later, I'm pleased to share with you that beginning yesterday, Bullish tokenized shares are trading on our own regulated venue for the first time.

This also marks Bullish's first trades of any tokenized security. This is just the beginning. We are building the infrastructure for tokenized securities, and this quarter, we turned that from a blueprint into something real. Our business has remained diversified and resilient against a soft quarter for crypto with prices and volatility down across the market. Our diversified largely recurring revenue base and mission-critical product offerings have helped carry us through. and our pending acquisition of Equiniti will be another step towards further business model resilience.

Regarding Equiniti, we're on track to close in January 2027. We have all of the antitrust clearances secured and other regulatory approvals are advancing. Both companies are already building today for the future combined business. What excites me most is the demand from public companies, layer 1 and layer 2 blockchains and other market participants who want to get started in earnest on issuing tokenized securities. The build of this ecosystem will take time, but the interest and demand are already there. I'm pleased to share that on October 27, we'll be headed to the New York Stock Exchange for a showcase where we'll share a first look at the tokenization platform. We will introduce new issuer and layer 1 partners and demonstrate live tokenized equity issuance and trading.

Tokenization of security sits at the heart of our strategy and is the central theme in the modernization of market structure. Tokenization is the process of turning static traditional financial assets into active programmable blockchain-based assets. In May, we announced our agreement to acquire Equiniti, the second largest transfer agent in the world. Tokenized real-world assets on chain have grown more than 20-fold since around 2024 to roughly $37 billion. Tokenized cash in the form of stable coins is now around $290 billion.

Securities are the largest way still to come, a roughly $270 trillion market, that Citi sees reaching about $5.5 trillion tokenized by 2030. I believe this is quite conservative. Not all tokenization is the same, and that distinction is the basis of our strategy. we are focused on issuer sponsored tokenization, where the company itself chooses to tokenize its actual shares and its transfer agent records the token as the real legal share on the official register. That is very different from a synthetic token, where a third party wraps a claim on a share it holds elsewhere or maybe doesn't even hold it elsewhere at all. and the issuer sees none of the benefits of this tokenization.

When the issuer on the other hand, creates the token, the token is the actual share, true legal title, the issuer can finally see who owns its stock. Corporate actions and voting can be programmed into the instrument and a greater share of the economics can flow back to the issuer, investors gain too. They benefit from smoother collateralization of their holdings around-the-clock trading, instant and atomic settlement, fractional access and access to shareholder rewards and more direct relationship with public company issuers, a facet that issuers are also very excited about.

I'd like to spend a few moments telling you a little more about Equiniti because the stand-alone business deserves to be better known. Equiniti maintains the share registered the legal record of ownership for nearly 3,000 corporate issuers, including roughly half of the FTSE 100 and 30% of the S&P 500. It serves more than 20 million shareholders and moves over $0.5 trillion of payments each year. We believe it is 1 of only 2 players of real scale in its markets with high barriers to entry over 95% client retention rate and relationships that average well over a decade. And Equiniti is far more than a register. It runs 5 connected services as laid out on Page 24 of the slide deck that are at the center of how public companies and their shareholders interact. Each service is mission-critical sticky and recurring. And together, they make Equiniti indispensable to how thousands of public companies operate.

I'll now turn to how the Bullish business performed this quarter, starting with the exchange. On spot, our core market trading volumes moderated with the broader crypto market, but we kept deepening our institutional footprint. One of the largest global wealth managers in the world selected Bullish as the exclusive crypto trading provider for their Asia business, and we began relationships with many new customers, such as SoFi, Berenberg, Bit2Me, BitoPrime and others. We keep winning the institutions that value a regulated venue. On options and derivatives, in a positive development, we now believe we will gain access to the U.S. market for our perps, dated futures and options markets in the next several months, nearly a year earlier than we previously anticipated.

We believe that the United States is by far the largest global market for derivatives and represents a huge opportunity for Bullish to be amongst the first to offer onshore crypto derivatives. While industry volumes have contracted this year as volatility came down, we still believe that the digital assets derivatives markets will grow more quickly than spot volumes in the years to come. In the second quarter, we reduced trading incentives, prepared our U.S. readiness plan and started put in place partnerships with retail broker dealers and also went live with other key market participants such as market access provider paradigm.

While our volumes and market share declined in the second quarter, we are excited about our new strategic positioning and the long-term opportunity. Beyond the exchange, our Media & Events business continues to generate business opportunities throughout the bullish business. Consensus, our flagship conference drew more than 16,000 people from over 100 countries to Miami, where we tokenized our own cap table live on stage, a first for an NYSE-listed company. CoinDesk and Consensus power our whole franchise. We are able to gather the industry together in a way that consistently generates new business opportunities.

Coindesk.com, our media arm, continues to experience strong growth, with page views up by 10 million in Q2 2026, a 38% year-over-year increase. Unique visitors increased 83% against the same period prior year, and our market share continues to consolidate. Our CoinDesk indices continue to power institutional products. In April, Morgan Stanley chose CoinDesk as the benchmark index for their flagship Bitcoin ETP, which has already reached roughly $400 million in assets. We continue to win repeat business with our licensees. For example, Grayscale launched their hyper-liquid ETP with our indices in June and Morgan Stanley launched with the Ethereum and Solana ETPs with us in late July. We're putting wins on the board but index revenue scales with the value of assets in each product. So a softer price environment has held total index revenue back even as we gain share and our mandates add up.

Liquidity Services delivered sticky recurring revenue from our delivery of the listing, liquidity and visibility that every asset needs to come to market and trade well. In Q2, we continued adding great new clients including the first exchange to list SoFi's new stablecon, SoFi USD. Finally, on the topic of regulation and legislation here in the United States, the Clarity Act did not advance this session. While clear market structure legislation would help the entire industry, our strategy does not depend on it. Per reporting by Bloomberg, the SEC is expected to publish a so-called innovation exemption potentially in the weeks ahead, which would provide some rules of the road for tokenized securities. We have advocated for this innovation exemption and would welcome this as great progress. We and issuers are hopeful that this announcement will include provisions that provide control to the issuer of the token issuance process.

If indeed, the SEC does provide a role for the issuer, we believe this will further cement the importance of the issuer sponsored token and provide further validation that our acquisition of Equiniti was the right partnership at the right time. And practically speaking, this innovation exemption will prompt a dialogue among all of our issuer customers about tokenization on an accelerated time line. Thank you again for your support over the last year.

I'll hand it to Dave.

Thank you, Tom, and good morning, everyone. This morning, we published our second quarter 2026 financial results alongside the 6-K filed with the SEC as well as our earnings press release and investor presentation available on our IR website. As a reminder, reconciliations of our non-IFRS metrics are included in today's earnings presentation and 6-K.

Now turning to our second quarter adjusted financial results and KPIs on Page 14 of today's presentation. Total adjusted revenue was $92.6 million, essentially flat with the first quarter and up 62% year-over-year. Subscription services and other revenue reached a record $62.7 million during the second quarter and adjusted transaction revenue came in at $29.9 million. Adjusted operating expenses for the second quarter were $63.1 million, reflecting our previously provided guidance that 2Q would represent our peak level of quarterly adjusted operating expenses in 2026.

Our increased operating expenses were driven by consensus related costs and approximately $2.5 million in onetime compensation expenses tied to our broader business transformation. This investment in our human capital included signing bonuses for incoming senior talent and retention and relocation bonuses for some of our existing leaders. These onetime compensation expenses will be offset in the second half of the year by efficiencies already realized in Q3 as we continue to optimize our spending across the entire cost base. Second quarter adjusted EBITDA was $29.5 million at an approximately 32% margin. Adjusted net income was $14.3 million after finance expense of $14.5 million.

Turning to our balance sheet. As shown on Page 17, we ended the quarter with net liquid assets of $2.1 billion. Looking forward for the remainder of the year, we've updated Bullish's 2026 full year guidance, as shown on Page 22. We narrowing our previously provided guidance due to increased full year visibility. SS&O revenue is now expected to be between $225 million to $245 million. Based on our current outlook, we expect the second half SS&O revenue implied by our guidance will be split roughly 45% in the third quarter and 55% in the fourth quarter with new partnerships already signed and coming online this quarter, driving that expected sequential growth.

Adjusted operating expenses are expected to be between $225 million to $230 million, roughly equally split between the third and fourth quarter. We continue to expect full year finance expenses of $52 million to $60 million. And as a reminder, we do not guide on adjusted transaction revenue and we encourage everyone to review our monthly trading metrics posted on our IR website. Finally, we are maintaining our full year 2026 financial outlook for Equiniti as well as our medium-term combined outlook, as previously discussed during our May announcement and first quarter earnings calls and as covered on Pages 26 and 27 of today's presentation.

With that, I'll turn it back to Tom for closing remarks.

Thanks, Dave. And now we'll open it up for Q&A.

[Operator Instructions] Our first question comes from the line of Brian Bedell of Deutsche Bank.

Maybe let me just start on the tokenization theme for equities. Tom, maybe if you could just talk about how you see the 2 ecosystems evolving? When I say that, I mean the synthetic versus the actual clearly, your model is based on the actual, but we're seeing early progress certainly on the synthetic side. And I guess the question would be to what extent do you see those 2 forms of trading tokenize so coexisting in the future? Or do you think the share of tokenized versions will move really to the actual your model?

Brian, thanks so much. Great question. and it underscores the nature of the questions we're getting on tokenization. I remember just 3 months ago when we announced the deal, the questions were of the flavor, will tokenization ever happen. And they've moved to they've kind of moved to how quickly with tokenization happen and even -- well, when it happens, how much will you win by which is great as we derisk the thesis of the acquisition. To answer your question directly, I've no doubt that both models will survive and maybe even thrive, and it's not dissimilar from the traditional equity markets today. Think the actual share versus an ETF or the actual share versus MDR or even an actual share versus, in some cases, a fund structure or a derivative structure or a structured product.

So too, in tokenized world, will you see multiple different models. So for example, the synthetic model may well be sufficient for a small offshore retail customer who doesn't understand credit risk doesn't care to understand credit risk. It's flipping in and out of a share at midnight time Turkey, an institutional New York, London, Hong Kong-based firm that manages customer money is certainly not going to hold some IOU or derivative that goes through a credit chain that involves, for example, multiple brokers. So I suspect you will see both evolve, the issuers will insist upon it because only the issuer sponsored token is the actual share and only the issuer sponsored token really offers a considerable benefit to the issuer themselves.

Yes. That's great perspective. And then just my second follow-up question on the revenue synergies on the trading side that you're seeing evolving and then combined with the comments that you made about the traction with retail broker-dealers and in advancing derivatives crypto trading. To what extent do you see that enhancing your trading volumes coming into the second half? Of course, you don't guide to that to the trading volumes, but just trying to get a sense of the organic component of that in the second half and into '27 potentially.

Thanks, Brian. We don't expect a major uplift to transaction revenues during 2026 from tokenized equities, but we certainly expect that during 2027, that will be a contributor to our business. As Tom mentioned, we already trade securities today. Bullish stock is streamed live on our own platform. We expect the number of stocks and issuers to come on platform with issuer native tokens to increase throughout the back half of the year. We also believe that the development of additional regulated trading venues kind of throughout the globe that will be trading tokenized stocks will help increase the broader liquidity profile of the asset class, and we do expect in 2027 to see some benefits to our trading activities from tokenized stocks.

Yes, and Brian, just to kind of reflect on this moment that we're in, we were on this call a year ago, or a year ago today was our IPO. And if I can kind of frame that moment, Bitcoin was round numbers, $120,000. The market cap of digital assets was round about $4 trillion. Fast forward to today, the price of Bitcoin is round about $60,000. The market cap of crypto is round numbers, $2 trillion. And as you and we both know in this industry because it is still relatively nascent, as price goes, so goes volatility so go trading volumes. And so we don't want to get on this call in mid-August and cheerlead for trading volumes, not having a clear crystal ball in terms of what will happen for prices to prices and volatility throughout the year.

What I will tell you is -- and you saw this in some of the comments in our prepared remarks, but you'll continue to see it in the months and quarters ahead. We're doing everything to grow market share. And we're doing well, and we're winning across the board, meaning if you look at the portfolio of products that we offer, adding new institutional customers adding new partners, adding new regulated venues, as Dave just said, as of yesterday for the very first time, we traded and are now able to trade tokenized securities. So we are there ready to capture the growth when it ultimately comes back to digital assets. but we don't want to overpromise because we don't know exactly what's going to happen.

On the other hand, we do know that tokenized securities trading is going to be a huge wave. Again, it's a $270 trillion market. And so any small slice of that comes on board in the back half of 2026 and certainly 2027, that's an opportunity. Ultimately, I'm not saying immediately, but ultimately, will dwarf the trading opportunity of true crypto assets and that $2 trillion market cap that I referenced at the outset.

Our next question comes from the line of Joseph Vafi of Canaccord Genuity.

Nice to see all the progress along the evolution here of market structure and the like. I wanted to drill down on potentially being able to open up the U.S. market for options and derivatives potentially a year earlier, if you could kind of double-click on that comment, where that's coming from, obviously, maybe the regulatory environment is favorable. Just a little more color there would be great.

Yes. No, I appreciate the question. And I'm kind of a closet derivatives, regulation [indiscernible], so appreciate the nuance here. Spent the formative part of my career managing futures exchanges and clearing houses. And there was kind of a path that was a quite painful path for getting access for certain marketplaces, and it involved the full approval of the full complement of a future trade platform of futures clearinghouse as well as in FCM in order to access the U.S. market. But a new pathway has opened up where if you operate an adult compliant, responsible, overseas platform as we do and have for many years, as you know, we're regulated by the toughest regulators on planet Earth, including the Germans often and the Hong Kongers and New York with a bit like and so on and so forth that you're able to access the U.S. should you get the necessary approvals with an approved FCM, which is the -- that's future parlance for broker-dealer.

So if you have an approved FCM, you can leverage that adult regulated overseas trading platform. And so that was -- perhaps it was a lack of imagination on our part or my part personally. But that new pathway, we believe, has become available. And should we go through the kind of right hoops and steps here over the next couple of months, we believe we'll be able to access in an unfed way, the U.S. markets for derivatives.

That's great. And then kind of I guess, a related note on the regulatory front. If you've got any additional comments on that, I guess, what was the innovators carve-out or something like that relative to tokenized equities and favoring the underlying versus the synthetic and what we might expect there and market reaction and issuer reaction to that kind of rule coming out of out of the SEC, I guess?

Sure, yes. And I'll share a few breadcrumbs, but some of our conversations will keep confidential just out of respect for our regulator in D.C. The the CLARITY Act would provide a fair amount of certainty, but at a high level, the certainty that the CLARITY Act was providing was by and large around traditional crypto assets. So in other words, you have coins that fall into a little bit of an ambiguous world that's part commodity, part security, and it gets difficult to figure out, in some cases, should I be working under the auspices of the CFTC or the SEC.

In addition, imagine somebody holds a portfolio with something that's slightly more commodity and something that's slightly more security, are the -- do the rules exist and the laws exist where I can hold them in a single portfolio. So that was the kind of thing that the CLARITY Act was really clearing up along with some CLARITY, sorry to use that we around DFI and what was and wasn't allowed in the DFI world. What it was doing less of was providing a whole lot of certainty around tokenization. And you might view that as a negative I actually view it as a positive. The reason being, you don't really need a ton of certainty around tokenization. When you're -- the market we're going after is the tokenization of the global securities market. You hear Dave and I talk about that all the time. That's the $270 trillion market.

Well, good news, we have 100 years of legislation and regulation underpinning the Global Series market it's actually abundantly clear. Nonetheless, there are some elements of ambiguity. And I applaud the SEC for saying, hey, look, we want there to be perfect clarity here because we're not going to engage in regulation by enforcement. We're not going to catch you with the rearview mirror when it wasn't abundantly clear exactly how you would approach this market. And so the SEC has set out to say, "Hey, we're going to provide this innovation exemption." The intent is to help this market develop with some, I'll call it, safe harbors that may not be the right legal term. And so that people like us, people like the issuers, broker-dealers exchanges, would understand exactly how to go about tokenization. So that's kind of the backdrop of that.

And they're taking their time rolling it out. And there were news reports this week that we could see it as soon as this week. I don't think we will see it this week. This is the kind of thing I'd rather come out and be good and come out and be quick. Now to go to this core issue that you're talking about of issuer sponsored versus on issuer sponsor. I don't know exactly what the Texas is going to say. So this isn't inside information. But I do know there was a great hew and cry from the issuer industry around tokenization as it started to take hold around about 4 or 5 months ago. Look no further than our CFO sitting to our left to see a frustrated public market issuer, where all of a sudden, your stock is so-called stock. It wasn't even your stock, but investors think they're holding your stock because they're holding your token on some platforms you've never heard of. Meanwhile, it's not your stock. It's a derivative or some sort of warehouse receipts that may or may not be backed by your stock.

And when something goes wrong, all of a sudden, you're getting calls from these investors or their intermediaries, blaming you, even though you had nothing to do with it. It makes no sense. The issuers want control of this process. They want to be able to say, "Hey, if we're going to issue this thing, we want it to be our stock not some derivative transaction or a minimum, you can't use our name or you can't call it our stock." You need to do the appropriate disclosures around it. just like the existing rules and legislation say. And I think -- and I'm putting that in quotes because look, I don't know this all with certainty. I think the SEC hears that. And I think the SEC wants to celebrate the role of the issuer.

In other words, and shine the role of the issuer. And just as a dollars and cents matter, that's great for us because that liquidity, we've been having these conversations with issuers, and I'll just tell you like, I'd love to get on this call and tell you every issuer wants to tokenize tomorrow. There are some issuers who don't know what tokenization is. Well, good news, this innovation exemption talking about the role of the issuer in the tokenization process. Guess what that does, it provides a mandate for us to go and talk to every single one of our issuer response, every one of our issuer customers about tokenizing their shares and we think has the possibility of accelerating the time line for us to provide all sorts of tokenization services to this group of issuer customers.

And I want to say one thing, this is for my lawyers as much as anything. I'm saying we, we, we, issuers, issuers, please understand when I say that, I'm talking about a pro forma world where we have successfully closed the Equiniti deal. And as Mike said at the outset, there are, of course, risks. And I just wanted to highlight that comment.

Our next question comes from the line of Dan Fannon of Jefferies.

Tom, you talked about a lot of momentum in terms of new firms signing up for crypto trading, I think, both -- mainly on the spot side. But can you talk about the backdrop of or I should say the backlog of firms that are -- that you are in conversations with in how to think about the evolution of both spot trading adoption from an institutional perspective as well as derivative trading.

Sure. I'll let Dave chime in as well, Dan. Look, I'll say because I'm an optimist, I'll start with the positive. Pipeline is as large as it's ever been, and it continues to include more and more institutional names as time passes and the logos that we're adding are among the most credible that we've ever added in our company's history. And the benefit of adding a credible logo perhaps obvious these are durable companies that don't change their mind about their strategies on a quarterly or semiannual basis. All of that is great. And so I feel really good about consolidated market share and take a step back, Dan, I would argue we are among the very, very top. I won't put a number on it, but among the very, very topic changes when it comes to credibility. We can walk into the German regulator, and we can get approval. We can walk into the New York State regulator, the look at them cost stable and get full pale blessing to operate in their local. You can just look around and you can see there are very few like that. And that's why we win institutions.

We have great liquidity at a low cost. We have a feature-rich platform. We're known for running a reliable platform that's highly compliant and super credible. All of that's great. I'm not going to mince words. Crypto is a lousy environment for trading right now, Dan. And I don't think that the CLARITY Act not passing this session is helpful. And I'd love to be able to tell you oh, it doesn't matter at all. I think around the trading of pure crypto assets. So I think Bitcoin, I'll call that a pure crypto assets, some of these layer 1 blockchains. I was looking forward to the CLARITY Act because I do think there's another wave of institutions that would have rolled in some of the obvious guys, some of you on the call, work for them that still don't hold Bitcoin, let's say, for private wealth clients here in the United States.

So feel really good about the pipeline. We continue to build features and regulatory approvals and build out our jurisdictional footprint all around the world. But -- and I'm responding to how you frame the question. And now I'm kind of pivoting to tell you, I'm even more excited about the trading of tokenized securities on this mousetrap that we built, and it may well turn out to be that, that was the giant growth opportunity that none of us saw coming as opposed to the traditional crypto assets.

That's helpful. And I appreciate the clarity there or -- and then just in the context of SS&O, obviously, took the guidance up. The momentum in that side of the business actually seems quite good. Maybe Dave unpack a little bit of what's happening versus what you thought at the beginning of the year when you initially gave the guidance and kind of where things sit today.

Yes. Thanks, Dan. To be clear, we've maintained the midpoint of the guide. We've just narrowed it here today. But given the environment we've seen over the last 6, 9, 12 months, where Bitcoin has been down 50%, [indiscernible] down 50% to 75%, interest rates from a year ago down almost 20%. We're extremely pleased with the resiliency of our SS&O line item. Tom touched on it a little bit, and there's a slide in the deck. We continue to use the consensus event as an acquisition channel and also as a cross-sell people to create stickier and stickier revenue. Over half of our consensus sponsorship revenue came from customers with multiple different products. We are beginning to see renewed momentum in our pipeline of SS&O, particularly around tokenization. It's not just because of the Equiniti transaction.

In general, that is becoming the fastest-growing part of crypto marketplace. And it's just a bigger TAM. And so we're excited about this big position of our business and the new developments in the market. And we think the business we've built is perfectly positioned to ride those tailwinds across all of our different line items, but especially in SS&O and Liquidity Services.

Our next question comes from the line of Pete Christiansen of Citi.

Question on capturing economics, tokenized equities. So I guess when you think about the issuer sponsored model, the objective the objective here for the shares to trade primarily on bullish? Or do you envision the token, I guess, being interoperable across multiple chains venues with Equiniti serving as the authority registry? And I guess in this open architecture kind of framework, where do you expect bullish to capture the majority of the economics?

Yes. Great question. There's really kind of 2 insightful embedded questions in what you're asking, Pete. One is kind of walled garden versus interoperable and the second is around the economic model. So if you don't mind, I'll dissect it in that fashion. Let me just start with walled garden versus interoperable. We are absolutely building our token to be interoperable. In fact, on October 27, we'll give you some more information and in the months and quarters ahead. As I said earlier, we will drop a few breadcrumbs but not revealing the whole strategy. But we're very much engaged with trading venues regulated trading venues, less regulated trading venues, traditional crypto venues, trade firms, about the interoperability of this response or tokens with those platforms, number one.

Number two, I even see that interoperability working with so-called CSDs, central securities depositories in the jurisdictions that we operate. And in the U.S., the most notable is DTCC or NSE, but same thing abroad. One of the models that works well for those central securities depositories is they'll hold the actual share for safekeeping and they'll issue a synthetic token on top of that. Sometimes you may have heard that referred to as an entitlement but it wouldn't surprise me at all to see that model really stay in place in various forms in various locales and they'll just hold the issuer sponsor token as opposed to the old school, less beneficial book entry share.

And in addition, with respect to layer 1 blockchain, I don't think in the early days, you will see a single blockchain gain 90-plus percent market share. I think early days, there's going to be 1,000 flowers in that loom and then there's going to be a consolidation as the market kind of realizes what is the best blockchain or to support the issuer sponsored token. And so that's how we're looking at that as well.

In terms of the economic model, Pete, we -- and I'll let Dave chime in we offer the following services for tokenization. And apologies for giving you an exhaustive list, but I really just want to give you a sense of the areas that we can provide value, and we can charge for that value because customers will appreciate it. Number one, we can sit down with the customer and discuss exactly what they want their token to look like. Number two, we can actually generate that token using our tokenization factory, the kind of thing we've been doing now for the life of our company. And one of the ways we helped this tokenized cash or stablecoin market come to life. Number three, we can list it on our own regulated venue. Number four, we can provide liquidity on our venue or other venues. But those can be regulated venues, they can be D5 venues.

Number five, we can provide visibility for that token via our CoinDesk portfolio of assets like think Consensus or the CoinDesk itself. Number six, we can be a transfer agent as we are today. And today, the transfer agent actually earns a quite low fee on a per customer basis. And this new service is clearly a value-added service. So quick query, what that will look like. And then finally, number seven, we have a set that I'll put it in kind of a group of other but really doesn't deserve to be in the other bucket. We have a meaningful newswire business, Globe Newswire in the combined company. We have investor tools that we provide through notified and Equiniti. And all of these are the sorts of things that a CFO is going to be Thursday for as their stock goes tokenized, they're going to need to understand it, they're going to need to understand who's trading it, why they're trading it. who are the holders, how can they reward those holders.

Some of these consumer goods companies are going to want to reward their holders not just with dividends and greater voting rights perhaps to their loyalty, but maybe even discounts or tickets or award points or frequent flyer miles or what have you. So the number of things that we have in our quiver to provide the tokenization and charge for are many. And therefore, for me to give you kind of an exhaustive answer on the exact economics, it's a bit difficult.

Yes. And Pete, I think I'd frame it for you this way. Our focus is going to be on the issuer and the success of every issuer customer and delivering great value for money to that customer, be it tokenizing their stock and other services. We do expect the bullish exchange to be a beneficiary of our success and our issuer success. We do expect liquidity services to be a core product for us going forward. But the focus is on the issuers first, and we believe the transaction revenue will follow.

That's really helpful. I do want to ask though about some of the carve-outs from the liquidity deal, particularly in retirement solutions and customer resolutions, those sorts of things. I know those are faster-growing parts of one of these competitor. I'm just curious, does that create a client retention issue by separating those components of the deal?

No, Pete, those are largely independent businesses from the issuers to the resolution business and the pension business, and they are not related to tokenization and issuer success. Again, that is what we're focused on is issuer success. We're happy to part with those assets. We don't believe they're going to get our growth profile going forward or margin profile, again, distinct from our tokenization and issuer-centric focus as we're happy to not be taking those assets with us.

And just to give you an example, Pete, one of those businesses is a business that sets up temporary call centers during a crisis. So going back to my childhood, Gerber baby food it comes out, there's glass in the baby food and all of a sudden, they're getting 1 million calls a day. This company shows up and sets up a call center and deals with that influx of very angry customers. Interesting business. Entirely unrelated to what we're building here. So the short answer is no. I appreciate the thrust of the question. But I want to say, completely unrelated. There may be some tether that I'm forgetting to all hedge and say, almost entirely on at a minimum.

Our next question comes from the line of Ken Worthington of JPMorgan.

I know you don't break it out, but maybe you can help us directionally on what happened to Liquidity Services revenue in relative to 1Q. Did it shrink? Did it grow? Was it at unchanged from last quarter? And are there any sort of puts and takes to call out in this quarter?

Thanks for the question, Ken. We don't give that level of detail, as you'll know. I'd say, in general, Liquidity Services in the second quarter was again resilient. There were definitely headwinds versus the first quarter with overall lower prices in the environment. We had new bookings during the quarter, but not as many as we're experiencing today. And so ex consensus, we're happy with the stability of liquidity services and the SS&O revenue, excluding consensus, during the second quarter, it was broadly in line with the underlying business previously in the first quarter, a couple of different puts and takes, but steady, and we're proud of that resilience that we displayed in the second quarter and what we're going to do in the second half.

Okay. And maybe bigger picture, David, you and I have talked about this a bunch, but can you talk to what's happening with dematerialization in the U.K. and the potential impact on Equiniti's U.K. profit, if the business moves away from shareholder accounts to more omnibus structures, how does that sort of impact the number and types of services offered by Equiniti, and how does that impact revenue? And just talk about time frame here for dematerialization.

Yes. Thanks, Ken. Taking a step back, dematerialization -- and this became really clear in the July report from the commission -- the dematerialization task force that was published mid-July this year. It's simply the process for the removal of paper shares in the U.K. market says so on the cover of the report. Furthermore, the report begins and ends with the acknowledgment that tokenization should be developed, not just in parallel, but is likely to come before any of these further steps that had previously been contemplated by the dematerialization task force, such as the so-called step 3, which is the intermediate model. Even in that world, we believe Equiniti is a beneficiary of this process to remove paper shares from the market.

We have a broker dealer. Some of our competitors do not. We believe there will be customers who are going to be up for grabs, and we'll be well positioned to get those customers in the future. The removal of paper shares is currently scheduled for the end of next year. And as we put -- there's a page in the appendices of the deck, only less than 2% of Equiniti revenue is directly related to paper certificates and mail revenue. It's de minimis to their financial profile even more de minimis to the combined financial profile and we believe the convergence of tokenization and dematerialization is a tailwind to Equiniti that will more than offset that less than 2% revenue exposure that we have today.

I'm glad you asked this question, Ken. As you would imagine, we diligenced their businesses on both sides of the pond because they really have a nexus of business in the U.S. and excess business in U.K. dematerialization the big piece of legislation in the U.S. is CLARITY Act, a big piece of legislation in the U.K., was this kind of dematerialization piece that you brought up. And the net of our diligence is that it was kind of puts and takes where the transfer agent would have a tail of customers that would have to really hold on to. And on the flip side, it was pushing hard towards broker-dealer activity, and we're the only guys that have a captive broker-dealer and a really well-run broker-dealer. And so we kind of looked at it as, okay, there's puts and takes, probably in that neutral to the business or something of that it'll -- they have since come out and said -- I just want to reiterate what Dave said. Hey, tokenization kind of obviates this whole conversation, and we really should pivot to exactly how tokenization is going to work.

And that's where, as you know, we've repositioned our entire business as of early May of this year. And so now undoubtedly, we see this entire thing as a big opportunity for us. And similar to potentially this innovation exemption accelerating conversations that may have otherwise taken place, let's say, in the back half to a much earlier time frame. So two, does this dematerialization/tokenization conversation in the U.K., accelerate those conversations and give us a mandate and an open door to go in and talk to customers, educate them, work with them, be their consigliere as they move to a tokenized world.

Our next question comes from the line of Owen Lau of Clear Street.

So I hear that you're going to have a tokenization showcase in October, and you may be limited to what you can say. But could you please give us an update on the pipeline of the issuers wanting to tokenize their shares, profile of these companies? What are they excited about the tokenization opportunity? And maybe talk about what you expect to get out from this event in October.

Owen, thanks a lot. It's good to hear from you again. The -- if I can just start with some contextual comments we announced the Equiniti acquisition in May. As you would imagine, we are deep in planning the actual integration post-close. We're actually collaborating with the company on various and sundry solutions, including around tokenization. We bought this beautiful old antique home up on a hill in Newport at the corner of Main and Main we knew we would go in and it would have beautiful mill work and old growth number, but it was a fixer upper. And we knew that going in. We just didn't know exactly what we would find when we got in the inside. And what we're finding is that there are a lot of upside. There's a lot of -- to continue the metaphor, there are a lot of rooms that have been renovated. There are great managers and leaders there that I'm learning from every day.

But perhaps the most exciting part of it is the direct relationship with the issuer where they pick up the phone, and it is the quality of the issuer list and relationships that Equiniti have that are even deeper than we expected, and we knew that they had high-quality relationships. So the issuer pipeline in terms of those sort of conversations in the process there is filling up. Still early days. We'll have more opportunities this quarter than we did in Q2 and we'll have more opportunities in Q4. If I reflect on it and kind of have to handicap it, it feels more like, yes, there's going to be activity here in the latter half of 2026.

And then this is a 2027 in earnest growth trajectory in part because the ecosystem needs to develop. For example, the trading solutions for trading of these tokens are nascent. Your Dave say, and I said in my opening remarks, we just started trading tokenized securities literally yesterday. And so we feel great about the pipeline, a little bit less certain about the time line but you'll learn a lot more about that on October 27. With respect to October 27, we want you to have a more holistic perspective of this ecosystem. So it's not just about issuers, although they're important. It's about other partners. So for example, layer one, the layer 2, the blockchains are chopping at the bit to be the blockchains that these issuers choose to tokenize their product.

As I said in my comments, there's $37 billion of tokenized assets. To be clear, that is a rounding error. We have companies that we're talking to about tokenization that would be a multiple of that $37 billion. So you can imagine if you're a layer 1. And also broker dealers who want to make sure they too are part of the solution and they're offering services to their customers. And then finally, you gave a lot for us to answer there. So apologies if this is long-winded, but I wanted to get to everything you asked in your question.

In terms of why the issuers are interested, the answer to that is turning out to be more multi-varied than we expected. I'll give you an example. When we talk to consumer goods companies, they are very eager to have a direct relationship with their customers. And anything we can provide to them through this tokenization process that gives them more of a direct relationship from their customers. They can learn from their customers. They can reward their customers. Like I said in my prepared remarks, the ability to provide, I don't know, frequent flyer miles or hotel points or a discount on a subscription or even just a thank you for their shareholding. That sort of thing is very appealing. And then depending on the company, being able to provide accelerated dividends for longer-term more lore holders or additional voting rights or the 24/7 trading. So it's not a one size fits all, but there's a number of things that we're hearing.

Got it. That's super helpful. And then my follow-up on a modeling question. Your second quarter at just OpEx seems a little bit higher than expected, but you only raised the low end of your full year OpEx guidance a bit. So the implied second half run expense run rate was much lower. So on a bullish stand-alone basis, it's the second half runway, a good exit way for us to think about going into 2027. Is there any equity-related investments we should be aware of for later this year?

Thanks, Owen. Appreciate the question. I'll take that one. As I mentioned in my prepared remarks, the second quarter featured higher expenses than we expect from any other quarter this year. That's in part driven by variable expenses associated with our consensus Miami event as well as the $2.5 million of onetime compensation expenses that I detailed related to our broader business transformation, signing bonuses for new hires, retention and relocation bonuses for certain existing key executives. We maintain a very tight grip on the costs. We've already realized additional synergies and further head count reductions in the third quarter to keep us in line with that guide.

I would not say that the back half of the year is representative of the run rate for '27 because that would be excluding the variable consensus related expenses we have in the first and second quarter. We expect that baseline in the second half of the year, which excludes the consensus related events is roughly good. We'll probably expand over time as we invest in the platform. But we intend to hit our guidance there, and we maintain a tight cost control. And the second quarter, as I mentioned, was definitely a bit anomalous with regard to the wages and compensation expenses with that additional $2.5 million that will not recur and the offset in the back half of the year by those synergies we've already realized.

[Operator Instructions] Our next question comes from the line of Ed Engel of Compass Point.

As you think about competing with some of these synthetic issuers, is there anything you can do to kind of jump start distribution of your issuer sponsored shares? I saw you mentioned the onboarding of market makers like winter meet. So just kind of wondering how you're thinking about solving the cold-start problem relative to the synthetic assets, which kind of already achieved pretty strong distribution pretty quickly.

Yes. No, great question. That's why we did the Equiniti acquisition is we have 3,000 issuers that we can go to with product out of the box. At the same time, the issuer is in control. And so this isn't the kind of thing where all 3,000 will start on the same day. But the difference between us and our more durable model and the synthetic model is, once you've created it, it's there forever as long as that company is a public company. It's not the kind of thing that can just turn around and disappear the next day or you put in the hands of an investor and they think they're getting IPO proceeds and they get none, which you probably read about in the press. So we don't think it's a cold start problem. We actually think it will be an accelerated start, but it's not and every single thing happens at once as some of the other models may be which I suspect will prove to be far less durable.

Our next question comes from the line of Rayna Kumar of Oppenheimer & Company.

This is Guru on for Rayna. A lot of questions have already been asked, but if I can maybe switch us in other aspects of the business. Much of the conversation pertaining to CoinDesk, right, over the past few quarters has evolved almost exclusively around some of the nice wins on the indices and data side. And of course, on Consensus events. But if you can narrow in on the CoinDesk Media segment, maybe comment on your outlook for this media portion of your business, excluding events, right? Metrics on Slide 14 highlights on strong growth. You called out 38%. So wondering if this will primarily remain focused on supporting broad ecosystem through visibility, cross-selling, et cetera? Or if it could grow into a meaningful stand-alone piece as well?

Thanks for the question. Yes, we're happy with the recent success in our viewer counts at CoinDesk. That's certainly true. Those have improved dramatically, thanks to the new leadership from [ JERO ] that we brought into the building late last year. We are currently monetizing per se all those extra eyeballs through banner ads or things of that nature. We want to keep the website premium. It is directed mainly at the benefit of our existing issuers and partners and broadening our reach. We're happy and pleased with that business and the resumed growth that's achieved in views. And we expect it to be a beneficiary of our broader business transformation towards tokenization with large.

There are days when the market share of that business is actually a majority of crypto media, a majority. And there are lots and lots of competitors. And so we've carved out this role at the intersection of technology and finance. That's something we're going to be able to grow for years to come. And as Dave said, it's very helpful for us on occasion to be able to use that asset for, say, for example, advertising purposes for other opportunities that we have under the Bullish umbrella.

Our next question comes from the line of Nathan Frankowitz of Cantor Fitzgerald.

Tom, on your comment that $5 trillion in tokenized equities by 2030 might be a bit conservative. Can you just kind of walk through what factors do you think might most influence whether that number plays out above or below that estimate. And then as a follow-up, do you have any thoughts on how that $5 trillion plus could be distributed between blockchains, such as any or categories in particular or new more permission ones like Canton?

Yes, really good question. Citi is on this call. So I'll start by saying the analysis is excellent. I'm just more anecdotal, and I want to say that right up front. I had a conversation on Tuesday with the CEO of a $70 billion company about them tokenizing their stock. So I'm just looking at it and saying, okay, it's $37 billion today. I just had a conversation, a real conversation with a real CEO of a $70 billion company about them tokenizing their stock. It doesn't take a lot of math to math more than $5 trillion, $6 trillion by the year 2030. I actually see a world where it kind of starts slowly, almost a trickle. And then we have a catalytic event, either the wave accelerates or there's a onetime a big IPO only does a tokenized offering.

And then once you have that, all the institutions are holding the tokenized assets, the broker-dealers are holding the tokenized assets and you flip the U.S. or the U.K. equity markets on to public blockchains, perhaps alongside traditional shares for a period of time, could be years, could be a decade. But right there, you've just blown through $5 trillion, $6 trillion in terms of tokenized assets. So I -- admittedly, I'm coming at it more anecdotally than quantitative, almost top down based on these experiences that we're having. But like I said in May, the question was, oh, geez, is tokenization going to happen? And if I'm honest, we have that question too internally, look, good teams fight we spent $4.2 billion for the business.

You think we don't look at the glass half full and the glass half empty, we do. And we ask that question. I can tell you we haven't asked a question in 6 weeks. Like it's out -- the horse is out of the barn. It's just a question of how quickly is it going to happen and to what extent are we going to be a leader. In terms of the public blockchains we're going to be the ultimate winners out of this I don't have a clear crystal ball. I think the most decentralized working on privacy solutions, the least decentralized that have privacy solutions are looking at how can we do a better job of decentralizing. And it's going to be whichever of those blockchains meets the moment and meets those customer needs to ultimately be the big winners. And we're open to that being many. We're open that being several and that's fine with us.

I would now like to turn the conference back to Tom Farley for closing remarks. Sir?

Hi, everyone, it's Dave. Tom had to jump to a customer call here. But thank you, everyone, for attending this morning's call. We look forward to staying in touch with all of you on this journey as we build out the future of financial infrastructure. Please reach out to our IR team with any follow-up questions, and we look forward to seeing everyone next quarter.

This concludes today's conference call. Thank you for participating. You may now disconnect.

Thank you for standing by. At this time, I would like to welcome everyone to the Bullish Global First Quarter 2026 Earnings Call and Q&A. [Operator Instructions]

I would now like to turn the call over to Michael Fedele, Vice President of Finance. You may begin.

Good morning, and welcome to our first quarter earnings call. I'm Michael Fedele, Vice President of Finance, and I'm joined on today's call by our Chief Executive Officer, Tom Farley; Chief Financial Officer, David Bonanno; and Director of Corporate Development, Liam Foley.

This call will contain forward-looking statements, including those relating to our expected performance and business opportunities, our proposed acquisition of Equiniti Group, the anticipated benefits and strategic rationale of the transaction, expected timing and closing conditions and business opportunities following the transaction. These statements are not assurances of future performance and are subject to risks and uncertainties that could cause actual results to differ materially. Such risks include, among others, the possibility that the Equiniti transaction may not be completed, failure to obtain required regulatory approvals and the possibility that anticipated benefits may not be realized and risks related to the integration of Equiniti's business.

For more details on these and other risks, please refer to today's earnings press release and our SEC filings, including our 20-F dated March 9, 2026. We undertake no obligation to update or revise any forward-looking statements. This call will also include a discussion of non-IFRS financial measures. A reconciliation to the most directly comparable IFRS metrics can be found in our earnings press release and presentation, which also contain additional information regarding non-IFRS financial measures and key performance indicators.

I'll now turn the call over to Tom.

Thanks, Michael. Good morning, everyone. Thanks for joining. I'm Tom Farley, Chairman and CEO of Bullish. I'm going to lead today with the most significant strategic milestone in our history, our agreement to acquire Equiniti, a leading global transfer agent before turning to our first quarter results.

For those of you who have followed our calls closely, first of all, thank you. You'll remember that I spoke at length during our Q3 call about tokenization and how we would grow our already successful stablecoin tokenization business. I'm sure some of you was thinking those -- during that call, what is this guy talking about? Tokenization is only part of their existing business and he's spending quite a bit of time on it. Well, for those of you who know Dave and me, one of our favorite expressions is promises made, promises kept. On these earnings calls, we will give you an idea of where we are headed as a public company, and then we will go there.

On May 5, we announced a definitive agreement to acquire Equiniti for $4.2 billion, creating a tokenization powerhouse with an end-to-end stack spanning origination, issuance, trading, liquidity and visibility, purpose-built for the blockchain era. I want to walk you through the strategic logic because this transaction is transformative, not just for Bullish, but for the broader evolution of capital markets.

Capital markets move in infrastructure eras. We went from the paper era with physical certificates and manual ledgers to the electronic era, which delivered dematerialization, electronic settlement and ultimately T+1. We are now entering the blockchain era, which offers something fundamentally different, unconstrained programmable ownership through tokenized assets. Tokenization is the process of turning traditional financial assets into blockchain-based assets. It turns static assets into active infrastructure, assets that are always on, that settle instantly and that carry dynamic functionality embedded in the instrument itself.

We've already seen this migration play out with digital commodities and with stablecoins, which now exceed $300 billion in market capitalization and many trillions in annual payments volume. The next wave is tokenized securities. The global securities market is a $270 trillion market cap opportunity. We are in the first inning.

But the drivers of the deal thesis include 3 structural elements working in concert. First, an end-to-end tokenization services stack from token design and smart contract deployment through regulatory compliance, distribution, liquidity and research. Second, a unified transfer agent ledger, one source of truth that bridges certificated and tokenized shares, enabling real-time settlement without displacing existing market infrastructure like the DTCC, EuroClear, Clearstream, so on and so forth. And third, a broad base of blue-chip issuer relationships, public company client relationships, the ability to go directly to issuers and say, hey, we can do this for you seamlessly with no listing change, no vendor switch and day 1 compatibility, including the ability to embed smart contract logic in share issuances.

We at Bullish have already been building the first element for many years, the technology and the market infrastructure, in fact, since our founding. We operate the exchange, the liquidity engine, the indices, the data, the research and the distribution platform. What we did not have and what no one in crypto or globally had were the second and third elements. A regulated transfer agent with direct relationships to thousands and thousands of public company issuers and a unified ledger that bridges TradFi and blockchain.

Equiniti and more specifically, Equiniti plus Bullish offers exactly that. Equiniti is the transfer agent of record for nearly 3,000 public company issuers, including over 50% of the FTSE 100 and over 30% of the S&P 500. They serve 15,000 total corporate clients. They have 20 million KYC shareholder customers on their platform who are just a wallet address away from accessing the benefits of tokenization. They process over $0.5 trillion in payments, primarily dividend payments annually. Average transfer agent client tenure exceeds 15 years and average transfer agent client retention is approximately 99%. Equiniti operates in a duopolistic market characterized by high barriers to entry and deep institutional trust.

Now let me share something that has reinforced our conviction even since the announcement 9 days ago. The volume and quality of inbound interest has been extraordinary. We have received scores of inbound inquiries from issuers interested in tokenization, financial services firms interested in liquidity services on already tokenized assets, technology partners interested in building on our combined platform and even regulators seeking us to tokenize in their jurisdiction. The breadth of interest spans our exchange, our liquidity services business and, of course, the tokenization opportunity specifically. This is exactly the kind of market validation we hoped for, we anticipated even. But frankly, the pace has exceeded our expectations.

We are clearly building something with strong end market demand today. Why is it that our acquisition announcement has been so compelling to the leaders of our industry and the leaders of our potential customers. It is for one primary reason. Industry participants realize the obvious. Only the issuer, the public company itself, can allow for tokenization of public company equity that results in the token being the actual share of stock in that particular company. If anyone else attempts to "tokenize," they are creating something other than the actual stock. This goes for electronic brokers, crypto platforms, traditional brokers, settlement providers and clearing providers.

The transfer agent defines the legal ownership in partnership with the issuer. The token is the share. Without a transfer agent, tokenization is synthetic, off register, it lacks legal standing and ultimately will be unacceptable to institutional capital. The resulting token in those circumstances is actually a derivatives transaction or a warehouse receipt or a more colloquial language, an IOU, all of which have complexity and counterparty risk.

In tokenization performed by the transfer agent, however, tokens represent true legal title. This is the bridge between TradFi plumbing and next-generation digital asset rails, and this is what unlocks institutional adoption at scale. On the transaction itself, we are acquiring 100% of Equiniti for $4.2 billion. The consideration consists of approximately $2.35 billion in newly issued Bullish ordinary shares and the assumption of $1.85 billion of existing Equiniti debt. Siris, the current owner will receive 2 Board seats and retains a call option to acquire certain noncore Equiniti business lines that are excluded from all of our financial outlooks. We are targeting a close in January 2027, subject to customary regulatory approvals.

I'd also like to take a moment to thank Frank Baker and the Siris team for sharing our conviction and excitement as we execute on our vision to become the global leader in tokenization.

The combined company will be formidable. We will be the global tokenization leader, providing the base layer of tokenization services with the value-added services that ensure tokenization succeed. Dave will take you through more of the financial details of the combined company in just a few minutes. Before I shift it to Dave and before I shift to our Q1 results, let me say this. When Dave and I came to Bullish, we said we wanted to build the ICE of crypto, a diversified institutionally trusted infrastructure platform that would define how digital assets are traded, serviced and understood. With this Equiniti acquisition, we are building the bridge between traditional capital markets and the blockchain era. We are not trying to displace existing infrastructure. We are upgrading it, and we are doing so with the regulatory standing, now the issuer relationships and the technology to drive this transformation. This is a 20-year opportunity, and we're just getting started.

Now let me turn to a qualitative review of Q1. Dave will take you through the financial results in just a moment. On the exchange side, our business continues to gain traction. We traded $11.6 billion in options market volume during Q1 and have built our open interest share to 14% of the global Bitcoin options market, making Bullish the clear #2 exchange globally for Bitcoin options.

In April, we hit a single-day volume high of $858 million, and we signed several new clients, including, for example, Ripple Prime, QCP and others. We're building a world-class derivatives franchise and continue to be excited by our progress. We also recently filed last week to officially receive our futures and options exchange and clearinghouse licenses, known as DCM and DCO licenses, which will help us expand our derivatives products to the United States. We continue to make progress towards attaining licenses to facilitate trading of securities on both sides of the pond and remain on track to receive European U.S. licenses prior to the end of 2026.

Our liquidity services pipeline remains robust. In Q1, we signed Metso, and Valmet and others, and we have carried that momentum into Q2. CoinDesk continues to extend its leadership position. Total page views were up 30% and monthly unique visitors surged roughly 60% higher quarter-over-quarter. CoinDesk progress is continuing into the second quarter. Our visits were up 82% year-over-year in April. CoinDesk Indices now serves as the benchmark for Morgan Stanley's BTC ETP, MSBT, sorry, 3 acronyms and soon to be launched E and Solana ETPs slated to launch in the coming months. MSBT commenced trading on April 8 and swiftly amassed over $220 million in AUM, one of the more successful ETF launches in history. This is particularly exciting given Morgan Stanley's $7 trillion wealth management platform, servicing over 17,000 financial advisers and wealth professionals.

On the event side, Consensus Hong Kong and Consensus Miami were each home runs, drawing a combined 26,000-plus attendees from more than 100 countries. Net ticket sales for Miami were 120% greater than sales for Toronto, and I can truly assess that Miami was a buzz with talk of our Equiniti acquisition and with enthusiasm around tokenization in general. I don't want to be the one to call the end of a bear market, but Miami certainly did not feel like a bear market.

With that, I'll turn the call over to my partner, Dave, to walk you through our Q1 financial results in detail and provide additional context on the combined financial outlook.

Thank you, Tom, and good morning, everyone. This morning, we published our first quarter 2026 financial results alongside the 6-K filed with the SEC as well as our earnings press release and investor presentation available on our IR website. As a reminder, reconciliations of our non-IFRS metrics are included in today's earnings presentation and 6-K.

Before discussing our financial results, I want to highlight that we will be providing a first half 2026 financial update on Equiniti during Bullish's next earnings update in a few months from now. Additionally, before concluding my remarks, I'll spend a little time reviewing the previously disclosed outlook for the combined company that we discussed last week at our Consensus event in Miami.

Now turning to 1Q 2026 results, starting on Page 11 of the presentation. Total adjusted revenue for the quarter was $92.8 million, up approximately 49% year-over-year. Compared to 4Q '25, total adjusted revenue, adjusted transaction revenue and subscription services and other revenue all posted slight growth despite significant digital asset price weaknesses, including Bitcoin being down approximately 24% quarter-over-quarter. Our ability to grow all revenue line items quarter-over-quarter despite the significant macro headwinds is a testament to our diversified revenue model and organic growth profile of the business.

Adjusted operating expense was $57.7 million in the first quarter, up from $48.1 million in the fourth quarter. That is an approximately $9.5 million increase, which includes roughly $7 million of expenses related to our Consensus Hong Kong event largely contained in the advertising and promotion expense line item. Of the remaining approximately $2.5 million of incremental expense, 50% was attributable to our investment in artificial intelligence tools across our entire business, including the expectation that we would announce the Equiniti transaction. The remainder was split about evenly across additional employee expense and the targeted performance-based awards I discussed when we provided our full year guidance back in February.

Adjusted EBITDA for the quarter was -- excuse me, $35.1 million with an approximately 38% margin. This compares to 1Q '25 adjusted EBITDA of $13.2 million at a 21% margin. This year-over-year increase reflects an approximately 72% contribution margin. This despite increased Consensus-related expenses and increased investments that I just discussed. Adjusted net income was $20.3 million for the period or $0.13 per adjusted diluted share on a base of approximately 151.2 million adjusted diluted shares. This compares to adjusted net income of $28.9 million in the fourth quarter of '25 and $2.1 million in Q1 2025. Finance expense was $14.1 million in the first quarter, modestly below Q4's $14.9 million.

Regarding our previously provided full year 2026 guidance on Page 22 of the presentation, we are reaffirming all of those ranges for the full year. Additionally, I would like to highlight a little more context on our expectations for adjusted operating expenses as we move through the remainder of the year. First, as noted on Page 22, we expect full year 2026 adjusted operating expense between the midpoint and upper end of the range as we accelerate investment in our tokenization platform. This slightly elevated spend is essentially the pull forward of future platform investment included in our net cost reduction guidance of $25 million to $50 million post closing of the Equiniti transaction in early 2027.

Second, I'd just note that we expect the second quarter '26 to be our highest quarterly expense level during the year, driven by spend related to our highly successful Consensus Miami event last week. Hopefully, this additional context helps everyone sharpen their pencil a bit on the cadence of the cost base as we progress through the remainder of 2026.

Before turning it back to Tom and beginning the Q&A, I want to provide a quick financial refresh regarding our outlook for Bullish on a combined basis as covered on Page 22. First, we expect the pre-synergy combined 2026 adjusted total revenue outlook of between $1.25 billion and $1.35 billion, adjusted EBITDA less CapEx between $490 million and $530 million and adjusted net income between $270 million and $290 million.

Turning to Page 23, covering our medium-term outlook as compared to the combined 2026 financials, we expect approximately 6% to 8% annual revenue growth, $25 million to $50 million in net cost reductions and EBITDA less CapEx growing at approximately $100 million per year. Additionally, we expect to generate approximately $1 billion of free cash flow over the medium-term period and exit 2029 with about a 50% EBITDA less CapEx margin. Please refer to last week's announcement presentation and today's slides for additional detail on this outlook.

And with that, I'll turn it back to Tom for closing remarks.

Thanks, Dave. We've delivered a strong Q1. We've announced a deal that fundamentally reshapes our company, and we're excited to keep executing and proving out our thesis. The positive market response from our current and potential clients from the industry over the last week or so certainly helps.

With that, I'll ask the operator to open the line for questions. Thank you, everyone.

[Operator Instructions] And your first question comes from Owen Lau with Clear Street.

Could you please talk about the time line of getting your DCO and DCM license? Does Bullish have any plan to get into traditional equities, commodities and metal derivatives trading, which Tom, you have a lot of experience on.

Thanks, Owen. Good to hear from you again. Having been in that world now for most of my career, I can tell you there's a lot of tea leaf reading in estimating a regulator's response time. The good news is we are already, as you know, Owen, regulated by the most stringent regulators in the world, including the SEC, but also BaFin in Germany, the SSE in Hong Kong, the New Yorkers here with the BitLicense, so on and so forth. So that gives us a good bit of credibility. I also think that the regulators tend to look favorably on our management team given that we've kind of been there, done that with running really important regulated businesses with good hygiene, good compliance and regulatory hygiene.

With all that said, to give you a more specific answer, the DCM and DCO licenses really range in terms of the timing. But we have seen with this CFTC a lot more alacrity, and we're seeing full approvals come for DCOs in under a year. I'll put it like that, Owen. I don't want to be too aggressive with what I tell you. And you can look up and see -- you can kind of do the research and see what I'm describing. But so far, we've -- everything has gone well and our conversations with CFTC have gone well. I've spent time with the Chairman and the heads of the various divisions, and it feels great. It feels good in terms of the start here.

To answer your question directly, this DCM and DCO positions us in a couple of different ways, Owen. In general, we believe that this whole tokenization thing is going to take off as you know. And having the U.S. licenses, the appropriate U.S. licenses, and it's not just the DCM and DCO, but we will also be filing our broker-dealer license, I believe, this month here in May, which typically has a shorter window for approval than the DCM and DCO. Those collectively will give us the ability to trade on a secondary basis, these tokens as they come to market. So it really helps us with the kind of full stack pitch to firms as they're contemplating tokenization. And not only can we list them for trading, but we can also help them with their liquidity and help them with their visibility through CoinDesk and Consensus. So it kind of perfects the offering.

But also just more tactically, if you think about the -- what I'll call the old Bullish stand-alone business, this enables us to take an options market, which we have not been able to bring to the U.S. because we don't have that DCM and DCO and has gone from 0 to 14% market share, as you heard in the prepared remarks, in just 6 months, and it opens up the single largest market in the world for us for options for data futures and perpetual futures just on our core kind of crypto derivatives franchise. So those are the 2 strategic reasons why we pushed ahead and done this. We have a great team that's worked on these applications and got them in, and I'm confident that we have a full package, and we'll be able to move through this process as expeditiously as possible.

Your next question comes from the line of Pete Christiansen with Citi.

Great event last week. And again, congrats on the Equiniti deal. Simple question here. The industry often, and we're hearing it from a number of sources here that demand for tokenized securities is large, but -- when we talk about the issuer side of the equation, I feel like their voice isn't as hurt as much. From your perspective, what do you believe becomes compelling enough for existing public company CFOs to actually change their shareholder infrastructure that some main question is already functions pretty reasonably today. Just helpful if you could give us your view of the other side of the equation here.

Yes. Pete, I love this question. It really gets to the heart of the matter. And I guess if I can do a little couch time here with this broad audience, when I've had my doubts, it's been exactly around this issue, which is what's going to be the catalyst from this to really take off and to see that $270 trillion global securities market dip. And I will tell you, Pete, that even in the last week, it's just all the potential fears or insecurities we have around that have been blown to smithereens. We've heard from Dow companies that they want to get on the path of tokenizing their stock and they want to do it pronto. We were -- I was tabulating last night the number of inbounds that we've gotten from issuers, but also partners who work with issuers and literally lost count. It's in the dozens and dozens, just in the last week. And so that alone gives us great comfort, and that's probably what you can hear in our tone.

To get down to kind of brass tax, for the issuers, the benefits are both their own benefits, but also the benefits for the investors and a happy investor makes for a happy issuer does it ultimately reduce the cost of capital. And so from the issuer's perspective, they realize very quickly that tokenization gives them a lot more visibility into who owns their shares. But even if it's there's privacy and obfuscation around who owns the shares, how often are they trading? How long are people holding their shares? Are these buy-and-hold shareholders? It gives them the ability to reward buy and hold shareholders. You can imagine structures where dividends, rewards, buy and hold behavior.

And so if you go talk, Pete, to the IROs and the CFOs of public companies, which I've done most of my career, frankly, the #1 thing they will tell you is they're in the dark that the nested infrastructure that's built up in this country over 200 years means that they get very, very little information. We live it as a public company. It's almost comical how little information we get about our own shareholders. So the tokenization, the promise of more information is very, very compelling.

On the investor side, it's going to give the investors much more opportunity to trade, for example, 24/7. So imagine you're a large investor in Asia interested in trading U.S. securities. It will give investors more options in terms of lending and borrowing their shares and pledging their shares as collateral. And so if you're making investors happy, you're also making the issuers happy.

But the thing I just set you at ease with is what's really set me at ease as well because like the thing Dave and I have said publicly, but I'll repeat it again, the only question here is how quick will the adoption curve be. And we made a conservative assumption when we put out figures last week, quite conservative, as you can see yourself, Pete. And in the last week, what we realized is, oh, boy, there's the opportunity this thing is going to take off real fast. And it's because of that groundswell of support that we've gotten on the transaction and interest in tokenizing shares.

And Pete, I'll just add a little bit from my seat as the CFO. I do think the person purchasing transfer agent services and tokenization services in the future will be the CFO. Q4, the transfer agent service was largely a tax for no value add. It was required by law, but you didn't see it. You never really sure what functionality it provided you and it was handled by your legal team and probably someone down the wrong in the legal team. 24/7 price discovery, access to new buyer bases and any modicum of incremental visibility into my shareholder base is worth substantially more than the product I pay for today at Equiniti. I feel deeply convicted about that, and I look forward greatly to discussing this with all the CFO issuers of the world, frankly. And I do think that this product is going to have instant traction from what we've seen.

We need the Equiniti venues to catch up. We are pursuing, as Thomas mentioned, 2 different licenses to enable Bullish to trade securities in our single global order book and unified account structure around the world. We expect both of those licenses to be obtained during the course of 2026. We also expect third-party trading venues, both here and possibly abroad as well to begin during this year. And so we think the liquidity problem and the 24/7 price discovery promise will be fulfilled in the not-too-distant future, followed by incremental visibility into your shareholder base and then additional services and benefits that Tom just mentioned, which turn your stock into an asset it's never been before. And we're quite excited about the future. The inbounds we've gotten are beyond crypto-native companies. As Tom mentioned, we've spoken and gotten inbounds from industrial-type companies. So it's exciting. We look forward to getting back to work and building the future of tokenized equities.

Yes. I want to give you one last example, Pete. I know I'm going kind of full nerd on the market plumbing here. But going back to -- well, going back to my days at the New York Stock Exchange spending time with issuers, but frankly, going back to Monday when I was at the SEC, one issue that CFOs and Investor Relations is so-called naked short selling. I know to many of us on the call, we -- analogies, how big of a problem is that? This is -- it is detested in the issuer community. And tokenizing shares instantly causes that issue to go away for those tokens. So it's just another example of where the transparency will really benefit the issuers.

Our next question comes from the line of Ken Worthington with JPMorgan.

I wanted to dig a bit into more of the SS&O line this quarter. It was flat despite the Consensus Hong Kong event this quarter. Can you give us the puts and takes in SS&O this quarter that kept revenue flat relative to 4Q levels?

Yes, Ken, I appreciate the question. As we discussed in February when we gave the full year guidance, we said in terms of the puts and takes on SS&O, the headwinds would include macro forces outside of our control, namely digital asset prices. As I mentioned, Bitcoin was down 24% quarter-over-quarter. Every other digital asset was down far worse than that. Additionally, interest rates, which do affect some of our stablecoin-based revenues were also down 10%. And finally, I mentioned the selective discontinuation of legacy liquidity service offerings that originated from approximately the 2023 time period that are no longer priorities for our business going forward.

We took all of those headwinds instantly in the first quarter. We got on with business with regard to focusing our resources around liquidity services we plan to continue providing into the future, did not renew most of the contracts or nearly all of the contracts that we intended to exit for the year. We absorbed the price immediately, and we absorbed the rate impact immediately. Despite all those headwinds, we were able to have Consensus Hong Kong, which is the smaller of the 2 events, helped more than offset that, and we were able to eke out a slightly positive sequential growth quarter, which all things considered in the current environment, we're pretty proud of. We can always do better. But we did absorb all the negative headwinds I discussed for the full year immediately in the first quarter.

Your next question comes from the line of Joseph Vafi with Canaccord Genuity. Your next question comes from the line of Chris Brendler with Rosenblatt Securities.

I'd like to ask on the U.S. expansion, sort of that wasn't that long ago that you were able to start soliciting U.S. clients. And it sounds like this tokenization initiative is very U.S. focused. So can you give us an update on your progress in building your U.S. client base and how this acquisition actually might accelerate that growth?

Yes. Kind of taking it in reverse order. The -- I just want to highlight that Equiniti is actually the market leader in the U.K. and has a presence in many countries. So if our message seems too U.S.-centric and may just be because it's coming from Americans who happen to be sitting in New York City. But this is truly a global opportunity that extends beyond the U.S. and includes both equities and debt securities. The U.S. initiative is going very well. As you -- as we've told you about on prior calls, the customers continue to ramp up. But perhaps the most exciting part of it is that now we're seeing a U.S. funnel or pipeline that includes some of the largest financial institutions in the world.

Now the downside of that is it extends the sales cycle because these are firms that go through extensive diligence, reverse diligence compliance, regulatory, and we can stand up to the scrutiny, but it takes time. But our U.S. launch that we started just post the IPO back in the early fall is moving a pace just as we expected it would and perhaps slightly exceeding expectations.

Okay. Great. And then I had a follow-up. Can you just give us, I guess, a little bit of insight into the level of competition between Computershare and Equiniti. I feel like it's like a happy duopoly, but is there an opportunity as you add these services and potentially differentiate the platform as you take over, is there an opportunity for Equiniti to gain share in your mind?

Yes, great question. There's a little bit of back to the future for me, having spent many years leading the New York Stock Exchange. It's not an entirely dissimilar market structure. So I can speak somewhat authoritatively on it, even though we haven't closed on the transaction and still have several months here to get the deal completed. There is absolutely an opportunity to grow market share. In fact, we've received inbound from multiple customers from other transfer agents in just the last week who have acknowledged that having one unified transfer agent ledger. In other words, we don't have a crypto transfer agent working together with a traditional certificated share transfer agent, which introduces great complexity to the issuer. We have one traditional ledger has already been -- has been appealing message for us.

I will say the retention rates for both Equiniti and competitors are fairly high in this industry. And so the battleground is often on new listings, IPOs and then slowly growing the share from the installed base, slowly. So this isn't something that's going to flip overnight from 50% market share globally to 75%. But clearly, we will have a better mousetrap, and we are going to accelerate our build efforts, our investment efforts. You saw a little bit of that, as Dave highlighted in the first quarter.

And if I can editorialize for a second here, I know it's going to sound like an elliptical answer. I wanted to give everybody a sense of the context here. It became clear to us and frankly, to many in the industry about a year ago that the unlock here for tokenization is the transfer agent. And the reason is the transfer agent works hand-in-hand with the issuer and only the issuer, only the issuer. If you remember one thing from this earnings call, please remember this, only the issuer can allow for a token to be the share of stock in the company. No one else can do that.

And so when that really dawned on us as it dawned on others, Dave and I decided to zig when others were zagging, and we said, we need in one fell swoop to have a unified transfer agent ledger and thousands and thousands of issuers. And so this Equiniti deal has been in the works since the week of Labor Day 2025. And in fact, we've been moving towards an announcement in earnest here most of 2026. And so we have been investing in our capability to acquire these assets, integrate this business, do it in a thoughtful way and preparing for this day for many months. This isn't something that was flash or came out last week. And so you're seeing those investments, and we will be prepared.

Your next question comes from the line of Joseph Vafi with Canaccord Genuity.

Do you think you could frame -- it's early days, but the revenue opportunity coming from an issuer that is obviously on Equiniti today that would add a tokenization option on their equity and how that may look just from an issuer perspective and then a broader ecosystem revenue opportunity play?

Yes. Joseph, can you just reask the first part of the question? Are you just saying like how far is the day when somebody can have tokenized stock available? Is that right?

Well, not really. Well, more like if an issuer decides to provide a sleeve of their stock in a tokenized form, what does that mean for Equiniti Bullish from a revenue perspective, maybe providing that service? And then from there, what does it mean kind of in a broader ecosystem opportunity for the company, providing that stock service, both in traditional electronic and then tokenized form.

Yes, yes. No, excellent. Great question. I get it. It's kind of, hey, we're trying to build a financial model for something that's never been done before. Give us a little more context and contour around it. I'll just -- I'll let Dave offer a few words. I'll just highlight a couple of things.

One, this is not pie in the sky or on the come. This has actually been done by a great public company called Bullish. So last week and part of why this announcement really resonated, the Bullish Board on Monday night voted to tokenize the shares of Bullish. And in fact, we went ahead and minted, I think it was 151 million of shares on the Solana blockchain. And so we didn't so-call it kind of tokenize, as you called it, a sleeve or a portion or a single class of shares. We just tokenized all of our shares, which is to say we just added a characteristic to shareholdings, which is they can be in tokenized form. So you don't have to ask -- if you're a Bullish shareholder, you don't have to ask, hey, can you please go through some cumbersome process to tokenize your shares. They're all tokenized. And if you want to withdraw them, you can withdraw them. And it's on the Bullish Investor Relations website.

What Dave highlighted earlier that I'll highlight again, the thing that will grow very, very rapidly in 2026 is the ability to then do some very interesting thing with those tokens. That's the beauty of blockchain technology. And for those of you who haven't gone down the rabbit hole, the programmability and the composability are what create endless opportunities for what you can do with those tokenized shares. I haven't even mentioned on this call the rise of AI agents and the intersection of tokenized shares with AI agents. But it's hard for any of us to comprehend exactly how powerful that combination will be. Just think back 2 years ago for the very first time you logged into ChatGPT versus what you can accomplish now with Claude Cowork.

So when you think about, hey, what will be the precise financial model here I'll just start by saying it's very difficult for us to enumerate all of the opportunities for us to grow our financial model in really exciting ways. At a base level, can we charge for tokenization services to the issuers? Of course. Can we make incremental money from trading tokenized securities on our platforms where we're approved on both sides of the Atlantic? Obviously. Will we be able to add liquidity services to help these tokenizations be successful, much like we offer liquidity services for stablecoins, which are simply the tokenized U.S. dollar so that they can be successful? Of course. And this creates exponentially more opportunities to do so than the 40 or 50 stablecoin issuers that are in existence today. We're talking about global security issuers in the dozens of thousands all around the world.

So those are the obvious ones that we can point to. But the less obvious ones are how are we embedding fee infrastructures and revenue models into ongoing trading of the tokenization or that intersection of AI agents or the intersection with DeFi platforms over time. There are some that we just -- it's kind of mind blowing, and we haven't yet put into our own financial models. And so I'm not going to try to convince you to do it in yours.

Yes. And Joe, I'd just highlight again, right, we stick by the guide for the medium-term outlook period of approximately 6% to 8%. But as Tom mentioned, a lot of these things are unfolding in real time. The existing transfer agent service, as I mentioned previously, is essentially a tax without any value add. It's a fairly low cost to a public company issuer. We believe that there's substantial value that will be provided via tokenization, and we can substantially increase the cost of the service without actually having it be terribly expensive at all for the issuer and still being very good value for money.

When it comes to the larger parts of our business away from just the specific TA revenue stream from the issuer for tokenizing their shares, Tom mentioned a lot of different angles that could flourish. I would just say that we see new opportunities with blockchain networks, stablecoin issuers, tokenized treasury issuers and even retail distribution partners similar to what we pursued on the spot trading side to enhance the revenue growth over time. We're working through all of those, frankly, in real time. And when we get back to the desk, that's what we're going to spend all of our time doing. And we look forward to keeping everyone updated as we move through the year on our progress.

[Operator Instructions] And your next question comes from the line of Ed Engel with Compass Point.

Just trying to expand on that last question. Do you have any information on revenue per institutional customer for your existing SS&O business or potentially range of that, that we could potentially kind of use as a guidepost as a long-term target for cross-selling some of the issuer Equiniti?

Thanks for the question. We haven't provided any specific disclosure on the exact number and average price cost of the liquidity services offering. I would note that there's a bit of a range, including larger scale industrial relationships such as our Solana collaboration, back to our regular way on-exchange liquidity services, which would be kind of a fraction of the revenue we generate from some of the more larger industrial partnerships with stablecoin issuers for our treasury, Solana network partners and others. We do see a large opportunity for liquidity services to be applied to the 3,000 public company issuers that Equiniti has and the additional ones that we intend to win over time.

We're too early to begin sizing that opportunity. But as we mentioned and what we want to convey generally is we see the surface area for incremental revenue growth to be extremely large. And we plan on working through that over the course of the back half of this year. We look forward to updating everyone, and we have a clear line of sight into where we think the plan will land and more context and visibility that we can provide, we will do so.

Yes. And I would just...

Yes. Go ahead, go ahead. Sorry.

Yes. I mean we're a customer of Equiniti. And so we know what we pay, and we know what our liquidity services customers pay. And you're talking about like just 2 different -- we're just playing 2 different games. So our liquidity services deals often are 7 figures, whereas we're in the relatively low 5 figures for what we're currently paying for just kind of straight transfer agent. And so that's one of the beauties of this transaction is the ability to provide much, much higher value services such as our liquidity services to really ensure and enable that as these companies make this leap to the tokenized world and they take advantage of these real benefits, we're going to be able to provide this much higher value service to them, which they love. As you know, as we've talked about, our liquidity services customers are our happiest customers because the service is really quite valuable. So they will benefit from it. We will benefit from it in terms of a financial model.

That's great color. And then on the OpEx pull forward for some of the tokenization investments, how do you think about building versus buying here, especially just given how many startups in the space? Or is it too early to really M&A here? Or it sounds like you guys are focused on doing this internally?

Yes. It's kind of the way we look at everything. I'm sitting in a room here with Liam and Mike. We've probably looked at 250 companies. The problem we have, the darn problem we have, we are very disciplined buyers. and we have a great team of native blockchain, PhD engineers, par excellence, second to none in the world. So we can just do it ourselves. And so we never say, oh, we're going to go buy in this area, and we'll just put the product road map on hold. That's just not how we roll. We'd much rather build it ourselves and create an organic solution. But at the same time, we talk to everybody. And if somebody wants to believe in the vision and buy into the vision and be reasonable about the value of their own business, we're open to have the conversation. It's no different here.

The nice thing is we've already been building essentially a transfer agent. We got the -- as we told you back in Q3, we got our own regulatory license. We weren't waiting for an Equiniti to come along. We already had the smart contract engineers and in fact, have had them from our founding. We are already building smart contracts. We're already bridging layer 1 to layer 2s. We are already doing tokenization services to stablecoins, as we've talked about many, many times with you in the past. And so we don't have to go buy anything. We're already a leader and in the lead transaction, but we're open to it, and we will continue to have those conversations.

Yes. And I'd just reiterate, as we go through time here, pursue our goals and our strategic ambitions, we will never be put in a position where we have to buy. That is what I reiterate time and time again around here. We will build and then you're not forced to buy and you're in a better position to buy when you want to. So we'll continue to pursue our ambitions through that lens. We will build. And if we want to buy, we'll be in a strong position to do it because we won't be beholden to any seller in an event that we have to buy. That will never happen to Bullish.

Sorry about that, Stephan. (sic) [ Ed ]. I appreciate you asking those great questions. I just want to once again say thank you to all of you. We'll be back next quarter sharing a lot more information, as Dave described, not just on Bullish but also on the pro forma company, including the strategic assets that we acquired last week, really give you a sense of where all that's headed both in 2026 actual results, but also kind of into the future. Thank you so much for being here. This is going to be super exciting. It's the most fired up I've ever been in my career. This opportunity to take the global securities market and put it on to a new programmable, customizable technology platform with tons and tons of benefits for issuers and investors is going to be a blast. Go Bullish.

Ladies and gentlemen, that concludes today's call. Thank you all for joining. You may now disconnect.

Thank you for standing by. My name is Kate, and I will be your conference operator today. At this time, I would like to welcome everyone to the Bullish to acquire Equiniti. [Operator Instructions]

I would now like to turn the call over to Michael Fedele. Please go ahead.

[Audio Gap] Executive Officer, Tom Farley, Chief Financial Officer, Dave Bonanno; and Director of Corporate Development, Liam Foley. This call will contain forward-looking statements, including those relating to our proposed acquisition of Equiniti, the anticipated benefits, strategic rationale of the transaction, the expected timing and closing conditions of the transaction and the business opportunities following the transaction.

These statements are not assurances of future performance. They are subject to risks and uncertainties, and our actual results could differ materially. Such risks and uncertainties include, among others, the possibility that the transaction may not be completed, failure to obtain required regulatory approvals, the possibility that anticipated benefits of the acquisition may not be realized and other risks related to the integration of Equiniti's business. For more details on these risks, please refer to today's earnings press release and our SEC filings, including our 20-F dated March 9, 2026.

We undertake no obligation to update or revise any forward-looking statements. This call will also include a discussion of non-IFRS financial measures. A reconciliation of these metrics to the most directly comparable IFRS metrics can be found in our press release and presentation, which also contain additional information regarding non-IFRS financial measures and key performance indicators.

I'll now turn the call over to Tom.

Good morning. I remember walking into the trading pits of the New York Board of Trade back in February 2008 and seeing paper everywhere. carbon copies, handwritten tickets, manual processes, every trade left a physical trail of friction. As President of the New York Board of Trade, I had a front row seat to one of the great market structure transitions of our time, the move from open outcry and paper-based processes to electronic trading. That transition changed everything.

The paper era was rigid, opaque, error-prone and slow. The electronic era brought speed, scale, transparency and access and improved the market for everyone, traders, investors, brokers and issuers. Today, we are standing at the edge of another generational upgrade. Blockchain technology has laid the foundation for the next era of market structure, the blockchain era. This is capital markets reimagined as a programmable layer.

Assets are no longer just records in fragmented databases. They become programmable, self-custodial and continuously functional through tokenization. Tokenization is the process of turning traditional financial assets into blockchain-based assets. But that definition understates the importance, the significance of what is happening.

Tokenization does not simply move an asset from one database to another. It changes what that asset can do. Traditional assets are static. They sit inside fragmented systems. They settle slowly. They require reconciliation. Corporate actions are operationally complex. Ownership data is often delayed or incomplete or scattered across multiple intermediaries.

Tokenization turns static assets into active infrastructure. A useful analogy here is the shift from the typewriter to the computer. The typewriter was not broken. It worked. Every page you produced, it was frozen the moment it was typed. If you made a mistake, you just retyped it. If you wanted to share it, you mailed it or faxed it. If you wanted to find it later, you searched a filing cabinet.

The computer changed what a document was. A document became editable, searchable, shareable, programmable and connected. Tokenized assets are the computer in this analogy, of course. They transform an asset from an inert record into a living piece of market infrastructure. Why does this matter?

It matters because tokenized assets can deliver, first, always-on infrastructure. We live in a 24/7 world, but yet our core markets are still closed for more than 80% of the week. Tokenization enables assets to be traded, monitored and serviced continuously. Second, tokenization offers instant settlement. Ownership and payment can move together through atomic settlement. That reduces delay, reduces reconciliation and reduces counterparty risk. Third, tokenization offers a new dynamic functionality. Dividends, splits, votes, tender offers, compliance checks, corporate actions, they can all move from manual workflows to programmable execution. And this is where tokenization also intersects with one of the most important trends in the world, AI agents.

AI agents will not be able to operate efficiently in markets built on fragmented records, manual workflows, delayed settlement or opaque ownership data. Agents need systems that are predictable, rules-based, machine-readable and executable. Tokenized assets provide exactly that. A tokenized security can carry permissions. It can carry the compliance logic, ownership data and transaction rules directly in its infrastructure, in its code. That means AI agents can eventually interact with assets in a far more functional way, checking eligibility, routing transactions, executing instructions, monitoring events, many other use cases.

In other words, tokenization does not just modernize markets for humans, it creates the asset infrastructure that autonomous software can also use. That is why this is such a powerful shift. The full scope of innovation is impossible to predict, but the direction is clear. Tokenization adds capabilities, control, customizability and automation to the core of capital markets. It writes the next chapter of market structure. The market structure revolution has already begun.

Digital commodities and fiat have already migrated to the blockchain era. The first major asset successfully tokenized was the U.S. dollar in the form of stablecoins. Stablecoins have grown from 0 to roughly $300 billion in market capitalization with many trillions of dollars of payments volume per year. On our Q3 earnings call in November, I said that stablecoins were only the beginning.

Tokenization was still in the first inning. I described the future where substantially every major asset class would eventually move on chain. Since that call, in Q3, the market cap of non-stablecoin tokenized assets has grown by more than 50%. And that is encouraging, but it has grown from roughly $20 billion to $30 billion.

In the context of global capital markets, $30 billion is still tiny. It is smaller than hundreds of individual S&P 500 companies. So why are we so excited? Because the global securities markets is approximately $270 trillion. $270 trillion and tokenized securities are next. Markets do not cling to inferior infrastructure forever. Over time, markets migrate towards speed, efficiency, transparency and lower cost and tokenization is the next inevitable step.

To unlock this massive $270 trillion opportunity, we looked around and asked ourselves, what type of service provider does the market need to catalyze this growth? We identified 3 critical characteristics that are needed to be the ideal, helpful, valuable service provider to catalyze large-scale adoption of tokenized securities.

First, we needed an end-to-end tokenization stack. Second, we needed a unified ledger that can connect traditional finance and blockchain-based assets. And third, we needed a broad base of blue-chip public companies to collaborate with and to make scaled tokenization of securities a reality. Bullish already had deep tokenization capabilities in-house, as those of you who have been following the company know. But we did not yet have the full traditional finance ledger infrastructure, and we did not yet have the direct issuer relationships required to drive adoption at scale. That is why today's announcement is so important.

Today, Bullish announces the acquisition of Equiniti, a leading global transfer agent with more than 2,500 public market issuers on its client list. Equiniti is a truly unique asset. It has sticky recurring revenue. It has average client relationships of more than 15 years. It serves thousands of issuers, including approximately 35% of the S&P 500 and more than 50% of the FTSE 100. It even processes $500 billion in issuer payments per year that Equiniti makes on behalf of its customers, a notable secondary opportunity for future platform modernization.

Equiniti has what cannot easily be built, trusted entrenched relationships at the core of the issuer ecosystem. That is exactly the infrastructure needed to bridge traditional capital markets into the blockchain era. By acquiring Equiniti, we are assembling under one roof the 3 elements required for tokenization to become real at scale, the technology stack, the ledger infrastructure and the issuer network.

Together, Bullish and Equiniti become a true force in the tokenization megatrend. Bullish is one of the largest and fastest-growing global regulated digital asset exchanges and information services businesses. Equiniti is a leading global transfer agent with approximately 20 million registered KYC'd shareholder customers that are simply a wallet away from accessing the benefits of tokenization, $0.5 trillion in annual dividends processed and thousands of blue-chip institutional clients. Combined, we're creating a tokenization powerhouse with approximately $1.3 billion in 2026 revenue and $500 million in pro forma and combined EBITDA less CapEx before any transaction synergies.

There is a useful historical parallel here and one that I'm personally familiar with. At the turn of this century, ICE acquired the International Petroleum Exchange in London and the New York Board of Trade in New York. ICE combined world-class technology, a massive wave of electronic trading innovation and established exchanges with customers, contracts and cash flows, established exchanges like the International Petroleum Exchange and the New York Board of Trade.

The result was one of the most valuable exchange businesses ever built. This transaction follows the same strategic logic. We are combining a business with customers, cash flows and embedded market infrastructure with a business built for innovation, growth and the next era of market structure, the blockchain era. Equiniti's end-to-end support of issuers on traditional rails is the perfect complement to Bullish's blockchain capabilities. Together, we believe we are creating the world's largest blockchain-enabled issuer services provider.

But before I go deeper into the 3 elements required for tokenization success, it is worth explaining why a transfer agent is so critical. The transfer agent is the foundation of the capital markets ownership stack with legal authority to say who owns what. Brokers, custodians, clearing agencies and downstream ledgers all depend on the transfer agent doing its job. The transfer agent maintains the official shareholder registry, the ground truth record of ownership, if you will. Tokenization works best when the token is not merely an abstraction of ownership, not a receipt or some sort of synthetic exposure, but the actual ownership record itself.

To make that possible, the transfer agent must be able to write ownership to the blockchain either instead of or alongside the traditional ledger. Without the transfer agent, a token is just a receipt. With the transfer agent, it becomes legal title. That places the transfer agent at the very center of what we expect to be a multi-decade transformation of global market structure. Bullish is equipped to offer end-to-end tokenization services with this announcement.

We can support token design, token engineering, issuance, compliance, operations of the token, but we couple it with value-added services like distribution or secondary trading of the token, liquidity provision and market visibility through our CoinDesk and Consensus brands. These capabilities are part of the Bullish DNA and got stronger today.

Our blockchain and token engineering teams have been building since our inception in 2020. We can design smart contracts for tokenized shares, deploy those contracts and support the creation and operation of tokenized assets. We can monitor activities, support regulatory compliance and manage token operations once an asset is live, including over time, increasingly automated corporate actions, as I described earlier.

We can also support secondary market distribution across venues and provide deep institutional market making. And as I said, through CoinDesk, we bring marketing, research coverage and global visibility. Equiniti's existing investor relations and public relations capabilities will only further strengthen that offering. This is not a narrow product. It is an end-to-end platform for the $270 trillion tokenized securities era. The ability to tokenize assets means very little without a trusted way to track ownership. That is where Equiniti's transfer agent ledger becomes so important. Bullish and Equiniti have already collaborated to build a single source of truth, a unified ledger that can move between Equiniti's traditional finance rails and Bullish's crypto rails. We will have more to share on that later today.

We aim for a unified ledger to serve as the legal authority for holdings across Equiniti's nearly 3,000 public companies. It will track ownership, support corporate actions, facilitate proxy voting and remain compliant through strong KYC and AML capabilities. This unified ledger is critical. Issuers will not accept a fragmented world where one system tracks traditional shares and another system separately tracks tokenized shares. They need simplicity.

We're hearing that from issuers day after day. They need one authoritative record. They need a ledger that can track both certificated shares and tokenized shares in a single compliant real-time environment. And we are not just describing that as a future operation. We have already built it. The future is now. By combining Bullish's crypto expertise with Equiniti's transfer agent leadership, we have created a unified ledger that can track tokenized shares and certificated shares in real time. The third requirement is adoption from thousands of blue-chip issuers.

For tokenization to succeed, blue-chip issuers must see real value in tokenizing their shares. There are approaches already in the market today that essentially create synthetic exposure to real-world assets and call these tokenized securities. These products may look like shares, but in substance, they are often more like depository receipts or [ IOUs ] or something else. That is not the future we believe in or at least not the future we are interested in. Synthetic tokenization can further obscure ownership. Issuers do not want that.

We will be guided by issuers. It can create distance between the investor and the issuer, and we do not believe institutional investors will accept that as the end state for tokenized securities. The durable opportunity here is issuer-led tokenization. Our vision for tokenization means the issuer is directly involved at all steps and benefits. It means the token can represent real ownership, real rights, real compliance and real corporate actions. That is the approach we believe will create the largest and most enduring opportunity over time.

And issuers will quickly understand the benefits, faster settlement, modernized operations, improved transparency, better control, programmable functionality, closer relationship with their investors and perhaps most importantly, new pockets of liquidity. Equiniti gives us access to thousands of the world's most important public market issuers instantly. That makes this transaction one of the most powerful catalysts for the next era of capital markets.

Before I hand it over to Dave, our CFO, let me leave you with this. We are still very early, just like I said in the Q3 earnings call in this tokenization push. We believe it will be a 20-year-plus transformation of market structure. And Bullish has now assembled something unique, 3 structural moats that reinforce one another. First, an end-to-end tokenization stack spanning origination of the token, issuance of the token, but also support of the token through trading liquidity and visibility.

Second, a unified ledger that bridges the old school traditional certificated world with the tokenized world, a platform that speaks both languages at once.

And third, thousands of the world's most important issuers are already embedded in our infrastructure and positioned to benefit from this transition. This is a one-of-one platform. It brings together regulated digital asset infrastructure, issuer services, transfer agent authority, liquidity, data, media and blockchain engineering. We believe this combination positions Bullish to lead the next era of global capital markets, and we're thrilled to be leading that charge.

Good morning, everyone, and thank you, Tom. Before turning to the specifics of today's transaction, I want to highlight that this acquisition delivers on the 5 core financial pillars we discussed during the IPO and second quarter earnings call. As a reminder, those pillars are organic revenue growth, diversified revenue streams, operating leverage, maintaining a highly flexible and liquid balance sheet; and finally, value creation through M&A.

Today's transaction delivers on all 5 of these pillars. First, Bullish will increase our customer base by more than 10x, providing Bullish with a massive captive audience to power future growth. Second, it further diversifies our revenue streams across products and geographies. Third, it creates significant operating leverage, driven by accelerating revenue growth and continued cost reductions throughout the medium-term outlook. Fourth, the transaction also preserves our net liquid asset position to drive future growth. And finally, it delivers on value creation through M&A. Today's transaction will position Bullish directly at the center of the coming tokenization wave with significant scale and approximately $1 billion of expected free cash flow over the medium-term outlook. It is also significantly accretive on a pre-synergy basis when compared to our 2026 guidance and annualized first quarter adjusted transaction revenue prior to any of the synergies detailed in our medium-term outlook.

Turning to the specifics of the transaction on Page 12 of the presentation. Bullish has agreed to acquire Equiniti for $4.2 billion with anticipated closing in January of 2027, subject to regulatory approvals and other customary closing conditions.

The acquisition consideration consists of Bullish assuming Equiniti's $1.85 billion in debt and issuing approximately 61 million in new Bullish shares, equal to approximately $2.35 billion based on Bullish's 30-day volume weighted average price of $38.48 per share. Following the close of the transaction, we expect Bullish to have approximately 222 million fully diluted shares outstanding. The transaction also maintains Bullish's strong balance sheet. We expect a net liquid asset position exceeding $500 million post closing at current Bitcoin price levels and supported by rapidly growing earnings power and free cash flow.

Turning to the combined 2026 financial outlook on Page 13. We've shown Bullish's existing 2026 guidance and 1Q annualized adjusted transaction revenue, combined with our expectation for Equiniti's 2026 financial performance. As a reminder, the 2026 combined financial outlook does not include any synergies. This results in a combined 2026 outlook of $1.3 billion of adjusted total revenue and approximately $500 million of adjusted EBITDA less CapEx.

Now turning to our medium-term outlook covering the 2027 through 2029 period on Page 14. We expect total revenue growth to accelerate during the period from approximately 6% to 8% plus versus the combined 2026 financials, driven by approximately 20% growth in tokenization and blockchain services and relatively flat traditional transfer agent revenue and interest income.

For the combined cost base, we anticipate $25 million to $50 million of additional cost takeout between 2027 and 2029 as compared to the combined 2026 financial results driven by $50 million to $75 million of cost reductions being offset by approximately $25 million of investment into new infrastructure and product offerings.

Finally, we expect a combined effective tax rate of approximately 20% between 2027 and 2029, although cash taxes are likely to be lower than 20% during that period. Finally, we expect the combined revenue growth and cost structure to result in a compelling financial profile with adjusted EBITDA less CapEx growing nearly $100 million per year over the medium-term outlook period, leading to approximately 50% adjusted EBITDA less CapEx margins exiting 2029, EPS growth of approximately 20% per year and cumulative free cash flow of approximately $1 billion.

And with that, I'll turn it back to Tom before opening up the call for Q&A.

Thanks, Dave. I just want to reiterate how excited we are. We think this positions us to be the global tokenization leader, and we believe the tokenization of global securities markets is a $270 trillion opportunity as I've described. And we're in the early innings, and we hope that all of you who dialed in this morning will be along for the ride.

And with that, we'll open it up for questions.

[Operator Instructions]. Your first question comes from the line of Daniel Fannon with Jefferies.

So I just wanted to follow up on the longer-term outlook or I should say, the medium-term outlook. Obviously, longer term, Tom, I understand the focus and outlook for tokenization. But when I think about the 6% to 8%, can you kind of break that down a bit more? And ultimately, as you think about the 20% growth in tokenization and blockchain services that you're assuming, I just want to get a little bit more underneath is, how you came up with that assumption.

Great. Thanks, Dan. Appreciate the question this morning. The assumptions in our medium-term outlook are a combination of our expectation around the pace of equity tokenization and our rollout of tokenization services, expansion of our stablecoin business as well as trading of securities and other ancillary services. As this technology is adopted throughout the medium-term period, we expect that to accelerate. As Tom mentioned, we are currently in the early days of this trend, but we are confident that it will play out over a 3-year period, and we believe we're perfectly positioned to offer a variety of different services into our customer base with accelerating growth throughout the period.

Understood. And then I guess just a follow-up on the history here of Equiniti's growth, how their market share as a transfer agent kind of evolved over the last couple of years. It seems like you're assuming pretty low growth in that business going forward. But just curious in the context of they operate in a pretty competitive environment. I think one of the peers announced a similar offering today as well in terms of what you're looking to do. So I just want to understand their competitive positioning a little bit better in terms of how they've operated over the last couple of years.

Yes, Dan, thanks. The global transfer agent industry is roughly a duopoly between Equiniti and Computershare. It's been a pretty balanced market with limited growth in recent years. We expect the traditional transfer agent business of Equiniti, again, to be roughly flat. Some of that will be us transferring business over to the tokenization platform that may decrease or flatline some of the existing revenue. We expect the interest income there to be flat. But generally speaking, it's been a duopoly with limited growth really due to consolidation and fewer public companies. We also expect that, that trend is likely to reverse or at least stop being a headwind over the medium-term outlook.

Yes. Perhaps staying the obvious in case anything is lost in the shuffle, Dan. The opportunity here is tokenization. And so when Dave is talking about growth, we're separating out the tokenization growth, which we expect to be significant. And he's separating out growth that would come from tokenization versus growth that would come from the existing 4 corners of the business.

Your next question comes from the line of Kenneth Worthington with JPMorgan.

How much of Equiniti's revenue today comes from traditional TA versus the blockchain services? And to what extent is Equiniti servicing stablecoins in the digital commodities markets today? And then just on your point on tokenization, why do issuers want to tokenize their stocks? If the existing system works and it's time tested, do they care enough about quicker settlement to make this change? And my thoughts were there needs to be sort of a cost saving story or a valuation-enhancing story. Do you think that is there to encourage that tokenization push?

Ken, thanks a lot. Will you just repeat the first part of the question? I missed it. I got the second part. Apologies.

How much of Equiniti's revenue is coming from traditional TA versus the blockchain?

Yes. Got it. So Ken, it rounds to 0, the blockchain revenue that Equiniti has today. That's part of the beauty of this transaction. And I referenced it in my prepared remarks. We've actually been working with them for months now, separate and apart from this transac -- well, related but separate from the transaction. And we brought to bear our blockchain capabilities. We've been very impressed by their technology [ stuff ] and actually their blockchain know-how, but this is the top of the first inning for them in terms of blockchain services. That's why it's so exciting. And so you're going to see from them today actually an integrated transfer agent capability for the very first time to be able to handle tokenized securities. So that's brand new. So I think that answers the first part of your question.

And then the second part of the question, I would just highlight that issuers don't necessarily see the market working as well as you implied. I was on the other side. I had an issuer advisory council when I was leading the New York Stock Exchange. And you would not believe the negativity you hear from CFOs and IROs and general counsels about the way the market works today. There's intermediary after intermediary, distancing the issuer from what's actually happening with the stock. There's lots of opacity in terms of who's buying what, why is it being bought? How is it being bought? Where is it being stored? Where is it being recorded? And the issuers, so the CFOs, the day, Bonanno, if you will, are always looking for new pockets of liquidity, and that's very, very difficult to do in a rigid financial system that's so prescriptive and built on, in some cases, 50-year-old technology, but at a minimum, 20-year-old technology. So to put it succinctly, the benefits to the issuers are obvious. 24/7 is going to bring new pockets of liquidity, more transparency around my stock is more information. And then also that they're just going to make their investors happy because of the investor benefits that come along with it. Now I'm obviously a cheerleader for this tokenization trend, Ken, and it's only going one direction. I will say, just to temper the enthusiasm, the time line, it's the time line of this that's uncertain, not whether this wave is happening. And when I say the time line is uncertain, there is -- there are some regulations to be sorted out, and there are some protocols to be sorted out so that we can see the type of liquidity in the tokenized world for trading of these tokenized shares that we see in the certificated share world. But aside from that, the benefits to issuers are very clear, will be very clear. And we've already spoken to issuers, and we're hearing that directly from them.

Got it. And then Equiniti makes a lot of money from interest income. Is there a float component to the business? And how interest rate sensitive is the interest income?

Yes, Ken. As you can see on Page 13, Equiniti, we're expecting to have approximately $230 million of interest income that is from float. As Tom mentioned earlier, Equiniti processes $0.5 trillion of payments mostly related to dividends from its corporate issuers. So that is float income. The business has interest rate sensitivity. We can detail that more on the call -- our earnings call in a week or so. But there is a bit of interest rate sensitivity there. The mix of that float is about 2/3 U.S. dollars, 1/3 pounds. And it's currently unhedged, and we'll be considering alternatives for that as we go through the back half of the year.

Your next question comes from the line of [ Aditi Balachandran ] with Citi.

Congrats on the announcement. Really excited to see you guys diving even deeper into the tokenization space. So I guess I had a bit of a more macro question, specifically surrounding clarity and regulation. We've seen a little more movement in the last few days. But I guess, Tom, what are your views on the Clarity Act as it stands right now and with what it says in regards to tokenization? And what happens if this current momentum that we're seeing in the last day or 2 stalls again?

Thank you. Great question. And I'll refer back to Ken's question and my comments there about the time line. One thing that would certainly be positive for the time line and kind of shifting the global securities tokenization adoption curve to the left would be a successfully passed Clarity Act bill because the Clarity Act brings a lot of clarity, apologies, to what is the security, what is the commodity, exactly what are the rules of the road, and it will also give a lot of comfort to our highly regulated broker-dealer brethren, other custodians, even other transfer agents to really move forward and start ramping up the tokenization push. I'm glad you brought it up. The one thing I would say is there's been a breakthrough on the stablecoin impasse, the stablecoin yield impasse. But there's still just all sorts of debate going on in this bill. And a lot of it is coming from our brothers and sisters in the digital assets community. And I would just implore them to realize, the time is now. Just -- it's as good as we're going to get. Nobody is ever going to be perfectly happy with legislation. That's a good thing. And it's time to get behind this and start pushing in the same direction because the more we in the digital assets community are pulling it in different directions, the more we're going to risk missing this moment and not getting a market structure bill, which could take us back 5 years to a time with a lot of ambiguity that none of us wants to go back to.

Your next question comes from the line of Owen Lau with Clear Street.

Congrats on the deal. On Slide 14, I want to go back to the 2029 exit EBITDA, run rate EBITDA less CapEx margin of 50%. I think if I do the math, your pro forma margin is about 39% or so. I know you have some like cost optimization and reduction, but could you please give us more detail how you can go from the pro forma margin to 50% plus in 2029?

Yes. Thanks, Owen. And your math is directionally correct there on the starting and ending margins. The margin expansion is driven by 2 factors. First is the revenue growth that we expect to experience during the period. Again, the expectation we're setting is that accelerates from approximately 6% to 8% plus as we exit 2029. And then on the cost side, you can see that we expect $25 million to $50 million of additional combined cost reductions versus the 2026 [indiscernible] combined base case. That's driven by synergies, partially offset by investment into the platform. Liquidity has spent significant resources and time in the last couple of years modernizing their infrastructure and rightsizing their workforce. And so we believe the company has been on a very strong trajectory with regards to cost control and takeout. We expect that to accelerate during 2026. And frankly, for Bullish to be a beneficiary of a lot of hard work in '26, that flows through in '27. So we expect the cost takeout to actually be more front-loaded than backloaded. -- and again, the revenue growth to be accelerating throughout the period.

Got it. And then maybe a follow-up on the potential revenue synergy. Is there any potential like synergy on the revenue side between Bullish and Equiniti?

Yes, absolutely. It's part of the reason -- it's a major reason that we're doing the deal. We expect during the outlook period to -- or there to be significant adoption of tokenization. We believe we're perfectly placed to offer a highly unique end of one type product into the market. We think there will also be additional synergies around trading visibility, liquidity, stable coins and more. So we're incredibly excited. And I actually think that we're doing this call from our consensus conference down in Miami. And both Tom and I, our phones are blowing up right now with new business around this. And so we can't wait to get down on the floor, meet our partners and new partners. And we expect that as the -- as time unfolds and we move forward here, we're going to see some really interesting new use cases, products, services and plenty of revenue synergies.

Owen, I would just emphasize, that is why we did this deal. It is revenue synergies. That is the -- if I could summarize the entirety of the strategic rationale, it is revenue synergies, maybe being a little bit glib. What we focused on in our model is just the sort of plain vanilla tokenization trend. So okay, we've got these issuer customers, they're going to be coming on board in the tokenization train, and we're going to be there to provide these tokenization services for them. Sitting down with them, designing the smart token, writing the smart token, operating it, operating a white list. Keep in mind, we have 20 million shareholder customers already white listed. They are a wallet address away from being fully white listed tokenization shareholders. And then we can take the Bullish services, which, by the way, were instrumental in tokenizing the U.S. dollar stablecoins. Remember, we have substantially every stablecoin customer, all every one of the challenger stablecoins as an active customer of Bullish, providing a whole number of tokenization services to them. So that's I think the secondary trading, listing and compliant venues all around the world, the provision of liquidity, the marketing of those tokens, writing research on them. Those fit perfectly with the tokenization trend and also are a revenue synergy because now we have 3,000 issuers to be able to sell into as they are issuing securities, debt, equity and otherwise. So that is the deal. We have not contemplated other revenue synergies in here, which trust me, there are others, but we wanted to really focus on the more highly confident, but this is a business with $500 billion of annual payments. As you know, we are stablecoin experts. There is no stablecoins that are used within Equiniti. We know how to use those, and we know how to use those in a very exciting and profitable way. We did not contemplate additional synergies around the Bullish Exchange outside of tokenization. We have not contemplated partnerships with Layer 1 blockchains as we move into this global securities tokenization trend. We've just focused on the core area of revenue synergies to the Equiniti issuers for tokenization services over the window that we've provided.

Your next question comes from the line of Gareth Gacetta with Cantor Fitzgerald.

I was wondering if you could provide any detail on sort of the issuers most eager to lean in throughout this whole diligence process? And also, how important do you think investor demand for the tokenized product is in driving the adoption? Because it sounds like if you create kind of a seamless integrated product behind the scenes, they might not even know which product they're actually trading with.

Yes. I think those are both questions, both great questions. The investor demand will indeed drive issuer demand and to some extent, vice versa. And you know how these things go. You get the early proof points. People realize, okay, this thing is happening. It's not a coincidence that -- just yesterday, I believe, or maybe it was Friday, the DTCC has put out an announcement. We're excited to speak to them. I know Frank La Salla, the CEO, is down here at this conference and look forward to collaborating with DTCC. The New York Stock Exchange has put out multiple announcements about how they will be handling tokenization. The NASDAQ has put out announcements about how they will be handling tokenization. So they're all talking to issuers. We're talking to issuers, and it kind of starts slowly like that. And then usually, there's a catalyzing event. And it's hard to predict what the catalyzing event will be in this case. But all of a sudden, you will see a hockey stick take-up on tokenized securities because the benefits for the investors are obvious and for the issuers are obvious. So once people see, they look over the fence and they go, wait a minute, they have lower cost of capital or, hey, it's cheaper to lend and borrow shares when I trade NVIDIA, who's now tokenized it as opposed to when I trade CoreWeave, which hasn't. And that's when the thing really ramps. For me to predict exactly when that would be is just impossible. I will speak, however, to your question about issuers. I'll give you one example, Bullish. So we have -- as of today, yet last night, our Board agreed to fully tokenize our entire 151 million cap table of shares, and that has been approved. And now investors can go to the Bullish Investor website. They can see exactly how they can withdraw tokens. They can literally withdraw them to a self-custodial wallet, you could withdraw them to a MetaMask wallet or a Phantom wallet as long as they are white listed and on the white list, which we will operate, obviously, for issuers for a fee, goes back to revenue synergies. And that's something that's possible right now. And so investors will fool around with it and they'll say, "Oh, wow, this is really good for this use case. But hey, Tom, we really want you to improve the liquidity". And we'll say, okay, no problem. That's coming. New York Stock Exchange has announced they're launching a tokenized ATF. Bullish has announced they're launching a tokenized ATF. So that's how these things formed up. I lived it. When I went to the New York Board of Trade, I walked on to that floor and I told you about the carbon copies on the floor, there was 0 electronic trading, 0. And when we introduced electronic trading, some places, it went immediately to 50%. Other places, it didn't happen at all, and then there was a catalyzing event. But the truth of the matter is 2 years later, 100% was electronic and essentially 0 was being traded on the floor. And so that's what the transition is going to look like. It's going to be a little messy in the sense that we can't perfectly predict the timing, but that's some of the context for you to follow along at home.

Awesome. That's great color. And maybe could you just provide a quick update on capital allocation going forward? And maybe what do you think the net leverage at close will be and kind of deleveraging going forward?

Yes. So as I mentioned during my comments, we expect at closing to have north of $500 million of net liquid assets that's net of debt. So net leverage will be negative or essentially 0 post closing. And then I mentioned the free cash flow over the period. Not sure yet if we'll go immediately to pay down debt. Some portion of it probably will. But what we like about the transaction is it leaves us in a net cash position still even after assuming the $1.85 billion of liquidity debt and puts us in a position to generate very significant free cash flow. We could delever should we choose to or we can use the free cash flow, excess cash and strong balance sheet to pursue more growth either organic or inorganic.

Your next question comes from the line of Brian Bedell with Deutsche Bank.

Congrats on the deal. Looking for [indiscernible]. Yes. Maybe just go back, I know you said it's difficult to predict, but maybe just want to get a sense of how you're thinking about the U.S. listed equity market right now tokenizing their securities. So sort of maybe by the end of your time horizon, [ year of '29 ], maybe what portion of the market you think does take up tokenization in the U.S. And then also to what extent you see this happening globally relative to the U.S. in terms of the take-up U.S. versus non-U.S.? And can you also tokenize other types of securities with Equiniti's as well?

Yes, sure. Thanks, Brian. Let me take it in reverse order. Absolutely. So a lot of kind of ink is spilled about tokenized equities because we're also programmed from reading the Wall Street Journal, watching CNBC or otherwise to follow the stock market. But the fixed income market is equally interesting to us. And in some ways, Dave and I talk about this a lot. In some ways, we think it's equally ripe for a mapped up, this sort of massive tokenization wave. So the short answer is absolutely yes. And I think we can agree if you just focused on the fixed income market, the fixed income market absolutely needs more transparency and liquidity tools, maybe even more so than the equities world. In terms of U.S., let me take a step back. It's not our intention to -- just to be clear because the preface of your question kind of invokes some words around this. It's not our intention to be a listing venue. Think NYSE or NASDAQ. I've been in that business. That's not our intention to be a primary listing venue. But we will very much seek to provide liquidity solutions and trading on regulated venues, secondary trading unregulated venues.

And then in terms of your -- the portion of your question dealing with what will that adoption curve look like, you've Brian known Dave and I long enough. We do 2 things. We kind of put out guidance that we feel confident in, that's aggressive, but also you can rely on. But number two, we don't bulls*** you. And the truth is we just don't -- we can't precisely predict what that curve is going to look like. And so for purposes of this guide, we just took a very humble approach to it and said, "Hey, what if some small almost single-digit number of issuers moves into this meaningfully single-digit percentage moves into this meaningfully over the near-term horizon. In reality, it is my hope and belief that we will see some pretty aggressive adoption of tokenization because the benefits are just way too persuasive. The good part about the U.S. is the current laws and regs allow for it right now. And as I sit here or as I sit here in 10 minutes when the market opens, as I said, Bullish will have a fully tokenized cap table. The downside is that we have a series of rules called Reg NMS for National Market System around the trading that you really have to step through one by one to integrate the trading of tokenized securities. And that's why the liquidity solutions have followed and will follow the solutions of getting the shares actually tokenized and in the hands of the shareholders. I hope all that made sense. I was trying to answer kind of 3 questions in one.

Yes. No, that totally makes sense. I appreciate it. If I could squeeze just one more in, and that would be this industry is, like you said, it's a duopoly. Do you expect the tokenization industry, the business that you're buying to remain concentrated? Or do you see the potential for more entrants to do what you're doing essentially on the tokenization side and therefore, the tokenization aspect will be more fragmented longer term?

Yes, great question. You need the issuers. You need the issuer. You just -- you can't go issuer by issuer. There isn't enough time. This wave is too powerful and too fast. And you look around the world and there's maybe 2 that have the issuers. So let's start there. And the thing that gets us most excited, Brian, is you also need the value-added services because what we found in stablecoins is it's not dead easy to tokenize the U.S. dollar, but it's not rocket science. You need to have some brilliant PhD engineers who really understand how to architect and build a smart contract. But what you really need to make it success is what we call the success layer. You need the ability to list it on trusted venues where institutions congregate. You need liquidity solutions. Like where is the actual bid and offer going to come from? And you need the ability in order to bridge the liquidity gap from the old school world to the new world, you need to be able to bring visibility to what you're doing and research and marketing -- and no one can do all of that, not even close. So will there be competition? I'm sure because people don't like to ignore a $270 trillion opportunity. Are we particularly concerned? No. We just want to perfect our offering, and we think we're going to be a one of one when this transaction closes.

Your next question comes from the line of Joseph Vafi with Canaccord.

Congrats on this deal announcement. Really, really great to see. I joined a little bit late, but just -- yes, just -- I joined a little bit late, but I was just wondering here for looking at the business and your strategic view of it, Bullish at core as an exchange, but with liquidity services, with some of your other offerings and now this acquisition, you really -- a bigger ecosystem infrastructure almost like player. I just wondering how you look at the business today and your place in the ecosystem and if you continue to look to expand that positioning kind of just away from exchange-based business and into a bigger ecosystem player.

Yes. No, that's great. I mean sometimes we joke that we just don't have imagination. All we do is kind of copy the best business models. I mean I came up in this exchange industry myself. My first, I'll call it, big job was running the New York Board of Trade. We operated a floor-based trading venue, electronic trading venue, a captive clearinghouse for which we owned all of the technology and in some cases, even sold that technology to others. And we actually operated the warehouses, the physical warehouses for cocoa and coffee, some of which sit right there in Brooklyn on New York Harbor. That is to say -- and then I moved on to the New York Stock Exchange, where we offered the actual trading venues, we offer equities and options. We even provided the data services for the entire industry, Opera, the consolidated tape, which is to say, I know no other way to make yourself integral to the ecosystem is to provide a vertical stack of customers so you can meet their customers where they are along the journey and build a really great business while you're doing it. In both cases, that I just highlighted to you, the margins doubled from already healthy bases in those businesses under our leadership and really part and parcel from running this integrated business. At Bullish, we now operate the trading solutions. We operate the clearinghouse, and we operate the infrastructure layer. That is keeping this golden source of truth, the ledger of who owns what. It's very -- in my mind, it kind of flows from the top or from the left to the right, where you have the trader walk in the door looking for trader solutions and then they need to risk manage the positions to the extent there are derivatives like an option through a clearinghouse, but then they also need to be able to keep track of who owns what and who owns legal title and settle the transactions and so on and so forth. So today, we've completed that ecosystem play that we've been looking for, Dave and I have been looking for since we joined full time 3 years ago this past Saturday. And we feel like we now have it, and it's time to really just build and catch this tokenization wave.

Thanks Tom, and nice timing around Consensus.

Another consensus exclusive, we like to say. For any of you who are not here at Consensus, we would love to welcome you next year. Reach out to me if the ticket is in the way because I think when you come and you see this conference, you won't miss it in the future. It's truly an amazing gathering, 20,000 people, mostly institutional, focused on this next layer of programmable finance.

With that, I just want to say, on behalf of Dave and our team here, thank you to all of you. I also want to say in case they're listening to our Equiniti colleagues, we look forward to working with you, and I want to thank them. We're so excited to have them along for the journey and these assets that we picked up today. And we look forward to seeing you on our earnings call actually quite shortly.

Ladies and gentlemen, that concludes today's call. Thank you all for joining. You may now disconnect.

Thank you for standing by. At this time, I would like to welcome everyone to the Bullish Global Fourth Quarter 2025 Earnings Call and Q&A. [Operator Instructions]

I would now like to turn the call over to Michael Fedele, Vice President of Finance. You may begin.

Good morning, and welcome to our fourth quarter earnings call. I'm Michael Fedele, Vice President of Finance, and I'm joined on today's call by our Chief Executive Officer, Tom Farley; Chief Financial Officer, David Bonanno; and Director of Corporate Development, Liam Foley.

This call will contain forward-looking statements, including those relating to our expected performance and business opportunities. These statements are not assurances of future performance. They are subject to risks and uncertainties and our actual results could differ materially. For more details on these risks, please refer to today's earnings press release and our SEC filings, including our prospectus dated August 12, 2025. We undertake no obligation to update or revise any forward-looking statements.

This call will also include a discussion of non-IFRS financial measures. A reconciliation of these metrics to the most directly comparable IFRS metrics can be found in our earnings press release and presentation, which also contain additional information regarding non-IFRS financial measures and key performance indicators.

I'll now turn the call over to Tom.

Thanks, Michael. Thanks, everyone, for joining our call, and good morning. It is great to be with you. I'm Tom Farley, Chairman and CEO of Bullish. We have a lot to cover today. We closed 2025 with strong momentum and have continued to execute on the vision we laid out during our IPO process and in the subsequent quarters. We focus on serving institutions, and we are winning a wave of institutional business in the U.S. and globally.

The next wave of digital assets growth is taking shape in the form of tokenization of real-world assets and the institutional adoption of blockchain technology. I believe this will be a huge 20-year long institutional flood powered by Bullish's purpose-built offerings. In 2025, we executed on our core objectives. We captured the first wave of traditional finance institutions flowing into the digital asset space. We scaled our liquidity services into an indispensable tokenization offering for issuers of stable coins and other digital assets.

We launched options trading in Q4 and scaled rapidly in terms of our market position. We locked down our Tier 1 licenses, including the New York bit license, Mika in Europe and additional authorizations from Hong Kong's SFC and Germany's BaFin and we achieved a key milestone of entering the public markets.

We executed on a strong fourth quarter financially as well. We earned record SS&O revenue of $54.6 million, an increase of 284% year-over-year and our adjusted EBITDA was $44.5 million, an increase of 55% from the prior quarter and 181% from the same period in the preceding year. While 2025 was a great year, I'm even more excited for 2026. For several years now, Bullish has intentionally positioned ourselves at the intersection of 3 strong ongoing trends that are driving digital asset evolution. Trend 1 is that increasing regulatory clarity is requiring infrastructure businesses like Bullish and their customers to operate in a compliant and responsible fashion.

Trend 2 is that the number of traditional finance institutions operating in digital assets is increasing dramatically. And trend 3 is that tokenization use cases are expanding exponentially, including from major asset classes on the back of the successful tokenization of the U.S. dollar via stable coins. These trends happen sequentially and now they're happening all at once with each trend, reinforcing the momentum of the others. We're hitting this inflection point here in 2026.

In 2026, we are laser-focused on our top 3 priorities that position us at the intersection of these trends. First, we will continue our exceptional growth in our exchange, prioritizing growth in the regulated institutional derivatives market as well as building our U.S. presence for all products. Second, we will further establish ourselves as a clear market leader in successful tokenization of real-world assets by scaling our liquidity services offering and widening our tokenization services and global regulatory footprint to meet the market's needs.

And third, we will accelerate our already market-leading positions in the digital assets, indices and insight spaces. While the last 4 months have seen digital asset prices drop precipitously, our business continues to grow, and we were built to take advantage of opportunities created by volatility in bear markets as well.

In fact, we believe that this current malaise will present promising opportunities to grow Bullish organically as well as through M&A. We are more convicted than ever that our institutional positioning is the right approach at the right time. The next big leg of digital assets growth will be driven by institutional adoption. During tough times like these, our strong balance sheet and solid reputation positions us to bring on institutional clients that other less reputable or less capitalized firms simply cannot.

In summary, we expect that Bullish can and will thrive in 2026 despite a rough macro beginning to the year for our industry.

Shifting to the business update. In the fourth quarter and sequentially over each month of 2025, we had all-time highs in monthly active customers and set records for total customer funds on platform and open interest for perps and options. The growth of active trading clients on our platform is accelerating around the world, in Europe, Asia and the United States, we are seeing a wave of institutions onboarding that include notable broker-dealers, divisions of commercial banks, and the world's largest digital assets electronic communications network, for example, among others.

The launch of options has attracted a whole new set of institutional clients onto our platform. These new customers are now initiating trades across our spot and perps products as well. Honing in on the options launch, we went live on October 29. And the uptake in volumes and open interest has been remarkable over just about 3 months. By the end of the quarter, we were over $2 billion in open interest. And earlier this year, we hit a high of more than $4 billion of open interest as well as reaching a high of 29% volume market share.

We are now the clear #2 Bitcoin options platform by open interest globally. The launch phase of our option strategy is complete. We are now focused on continuing to gain share and aspire to be the options trading market leader. Our tight spreads and one global order book continue to resonate with clients and set us apart from the competition.

Our singular order book allows our institutional clients to cross-margin their spot futures and options positions in real time and also to access deep liquidity. We have reacted to client demand and are proud of the progress we have made in the short time since launching.

We're also continuing to add to our regulatory toolkit. We're now registered to act as a transfer agent and we're actively exploring other licenses, including DCO, DCM, broker-dealer and ATS licenses in the United States to help enhance our positioning in the multiyear tokenization mega trend. The ability to gain broad regulatory access throughout the world is a feature of our business model that we believe is rare in our industry and is only becoming more important over time. We intend to list tokenized securities here in 2026, and we're working with the market and regulators to successfully execute on this objective. We look forward to keeping everyone updated on progress throughout the year.

Speaking of tokenization, our liquidity services business continues to find new use cases and deliver exceptional value to our partners. We believe the service is tailor-made for tokenization and we are increasingly seeing demand from asset issuers tokenizing real-world assets.

To take a step back, imagine you're a tokenized asset issuer. To launch that token, you'd need to design the token, write the smart contract code, possibly perform KYC and AML and hold a white list and finally, tabulate ownership. The good news is that you've tokenized your assets. The bad news is that, that was the easy part. For your token to truly be a success, there are several value-added services that you still require.

First, you must get the token listed. The listing is typically unregulated and unregulated venues. Second, you must ensure a 2-sided marketplace with ample liquidity to allow for efficient trading. Third, you must ensure that the token is being marketed properly and is amply visible to the broader market. High-caliber assets also tend to have research reports, research analysts, not dissimilar from many of our friends here on this call, help investors better understand the assets, its value proposition and its potential.

Bullish is now powering our partners' growth with the listing, liquidity, marketing and now research that they need to maximize their success. These value-added services are required both for tokenization of real-world assets such as dollars in the form of stablecoins as well as tokenization of other financial market products. We remain exceptionally pleased with the growth of liquidity services for all of these types of customers.

In Q4, we added IOTA, VeChain, Paxos and Midnight. We've also added Canton, the token for the real-world asset-focused chain. And earlier this year, USD AI, the first decentralized credit protocol that connects stable coin liquidity directly to real-world compute cash flows.

Looking ahead, our pipeline remains strong. We continue with a rapid new listing pace, expecting to list 5 new partner assets, including Fidelity's new stable coin in this week alone. When major financial institutions, stablecoin issuers and other digital asset clients choose a partner for liquidity services, they gravitate to Bullish because we are the only solution of its kind in the market, offering listing, liquidity, marketing and research.

Shifting gears to our Information Services business. CoinDesk Indices completed a breakout year. We served as benchmark data provider for 30 different single-token ETFs launched in 2025 and were especially dominant in the fourth quarter, listing 15 of the 39 new digital asset ETFs brought to market. We're winning mandates from top-tier issuers like ARCC and ProShares, and we're well positioned to win license agreements for upcoming single-token ETFs from other major traditional finance players.

Next week, we expect Intercontinental Exchange or ICE to launch a series of futures benchmark to our CoinDesk Indices. This includes cash-settled futures tracking the CoinDesk 20, CoinDesk 5 and 5 single token indices, including Bitcoin, Ethereum, Solana, XRP and we believe the first regulated exposure to BNB in the U.S. markets. This partnership will better help us integrate our leading digital asset capabilities with ICE's traditional finance customers.

On the Insight side, CoinDesk Insights is among the most recognized brands in the digital asset space, and we've continued to leverage this notoriety to better cross-sell our top customers and drive our flywheel of organic revenue growth across all layers of our business. Our research solutions are also growing since the Q3 2025 launch, and we have had 9 distinct customers pay for our research in the fourth quarter alone, our first full quarter of offering this service.

I'm also excited to quickly touch on Consensus Hong Kong, due to occur next week. The lineup is terrific. The exhibition floor is packed. Enthusiasm around the event is sky high. We have over 300 side events around Hong Kong, and we have several notable Hong Kong officials, including Honorable John KC Lee, the Chief Executive of all of Hong Kong and key partnerships with Solana and SALT. We see this event as an opportunity to drive additional business to Bullish and believe it will serve as an accelerant for our sales pipeline in Asia.

With that, I'll turn it over to Dave to discuss our financial performance and business drivers.

Thank you, Tom, and good morning, everyone. I'm David Bonanno, CFO of Bullish. This morning, we published Bullish's preliminary fourth quarter and full year 2025 financial results covered in our 6-K filed with the SEC as well as our earnings release, investor presentation and January's monthly exchange metrics found on our IR website. We plan to publish our full year 2025, Form 20-F in early March. As a reminder, reconciliations of our non-IFRS metrics can be found in today's earnings presentation and 6-K.

Turning to today's financial results, total adjusted revenue for the full year and fourth quarter 2025 were $288.5 million and $92.5 million, respectively, representing approximately 35% full year growth and nearly 70% growth in the fourth quarter of '25 versus the fourth quarter of 2024. Fourth quarter SS&O revenue of $54.6 million exceeded the high end of our previously provided guidance and brought full year 2025 SS&O revenue to $157.7 million, up nearly 160% from 2024.

Fourth quarter adjusted operating expenses were $48.1 million roughly flat from the prior quarter and at the bottom end of our guidance, resulting in 4Q '25 adjusted EBITDA of $44.5 million, a record high 48% margin and nearly half of the full year 2025 $94.3 million in adjusted EBITDA. Finally, our adjusted net income in Q4 was $28.9 million and $38.8 million for the full year 2025.

Before I turn to our 2026 outlook, I want to take a moment to highlight a partner whose services illustrate the types of exciting new tokenization on chain capital markets innovations enabled by blockchain technology. USDAI's deep platform and tokenized dollar product allows users to invest directly into a pool of tokenized treasury bills and fully secured GPU backed loans with AUM currently exceeding $650 million. These loans benefit from traditional credit protections afforded to secured creditors such as perfected leans and third-party collateral verification combined with full on chain transparency reporting.

USDAI's products and services are bringing new investment alternatives directly to consumers and have established clear product market fit for this emerging asset class. As USDAI and other innovators are bringing new assets and investment opportunities on chain, we believe Bullish's full suite of services will continue to remain indispensable for our partners' success and we look forward to continued collaboration with USDAI in the future.

Now turning to our 2026 guidance. We expect SS&O revenue between $220 million and $250 million and adjusted operating expenses between $210 million and $230 million. We are not providing full year adjusted transaction revenue guidance and instead encourage investors to review our monthly exchange metrics such as this morning's January release. As previously mentioned, our adjusted transaction revenue can be volatile and we need look no further than the month of February, where we've already exceeded 50% of January's entire adjusted transaction revenue. I encourage everyone to continue following our monthly exchange disclosures to track our progress throughout the year.

Turning to our SS&O revenue guidance. The midpoint of the range reflects approximately 50% year-over-year growth, driven by a combination of expected positive tailwinds from continued strong momentum across all our business lines including steadily increasing tokenized RWA liquidity service bookings as we move through the year as well as expanded and more intelligent cross-selling, pricing and product development throughout the entire organization, partially offset by unfavorable comparable market conditions for asset prices and interest rates as compared to 2025 and selective sunsetting of older liquidity service products as we continue optimizing resources for margin expansion.

Our adjusted operating expenses, the midpoint of our guidance reflects low single-digit growth in our existing cost structure plus incremental expenses associated with moving our flagship consensus North America conference to Miami from Toronto. As well as new performance-based incentives designed for and triggered by very specific growth outcomes generated by our sales force as well as exchange participants.

And finally, 2026 finance expense is expected to be between $52 million and $60 million, which is flat to slightly down from the fourth quarter run rate.

We appreciate everyone's time this morning. And with that, I'll turn it back to Tom for closing remarks.

Actually, we're going to open it up for Q&A.

[Operator Instructions] And your first question comes from the line of Owen Lau with Clear Street.

Going back to your 2026 SS&O guidance. Could you please talk about your key assumptions what are the variables that can get you to the high end versus the low end of your guidance range?

Thanks, Owen. Good to hear from you. In terms of the key factors influencing the SS&O guide for 2026, I laid them out in my prepared remarks. For potential upsides, we would expect that with an effective passage of an infrastructure bill here in the United States, will unlock and accelerate our pipeline in the SS&O line item.

Macro headwinds, we already highlighted, those are baked into the guidance and we think that the range reflects a good conservative mix of the expected outcomes, both from idiosyncratic, regulatory and market-based perspective for 2026.

Your next question comes from the line of Brian Bedell with Deutsche Bank.

Maybe just also focusing on SSO. Can you talk about the contribution from the consensus conferences that you're expecting within the SS&O revenue this year. And the -- just a little bit more on the tokenization RWA of real world assets. The progression of that during the year. And I don't know if you want to just -- if I can layer on another one in there, just on the USD AI, maybe just a couple of use cases to just better flesh that out in terms of how that might develop and contribute to SSO during the year?

Yes, sure. Thanks. Appreciate the questions, Brian. With regards to the consensus events in SSO, we expect those events to both be larger than they were in 2025. We also expect to continue expanding the way that we use the consensus conference and franchise to fuel the growth of our remaining business. We often use that as additional product to help serve our partners and give them visibility around their products and key leaders. We expect that part of our SSO to continue to grow, but it's probably at the lower end of all the growth rates within that bucket.

Your next question comes from the line of...

Another question was, how do we expect tokenization to roll out in terms of SSO.

Sure. Yes. In terms of the tokenization within SS&O, Brian, as we announced this morning, we signed USD AI, which I'll touch on in a second. They are an example of just one type of tokenization partner. Again, I do think the Clarity Act and the infrastructure build getting passed will unlock and rapidly unlock a new wave of potential customers across all of our different products. We are seeing that in the international market already. We do expect to get regulatory approvals to list and trade and provide liquidity for securities and other tokenized assets outside of the United States.

But we believe that, hopefully, in the back half of the year, we'll have a positive outcome on the market infrastructure bill as well as being able to improve our -- and expand our regulatory footprint here in the United States, specifically around RWAs and tokenized assets.

And just to add one thing to that, Brian. If you remember, our liquidity services business came about in 2023, and it came about because this concept of tokenizing the dollar was really gaining steam. If you go back to 2022, there was only a handful of billion stablecoins in the world and fast forward to today, there's 300 billion. And so people like Ripple and PayPal were coming to us saying, "Hey, creating the token is the easy part, although they would solicit our feedback and advice on perhaps how best to design the token.

But do you have any tokenization services that you can offer that will make this thing a success. And that's the business that we built. We chose to call it liquidity services, could have very easily called it tokenization. But in those days, that was not a buzzword like it is today.

As I mentioned in my prepared remarks, the easy part is designing a token, choosing the so-called tokenomics, how many tokens will you have, who will own and so on and so forth and writing the smart contract code. I mean, we have dozens of great developers here in Bullish that write smart contract code. That's not a complicated concept. The hard part is making the thing a success.

So we are already in the tokenization business. This is what I referred to. We're listing these products, we're providing liquidity for them. We're doing marketing. We're now writing research. So answering your question specifically, like, hey, how do you see tokenization rolling out in SSO. It's already rolling out, and it's why this business has grown so dramatically and continues to grow. But now think about the future when you have -- I'll pick one at random, the U.S. equities market or the global fixed income market starts to move into this on chain future.

All of those same requirements still exist from the base level, hey, Bullish, help us design this thing help us write a smart contract. Okay, easy enough. But what about the hard stuff listed on a regulated venue. It's not easy to establish a regulated venue in the United States, in Europe. You have to be a credible player like we are with the balance sheet. You have to be compliant. You have to have a history of 3 lines of defense and real people you can put in front of a regulator.

So that business, we're already in it today. We are already a market leader today, and the industry is going to grow hugely. And the way we're thinking about evolving our product offering is to be able to meet the needs of the market in that eventuality.

Your next question comes from the line of Rayna Kumar with Oppenheimer.

I just want to ask about the Clarity Act. Could you comment where Bullish stands on the Clarity Act and what your thoughts are on some of the key provisions, including tokenization DeFi and stablecoin yields? And also, what do you think is the likely time line for passage?

Sure, Rayna. Thanks for the question. Good question, very relevant. I've spent a lot of time in Washington. I'm not a market prognosticator in the same way. I'm not a legislative prognosticator. I'll give you my innermost thoughts, but don't hold me to them. It does feel like the bill is moving to passage. If you recall, on the last earnings call, I was a little less optimistic.

But having spent time in Washington having met one-on-one with most, nearly all of the U.S. senators that are actively working on the bill on both Senate Ag and Senate Banking, it feels like there is a path. There's 3 key issues that require resolution. You hit 2 of them and the third is the so-called FX or conflicts of interest issues.

Think of those as the [ dems ] wanting to put handcuffs on the ability for the administration to be involved in crypto. So those 3 are all thorny for different reasons, but I see a path through for all of them. I think with respect to the yield question, the level of disingenuousness is almost befitting an SNL skit where all of the largest global banks in the world go down to Washington and then say, "Hey, we're really just here because of community banks and protecting community banks, which, by the way, represent about 11% of total deposits in the U.S.

God forbid, we would allow exchanges and intermediaries to yield because these community banks would be significantly impacted. So I don't think this is really about the community banks. I think it's a competitive issue. But I think there will be a negotiated settlement through this or negotiated agreement through this that all sides can live with.

The second issue around DeFi, the big issue to keep an eye on is what will the KYC and AML requirements be? for a DeFi platform. And that's the tough part because, on the one hand, the DeFi folks just want to have zero KYC/AML. And on the other hand, the heavily regulated folks or the people who have filed heavy regulation want to tie the hands of DeFi entirely, which could really curtail innovation.

Again, I think there will be a negotiated path through somewhere in the middle. And then on the conflicts of interest issues, I've spoken to the White House this week, spoken to offices of U.S. senators. And also there, it seems like there's a couple of paths that perhaps both sides can live with, but that perhaps is the thorniest of all the issues. Because of the potential for presidential politics 2028 presidential politics to be in play.

To put a time line on it, truthfully, I have no clue, but I'm actually personally hopeful and even a little bit optimistic that it could be before the summer.

Your next question comes from the line of Ken Worthington with JPMorgan.

This is Madeline Daleiden on for Ken. To actually follow up on the previous question on market structure legislation. If the banks were to get their way, could you please discuss the impact, if any, that intermediary is no longer paying interest on stablecoins would have on the industry -- the stablecoin industry broadly, but then your stablecoin promotion business specifically as well?

Sure. Great to hear from you, Madeline. I appreciate the question. Given the prevailing text of the multiple markups we've seen so far, we would expect should the final legislation land in either of those 2 camps, there would be minimal to really no financial impact on our liquidity services business.

You'll note in there, there are specific carve-outs for people providing liquidity and other services to stablecoin issuers to receive rewards and we believe that in any eventual outcome, our product will continue to thrive and we're not expecting, based on the likely potential outcomes we see from current drafting of the legislation, any negative impact that would occur to our stablecoin business at this time.

And if I could just add one note. Rayna had asked kind of what is the impact on Bullish? We're broadly fine with the bill as it sits. There's a whole bunch we would change in a perfect world. But it all kind of works for us. And the most important thing to us, frankly, is getting a bill passed because we've seen it. We saw it with the GENIUS Act where all of a sudden you had a rush of credible issuers of stablecoins that didn't want to get involved until there was kind of federal law that provides some sort of safe harbor.

That's how we feel generally about market structure. In fact, we think the absence of the market structure, bill has probably contributed in some small to medium-sized way in the swoon in crypto prices. So first and foremost, we'd like to see a bill get done. But we have been received, warmly received, I will say, in D.C. as an honest broker. And I didn't know what to expect if I'm candid, I personally have been out of the lobbying game now for kind of 6 or 7 years.

I had enjoyed that reprieve. But jumping back in, we've been received as an honest broker. And where we kind of saw flaws in the text, we've been able to influence changes that will result in better legislation.

Your next question comes from the line of Pete Christiansen with Citi.

Nice execution guys and Tom, great to hear that Bullish is at the table during some of these negotiations. Just had a question about pipeline growth. Granted, you've had a lot of bouts of volatility in the crypto markets over the years. Just curious how you see the pipeline activity amassed during these periods of heightened volatility. And then just a quick follow-up. I think you mentioned M&A as a potential tool going forward. Is that scale? Is that capabilities, licensure? Just some color on that would just be a little bit helpful.

Pete, I'll let -- pardon me. I'll let Dave give his perspective on the pipeline as well. The build in the pipeline has been steady and consistent. And I would say really starting with kind of early summer last year increasing. But look, I've been around markets for a while, and this is a particularly volatile period and the price performance has been particularly disappointing. And so I like you, and waiting to see, does that continue? It wouldn't surprise me to see a little bit of a slowdown in terms of the size and the expansion of the pipeline.

I mean this degradation of prices across -- it's not just crypto, right? It's now it's software, and we all see what's happening in silver. Basically, anything risk on has kind of seen serious price degradation. So it's possible that, that will slow down a little bit. I would just say we're up to our eyeballs and being able to service the current pipeline. In fact, if there's a governor on growth for us at this point in our liquidity services business, it's been the ability to add new layer 1s and new crypto projects. Because we have so many in the pipeline. So even if there's a temporary kind of slowdown in the build, that's something that will be fine for us financially speaking.

Obviously, if that continued for a long period of time, that would not be a good thing. But in general, like this tokenization thing, it's real Pete. So if you're running, let's say, a major global prime broker or you're one of these global transfer agents or you're a CSD, a data repository somewhere around the world, you are working on this, you're getting involved in this. The money is being spent, and that is not going to stop just because Bitcoins down 40%.

Yes. And I'd just echo Tom's statement. We've been through a lot of volatility before in this industry. I think if you zoom out and you kind of look at our progress over the last year, the combination of the license footprint expansion, notably Mika, SFC, New York Bit License and U.S. access, combined with the launch of options, in particular, which brought a new customer subset to Bullish has all layered on top of each other in kind of rapid succession to bring on, as Tom mentioned, waves of new trading customers.

Every metric of active customer has been hitting new all-time highs literally, as we said in the prepared remarks, every single month over the course of the year with this year looking like no exception. So we'll see how long the volatility and bad price action persist. But underneath the hood, we're seeing strong, strong continued growth. And frankly, looking at our internal metrics, you wouldn't be aware of the external environment.

Your next question comes from the line of Brett Knoblauch with Cantor Fitzgerald.

This is Gareth on for Brett. I was hoping we could dig in on SS&O revenue for the fourth quarter here. Could you maybe provide some color on the mix of revenue between services, liquidity and events?

Sure. Appreciate the question. Yes, as you know, we don't break out the internals of the SS&O revenue line item because we tend to cross-sell them very aggressively. And oftentimes, we will discount certain products or include complementary certain other products or find the right combination of products and services that meet the customers' demands and get the job to be done, completed for that partner.

With regards to events revenue in the fourth quarter, I was actually mistaken on the last call, I had previously mentioned the fourth quarter had no events revenue. That was incorrect, there was events revenue in the fourth quarter, similar to the amount that we had in the third quarter. Both of those were fairly de minimis given the seasonality of our events is focused in the first half of the year and that probably will be the same trajectory in 2026.

Your next question comes from the line of Joseph Vafi with Canaccord Genuity.

Congrats on the execution here in the quarter, guys. Just what be interested here with this macro, what customers are saying about their crypto strategies, digital asset strategies, tokenization strategies, maybe tokenization moves forward as a value prop. But as the asset class has kind of come in here, how are they thinking about it from your conversations with them?

Yes. Joe, I wish I had a new kind of new commentary -- new profound commentary over and above what we've already said. I'm largely going to be repeating myself because just telling you what's on the ground, and I'm very involved with new business opportunities, as is Dave, and there really is no change in tone. And I know that sounds ridiculous because with each passing day, we're seeing the price of Bitcoin go down by several thousand.

But I want to caution, I think it was Brett who asked the question before, I want to add a note of caution, which is -- this is happening in real time. And I do think there is going to be some form of recalibration, Oh, just how big is my investment, in particular from crypto-native types because a lot of crypto native types look not dissimilar from Bullish. They own some crypto. So when crypto's down 40% when Bitcoin is down 40%, they're feeling a little less eager to go spend a lot of money on the next new project.

So I expect there to be some hiccups coming out of this period of extreme volatility, but it's really kind of breaking and it's accelerated over the last couple of weeks. We have not detected any change of tone. The good news is on the tokenization front, I do not expect to see much moderation all. Why? because it works because it's not just the 24/7 nature of it. In fact, that's just an interesting by-product of it. It's the ability to lend and borrow assets much more simply.

It's the ability to have an immutable ledger. It's the ability to have many fewer layers of intermediaries involved in the plumbing of global financial markets. It's the ability to allow -- and this -- people don't talk about this as much, but some brilliant 22-year-old kids to go build using the composable nature of public blockchains to go build some new novel innovative platform that enables lending borrowing, exchanging risks, exchanging titles, so on and so forth.

That is independent from the price of Bitcoin. So we expect to see this market continue. We expect to continue to see investment. But in some quarters, I think there will be some form of a slowdown but unclear exactly what shape that will take. And for us, as I said, the pipeline is so full right now. In the near term, that wouldn't be something that would have a meaningful impact.

Yes. And Joe, and I'd also just note that our institutional focus and focus on the highest quality assets in crypto, we believe, may make us a little bit more insulated from negative reactions to broader crypto asset prices. What we're seeing in our pipeline across the board is continued strong momentum onboarding bookings and activity. We think that's probably partially in part due to our focus on institutions high-quality assets and crypto's most liquid assets.

Your next question comes from the line of Ed Engel with Compass Point.

Just wondering, could you comment on maybe some of the progress you're seeing with the U.S. launch and whether that's having any impact to volumes, whether it's in the fourth quarter or kind of your outlook for this year?

Yes. Great question there, Ed. As you know, we only got our New York license about midway through the fourth quarter. And as we've previously explained, and as I just referenced, our focus is on institutions, regulated entities, people handling customer funds, fiduciaries, that onboarding testing integration process is a several month process.

That said, we do have several active trading customers here in the United States. And most importantly, our pipeline here in the United States is the most dense pipeline we have by far of high-quality trading customers, servicing customer flow for natural buys and sells. We expect that those type of customers have a duplicative effect, maybe even possibly more than that on our trading activity every time an uninformed order hits the order books. It results in at least 1, 2, 3 more trades that otherwise wouldn't have occurred.

And so we view the volume and activity that we will be generating out of the United States increasing throughout the year as more additive than dollar for dollar in terms of trading volume due to the high quality of customers we're bringing on, as Tom mentioned, we're having particular success here in the U.S. with large retail brokerages. We particularly like those customers and the mix they add to our platform. So we're very excited about what the United States can bring to our exchange business.

We had a hypothesis that the U.S. would be particularly fertile for us because there's a lot of firms that have broad retail and professional trader customer bases in other asset classes that are wildly successful, tens of millions of customers in some cases. And many of those don't necessarily want to -- they want really great flow, and they want to do it with a partner who's not in competition with them, and they want to do it with a regulated partner.

In other words, a partner that's actively seeking out in our case, exchange regulation all over the world. For brand reasons, they don't necessarily want to just be dealing with one-off counterparties. And that has proven to be true and that is an excellent development for us. It just takes time. These are the same sort of people who are very careful about the partners they choose.

It's interesting. I thought our onboarding for customers was tough. The reverse onboarding that they are doing for us is even tougher. And so those things take time. But the beauty is once you've done that, and they've done the work to connect to you and you've done the work to connect to them and you've proven yourself a worthy counterparty. Those are decade-long or multi-decade-long relationships. So it feels good so far in the U.S.

And as Dave said, the hope and belief -- and this is already happening, but the hope and belief is that over the quarters ahead, you will see incremental volume, in many cases, coming from outside the United States that is only happening because of this volume that originated inside the United States.

[Operator Instructions] And your next question comes from the line of Chris Brendler with Rosenblatt.

I wanted to ask a follow-up on the options business. It seems like it's really hit the ground running, going up faster than I would expect that, I think it's actually greatly exceeding the sort of the expectations that were laid out at the IPO.

So I just wanted to see your thoughts there on how much of that can continue. The momentum in that kind of business, I would think would sort of beget more volume, the more liquidity you bring to your customers the more likely they are to continue to trade with you. So how much bigger does the options business be in 2026 to maybe your expectations were 3 or 4 months ago?

We took a little bit of a flyer on options. Basically, we looked at the data -- and this was round about 15 months ago. And we looked at the data and what we saw was that crypto options was a tiny, tiny market relative to the rest of crypto. And we just said, "Hey, pattern recognition, no matter where you look, U.S. equities, global FX, global interest rate swaps, big markets." The options market in relationship to the linear market is always larger than it is in crypto. It sure feels like over time, it will grow. And so we started building that -- and we saw that bear out in real time. So if you look at crypto options growth over the last 6 months, well greater than the growth of the linear market.

So that trend that we bet on actually came to fruition. But there were other competitors. There's kind of 5 or 6 notable competitors in crypto. And so we just said, "Hey, we're going to do the best we can. We're going to stick to what we know, which is let's go after institutions in a regulated setting." But Importantly, let's do it with 1 global order book. Let's do it with one account.

So when a customer signs up with us, they don't have to hook the 5 different matching engines in different locales to trade different products. There's no confusion like that, just right to our API or trade on our screen in one account, you can have spot, options and futures with one global order book. Order books don't like to be split. That's why the New York Stock Exchange for 200 years, it was the only place you could trade Coca-Cola stock markets want to occur in a single global order book because that's where you get the deepest liquidity.

So we stuck to our knitting. We build exactly that. And the exciting byproduct we got from that is it gets really easy to provide significant margin offsets where we're still protecting the sanctity of the clearing operation that we run. But because it's all in one global account, we can provide the maximum offset for the customer. So we have kind of ripped through the competition. We passed numbers 6-5-4-3. We're now 2. We hope and believe on our way to number 1, stay tuned, it's not a promise. But it's all moving in the right direction.

Open interest is up to the right. Volumes are up to the right. Customer counts are up to the right. And we think that this market, to answer your question directly in terms of growth, we think there's a lot of growth left, not just market share growth. In fact, we think that's a minority of it. We think it's more about options growth in crypto, which is still relatively immature.

There are no further questions at this time. I will now turn the call back over to Tom Farley for closing remarks.

Everyone. We believe we're at a turning point here for digital assets. Notwithstanding the extreme volatility, we're aware of that as well, yes. But notwithstanding that or the cyclical nature this vision of faster, better, cheaper, permissionless capital, it's happening. It's being unlocked. And we're seeing the examples. A market structure build will only turbocharge that. We will ensure that we bring all these global markets on chain.

And frankly, that's why Dave and I are here are Bullish. And that's why we're super excited, slightly less excited on days when Bitcoin is down by several thousand. But we came here for that vision, and we've positioned Bullish for this moment and so we hope you'll be there with us, and we appreciate you being on this call and listening to the story and what's clearly a hectic day and a hectic couple of months here.

Thank you, everyone, and have a great day.

Ladies and gentlemen, that concludes today's call. Thank you all for joining. You may now disconnect.

Good morning, and thank you for standing by. My name is John, and I will be your conference operator today. At this time, I would like to welcome everyone to the Bullish Global Third Quarter 2025 Earnings Call. [Operator Instructions]

I would now like to turn the conference over to Michael Fedele, VP of Finance. Please go ahead.

Good morning. Welcome to our third quarter earnings call. I'm Michael Fedele, Vice President of Finance, and I'm joined on today's call by our Chief Executive Officer, Tom Farley; Chief Financial Officer, David Bonanno; and Director of Corporate Development, Liam Foley.

This call will contain forward-looking statements, including those relating to our expected performance and business opportunities. These statements are not assurances of future performance. They are subject to risks and uncertainties, and our actual results could differ materially. For more details on these risks, please refer to today's earnings press release and our SEC filings, including our prospectus dated August 12, 2025. We undertake no obligation to update or revise any forward-looking statements.

This call will also include a discussion of non-IFRS financial measures. A reconciliation of these measures to the most directly comparable IFRS metrics can be found in our earnings press release and presentation, which also contain additional information regarding non-IFRS financial measures and key performance indicators.

I'll now turn the call over to Tom.

Thank you, Michael. Thank you all for joining our call today. I'm Tom Farley, the Chairman and CEO of Bullish. We're pleased to share that Bullish continues to win. For Q3 2025, Bullish reported record adjusted revenue of $76.5 million, record adjusted EBITDA of $28.6 million and record adjusted net income of $13.8 million. As Dave will discuss here shortly and can be seen from the provided guidance, we expect more records coming for 2025 as a whole.

In the last 6 weeks, our momentum has only increased. On October 31, we fully launched our options franchise and the early results are encouraging. We also launched our U.S. exchange business and have onboarded marquee customers in the early days. We have signed up many new liquidity services customers here in Q4, including high-profile crypto projects. Our index business is gaining traction with many launches of U.S.-based ETFs and other listed products tied to our benchmarks. Our media business growth has accelerated in Q4, now registering in our weekly and monthly reports as the top crypto news site globally measured by views.

I will now share some context on where Bullish sits within the broader crypto ecosystem before moving on to discuss our business successes in greater depth. For several years now, Bullish has intentionally positioned ourselves at the intersection of 3 strong ongoing trends that are driving crypto evolution. One, increasing regulatory clarity with regulations that require infrastructure businesses and their customers to operate in a compliant and responsible fashion. Two, increasing numbers of traditional finance institutions operating in crypto in meaningful ways. And three, growing tokenization of major asset classes on the back of the successful tokenization of the U.S. dollar via stablecoins.

We are more convinced than ever that we are on the right path. We are squarely positioned at the center of each of these trends. We are proud of our regulatory footprint and are pleased with the ongoing institutional adoption that we are helping to drive. However, I'd like to expand on this third trend, tokenization. Tokenization refers to the process of turning traditional financial assets into crypto assets. We believe this trend will be the most transformational crypto value proposition of the next decade, and we are positioned to be leaders in this space through our liquidity services platform.

In fact, the tokenization trend gave rise to our liquidity services business back in 2023. The first major asset that was successfully tokenized was the U.S. dollar in the form of stablecoins. As dollars were tokenized, stablecoin issuers turned to service providers such as Bullish for help, to help them tokenize the U.S. dollar. We saw a market need for listings, liquidity and visibility as these new tokens bridge the chasm from TradFi to blockchain. We spent most of the years 2022, 2023 and 2024 in build mode to meet these needs, and we call the collection of these products, liquidity services, before tokenization was even the hot word on everyone's lips.

Today, for stablecoins, we are writing smart contracts enabling bridging from one layer, one blockchain to another. We are listing stablecoins against many other assets on a compliant and regulated global exchange. We are providing liquidity both on Bullish and on DeFi protocols, and we are marketing these stablecoins through our Consensus and CoinDesk properties. In short, with our liquidity services offering, we have built a tokenization platform, and it has become our fastest-growing business.

But that is not what excites us the most. The trend of tokenizing assets other than the U.S. dollar is in the first inning. These tokenization services have the potential to continue scaling meaningfully as more and more assets and asset classes are listed on chain in the years ahead. This includes substantially every major asset class you can think of. We look at the successful tokenization of the dollar, stablecoins as a road map for the future tokenization of these new asset classes. And as a partner for substantially all dollar and euro-backed stablecoins, we've learned the value of developing a rich set of capabilities specifically suited to helping that asset class tokenize.

We continue to evolve our services targeted at stablecoins. For example, Bullish now has direct [ mint/burn ] capabilities with nearly every stablecoin issuer and also advanced API orchestration tools that allow seamless movement between fiat and stables, powering our partners' growth. We believe that each new asset class will also require incremental asset-specific capabilities alongside our standard offering of the 3 core services every asset issuer needs to tokenize: listings, liquidity and visibility.

With this additional functionality need in mind, we have submitted an application with the SEC to receive regulatory approval as a transfer agent, which will further supplement our tokenization and liquidity services strategy for U.S. securities. We look forward to sharing more of our future plans with you over the months ahead, and we look forward to taking this tokenization journey with you.

Now, excitement about our liquidity service platform's potential for future tokenization growth aside, how is it doing right now? Our services continue to be sought after. We're adding new and diversified customers, and our momentum has continued into Q4. In the third quarter, we added a record number of liquidity services partners, and our active partner count is up 100% sequentially. We're on track for another strong quarter in Q4, building on the success of our existing Layer 1 blockchain relationships with market leaders such as Solana, Ripple and TRON. We have further broadened our Layer 1 blockchain relationships that we are supporting with liquidity services, adding 4 additional blockchain ecosystems, Canton, Cardano, Midnight and VeChain to our scope of services since we last spoke.

We are also pleased to share that our collaboration with the Solana Foundation continues to develop constructively. In the first quarter of this engagement, Bullish minted more than 80% of our stablecoins on Solana. And Solana's total stablecoin value locked, that is how many dollars are tokenized on Solana, grew by more than 40% during that quarter.

Shifting gears to discuss our very successful options trading launch, I'd like to first take a step back and remind everyone why we are so excited about this opportunity for Bullish. Crypto options are the most rapidly growing asset class in this space. They've grown to more than $200 billion in monthly trading volume just last month, up more than 230% from the same period last year. Furthermore, given the complex nature of options as well as the sophisticated user base, we are well positioned to carve out substantial market share in this asset class, and we expect to see that asset class grow by multiples in the coming years.

Turning to the specifics of our own progress. Our exchange launched in full and without risk caps at the tail end of October. In just over 2 weeks, we've already traded well over $1 billion of volume. And as of today, we have approximately $1 billion in open interest. Our best day was yesterday, where we traded $240 million, about 4% market share by our definition. I'm really excited by the traction we've attained right out of the gate, and I expect it to become a significant contributor to our financial performance going forward. Look, I've been involved with a lot of these derivatives launches over the years, including very successful ones and a few that I rather not discuss. This one has all the hallmarks of a big winner.

Our last earnings call occurred less than 24 hours after we received our prestigious BitLicense. We indicated that receipt of this license marked the final step in enabling U.S. onboarding for prospective Bullish exchange clientele. We also shared that it will take time for these U.S.-based customers to go live given their institutional nature and the typical lengthy onboarding process for these types of customers. But with all that said, we are pleased to share that we've already actively onboarded many new customers, including various retail brokers with millions of customers like Webull and Moomoo, institutional brokers such as Cantor Fitzgerald, a very large crypto custodian and other institutional clients. So things are progressing more quickly than we anticipated just a couple of months ago when we last gathered.

Our U.S.-based clientele value our already liquid global order book, which helped us launch without any 0 to 1 or cold start liquidity problems. We are encouraged by our early progress in the U.S. and look forward to continuing to seize market share in the months to come. Outside of the United States, we continue to make steady progress growing our exchange. During the quarter, we've added some of the largest retail brokerages in Europe, the Middle East and Latin America and integrated various crypto-focused hedge funds or asset managers that have already started trading derivatives on our platform.

Shifting to information services. Our CoinDesk business continues to perform well, supported by significant accomplishments in our indices business. We are pleased to share that since our last earnings call just 2 months ago, our indices have underpinned an additional 5 of 6 total newly launched U.S.-based exchange-traded crypto products as well as 4 additional global ETPs. During the span, we also won 6 new benchmark switches from competitors and have 2 active ETP filings for the CoinDesk 20 Index. On the CoinDesk Insights or media side, we continue to successfully capture more market share against competitors with our market-leading and accessible crypto content and coindesk.com continues to be a highly sought-after destination for advertising.

We have also successfully launched CoinDesk Research, a subscription-based vertical dedicated to delivering high-quality research and analysis. CoinDesk Research also serves as a natural extension and upsell to our liquidity services clientele. The thesis that we can land and expand is proving to be true. There are many examples of existing customers in Q3 and so far in Q4, choosing to take advantage of new Bullish company products and services in addition to their existing products and services.

Overall, we continue to win, and we continue to execute on the vision that Dave and I laid out when we first joined Bullish. We're proud of our success to date, and we believe that we're just getting started. We're just getting started on a macro level because tokenization of securities and other real-world assets and the shift of financial market infrastructure has only just begun. And we're just getting started today at Bullish generally because we believe we have or are pursuing the right mix of licenses, technology, talent and experience to be a winner in a world that is rapidly shifting on chain. We will continue to execute with focus, discipline and momentum as we position Bullish for sustained growth in 2026 and beyond.

With that, I'll turn the call over to Dave, our CFO, my partner, to review the quarter in more detail.

Thank you, Tom, and good morning, everyone. I'll start by walking through our third quarter results and then provide additional context about our operating performance before sharing our outlook for the fourth quarter. As a reminder, reconciliations of our non-IFRS metrics can be found in the back of today's presentation as well as in our 6-K filing published earlier today.

Total adjusted revenue for the third quarter was $76.5 million, up 34% sequentially and 72% year-over-year, exceeding the high end of our guidance. Third quarter SS&O revenue, which includes liquidity services and all CoinDesk-branded products, reached $49.8 million, up over 50% versus 2Q and over 300% versus the prior year's quarter. Through the first 3 quarters of this year, SS&O revenue represents 53% of total adjusted revenue year-to-date compared to 28% for the full year 2024.

Adjusted operating expenses for the third quarter were $47.9 million, down 2% from 2Q 2025. Adjusted EBITDA for the third quarter was $28.6 million, up 253% sequentially and 271% year-over-year. And lastly, adjusted third quarter net income was $13.8 million. As our business continues to scale, we are pleased with our cost control and high incremental margins, which we expect to continue into the future.

Turning to our current financial performance. Quarter-to-date trading volume through November 17 stands at $126 billion with an average trading spread of 1.7 basis points. Our November month-to-date trading spreads are averaging 1.8 basis points, up from the 1.6 basis points you will have seen in our October monthly metrics. We expect materially higher transaction revenue for the full fourth quarter as compared to the second and third quarters of 2025, driven by higher volatility and increased active trading customers.

Turning now to our Q4 guidance. We expect SS&O revenue between $47 million and $53 million and adjusted operating expenses between $48 million and $50 million. We remain confident in the outlook for our financial performance and believe Bullish is well positioned to deliver sustained and profitable growth in the coming quarters. Thank you for joining us today.

And with that, I'll turn it back to Tom for closing remarks.

Thank you very much. And as we said last time, thank you very much for your continued attention to Bullish and following along with the story. And we appreciate your time today, and we'll open it up for Q&A.

[Operator Instructions] Your first question comes from the line of Ken Worthington with JPMorgan.

I wanted to focus on liquidity services. So maybe starting, you mentioned that the number of stablecoins doubled this quarter. About how many stablecoins are you servicing? And then also, you mentioned previously that the pipeline of non-stablecoin tokens was starting to dominate that pipeline. How do the economics look for non-stablecoin tokens compared to stablecoins? And then I'll wrap the follow-up in here, too. Coinbase launched a service related to ICOs. To what extent does that compete with your non-stablecoin promotion business?

Thanks, Ken. Good to hear from you. I was probably doing my thing where I'm speaking too fast. The -- just to clarify your question, actually, the liquidity services figures, high level that I quoted refer to all liquidity services customers. That is to say we are not saying we doubled our stablecoin customers. In fact, off the top of my head, my guess is that we did not double the number of our stablecoin customers. We doubled the overall. So inclusive of, for example, the 4 Layer 1 blockchains that I described as well as stablecoin issuers.

So -- but just to answer maybe the thrust of your question regardless, we continue to add stablecoin customers, which is consistent with our going-in thesis, I think not too dissimilar from your own, that with the GENIUS Act, we will continue to see growth in the number of stablecoin issuers. And what we're seeing is the new issuers need those 3 tokenization or liquidity services products as much as everyone else, the listing, liquidity and visibility. But what's perhaps even more exciting is we're proving the product market fit for these services extends far beyond stablecoin issuers. And so during the quarter, we saw more of a, quite frankly, even mix among kind of 3 broad categories, which are stablecoin issuers, Layer 1 blockchains and then third, just token crypto project issuers. So in other words, not a Layer 1 or a stablecoin, and we're seeing more of a blend.

Just to touch on that, I'll let Dave kind of clarify if I butchered any of those figures and coming back to you, Ken. And then on the ICO platform, like where we've really focused is the highest quality crypto platforms, and that's consistent with our kind of reason for being, which is servicing the institutional customers. By and large, they're less interested in the tail of crypto. They're more interested in $1 billion or at least $0.5 billion market cap and up crypto projects. And so, so far, what you described at a competitor versus where we're focusing are just kind of fundamentally 2 different kind of fields of inquiry. So we're kind of focused on sticking to our knitting, building out our liquidity services in our core market and really enjoying the ride as our TAM expands in real time.

Yes, Ken, to your question about the stablecoin liquidity service agreements. As we mentioned before, we are partnered with basically every stablecoin out there, except for USDT currently. I believe that count is about 9 or 10 total stablecoins, both euros and dollar-based partners, with regards to the opportunity to further monetize stablecoins versus non-stablecoin partners. In general, we do see the ability to use our partners' assets that are stablecoins to do other revenue-generating activities just given the broad-based utility of stablecoins throughout crypto, DeFi and otherwise.

But we are also able to find other opportunities with the nonstable partners. It depends. Each one of these is a little bit bespoke with varying degrees of utility and contract sizes. We're excited about both sides of the pipeline. And both sides of the pipeline are growing, albeit right now with more emphasis on the nonstable portion given the next wave of, say, GENIUS compliance stablecoins has really yet to go live, but we expect a new wave of those to begin late fourth quarter, early first quarter, and we expect to pick up some new significant wins, which we'll talk about early next year.

Your next question comes from the line of Peter Christiansen with Citi.

Tom, David, congrats on the execution momentum here, really impressive stuff here. I want to double-click into the motivation to seek transfer agent capabilities and licensure. Obviously, there's opportunities with some of the coin indices and perhaps even bespoke products. But just curious, how do you think about the competitive landscape or setup for maybe some more commodity type of RWAs out there, single stocks? How are you seeing that competitive setup?

And then as a follow-up, I was just curious if you could speak to some of the performance you saw out of the AMM during some of the heightened volatility that we've seen in recent weeks. Obviously, spreads look pretty healthy there. But just curious if there's any other operating metrics that you think are useful for us to consider.

Sure. Good to hear from you, Pete. Two very meaty topics. I'll endeavor to answer the first, and Dave will take the second. I talked a bit in my prepared remarks about this tokenization trend fairly broadly. But I'd like to add a little more context and kind of contour given your question. When you think about stablecoins, they're really just the U.S. dollar, and it's a question, okay, how do I take the U.S. dollar? I'm going to speak in colloquial terms here for maybe people who aren't crypto heads in this all day every day. But you got the U.S. dollar and then how do I take this U.S. dollar and put it on blockchain, so I can use it for commerce. That is the act of tokenizing the U.S. dollar.

Well, if you think about the types of people who do it, some are super crypto native, think Tether or Circle and some are less crypto native. I think more recently, you've seen in the news, Western Union, for example. And then some are somewhere in the middle and think of PayPal or others of their hill. And so now those say, okay, I want to take the dollar and I want to tokenize it. They can do some of that -- those necessary tasks all on their own. But some firms look at it and they go, wow, there's a whole lot of expertise here, and I can't do it on my own. And you can think about, okay, how do you get from non-tokenized to tokenized and you can lay out a spectrum of products and services.

For example, do you write the actual smart contract to create the tokens or not? Do you write the effectively Excel spreadsheet or Oracle database on the blockchain that tabulates which accounts own which amount of tokens? Or do you go to a vendor for that? Do you go get the state-by-state licenses in the United States or the federal licenses now required under GENIUS? Or do you rent those? So those are all sort of tokenization services, if you will.

And we looked at that and we said, we're going to stick to our knitting, and we're going to do those services that we're really good at. And we said we're going to focus on the active listing the token, not just listing the token stand-alone, but listing the token against many other tokens -- listing the token, not just as a spot transaction, but as a perpetual future, a dated future, an options contract, doing it on a compliant regulated exchange, thereby conferring a certain level of respect to those asset issuers. We're going to focus on the liquidity provision, making sure that even in moments of distress, there are bids and offers available for those newly tokenized tokens, if you will, use the same word twice.

And then finally, the visibility. We own the premier properties in crypto. There is no debate about that. CoinDesk is #1 for views in the world for crypto news site. CoinDesk is where important institutional people and companies gather twice a year in Asia and the U.S., and we can help these stablecoins and tokens get their message out, okay? That's been our strategy.

So now your question is, hey, tell us about this transfer agent element. Well, we're looking at the world, and we're saying, boy, it feels like the next domino to drop here or at least the next enormous domino to drop, there'll be other little tests along the way is the U.S. securities market, whether that be single stocks or fixed income or what have you. And what we've drifted into and stablecoins, our customers have pulled us into it, is we now have a more expansive offering than just the dead simple listing liquidity and visibility. I gave the example of the API orchestration. I gave you the example of the direct mint earn. And I gave you the example of we're now writing those smart contracts ourselves to facilitate bridging from Layer 1 to Layer 1.

Well, what the transfer agent license gives you the ability to do is more actively engage with asset issuers who are tokenizing U.S. securities to offer more robust listings, liquidity and visibility, but also some services around the margin, such as writing the actual smart contract for them or tabulating who owns of what security. That is the license you go for in the U.S. under the SEC regime that gives you the freedom to be able to offer those additional services to securities issuers, whether in a tokenized or, frankly, a certificated form.

So that gives you a little more of the thinking behind that, Pete. Hopefully, that narrative -- it was a long one. Hopefully, it wasn't too boring, but gives you a sense of where we're headed.

And regarding dealer...

Go ahead.

No, you're playing the arms dealer side, right?

Yes. We just want to be helpful in this tokenization wave. We think it's huge, Pete. Just one more quick anecdote, Dave is going to punch me. But we went out and we started this tokenization effort really in earnest, we started building the features in 2022. We productized it in 2023. It really took off in 2024. We called it liquidity services, but it was tokenization.

We went in January of 2025 this year. And if you go back, Pete, this around the time we started talking to you and you look at our deck, we talked all about tokenization and there was kind of a big yawn. People just really weren't too excited about it. That's how much has changed in the year 2025. It's the regulatory regime here. It's also just the technologies of the Layer 1s are that much more robust. People have realized it's ready for prime time.

People now realize that the benefits of tokenization are real, being able to use those tokens more easily as collateral in a more efficient manner. I'm now speaking on a regular basis to the heads of the very largest banks in the world who are preparing for this wave. And so we've seen this coming. At times, we felt a little crazy because of the looks we were getting across the table, but we've been preparing for it, and we just want to be a part of helping our customers make this leap.

And Pete, with regards to your question around the volatility experience, probably you're referring to mostly October 10, the AMM performance in the -- performance of the exchange in totality, we're really proud and pleased with our performance and the way the technology held up. Every couple of quarters or so, we get really kind of a feature moment to advertise the difference of AMM liquidity versus what we see in other club order books. Way more depth was preserved on our order books during the flash crash on October 10 than you saw in other venues, notably the other offshore venues, where liquidity just absolutely evaporated in major assets like Solana.

Our spot prices had far fewer wicks, smaller wicks, our derivative systems had far fewer liquidations than you saw in other venues. And as a whole, we're really proud of the way the system held up. We had a lot of trading revenue that day, and that went noticed by our customers. And I do think that there is a lot of discussion underway in the market more broadly around the way that derivatives and marketing systems and order books function in, say, less regulated venues versus our own.

Just one more comment on that. I remember way back in kind of 2022, I had a launch with one of the most prominent executives at trading firm in our industry. And he said, I suggest you, Tom, as somebody who's been around kind of clearing and derivatives your whole career, go look at how these perpetual futures markets work on these other venues. You'll be appalled. And I did exactly that. I spent a weekend doing a deep dive and came back to our team and said, we will never do that.

It is wrong what happens on these markets. What we saw on October 10 is positions were liquidated for fully collateralized accounts. It's a heads, I win, tails, you lose approach from these unregulated venues. And it underscores for you why real institutions are never going to do business there. They're just not. Real institutions need to know when they're hedged, they're hedged. Their position isn't just going to evaporate in the dead of night when they have gains on it on a fully collateralized basis.

Your next question comes from the line of Dan Fannon with Jefferies.

I wanted to follow up on SS&O more broadly. Obviously, a lot of momentum, strong third quarter. But then when we look at the 4Q guide, it is basically flat at the midpoint. So can you talk about that -- squaring that with the kind of longer-term growth opportunity from a revenue perspective and the momentum in the business today versus kind of near-term revenue outlook?

Yes, sure. Thanks, Dan. Great to hear from you. Taking the second part of your question first. We remain very confident in the growth outlook for subscription services and other revenue looking forward. We see the pipeline filling up, new projects coming along. We believe tokenization more broadly is potentially a very large tailwind for that line item.

Specifically on the Q4 guide, there are a couple of different cross currents there. I'd say, one, we do continue to experience broad-based growth across pretty much all line items in SS&O in terms of customer wins and new contracts, as Tom has mentioned. Somewhat offsetting that growth would one be seasonality. The fourth quarter is the only quarter this year with 0 events revenue. The third quarter did feature our DC policy event and EDGE conferences. So there was some revenue in the third quarter from events, which will not occur again in the fourth quarter.

Additionally, there's a little bit of impact from large price -- downward price movement in the broader digital asset space, which affects partially the indices business, some of our lending business and to a lesser extent, liquidity services, but that is largely offset by the broad-based growth. There's a little bit of a timing element as well, whereas a lot of the new contract signings during the fourth quarter are coming middle end of the quarter versus the third quarter, where we had extreme momentum both in the second quarter leading into the early third quarter. And so when you put all that in the blender, we come out with the guidance you see in front of you today, which is flat to modest growth.

Great. That's very helpful. And then I was hoping you could just provide a little more commentary around the momentum post the BitLicense approval. You talked about a few onboardings. But I guess, could you expand upon those comments and talk about kind of the pipeline and how you see the kind of ramping up of that customer base as we go into, obviously, fourth quarter, but more importantly, into next year?

Yes, sure, Dan. As I said, we've had kind of more early wins and notable early wins than I think we were expecting to be able to reveal to you given that there were only 2 months or 8 weeks between our 2 earnings calls. So some really good early momentum. I would say the other thing that's positive is the pipeline has filled up very, very quickly and has many exciting names who will be known to you and have things like bank or investments in their title and have the potential to really move the needle.

I guess the downside is we have seen other than a bunch of early adopters who were quick to sign an agreement, it's hard. Like it's a slog. And I think some of this goes back to FTX, frankly, because we still get questions that are pretty clearly tailored to avoiding an FTX-like situation, where the diligence is just very robust. Hey, let's go through your SOC reports. let's go through your cyber reports. We want to see more working papers in addition to just the publicly available audit.

So everything feels good and about on track, and we have some positive upside surprises in terms of the number of big customers who have already signed and have come on board as well as the size of the pipeline, but it's going to take some time.

Your next question comes from the line of Brett Knoblauch with Cantor Fitzgerald.

Tom, I think we're expecting kind of CLARITY Act to get put through the Trump's desk before the end of the year and signed. Could you maybe explain to us what you're expecting that will do to your business, particularly from the liquidity services front?

Sure. And good to hear from you, Brett. I wish this call were Monday and not today. I'll be meeting with 7 or 8 of the 100 U.S. Senators, including many or most of those who are actively involved in, I guess, what was called in the house, the CLARITY Act, but more broadly a market structure bill tomorrow and Friday on the Hill, Brett. So I'll have a lot better sense.

I love hearing that the premise of your question was around a bill getting passed this year. You're a bit more optimistic than I am. I am very optimistic that it will get passed because I'm seeing bipartisan support. And I think it will be very helpful for the crypto industry, largely because of preemption, in other words, not having to go to each of the 50 states to get their very particular, in some cases, approvals for operating in the crypto business. I think that will -- that in and of itself will be a boon for infrastructure providers like Bullish.

And I think providing the legal certainty, much like it has on the stablecoin side will bring in many institutions and tokenization participants, asset issuers, for example. So getting that done will be great for growth, and I very much would like to see it. And I think it will only be helpful for our business. But I will know a lot more in the next 48 hours.

And look, there's a lot to come. I suspect the House Ag will come out with a whole new version of their proposed bill. I suspect that will have to be negotiated with -- I mean, pardon me, Senate Ag, that will have to be negotiated to some extent with Senate Banking. But then ultimately, there will be a conference procedure with the Senate and the House to make sure that we produce a bill that makes sense for our country and for this industry, and we will be a very active participant in that as evidenced by where I'm spending the next 2 days.

Awesome. And then maybe just on the U.S. momentum. It feels like that launch happened a bit sooner than we were expecting and then adoption was much faster than we were expected. Could you maybe pinpoint why it happened so fast and how it's been so good? And kind of what you're expecting, I guess, from the U.S. business, maybe the rest of this year and into next year?

Yes. I'm going to get PTSD while I give you this answer. So we made a couple of faithful decisions over the last couple of years. One of them, I'm totally happy that we did it, and it's ultimately something that I can share with you as an investment thesis, frankly, but it brought us a lot of pain and heartburn.

And what we did, Brett, is we said we're going to go get the toughest regulatory approvals in the world for the provision of spot crypto trading as an exchange. All of them. We're going to get Hong Kong. We're going to go to the freaking Germans, the BaFin, known as the toughest, most thorough regulator. We're going to go to the New Yorkers, not only are we going to go to the New Yorkers who are known for being very discerning about handing out BitLicenses, we're going to wait to launch in the U.S. And on top of all that, and we're going to go to the Brits and we're going to get benchmark administration license.

And on top of all that, we're not just going to ask them for licenses like every other crypto exchange has asked for, which is, hey, let me operate an exchange within your jurisdictions and let me operate everything within the 4 walls of your country. We're going to go to them and we're going to say, we want to have one global order book where men from Hong Kong's bid offer can interact with Gerhard's offer or offer to sell sitting in Munich or Elaine in New York's bid can interact with Soso's offer in France.

And that was very difficult because imagine telling a regulator, especially a particularly provincial regulator that, hey, yes, we'll onboard in your regime and we'll hold the customer funds in your regime, but we need to be able to operate a single global order book. And so it took us probably 2 years longer than it would have, maybe you could say should have, if we had taken the shortcut approach, which is what nearly every other crypto exchange has done.

But the benefit finally is accruing to us, which is when we get that BitLicense and we "open for business," all it really means is these customers have been knocking on our door for 2 years, we can just say, okay, you're cool, come on in, we've approved you. We've done the KYC/AML. We'll hold your funds in the U.S. We'll onboard you in the U.S. But the liquidity is right there. You can trade tomorrow and interact with all of our customers all around the world. So that's what enabled us to kind of get into business so quickly and which -- and the reason why it may look a little different than what you're used to from others.

Your next question comes from the line of Brian Bedell with Deutsche Bank.

Congrats on the good momentum here. Maybe just talk about another angle on the U.S. traction. Dave, you quoted some pretty good metrics for trading volume so far in 4Q. We typically think of a lot of the onboarding here is contributing to SS&O. But can you talk about the new customer momentum contributing organically to the trading volume outlook? And is that something that has the potential to grow even faster than SS&O just from the U.S. angle alone?

Yes. So thanks for the question. The -- our user counts across the board are continuously hitting new all-time highs. So that is definitely beneficial. This is for trading customers. That is definitely beneficial to the trading volumes. It's always difficult to disaggregate the attribution of more customers versus volatility price or our own internal pricing changes.

But when you put them all together, we are certainly realizing more trading revenues, more trading volumes per unit volatility than we have in the past. It is good to see a little bit of fallback in the market. It does bring to light the diversified revenue streams we have with exceptionally strong transaction revenue that we've had so far in the first half of here in the fourth quarter.

We continue to believe that over the course of 2026, the U.S. will become a major contributor to that. We're also extremely pleased with the launch of options. We expect options to be a major contributor to our transaction revenues next year. And we're pleased with the overall momentum we've seen on the exchange trading side. And a lot of that is around cross-sells, our liquidity services, our ability to trade in and out of different stablecoins and our laser focus on institutions, the products and services that they need are all paying off.

Yes. And just to add one element to that. Options -- I don't want to oversell it because we're still single-digit market share. But the early days have been a bit of a revelation. And what we're realizing is a couple of things. One, it's all organic from a product perspective. Obviously, we didn't have options when we gathered 2 months ago. So when I say we did $240 million yesterday, that's all organic, of course. But it's also organic to a great extent, in a customer sense. The options customer base is quite different than the linear customer base, so like the spot customer base. So that's been really good in bringing new customers on to the platform, which is exciting.

But then more broadly, we're realizing there's a real need in the market for an options exchange that allows customers in a single account to be able to trade spot and perps and data futures and options on a liquid compliant exchange with portfolio margining. And it feels like we hit the market just right on this one. So I'm excited. Stay tuned.

Yes, that's great news. And then just on the incremental margins, Dave, you referenced obviously high incremental margins. Fair to say that it's higher on the trading side than the SS&O side or not necessarily the case?

Probably, I'd say that's fair to say on the SS&O side, you do have the events business, which is our only line item that features any meaningful variable costs. So in total, probably a bit more on the trading side. You'll notice incremental margins in the third quarter were actually above 100%. That was due to more advertising spend in the second quarter for an event than there was in the third quarter.

If you look at the guidance and the kind of current run rate of the transaction revenues for the fourth quarter, you can pencil out not quite over 100% incremental operating margins, but definitely well north of 80%. And we continue to look forward to demonstrating the operating leverage in the business to demonstrating the benefits of the diversified revenue streams and having that begin to play through in hopefully a more volatile environment than we got in the second and third quarters of this year. Hopefully, that persists into 2026, and we look forward to posting more earnings, higher margins and demonstrating that operating leverage that we've been talking about.

[Operator Instructions] The next question comes from the line of Chris Brendler with Rosenblatt.

Congrats on the results as well. Maybe a little bit of an education for me, but I just wanted to ask about the monthly metrics on the spread side. I would have thought the options business would have been higher than spot. And so a function of it's early? Or am I just not thinking about that correctly?

And then the other question would just be the negative spread in perpetual futures in October. I imagine that's volatility related. Just give me a little color there on what drove the negative spread, so much larger negative spread in October for perpetual futures.

Yes, sure. So on the options side, early days, we continue, as we do with all the products to experiment with our pricing. And as I've mentioned before, we are always solving for maximizing our total adjusted transaction revenue per unit of volatility. That's across all of the products. The products do tend to work together. And so we've seen benefits from changing prices in certain products with the volumes or maybe revenues we get out of other products. So still early days on the spreads with regards to options, but we look forward to updating you on that as we go. And that is also why we report the monthly exchange metrics so everyone can keep track in essentially real time along with us.

With regards to the perpetual futures spread in October, yes, the volatility was largely the driver behind the negative spread there. Zooming out, though, we continue to make good progress on perpetual futures. We do hope that the ramping up of the options activity will filter down into perpetuals as well, and we can kind of move that into positive territory here going forward. It will be variable. It will be somewhat volatility dependent, but we're pleased with the progress, and we look forward to making more progress on perpetual futures.

Your next question comes from the line of Rayna Kumar with Oppenheimer.

This is Guru on for Rayna. With options now officially live on the platform, can you maybe just help us understand the potential capital efficiencies that you'd now be able to offer through greater cross-margining capabilities? And also going forward, given the role that tokenized assets can play here and just improving collateral management, do you see any specific near-term opportunities, perhaps just expanding your relationship with Circle beyond USDC and into USYC? Or just any other tokenized money market product, right? And if I can squeeze another one in directly in relation to the prior question. With options revenue likely becoming material in early '26, when can we actually expect perhaps revenue to turn positive?

Thank you, boy, a lot there. So in terms of options, one of the benefits that we have, along with that one global order book is one matching engine. And so when you look across the other exchanges, both regulated and unregulated that offer options, they tend to have different matching engines for different jurisdictions. They have a different matching engine for options than they do for perps. In one very notable case, they have a different matching engine for spot and a different matching engine for perps and a different matching engine for options. And so it's very difficult to then aggregate trades and positions back into a single global account.

For us, we've always just focused on building simply. We have a single matching engine. We allow customers in a single account to place all of their derivatives transactions as well as their spot transactions and the corresponding collateral that arises from those spot transactions and a single global order book. And so what that enables us to do is just put our thinking cap on and have smart, sensible margining where we capture from each customer the lowest possible margin we can, but no less.

So for example, if a customer has sold Bitcoin calls, but they hold Bitcoin collateral, you can take that account and you can provide a reasonable margin. If a customer owns a highly correlated crypto asset and they have sold short another highly correlated crypto asset, you can provide some offset, not a total offset, but some offset. This is the sort of thing -- look, it's not simple, and it's not made for an easy sound bite, but providing that portfolio margining is kind of the lifeblood of the options trading community.

That's what they need, and that's why they've rallied to us. I was joking with a colleague yesterday, an old colleague of mine, and he was pointing out that the old company we worked at had just been approved for a new VAR-based margining system that had been in the works for 12 years. So that gives you a sense of how complex this can be. But the beauty for us is we were able to start with something very efficient, which is what's leading to this early success, and it will only become more efficient over time as we have a chance to evolve it.

And regarding your question around tokenization, money markets as collateral, et cetera, we continue to follow the customers and the customer demand. We see tokenization of a variety of different assets opening up new opportunities for us, both across liquidity services and the exchange as collateral trading pairs and otherwise. So we think with hopefully, the passage of the market infrastructure bill as well, a lot of new opportunities will come out of tokenization that touch many parts of our business.

With regards to perpetual futures, we're not providing any specific guidance on transaction revenues. That's not something we've been doing. However, again, we do provide the monthly exchange data so that you can follow along at home in basically real time. And as I said earlier, we continue to see progress in that line item. We think 2026 will be a better year than 2025, which was notably better than 2024. But stay tuned and continue to watch the monthly metrics for updates on all of the transaction revenue line items.

Your next question comes from the line of Joseph Vafi with Canaccord.

Great progress. Just one quick one for me here on the spot spreads. I know there was some incremental pricing power in Q2. Maybe we just kind of drill down on that just a little bit more and some of the efforts there and what you're seeing in the spot market in Q3 and early Q4.

Yes. Thanks, Joe. The progress there has been -- yes, I think we touched on this in the last call. The second quarter, we spent a good amount of time iterating on our pricing structure in general. It was also a particularly low volatility environment. Those 2 things combined to create what were we hope to be anomalously low spreads during the quarter. You've clearly seen them rebound quite strongly off the lows seen in say, May and June type time frame. Again, we continue to optimize for total adjusted transaction revenue per unit volatility. We feel pretty good with where we are today. But there's always changes going on within the market, within our customer base, within volatility.

And so we'll continue to experiment and spread with the spreads. Higher spreads are not necessarily always what we're targeting. We're targeting higher adjusted transaction revenue. There may be circumstances where slightly lower spreads lead to more volume, which more than offsets the decrease in spreads. But I think where we are today represents a reasonably good baseline moving forward. Although, again, I will reiterate, it's a very dynamic situation in the market, and we will continue to make changes to optimize for total adjusted transaction revenue.

I just want to highlight, we do have to stop right at the opening bell. And I know there's a couple of other people in the queue, and we will make sure to circle back and get to you after this call and also make sure that we call on you early on the next call.

Your next question comes from the line of Bill Papanastasiou with KBW.

Just a quick one for me. Now that you've successfully secured the BitLicense and have expanded into the U.S., I'm just curious what's next? Are there any remaining geographies that you're looking to tackle and secure a Tier 1 license? Or will the focus remain on consolidating existing markets into the global order book?

Yes, that great question. Not really. I'll just highlight the U.K. still has not propagated any legislation around crypto trading, and that will come at some point. But no, we have the Asia band, the Europe band and now the U.S. band. There will be incremental spot licenses we will look to pick up, but it's frankly not even noteworthy enough to discuss on this call other than the U.K. But this is a continuing game of licenses. And it's not just for spot, but for derivatives and our index business as well. And so it's like we have full-time staff. This is all they do. And they'll just constantly be gathering licenses, and we'll be sharing those with you. But the big ones geographically are covered.

So I just want to jump in because I know Gautam and Owen and Ed, you guys are in queue. Sincere apologies. If I were less verbose, we would have gotten through it all. If I could answer all the questions like Dave. And we'll make sure that we get to you guys early next time, and we'll also circle back over the next 24, 48 hours and have discussions with each of you individually.

And finally, I just want to say thank you all again for following along with the Bullish story and look forward to 3 months from now being able to tell you about everything we've accomplished in the meantime. Much appreciated.

Ladies and gentlemen, that concludes the question-and-answer session and today's conference call. We would like to thank you all for your participation. You may now disconnect your lines. Have a pleasant day, everyone.

Thank you for standing by. My name is Eric, and I will be your conference operator today. At this time, I would like to welcome everyone to the Bullish Global Second Quarter 2025 Earnings Call and Q&A. [Operator Instructions]

I would now like to turn the call over to Michael Fedele. Please go ahead.

Good evening, and welcome to our first ever quarterly earnings call as a public company. I'm Michael Fedele, Vice President of Finance, and I'm joined on today's call by our Chief Executive Officer, Tom Farley; Chief Financial Officer, David Bonanno; and Director of Corporate Development, Liam Foley. This call will contain forward-looking statements, including those relating to our expected performance and business opportunities. These statements are not assurances of future performance. They are subject to risks and uncertainties, and our actual results could differ materially. For more details on these risks, please refer to today's earnings press release and our SEC filings, including our prospectus dated August 12, 2025. We undertake no obligation to update or revise any forward-looking statements.

This call will also include a discussion of non-IFRS financial measures. A reconciliation of these metrics to the most directly comparable IFRS metrics can be found in our earnings press release and presentation, which also contain additional information regarding non-IFRS financial measures and key performance indicators.

I'll now turn the call over to Tom.

Hello. I'm Tom Farley, the CEO and Chairman of Bullish. I'm joined by Dave Bonanno, our CFO. Thank you for joining us today on our first earnings call since going public. I expect to be a little longer-winded today in introducing myself and our company than in future sessions. I'm excited to discuss our results. But before I do, I want to spend some time highlighting my background, Bullish, our mission at Bullish and why I'm so excited to lead this business going forward. By way of background, I've spent my career working in market infrastructure with exchanges and other regulated entities across multiple asset classes and several geographies. In all, I've been Chairman, CEO and/or President now of 10 regulated exchange or related businesses.

I've held various leadership positions at Intercontinental Exchange, the world's largest traditional financial exchange group by market cap, where I served as President of the New York Stock Exchange, introduced electronic trading to the New York Board of Trade also as President and completed multiple large-scale transformational M&A transactions.

I know this market infrastructure business model well. My experience gives me a deep understanding of the amazing value that exchange businesses can offer our investors and perhaps even more importantly, our customers, but also of all the opportunities to further push the envelope, go the extra mile, if you will, and drive innovation. For the past several years, I've been applying my learnings to make Bullish the premier institutional digital asset market infrastructure business in the world.

Bullish is an institutionally focused business that operates globally and provides market infrastructure and information services that are designed to help institutions grow their businesses, empower individual investors and drive the adoption of stablecoin's digital assets and blockchain technology. We hold what I believe to be the 4 most respected and difficult to attain crypto licenses in the world from the European Union by way of Germany BaFin, from Hong Kong, the United Kingdom and as of yesterday, New York State, a BitLicense. Although the growth in the digital asset space over the past decade has been staggering, institutional adoption has lagged behind.

Looking ahead, we're excited by the continued opportunity in the digital asset space, and we're not alone. Industry analysts estimate that the crypto space will more than double in the coming years, and we expect this may prove to be conservative, and we expect that this growth will largely be on the back of institutional adoption. So what's changed? Up until now, we believe the lack of institutional adoption owed largely to regulatory uncertainties. Things are indeed changing, however. We are seeing increasing regulatory clarity all over the world. Europe's MiCA regulations and Hong Kong's ASPI-Re roadmap both add clarity. We are also quite optimistic with recent progress in the United States, including the adoption of the GENIUS Act, which defines stablecoin regulation and the progress towards a broader adoption of a crypto market structure bill, which intends to formulate the first national regulatory framework for digital assets market infrastructure.

We believe that this regulatory framework is not only exciting in the context of existing blockchain and crypto adoption, but could also plant the seeds for the large-scale transition of many traditional finance work streams and markets to blockchain technology in the years to come.

Turning to our business. Bullish operates 2 primary brands, the Bullish Exchange, which includes our exchange and related market infrastructure offerings and CoinDesk, our information services offering. Our exchange and related market infrastructure solutions differentiate Bullish from other competitors through our suite of Tier 1 regulatory licenses, one global order book, unconflicted business model, predictable and consistent liquidity with tight spreads and other areas of differentiation. We offer spot, perpetual futures and dated futures trading, and we'll soon launch options at scale. We offer clearing and custody and more. Our calling card is deep liquidity in crypto's largest assets and at competitive low fees.

Year-to-date through August 2025, our exchange has facilitated more than $530 billion of total volume, including more than $485 billion in spot volume alone. We support trading for many different trading pairs, and we have established significant volume market share in Bitcoin, Ethereum and stablecoin as compared to our identified peer set of regulated exchanges. Notably, none of our volume to date has come from the United States. While we have already had the ability to operate in many states because of our regulatory approvals, we refrained from launching our exchange in the United States until we received the New York State Department of Financial Services BitLicense, because of the prominence of the BitLicense as well as the relative importance of New York State to our business model.

Well, we received that license yesterday, and we look forward to bringing our exchange and our leading liquidity to the United States imminently, and we believe this to be the largest geographic market by far. We're also excited by our liquidity services offering, which provides digital asset issuers with subscriptionized liquidity, listing, visibility and distribution. This revenue line has grown significantly in recent months, as you can see, including through various recently signed agreements that are not yet reflected in our financial results, such as our collaboration with Solana, which was initiated on July 1, and agreements with various other stablecoin digital asset issuers, including effectively now all of the calendar stablecoins.

Our information services brand, CoinDesk, offers 3 primary services: CoinDesk Indices, which designs tradable benchmarks to track the performance of digital assets. Our flagship products include CoinDesk 5, which in conjunction with Grayscale, has filed to become the largest multi-token ETF in terms of assets in the world. And CoinDesk 20 which tracks the performance of the 20 largest digital assets by market cap. Our indices anchor about $41 billion in AUM and over $15 billion of trading volume as of June 30, 2025. Our second service, CoinDesk Data, offers a comprehensive suite of subscription-based market data and analytics solutions that serves as a key resource for more than 11,000 institutional investors, professional traders and industry professionals.

Recently, we announced we hired Dave LaValle, a long-time industry executive, well respected and well known in the industry to lead both the indices and CoinDesk Data initiatives. Our third service, CoinDesk Insights, provides news on the digital asset industry, having reached a global audience of more than 80 million people last year and serving as host for the consensus conferences in Hong Kong back in February and in Toronto earlier in Q2. Our Insights business earns revenue from advertising, sponsorship and events and serves as a critical cross-sell function for the rest of our business lines. Each of these 3 services, indices, data and insights is growing due to our great leadership team, introduction of new products and utilization of our broad reach to find new customers while cross-selling to our existing base. Dave will hit on our recent cross-selling success in his remarks.

I'll now shift gears to highlight a few accomplishments and areas of focus for us. First, on regulatory approvals. Bullish has pursued intentionally a suite of difficult to attain regulatory licenses from the most reputable Tier 1 regulators in the world to set us apart and prepare us for the institutional adoption wave. We already hold Type 1 and Type 7 licenses from Hong Kong's SFC and a benchmark administrator license from the United Kingdom's FCA. While we were previously grandfathered in Europe's regulatory regime through our license with Germany's BaFin, our license was recently uplifted to full alignment requiring no further need for grandfathering with the European Union's MiCA regulation. And repeating our very recent good news, we were approved for the New York DFS's prestigious BitLicense yesterday.

Throughout our positive communications with the team at New York DFS, we remain confident and optimistic in the impending approval of our application and are pleased to now share that we are licensed in New York. The BitLicense is infrequently granted and known for stringent application requirements. We believe this milestone is a testament to our ability to merge our innovative technology, including, among others, our automated market-making instructions with the capability to operate within the parameters of a highly regulated environment. This caps off the completion of what we call "the quad factor" which is the 4 toughest Tier 1 digital assets regulatory licenses in the world. We're looking forward to launching in the U.S. imminently.

Moving on to our liquidity services. This business continues to grow rapidly. And in recent months, we have entered into a collaboration with the Solana Foundation and many more liquidity services partners that are powering some of the most exciting projects in the space, including Pudgy Penguins, World Liberty, USDG, JitoSOL, Agora, BONK, AllUnity, Bitpanda and many more and have deepened our already strong sales pipeline for the future.

Our decision to accept our IPO proceeds in stablecoin was very well received by our partners, both existing and new. And while we've managed now to add many of the sizable challenger stablecoin providers to our liquidity services client list, the addressable market of both new stablecoin entrants and non-stablecoin token issuers remains massive. And accordingly, we have a deep and growing pipeline of future opportunities.

For our existing exchange operations, we are constantly optimizing our pricing. Starting in March of this year and stretching through Q2, we made several iterations to our exchange pricing. These optimizations included the adjustment of fees based on client type and client activity. This experimentation led to nonstandard fluctuations in both our volumes and our typical spread rates. We believe that the fruits of this optimization strategy have really started to manifest in Q3. You can review our monthly KPIs currently accessible on our IR website to see that monthly spreads and particularly volatility adjusted spreads are a good deal higher in the first couple of months of Q3 than they were in Q2.

Shifting gears, we continue to make progress towards an anticipated full launch of our options trading platform in Q4 of this year. In fact, our options trading product is already live in production as part of a mobilization or beta phase where clients are trading, but just in a risk-limited manner and ring-fenced to only a select number of clients. I've been a part of many trading product launches in my career, including options trading product launches. And this one has all the hallmarks of the successful initiatives so far. We will report back as we move towards full launch.

It was a busy quarter for our Information Services business. In addition to the hiring of Dave LaValle, on the CoinDesk Indices side, we continue to add assets under management, ending the quarter with $41 billion of assets under management tied to our indices, an increase of more than $9 billion from Q1. We also launched exciting new products, including CDOR, CoinDesk Overnight Rates, the benchmark interest rate for stablecoins. On the CoinDesk Data side, our integration of CC Data acquired in Q4 of 2024 is now complete, and we continue to regularly cross and upsell our customers.

For instance, recently, we signed a far more comprehensive CoinDesk Data contract with LSEG Refinitiv. We also continue to execute on the multiproduct cross and upsell, including through a recently signed custom deal with Midnight.

We also executed a very successful Consensus conference in Toronto during Q2, where we welcomed more than 15,000 guests. While we loved our time in Toronto, the United States is once again the capital of crypto, and we look forward to hosting our 2026 North America Conference in Miami on May 5 through 7. Please join us.

Finally, I'd like to discuss our U.S. launch. As I mentioned a moment ago, we have received the New York BitLicense. This was the last critical item for us to launch in the United States. So what's next? From an activation standpoint, our team has already been pounding the pavement, building a pipeline of interested exchange customers, including asset managers, hedge funds, retail brokers and more. In many instances, we can leverage our relationships with these very customers on the information services front to establish warm introductions and get them excited about the prospect of onboarding the Bullish. Our onboarding team and relationship managers have hit the ground running. We are also advantaged due to our global order book, a single global order book.

Any U.S. client that onboards to our exchange will have access to our already existing global liquidity from day 1, meaning there is no 0 to 1 or cold start problem and meaning that U.S. customers will instantly benefit from our best-in-class liquidity in crypto's largest assets. It is worth noting that our targeted customer base is institutional. Institutional clients do take some time to fully onboard to the exchange and begin trading. We are optimistic about the opportunity in the United States, and we believe it could fast become our largest trading market. That said, we wish to guide conservatively to volume expectations, particularly in immediately ensuing quarters since it will take some time for clients to fully hook to our platform technologically and initiate trading at scale.

Our receipt of the NYDFS BitLicense is an important milestone and positions us well. We're glad we have the opportunity to share this news with you folks today and look forward to addressing any questions about the license and our plans during Q&A. While there are several other highlights that I could address, including our recently launched investor trading competition or our IPO or the impact of accepting funds and stablecoins or any of the exciting new CoinDesk 5 and CoinDesk 20 developments, I recognize that our prepared remarks are already pretty lengthy this time around, and I want to ensure we save time for Q&A.

So I'll stop here. I'll give Dave a chance to introduce himself, discuss our business model, review the quarterly results and provide an outlook for the business.

Thanks, Tom, and good afternoon, everyone. Today, I'd like to walk you through our business model, the second quarter results and provide some context on our operating performance. Financially, we are building Bullish around 5 core financial pillars that serve as our foundation for continued growth and drive our capital allocation framework. These pillars are organic revenue growth, diverse and complementary revenue streams, operating leverage, maintaining a well-capitalized, highly liquid and uniquely flexible balance sheet; and finally, creating value through M&A for shareholders.

So how do these financial pillars translate into our business model. As shown on Page 10 of today's investor presentation, Bullish has a broad set of diversified and complementary revenue streams. While these various business lines each have their own revenue models, they all make money in familiar ways as described on the page.

In particular, I'd like to call out our SS&O revenue, which includes Liquidity Services and all the CoinDesk branded products inside of Information Services. Our SS&O revenue has grown to 45% of total adjusted revenue in the first half of 2025, up 28% from the full year 2024. This growth has been driven by significant new logo wins and cross-selling into our existing base of partners. On Page 11, we feature several of Bullish's recent business highlights across the business. Tom already touched on most of these, but I'd like to drill down a bit more into how our cross-sell efforts are generating multiproduct adoption across both the Bullish and digital asset ecosystem.

To do that, I'd like to highlight one extremely new exciting partner, Igloo Inc. As featured on Pages 12 and 13 of our investor presentation, Igloo Inc. is the owner of the well-known Pudgy Penguins intellectual property and issuer of the PENGU token. Igloo and Pudgy Penguins chose Bullish for multiple mission-critical subscription-based services during the third quarter that highlight the multiple ways that Bullish powers our partners' growth ambitions.

Pudgy Penguins is a global Web3 IP-focused company, onboarding new users to crypto through their globally recognized Pudgy Penguin character. Originally an NFT collection, Pudgy Penguin's IP and trademarks were acquired by serial entrepreneur Luca Netz in 2022. They have since become one of the world's most recognizable characters with over 220 billion social media and gift views, more than 2 million toys sold across more than 10,000 global retailers, including Walmart to Target and one of the most popular racing mobile video games in the Apple App Store, Pudgy Party.

Today, the Pudgy Penguin's NFT collections and PENGU token have a combined market capitalization of approximately $3.5 billion. The toys include scannable QR codes to download a digital wallet with an NFT that can be used in their online properties and video games. Additionally, Pudgy Party is powered by an in-game blockchain-based marketplace for redeeming rewards and trading in-game assets. Igloo Inc. chose to partner with Bullish across several multiyear subscription-based products, including our liquidity services, CoinDesk Data and multiple Insights products, including our research and CoinDesk Edge. We are particularly excited about this partnership. We are bullish on the future of this promising team, and there's clear line of sight to expanding the partnership by leveraging more of our CoinDesk Insights platform and Pudgy Penguin's strong ties to the Solana network and community. We look forward to sharing more developments with you here in the future.

Turning to our adjusted second quarter results on Page 14. You can see we closed the quarter roughly in the middle of all the previously provided ranges. Reconciliations of our non-IFRS metrics can be found in the back of today's presentation as well as our 6-K filed earlier today with the SEC. Digging in a bit more into our adjusted operating results, as shown on Page 16, the second quarter was shaped by historically low BTC price volatility, which led to lower market-wide digital asset trading volumes. Against these headwinds, we delivered record quarterly subscription service and other revenue, which helped to partially offset the lower trading activity, leading to total adjusted revenue for the second quarter of $57 million, down 8.7% sequentially and 6.1% year-over-year. Adjusted operating expenses for the quarter were $48.9 million.

As seen on Page 17, employee compensation expenses were $25.7 million, down 13% sequentially and 3% year-over-year, and we expect quarterly employee compensation expense to remain broadly at this level going forward. Additionally, I'd also highlight 2Q advertising and promotional costs of $7.4 million. This largely consists of consensus events variable expenses driven by our North American consensus event in Toronto. Adjusted EBITDA was $8.1 million, down 39% sequentially and 45% year-over-year as 2Q's lower adjusted transaction revenue flowed through to the bottom line.

Now I'd like to turn to our Q3 guidance for adjusted operating results. We expect total adjusted revenue to be in the range of $69 million to $76 million, with adjusted transaction revenue between $25.5 million and $28 million and subscription, service and other revenue between $43.5 million and $48 million. We anticipate 3Q adjusted EBITDA between $25 million and $28 million and adjusted net income between $12 million and $17 million. Going forward, we intend to provide guidance on a quarterly basis for adjusted operating expenses and SS&O revenue. Our monthly reporting for spot perpetual volumes and spreads should allow investors to see our performance at the exchange level on a regular basis.

Thank you for joining us today. We look forward to the questions.

And with that, I'll turn it back to Tom.

Thanks, Dave. We're thrilled to be able to share some of our accomplishments, our latest plans with you all. Q2 was a strong quarter and the groundwork we've laid in Q2 should position us well for Q3, Q4 and beyond.

With that, I'll pass it back to the operator to help facilitate Q&A.

[Operator Instructions]

Your first question comes from the line of Ken Worthington with JPMorgan.

Congrats on the IPO. Congrats on the BitLicense. Congrats on the strong liquidity and subscription services numbers. My question goes to that liquidity and subscription services line item. You're guiding to sort of mid- to high $40 million range for 3Q. If we look at 2Q, how many tokens were part of Liquidity Services at the beginning of the quarter? And how did it end the quarter? And as we think about 3Q, where does that number grow to?

Ken, thanks, and good to speak to you again. Yes, that business kind of jumped out as early as hell because it is really growing nicely. If I can just expand a bit and explain for the broader audience kind of what it is. So what this business is, is if you're a stablecoin issuer or a non-stablecoin token issuer and Dave gave a couple of examples of non-stablecoin token issuers, you really need to have your product listed.

And not just on Bullish, you need to have it listed in a number of different places to ensure that there's appropriate liquidity. And you need to make sure that there is appropriate liquidity. If you just list your product somewhere and there's no bids or offers, it's a tree falling in the woods. And you need to be able to have some level of visibility into your product, advertising or you need to be on stage at an industry conference or you need to have research written on your token. And when you look around and you say, well, geez, who can give me all of those? We like to think it's really just us.

And if you look around and say, who can give me all those and who can do it with an institutional grade wrapper with -- that's credible and compliant, it's certainly only us. And so I suspect that's what's really driving it. To give you a little bit of directional answer without necessarily giving you the specifics about, hey, we have this many in this quarter and that many in the following quarter, we've not disclosed that level of detail.

I will say it has accelerated rapidly throughout this entire year. And I think a lot of it is just the groundswell of regulatory clarity all around the world. Everybody knows the rules of the road. So they're willing to kind of push the chips in the middle of the table, and they're willing to make these kind of long-term commitments to someone like us to pay us in many cases, maybe even in most cases, 7 figures a year for this sort of subscription. So regulatory clarity is really helping us. And the growth has accelerated Q1 over Q4, Q2 over Q1, Q3 over Q2.

But I'll hand it over to Dave.

Yes, Ken, I would just note that in the third quarter guidance we provided, it's important to note that, that is the beginning of the Solana contract. That's a large collaboration for us. There's a lot to do for us there. Additionally, the additional proceeds from the IPO do carry some return on them. So that's going to influence the third quarter guide as well as that those assets came on the balance sheet around mid-quarter.

And I'll just echo what Tom said, it's been a rapidly compounding line item for us. It's the bedrock and the ballast head for the cross-sell efforts. And it's the growth of just the individual logos is being amplified by the additional products and services that we're able to sell into our new partners and existing partners.

You remember from our first conversations, we were certainly excited about this business but not overly so because we ourselves wanted to make sure there's product market fit, and we want to make sure that the customers were getting even more value out of it than we were receiving in the subscription fees, and that's exactly what's happening. So we're hearing from customers that it's driving liquidity, it's driving credibility. It's helping them with their projects and that word of mouth has really accrued to our benefit.

And maybe thinking more about the outlook for that line. I suspect that the passage of the GENIUS Act sort of pulled forward a bunch of the stablecoins to kind of subscribe to your services. What does the pipeline look like going forward for that? Have you basically locked up all of the major new stablecoins? And is the growth that you're seeing maybe beyond 3Q and 4Q of this year comprised of, you think, more stablecoins? Or is the growth as we look forward really expanding into non-stablecoin tokens?

I appreciate that question and perhaps oversharing, we actually had a version of our scripts that we were working on that. That said, we have as customers substantially all of the Challenger stablecoins. And I tweaked it because we're seeing new stablecoin entrants appear literally every single day. So at one point and really around the time of the IPO, we looked out and said, okay, just look at our stablecoin partners, PayPal, and I assume I can say these names, Agora, RAAX, which is VanEck and Ripple and really USDG, World Liberty, so on and so forth. And we kind of had this really great group. And so it begs the question, is this just a onetime burst of stablecoin issuers on the back of the GENIUS bill? And then will it continue to grow? Will it consolidate? Will it not? And I think that's an interesting industry question. Dave and I, as you've heard us say, I have always believed it will continue to grow. And this is a 1,000 flowers blooming and this will be a highly competitive industry.

And the last week, and I'll just give you 2 anecdotes, I got a call on Monday from an old friend from my [indiscernible] days, who you would know, Ken, saying, I'm launching a new stablecoin. I want to talk to you about it, I want to work together. And I got an e-mail immediately before this earnings call, saying I'm launching a stablecoin, and I want to work with you from also an old friend, one of my closest friends in the world.

So the answer is that the current pipeline is heavier on non-stablecoin token issuers. In other words, if we look at the current pipeline, and if I just say, hey, give me the 50 most likely, more than 25 are non-stablecoin token issuers, but the stablecoin issuers just keep popping up and the product market fit that we offer is highly, highly compelling, which is why we had literally essentially all of the Challenger stablecoin at one point in time.

Did that answer your question, Ken? I know it was a little bit long-winded.

You answered it well. So thank you very much and congratulations.

[Operator Instructions]

Your next question comes from the line of Peter Christiansen with Citi.

And certainly, congrats, Tom and team. It's been quite a month or 2 here and certainly great to see the BitLicense being awarded. That's fantastic news. I was wondering, Tom, maybe is there like an analog that we should think of in the back of our head? And obviously, who knows what's going to happen over the next 1.5 years as the U.S. institutional sector hopefully starts opening up.

But an analog in terms of sales cycle to sign up an institutional sized account, time to implement on the back end, that kind of thing. And then as you think about time as cross-sells start coming after volume starts building up. I don't know if you've seen a steady schedule among some of your existing client engagements that might be helpful to us. And then I'm going to throw in one last one here. I did notice the $10 million trader challenge promotion, which seems -- how should we think about this, I guess, in marketing and selling expense going forward? And just thoughts on that.

Great. Thanks, Pete. Yes. I'm going to let Dave address the trader challenge. Just in terms of the sales cycle, I think Pete's question is specifically about our U.S. launch. Again, for the avoidance of that, we've never brought on a U.S. customer. All of our customers are non-U.S. The BitLicense unlocks the U.S. as a market.

So effective today, we now can enter the -- actually, I think it's effective Monday, we can enter the United States. So Pete, look, unfortunately, if you look at our pipeline right now, it's filled with companies that have the word bank in their name or financial or investments. It's a more mature kind of white shoe set and the truth of the matter is it takes a while to hook them up. And that's why I added that in my prepared remarks. And a while can range from 2 months, and that's if somebody has a legal team that acts with alacrity and let's say they're using someone to help connect them to trading in crypto to quite literally 6 months if they're going to do all the connectivity to the APIs themselves, they're going to heavily negotiate legal doc.

The good news on our end, Pete, is we have been able to -- because we have regulatory approvals throughout the U.S., just not in New York until yesterday, we have advanced discussions in an advanced pipeline.

So I think it's going to take a little while to see the first couple of customers come on board. But if we don't start to see it in the next month or 2, I can tell you, I'm going to have some hard conversations internally because we have invested in a team that's been out building the funnel. So I hope that gives you a little bit of color, but that kind of gives you a sense of what to expect.

Thanks, Pete. I think your second question, you broke up a little bit there was related to the trading competition we have announced. Yes, there, the price is up to $10 million seed investment in their funds. So we're not just giving away the money in promotional rewards. We really like this type of activity. It's our first time engaging in it. But what we've seen in terms of new customer onboards, interest in participating in the program, our ability to push our data and its availability into new user bases who can then come trade on exchange and maybe they get a fund one day and they can benchmark to our CoinDesk indices products. The general idea behind it was exposing a different customer segment to our cross-sell potential, and we're really excited about it.

And the $10 million is not a payment. I mean it's an investment. So we're -- yes, we're excited about it.

Your next question comes from the line of Dan Fannon with Jefferies.

I wanted to talk about customer concentration. You guys mentioned how you've been adjusting some of the pricing for your various customer bases. So curious how that's evolved? Maybe talk about 3Q and how that's progressed. And ultimately, do you think you're done here? Or is there some more tweaking when we think about pricing going forward that you still likely need to make?

Man, the tweaking never ends, Dan. I wish it did, and I mean that as a career-long commentary. I remember when we introduced electronic trading to the New York Board Trade in February 2008 and GetGo and Hudson River trading were 50% of our volumes, is a very common thing in markets where you'll see a certain number of customers that amass a significant amount of volume, and that's okay, but it's something that we fiddle with currently, and Dave and the team have actually done a great job of bringing that down to a reasonable level over the last several quarters.

Yes. And Dan, I'd just comment the pricing changes we've made, which you can see the impact of that in the monthly operating results we provide. We're pleased with the outcome. If we continue to have some customers who are heavier in terms of concentration, we are okay with that in the relative new pricing framework. Having had a flat pricing fee, which created significant customer concentration was not going to be a solution for us long term.

So we're happy with the pricing changes, the way its diversified customer base, the way it's spread out the fees across activity levels and customer types. And so while we may continue to have a couple of customers who are heavy at the top of the book in terms of volume, we are more comfortable with that in the current pricing framework than we were previously.

Your next question comes from the line of Brett Knoblauch with Cantor Fitzgerald.

Congrats on the IPO. Tom, it seems like you're itching a bit to talk about CoinDesk 5, CoinDesk 20. It's nice to see the quarterly increase in kind of AUM tracking your indices and benchmarks. How should we think about the progression of maybe the asset-linked fees going forward? Is there any catalyst on the horizon like a CoinDesk 5 ETF that could really accelerate some of those flows? But yes, just more broadly about the indices business would be great.

Yes. No, you said correctly, Brad, as you may know from our past conversations, I love this business. That $41 billion of assets under management benchmarked to our indices, to be clear, we're getting paid fees on the whole of that $41 billion. But the way it works in the multi-token index world or even a single token index world is you're talking about a small number of basis points.

So when you run the math of the $41 billion times a small number of basis points, it's a nice business, but it's not huge. And so you're asking the absolute right question, which is what's going to cause this to really grow? Like what's going to enable us to be the MSCI of crypto, if you will. And essentially, what's happened in crypto, if I can cover a decade of history in 30 seconds is the first thing people were willing to invest in from an institutional perspective was Bitcoin, and that really compounded with the introduction of the Bitcoin ETFs.

And then with the ETH ETFs, people were willing to say, okay, "I'll have a little Bitcoin exposure and then I'll have an even smaller amount of ETH exposure as part of my overall portfolio." But now what we're seeing with Solana ETFs and other tokens, XRP, for example, Cardano, Avalanche becoming more mainstream, people are looking for broader sets a la the Dow or the S&P 500 or MSCI's Emerging Markets Index or something to be able to invest in a broader swath of the market while maintaining Bitcoin as their primary way to invest.

So we have the CoinDesk 5, which is quite literally 5 tokens and the 20, which is 20 covers the broader market to really be a catchers' mitt for both of those -- for that trend that people move out the curve first to the 5 then to the 20. And they're going great. This great scale private truck vehicle, which touchwood can -- we hope will be approved by the SEC to convert to an ETF will be the largest multi-token ETF, I think, in the world on day 1 at a minimum, quite possibly.

CoinDesk 20, we have a WisdomTree ETP in Europe that is gathering modest amounts of assets inflows on a regular basis. That too is exciting. We have signed but not announced the particulars with a major global futures exchange as well as a major global -- major U.S. equities exchange to launch products on the 5 and 20 on those respective exchanges. And we have a signed but not fully announced ETF arrangement in the U.S. for those products as well. So it's going to take some time, Brett, because the market needs to get more comfortable investing in more products than just Bitcoins, but it's happening in real time, and we're there for it.

The next question comes from the line of Brian Bedell with Deutsche Bank.

Congrats on everything as well. Just back to Liquidity Services and particularly the stablecoin side. Just trying to get a sense of -- given the onboarding of these contracts sort of that growth trajectory potential beyond 3Q. And maybe just to clarify, the -- it sounds like the guide of the $45 million plus for that for SS&O, I guess, $40-plus million of that is Liquidity Services Indices and Data, so applying a doubling roughly of, I guess, the second quarter run rate, how much of that additional growth is directly related to Liquidity Services from stablecoin? And then I guess back to the first part of the question, which is given the really strong market potential here with adding more challenger stablecoins, how should we think about that revenue growth potential?

Yes, sure. Thanks, Brian. The growth is all the segments within subscription services and other revenue, all the business lines in there are growing, as Tom mentioned before, all of them are growing organically. They feed off of each other. But the primary driver of the revenue growth that we discussed in Q3 is largely on the back of liquidity services. It is -- in terms of the revenue complexion, we spoke a little bit earlier about the pipeline and the outlook for the mix between stable and non-stable.

But currently, the revenue complexion is definitely weighted towards the stables, and I include our work with the Solana network in that bucket as well because, as you know, it's a stablecoin-based collaboration, although they don't issue a stablecoin, it's with our partners that we work with the Solana network to move those over and generate other activity and acceptance on Bullish exchange. So it is predominantly driven by the Liquidity Services. But again, those -- that is the bedrock for selling other recurring revenue streams into the customer base.

And just that sort of growth trajectory, I guess, as we -- not to give guidance in 4Q, but I mean, it sounds like it would be -- the way you're layering in these deals, we would have even more uplift in 4Q potentially in that scenario.

We continue to see strength. We do expect to see growth in the fourth quarter of that line item just based on the bookings trajectory and where we are in the third quarter. The growth in the line has been pretty substantial this year in terms of sequential growth. The Q3 guide, I wouldn't interpret that as this pace of growth well into the future. We look forward to kind of giving you the guide on Q4 subscription services and other on our next call, but we do continue to see growth in all of the product areas.

Your next question comes from the line of Chris Brendler with Rosenblatt Securities.

Congratulations from me as well. I want to discuss the monthly metrics and kind of the uptick we've seen in the spread over the last couple of months, especially in August. And maybe just give us a little color. I think we've talked about some of the pricing changes you're implementing, but just the sustainability of that and how it looks into your guidance into the fourth quarter would be great.

Yes. Let me just editorialize for one moment, and then Dave can give you the real answer. The one thing I wanted to highlight is because in crypto, a lot of people focus on spreads in part because amongst the retail group, so electronic brokers serving the retail crowd or exchanges serving the retail crowd, they oftentimes will have 50, 100, 150, 200, 250, 300 basis point spreads. And we've all seen that movie of what ultimately happens to those kind of spreads, whether you look at what happened in FX or equities or what have you.

We're in a different world. We don't compete on price. We don't -- the institutional group, you got to get to a fair value price. And then you're competing on determinism, you're competing on what other services you provide or what margin capabilities you have, what licenses you have, how reassuring is your custody solution, all those sorts of things.

So as we're moving our spreads around, what we're really doing is optimizing for revenue. And we run experiments a lot. And that is something that is going to continue. But what we have found is a nice sweet spot where we kind of had overcorrected pushing for revenue and really what we got out of it was volume and less revenue. And Dave and the team led by Chris Tyrer, President of our Exchange business, have done a really nice job of finding a sweet spot over the last several months that we feel comfortable.

Yes. And I think you'll see in the Q3 guide, the September implied spread, you kind of run out the math and you can see the volumes is about consistent with where we were in August, but a little bit lower just based on lower volatility. I would say that while our spreads have gone up in a volatility adjusted manner versus where we were previously, we still have some sensitivity to volatility, which has been a bit lower here in September than it was in August. But we do think that from a spread perspective, you'll get a good feel of where we should be, particularly when we get out of the September results.

I just want to add one item. I said earlier when Brett asked the question, and thanks for asking it, Brett, about our index business. And I told you I was excited, among other things, about a Grayscale product on our CoinDesk 5 index that has just been during this call, approved by the SEC. So that product, which, I don't know, it approaches $1 billion of assets under management, which, by the way, is huge for a crypto multi-token product, will become an ETF here in the U.S. and will likely be the largest ETFs in the world on day 1. So very exciting news and really good for that CoinDesk 5 franchise. So Brett, to answer your question, how do we grow the thing? Well, we just chopped some wood.

We'll take the next question.

Your next question comes from the line of Rayna Kumar with Oppenheimer.

This is Guru on for Rayna. A lot of my questions have already been answered, but if you could just maybe touch on how we should expect the spread going forward? I know this directly follows the previous question. If you could maybe just give us a trajectory of what we can expect going forward?

Yes, sure, and thank you for the question. As I was saying on the previous question, we expect spreads going forward to be roughly in line with the August numbers. They remain somewhat sensitive to volatility. September volatility has been lower than August when we put out the results and we finished the month of August, we're only about halfway through here.

We think you'll see, depending on the full month volatility, consistency if the volatility is same with August, slightly lower if volatility is lower and obviously higher if volatility is higher. Again, the reason we're doing the monthly disclosure on the transaction revenue spread is to provide this type of clarity for you guys to see it in as real time as possible. We do optimize for total adjusted transaction revenue, as Tom mentioned before.

We are also launching new products like options, which hopefully will be coming during the fourth quarter that may induce us to adjust spreads in other assets in order to maximize total adjusted transaction revenue.

Given all the moving parts in there, the dynamics around volatility, we believe the best way we can help you guys begin to tighten up your models is to do the monthly disclosure that we've been providing and then talk you through the trends as we go here. And as of right now, we generally tend to view August as a good benchmark type month for the spot spreads going forward.

Your next question comes from the line of Bill Papanastasiou with KBW.

Congrats on the inaugural earnings call and strong sequential SS&O revenue print. With respect to the BitLicense, obviously, the grant of it helps to firm up timelines of penetrating the U.S. market. But I was curious whether we should be thinking about any other additional read-throughs. In particular, I saw that the license allows for custody services in addition to trading. Is that an area that perhaps Bullish might be thinking of getting into down the road?

Yes. Sure, Bill. Good question. We actually are in custody, the provision of custody. We've taken a thousand flowers bloom approach where we enable our customers to custody with third-party qualified custodians or in some cases, self-custody using software or custody with us and our own bespoke custody solution. So to answer your question, yes, but only in the sense that we're already in custody. We're not announcing any sort of mega changes to the business model with this BitLicense approval. We do have a few things in the works that we're not really ready to drop breadcrumbs around, but no extensive business model changes with respect to custody.

Our last question comes from the line of Joseph Vafi with Canaccord Genuity.

Of course, my congrats here as well. Maybe just kind of double-click a bit on progress on the options platform. I know, Dave, you just mentioned it a little bit. It looks like maybe Q4 full rollout. Any other anecdotes there? Plus is it too early to really start thinking about what contribution may be there might be from a full rollout in trading volume?

No, great question. It's a meaty last question. We love to talk about it. First of all, let me start on a conservative note. It's a startup. It's a start-up. So no promises. It's hard to build derivatives volume no matter what market you're in. And so you should hear it from us that you should view this conservatively.

Nonetheless, we're really excited about it. We're already live, like live lives, not fake lives. People are in there trading real dollars in a regulatorily approved environment. It's working. Some of the biggest options traders on earth are in there every day. We're limited to a certain number of customers. We want to get it right. We're limiting those customers to a certain size of their position but looks good. And that's often the tough part, just getting off the ground with a system that works in an initial batch of customers.

With respect to options, options have been this kind of tiny market in crypto, like teeny tiny, a couple of percent volumes relative to the overall spot volume. And we made this bet, and we made it -- I remember talking to Dave and Chris Tyrer about this a year ago, where we said it's got to grow. It's got to grow. Every market you look at, the options market is minimum 25%. So look at U.S. equities, 25% or greater. Look at interest rate options, really easy market to get data on. More than 25% options as compared to the linear products.

And we just said this thing is going to grow, and there needs to be competition and there needs to be institutionally focused competition, low cost that has things like portfolio margining with the underlying futures, the underlying hedge. Let's go ahead and let's do it. And we're being rewarded.

In August, we saw options volumes in crypto pick up. In fact, they nearly doubled or maybe even more than doubled as a percentage of the overall spot volume. So we're seeing the underlying options market grow. We're seeing customers come in and work with us on our beta launch here. And we're going to share a lot more information with you on the calls ahead. But like I said, I put in my prepared remarks, I've been involved in a lot of launches, some real good ones, some losers, and you get a sense of what makes a successful launch. And this one has all the hallmarks of something that could work out nicely for us.

Ladies and gentlemen, there are no more questions at this time. There are no other questions. I would like to turn the call back over to management for closing remarks.

Sure. Thank you. Also, I want to thank our team, Liam and Michael, who got us prepared. We definitely had the jitters a little bit. It's our first earnings call. Randy, if you're out there, you told us whatever you do, you better not blow it on your first earnings call. So I hope we at least get a passing grade.

But we appreciate all of you staying for what those of you on the East Coast is something like dinner time. Our commitment to you is we're going to do our best to be in touch with you not just during the earnings calls, but in the interim and be transparent with you about the success or lack thereof of this business. And we really appreciate you following along. And just rest assured, we're working our b**** off certainly for our customers, but also for our shareholders.

Thank you all very much, and good night.

Ladies and gentlemen, this concludes today's call. Thank you all for joining, and you may now disconnect.