Geminice Station Inc-a Stock

Good day, and thank you for standing by. Welcome to the Gemini Second Quarter 2026 Earnings Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to Ryan Todd, Head of Investor Relations. Please go ahead.

Thanks, operator. Good morning, and thank you for joining Gemini's Second Quarter 2026 Earnings Call. My name is Ryan Todd, Head of Investor Relations at Gemini. Joining me on the call today are Gemini's Co-Founders, Cameron and Tyler Winklevoss; and our Interim CFO, Danijela Stojanovic.

Yesterday, we released our second quarter 2026 financial results. During today's call, we may make forward-looking statements, which may vary materially from actual results and are based on management's current expectations, forecasts and assumptions. Information concerning the risks, uncertainties and other factors that could cause these results to differ is included in our SEC filings.

Our discussion today will also include certain non-GAAP financial measures. Reconciliations to the most directly comparable GAAP financial measures are provided in the earnings presentation on our Investor Relations website and on the SEC's website. Non-GAAP financial measures should be considered in addition to, not as a substitute for GAAP measures. We'll start today's call with prepared remarks and then take questions.

And with that out of the way, let me turn the call over to our founders, Cameron and Tyler.

Thanks, Ryan. Good morning, everyone. With the close of Q2, we are approaching the 1-year anniversary of Gemini going public. In September 2025, the price of Bitcoin touched $117,000 and the market we were entering looked much different than the market we operate in today with Bitcoin closing Q2 below $60,000. Despite these headwinds, we have been heads down building to the Gemini of tomorrow.

The Gemini platform has changed more in the past 9 months than it did in the past decade. Last quarter, we spoke about the launch of prediction markets in December '25. And last month, following the close of Q2, we launched commission-free U.S. stock trading. With the addition of stocks, customers in eligible states in the United States can now trade thousands of U.S. equities with 0% commission, participate in prediction markets and trade crypto all from the Gemini app. Since the end of Q2, we also began operating our derivatives clearinghouse and settling our own prediction markets contracts following the DCO license we received from the CFTC in April.

This quarter, we continue to focus on rapidly evolving our predictions business. While Q1 was largely product and feature focused, this quarter, we invested in marketplace liquidity and improving the overall trader experience on our prediction marketplace. Since Q1, we tripled the number of contracted market makers on the platform, launched 3 new maker and taker incentive programs and expanded trading infrastructure with several improvements to our Predictions API.

On the product side, we shipped personalized insights powered by AI and a rebuilt interface with unique category-specific experiences across the contract markets we offer. Looking ahead, we continue to see predictions as the largest near-term growth opportunity on the platform, especially heading into the upcoming sports season in the second half of the year.

We've recently certified a wide range of new product filings and continue to deliver new experiences to directly capture that activity. And with our clearinghouse now live and clearing our own contracts, which keeps those economics in-house, we are now focused on adding distribution partners to our DCM and expect to have more updates on our progress here shortly. Through all of it, the focus stays on continuing to improve the health of both sides of the order book. Deeper taker flow attracts more makers, which tightens spreads and lets customers trade with greater capital more predictably. We believe that this is the next unlock in driving prediction activity higher at Gemini.

And with that, I'll turn it over to Tyler to discuss our recent business highlights.

Thanks, Cameron. Tyler here. In Q1, we laid out our strategy for Gemini 2.0, and Q2 was our first full quarter operating under it. As we march ahead in the second half of 2026, the shape of the business is visibly different. More products, a leaner cost base, less dollars going out the door and revenue that leans less on spot crypto trading every quarter.

Danijela will take you through the financials in detail shortly. So, I want to spend my time on what we built this quarter and what we intend to do with it. We've operated through crypto market cycles for over a decade, and the rule has held every time. Bear markets are for building. The first half of 2026 was a focus on building by design.

We put our dollars and our focus into shipping new products and securing regulated infrastructure rather than overspend on acquisition in an environment where we felt paid acquisition wasn't going to earn the right return. We continue to believe that was the right sequencing. It put us on pace to complete and operationalize our regulated derivatives stack, our designated contract marketplace at the start of this year, our derivatives clearinghouse live earlier this month and our FCM application filed in June. Very few firms in this country hold that combination of licenses, and we built ours in-house rather than spending significant capital to acquire it. And the stack was built for more than predictions. Most price discovery in crypto happens in perpetual futures, not spot. And today, the vast majority of that volume sits outside the United States.

We already offer perpetual contracts to customers in Singapore. So the product and the technology are built and running. We own the DCM and the DCO and have filed our FCM application. If and when we receive the approvals we need, we are ready and intend to launch perpetual futures for U.S. customers.

On the product side, this year, we have dramatically expanded what customers can actually trade at Gemini. With commission-free U.S. equities and ETFs launched in July, the platform now offers more than 5,000 tradable markets across equities, crypto and event contracts, up from less than 100 a year ago.

We also rebuilt our advanced trading experience on mobile, so customers can trade directly from the chart or the order book with positions, open orders and margin all visible in one place. We expanded the assets available for margin trading, and we continue to improve our developer platform and API trading capabilities for programmatic and agentic traders.

Taken together, the first half of this year was about building the products and license infrastructure needed to support a financial super app. We feel confident we've never had a better mousetrap, and it's driving better engagement with multiproduct users nearly doubling year-over-year. The focus now shifts to distribution and growing revenue by getting more customers and more activity on the platform, while holding the cost discipline we've established this year.

With that, I'll turn over the call to our interim CFO, Danijela, to discuss our financial results for the quarter in greater detail.

Thank you, Cameron and Tyler. Good morning, everyone, and thank you for joining us today. I'll start with a few key takeaways from the quarter, then walk you through the results in further detail and close with our updated financial outlook for the year. Three things I want to highlight upfront.

First, total revenue grew 37% year-over-year to $45.5 million, driven by continued growth in services revenue and our OTC business. This growth came despite a 38% year-over-year decline in exchange revenue as crypto market volumes remained under pressure throughout the quarter.

Second, services revenue and interest income reached $26 million, up 117% year-over-year and now representing 59% of net revenue, up from 50% in Q1, reflecting both the continued growth of the card and staking businesses and a softer trading environment.

And third, our cost restructuring is delivering. Total operating expenses declined 15% sequentially to $122.4 million and headcount ended the quarter at approximately 402, down 40% from our Q3 2025 peak. The full benefit of the Q1 restructuring is now flowing through the cost structure.

Turning to revenue. Net revenue was $43.7 million, up 33% year-over-year. Transaction revenue was $17.8 million, down 15% year-over-year and down 26% sequentially. Within that, there were meaningful moving parts. Exchange revenue was $12.5 million, down 38% year-over-year and down 27% sequentially, reflecting continued softness in crypto trading activity. Total spot trading volume declined to $3.8 billion from $11.3 billion in Q2 of 2025, a 66% decline against a 38% decline in exchange trading revenue. Institutional volume accounted for nearly 90% of the volume decline, while fee economics continued to improve in both retail and institutional trading segments.

OTC revenue was $4.7 million, up 671% year-over-year. Similar to Q1, the quarter included episodic client demand in response to periods of heightened volatility in the crypto market that contributed to elevated volumes. The underlying eOTC API program continues to add institutional clients, and we expect OTC to remain variable quarter-to-quarter given the nature of large institutional trades.

Prediction markets contributed $0.5 million to transaction revenue, up 18% sequentially. That figure is reported net of rebates. As Cameron mentioned, we launched new maker and taker incentive programs during the quarter and the rebates paid under those programs, roughly 20% of gross fees, are recorded as contra revenue.

Event contracts traded in Q2 were up 93% quarter-over-quarter, and our focus in the period was on building depth in the order book rather than maximizing short-term fee capture. While this is still an early-stage product, we are encouraged by the growth in customer activity and believe the investments we're making today position the marketplace for stronger monetization as liquidity and participation continues to scale.

Turning to services revenue and interest income, which was $26 million, up 117% year-over-year and up 6% sequentially. Let me walk you through the key components. Credit card revenue was $16.2 million, up 231% year-over-year and up 10% sequentially. Card MTUs were 106,000 at quarter end, up 165% year-over-year, though down 7% sequentially as we continue to shift our acquisition strategy towards higher returning, lower spend channels.

New sign-ups in Q2 were approximately 5,000, reflecting that deliberate pullback in acquisition marketing in the second quarter. Card receivables remained roughly flat sequentially at $219.6 million and pre-provision net revenue on the card improved 44% sequentially to $5.5 million, reflecting the continued maturation of the portfolio. Staking revenue was $4 million, up 88% sequentially and up 50% year-over-year.

There were 3 primary drivers of the increase. First, approximately $1.6 million relates to revenue that economically belonged in the first quarter but was recognized in Q2 as we completed the migration to our in-house validator infrastructure and resolved associated data capture issues.

Second, following that migration, we now act as a principal in the staking arrangement. So, validator costs now flow through operating expenses rather than being netted against revenue, increasing reported staking revenue on a gross basis.

And third, we also saw continued growth in staking adoption during the quarter, reflecting healthy underlying customer engagement with the product. Advisory fee revenue was $2.7 million, consistent with the prior 2 quarters, reflecting our ongoing advisory services agreement with a strategic customer entered into during Q3 2025.

As the compensatory warrant arrangement associated with that agreement reaches the end of its recognition period in July 2026, we expect to recognize a small remaining amount of advisory fee revenue in the third quarter, after which this revenue source is expected to conclude.

Custodial fee revenue was $0.6 million, down 67%, both year-over-year and sequentially, reflecting lower average asset valuations on the platform during the quarter and net custody asset outflows. Assets on platform ended Q2 at $8.4 billion compared to $18.2 billion in Q2 of 2025, reflecting the decline in crypto asset prices over the past year and the custody net asset outflows.

Interest income was $2.4 million, roughly flat sequentially. Now turning to expenses. Total operating expenses were $122.4 million, down 15% sequentially from $144.5 million in Q1 and up 24% year-over-year. The sequential improvement reflects the full quarter benefit of our restructuring actions.

Salaries and compensation were $48.2 million, down 26% sequentially. This includes $20.3 million of stock-based compensation. Without the $20.3 million of stock-based compensation, cash compensation was $27.9 million, down 32% sequentially and down 20% year-over-year, reflecting our lower headcount base following our workforce reduction.

There was no severance in Q2 compared to $6.5 million in Q1.

Headcount ended the quarter at approximately 402, down from 442 in Q1 and down approximately 40% from our Q3 2025 peak. Sales and marketing was $8.8 million, down 54% sequentially and down 45% year-over-year. Within that, brand and performance marketing was approximately $0.1 million as we paused broad-based acquisition spend and focused on organic and targeted channels. That level of spend reflects our tactical decisions during the quarter and should not be viewed as a fixed operating run rate as future investment will continue to be driven by market opportunities and expected returns.

Credit card rewards and promotional and referral incentives were $8.7 million, down 24% sequentially, reflecting lower cardholder spend activity during the quarter. Transaction losses increased from $3.6 million in the prior year to $20.1 million. The increase is primarily due to higher provision for expected credit losses on the credit card portfolio.

As we discussed last quarter, we previously identified an identity fraud event in Q1 and established an initial $4.1 million reserve based on the information available at the time. During the second quarter, as our investigation progressed, we identified additional fraud patterns and affected accounts associated with the same Q1 origination cohort. These account balances continue to mature through the delinquency cycle and our June 30 reserve reflects our updated estimate under the CECL methodology.

Importantly, based on our analysis, we believe the elevated provision is concentrated to this identified fraud-related cohort and does not reflect broad-based deterioration in the underlying credit portfolio. We've taken actions to strengthen our fraud controls and monitoring. And while provision expense will continue to evolve as the portfolio seasons, we expect future provisioning to be driven primarily by the underlying credit performance of the portfolio rather than onetime fraud events.

Technology expenses were $18.8 million, down 15% sequentially and up 5% year-over-year, reflecting operating efficiencies that largely offset continued investment in product development. General and administrative expenses were $20.6 million, down 5% sequentially and up 7% year-over-year. Combined, tech and G&A was $39.3 million for the quarter, tracking within our full year guidance range. On the bottom line, net loss was $107.7 million, an improvement of 19% year-over-year compared to a net loss of $133.2 million in Q2 2025.

Adjusted EBITDA was a loss of $74 million compared to a loss of $59.9 million in Q1 and a loss of $51.9 million in Q2 of 2025. That deterioration is driven primarily by noncash mark-to-market losses on Bitcoin holdings, reflecting the decline in Bitcoin prices during the quarter following the close of the $100 million strategic investment of Bitcoin that we received in May.

We believe that operating loss offers a cleaner view of our operational performance, which improved 18% sequentially from $94.2 million in Q1 to $76.9 million in Q2, reflecting the full quarter benefit of our restructuring actions and continued expense discipline across the business.

Monthly transacting users were 580,000, up 11% year-over-year, though down 2% sequentially as softer crypto market conditions weighed on trading activity. Let me close with our outlook. Consistent with prior quarters, we are not providing formal revenue guidance at this time.

While we have expanded our product portfolio and market infrastructure, many of these initiatives are still in the early stages of monetization. Our focus in the first half of this year was on building capacity by expanding our regulated footprint, launching new products and improving the marketplace.

As we shift our focus toward distribution and customer acquisition in the second half of 2026, we expect these investments to contribute more meaningfully over time, but the pace of that ramp remains difficult to predict given both the early stage of these businesses and the broader macro and crypto environment.

On expenses, we're refining the precision of our outlook. Cash compensation is still expected to decline 15% to 20% relative to 2025 levels, which does not account for stock-based compensation or restructuring charges. Stock-based compensation is still expected to total $100 million to $115 million for the full year.

We now expect technology and G&A expenses to be between $155 million and $170 million for the full year, narrowing our previous guidance range. On marketing, our guidance remains unchanged at 10% to 15% of revenue without rewards and promotions. Marketing spend in the second quarter was intentionally well below that range as we prioritized investments in product development, regulated infrastructure and marketplace capabilities during a period of weaker customer acquisition economics.

As we enter the second half of the year, we expect to increase brand and performance marketing while remaining within the full year guidance range we previously provided. With nearly 2 quarters of restructuring now behind us and the full cost run rate reflected in our results, we've largely completed the first phase of Gemini's transformation.

Over the past year, we believe that we have fundamentally reshaped the business by broadening our product offerings and establishing a more disciplined operating model. We are adding products, stocks are live, predictions are scaling and the derivatives infrastructure is in place. We believe that we are operating more efficiently than at any point since going public.

The next phase is execution and growing adoption across our expanding platform while maintaining the discipline that we have established. To summarize, this quarter reflects continued progress as we continue to transform Gemini into a broader multiproduct financial platform.

We delivered 37% year-over-year revenue growth despite one of the weakest crypto trading environments since becoming public, improved operating loss for the third consecutive quarter and continue to expand beyond our historical exchange business. While there is still meaningful work ahead to improve profitability, we believe we've largely completed the heavy lifting of expanding our product and market infrastructure. Our focus now shifts to scaling adoption, growing revenue and demonstrating the operating leverage embedded in the platform.

And with that, I'll hand it back to Ryan to open up the Q&A.

Thanks, Danijela. We'll now turn to Q&A. Questions were submitted in writing yesterday after the release of our second quarter results. Before we go analyst by analyst, we want to first start with a repeat question we received from several analysts, specifically on the provision for credit losses in the quarter.

Given how consistently it came up, we'll address that to start. So, on the provision for credit losses in the quarter, understanding that the majority of these provisions are from a fraud incident, how are provisions for credit losses looking outside of this incident within the portfolio? And with respect to fraud, can you help us understand what changed in your assessment from May to today? How confident are you that we shouldn't see another meaningful provision from this cohort?

Thanks, Ryan. Yes, we understand the question given the size of the Q2 provision. First, I would separate really the operational issue from the underlying credit performance of the portfolio. Based on our investigation to date, we believe that this was a concentrated identity fraud event associated with a specific Q1 origination cohort rather than broad-based deterioration in the portfolio.

And so, many of those accounts were still current at the end of the first quarter and then naturally progressed through the delinquency cycle during the second quarter. And as our investigation progressed during that time period, we identified additional fraud patterns and affected accounts associated with that same fraud event.

And so, as those amounts really matured and more performance data became available, we updated our CECL estimate to reflect the expanded scope of this identified fraud event. And what I will say is that the headline delinquency metrics this quarter are overwhelmingly influenced by that one concentrated cohort rather than a change in the broader credit characteristics of the portfolio.

And so, if you exclude the fraud-related cohort, you can see that the underlying portfolio has performed broadly in line with our expectations. Delinquency increased from 3.8% to 9.4%, but nearly all of that increase was fraud related. So, fraud-related delinquency rose from 1% to 6.1%, while when you look at the non-fraud delinquency, it increased modestly from 2.8% to 3.3%. So, this is consistent with normal seasoning in a relatively young portfolio.

And what we've done since we've taken these learnings and strengthened our fraud controls onboarding, and monitoring based on what we've learned through our investigation. From a timing perspective, these provision balances will flow through to charge-off state over the normal credit loss cycle as they progress through delinquency and reach charge-off status.

And lastly, we will say, obviously, it's hard with respect to the second half of the year. We're not providing quarterly guidance on provision expense or charge-offs. But as with any lending portfolio, provision expense will continue to naturally evolve as the portfolio seasons and as new information becomes available. But what we will say is that based on what we know today, we expect the future provisioning to increasingly reflect the underlying credit performance of the portfolio rather than this specific fraud event.

And as a repeated follow-up, what specifically changed in the fraud screening that's going to protect you from this occurring in the future?

Yes. So, unfortunately, fraud prevention isn't a static process. Fraud is an area where bad actors continue to evolve their tactics. And so our fraud controls and monitoring and underwriting capabilities have to continue to evolve alongside them. We've implemented a number of enhancements and controls based on what we learned from this event, and we will continue to invest in those capabilities over time.

We also periodically implement new enhancements and controls irrespective of any given event so that we can continue to be equipped to identify and prevent evolving fraud schemes. Beyond that, we don't think it's appropriate to discuss the details of our fraud controls publicly because those controls are part of our fraud prevention framework, but we view it as an ongoing discipline rather than a onetime fix.

Our next question comes from James Yaro at Goldman Sachs. On prediction markets, can you walk us through your competitive advantages in prediction markets, specifically in having them built in-house? How do you scale in this market given competitors are investing aggressively and bringing much larger customer bases?

This is Cameron here. So, I think one of the key points here is that we are not just a predictions app. We are actually building a super app that offers predictions. And those predictions are offered alongside spot Bitcoin, staking, a credit card and U.S. equities and more. And so, we think there's a lot of opportunity for cross-pollinization, and it's a broader offering than simply just predictions. And I think few people actually have such a strong breadth. In addition, focusing on predictions, we've also invested in the entire stack.

So, we've got the clearinghouse and the exchange, which allows us to control our destiny with more control and also work on distribution partnerships to help move the flywheel. And so, I think taken together, it's a much different story than simply just predictions. And I think the opportunity to cross-sell the existing customer base that we have is a great opportunity. For example, 50% of the people who have placed predictions on Gemini also have a Gemini Credit Card. That's one good example of the cross-pollinization among our super app.

Our next question comes from Michael Cyprys at Morgan Stanley. On perpetuals, given the CFTC's approval of digital asset perps in the U.S., what's the process and time frame for Gemini to bring a product to market? And what are some gating items that need to be overcome?

More broadly, if the U.S. regulatory path opens for perps beyond crypto, how quickly could you launch? And where do you think client interest might be strongest? And finally, given the liquidity advantages of larger incumbents, what gives you confidence you can build meaningful share?

Thanks for the question. This is Tyler. So, we are in the process of achieving the approvals we need to offer perpetuals on crypto in the U.S. And what's required is an amendment to our DCO, which is already in flight for marketing and the approval of an FCM, which is already in flight. And once we receive those approvals, we'll be able to launch perpetuals in the U.S. It's important to note that we -- the technology on our side is ready. We already offer this product offshore in Singapore. So, we've been doing this now for at least 2 years, maybe more.

And so, we understand the technology, the risk engine, the matching engine and how to run this type of marketplace. And now it's just a matter of getting the necessary approvals in the U.S., which we believe could happen this year. And so, once that happens, we will offer these products. These products have been the largest traded products with the most liquidity in crypto for a really long time. And so, we're very optimistic about the demand. The crypto industry likes to trade perps. There's a huge demand for it, and there has been there in globally for many years. And once we get the green light in the U.S., we're excited to bring this instrument to U.S. customers.

And this is Cameron. Just to build on that a little bit. Perps have been the most popular instrument in crypto for many years, but there's been no perps in the U.S. So, that story is just getting started. It's so early. So, when you think of competition and the opportunity, I think we're -- the starting gun has essentially just gone off. We're at mile 1 of a marathon. The perp story in the U.S. is just getting started. And there's just, we think, a tremendous amount of demand and excitement for these products, and it is very early days, even though they've existed offshore elsewhere for a long time.

Our next question comes from Adam Frisch at Evercore. Card MTUs fell in 2Q '26. Do you expect sustained MTU growth to remain soft negative given the bearish crypto market? And do you expect the growth in prediction markets and the newly introduced equities product to be able to reverse the card MTU growth trend?

Thanks for the question. This is Cameron. So, I think the story of the card in 2025 was very much a growth story, and a lot of that was the excitement of this innovative ability to earn crypto rewards with a credit card. Naturally, as crypto prices have declined 50% since their peak last year, thereabouts, interest in a crypto rewards card naturally wanes a bit and it can be cyclical.

With that said, I think we spent the last 2 quarters, if 2025 was very much about growth. I think the first half of 2026 is about maturity and making sure that we're putting in the right controls. We've got a big growth in receivables and ensuring that we catch fraud, we've got the right controls in place and that the portfolio is seasoning for the long term. And we think that the card is still very much like a diesel engine, and I think people love it. And I think there's a lot of growth just organically through word of mouth even in the crypto downturn. But we very much believe in this product, and we believe that it will continue to grow throughout 2026. But our focus has shifted in light of how the market has changed.

And this is Tyler. I'll also add that we're looking to expand the type of rewards that customers can earn with the credit card, such as offering the ability to earn stock rewards. And this plays into our overall vision, of course, of the super app where the credit card's one piece of that larger puzzle and experience.

And we're not just a crypto company. We offer obviously equities now and predictions. And as customer demand changes, whether it's they're into Bitcoin or that changes into AI stocks, we have that offering for them. And so, it's always harder to market crypto when the prices are down, even though customers -- this is the time they should be purchasing Bitcoin.

They tend to get excited about purchasing Bitcoin when prices near all-time highs. And so, this just further emphasizes the importance of having a really broad offering, the credit card earning rewards is part of that, but also being really broad in our offering on what rewards mean and whether that's you can earn back crypto or you can earn back in stocks. Obviously, AI stocks are really popular, and there's a lot of demand. We don't want to lose that customer. And so, that just goes back to this idea that we are -- of course, we started as a crypto company, but we really evolved into Gemini 2.0 into a markets company. And we continue to work on increasing the dimensions of that.

Our next question comes from Matt Coad from Truist. Could you touch on the long-term ARPU expansion opportunity for Gemini power users? Put another way, how does the ARPU for your retail customer that adopts all of your Gemini 2.0 product offerings compar to the blended average retail ARPU today? And how do you plan on creating more power users?

Thanks for the question, Matt. We believe there's a meaningful long-term ARPU expansion opportunity ahead of us, especially as customers adopt more of the Gemini ecosystem. So, historically, many retail customers engage with us through really a single product for the most part, but our strategy is to increase both the scope and the frequency of engagement by offering a more comprehensive financial platform.

And so the first half of '26 was really about that, right, about building the ecosystem and giving customers more reasons to engage with Gemini through products like prediction markets and now more recently, commission-free equities, while at the same time, ensuring the card business was on a solid footing after the fraud events.

And so going forward, the focus really shifts to distribution by driving adoption across that product suite, increasing cross-sell and also creating more multiproduct power users. And that's really what we believe will drive the next leg of ARPU expansion and customer growth. And a year ago, we were primarily acquiring crypto traders. But today, we're acquiring customers into a platform that includes a much broader product offering.

And we believe that will meaningfully expand customer lifetime value and gives us greater opportunity to really monetize each acquired and existing customer over time. And while we don't disclose product level ARPU, we consistently see that multiproduct customers, they do trade more frequently. They retain balances longer and exhibit stronger long-term retention. So over time, we believe this product ecosystem will really drive sustainable ARPU expansion through that greater product adoption and higher engagement frequency rather than, again, relying solely on higher trading activity or favorable crypto market conditions.

Our last question comes from John Todaro from Needham. Following the initial launch of stock trading on the platform, how have early volumes looked? Additionally, how are trading activity trends across the platform since the beginning of the third quarter? And are there any specific categories that clients are trading more frequently this quarter within predictions?

Thank you, John. Yes, so we're encouraged by the early reception to equities, but it's still very early days. The launch is only about 5 weeks old. So we're going to be careful not to overinterpret the initial activity. And we don't expect equities to be a material revenue contributor in 2026. But over the long term, the monetization opportunity really comes through deeper customer relationships, including customer cash balances and securities lending as well as order flow economics rather than trading commissions. But again, more importantly, as we've emphasized numerous times, we view equities as another step in building our super app and a broader investing platform.

And over the past year, as Cameron or Tyler highlighted, I believe we've expanded from fewer than 100 tradable products to roughly 5,000 across crypto, equities and prediction markets. And our multiproduct user base has nearly doubled year-over-year. So these are the metrics that we're most focused on because it does drive engagement and cross-sell opportunities.

With respect to Q3 activity, so spot crypto volumes have moderated from the elevated levels we saw historically, and it's weaker than the second quarter as well, which is consistent with publicly available market data. But at the same time, prediction markets have continued to perform well. We reached new monthly highs in prediction trading volume during July. And some of that was helped by the later stages of the World Cup.

But importantly, activity has remained healthy even after that concluded. We continue to see strong engagement in our -- specifically in our crypto prediction contracts, especially Bitcoin contracts that have across different sort of durations and expiry dates and really demonstrating that prediction markets are evolving beyond one-off event-driven trading.

Thank you. This concludes today's conference. Thank you for your participation. You may now disconnect.

Good day, and thank you for standing by. Welcome to the Gemini First Quarter 2026 Earnings Conference Call.[Operator Instructions] Please be advised that today's conference is being recorded. I would like to hand the conference over to Ryan Todd, Head of Investor Relations. Please go ahead.

Good morning, and thank you for joining Gemini's First Quarter 2026 Earnings Call. My name is Ryan Todd, Head of Investor Relations at Gemini. Joining me on the call today are Gemini's Co-Founders, Cameron and Tyler Winklevoss; and our Interim CFO, Danijela Stojanovic. Yesterday, we released our first quarter 2026 financial results.

During today's call, we may make forward-looking statements, which may vary materially from actual results and are based on management's current expectations, forecasts and assumptions. Information concerning the risks, uncertainties and other factors that could cause these results to differ is included in our SEC filings. Our discussion today will also include certain non-GAAP financial measures. Reconciliations to the most directly comparable GAAP financial measures are provided in the earnings presentation on our Investor Relations website and on the SEC's website. Non-GAAP financial measures should be considered in addition to, not as a substitute for GAAP measures. We'll start today's call with prepared remarks and then take questions. And with that, let me turn the call over to our founders, Cameron and Tyler.

Good morning, and thank you all for joining us on our Q1 2026 earnings call. I'm Cameron Winklevoss, President and Co-Founder of Gemini. Since announcing Gemini 2.0, we believe we have made meaningful progress towards our goal of building Gemini into a markets company. We started as a Bitcoin company.

We became a crypto company, and we are now building the super app for the markets economy, our vision of being the bridge to the future of money and markets. This quarter, we made meaningful progress towards that vision. While we still have significant work ahead, we grew revenue this quarter 42% and transaction revenue held steady year-over-year even as trading volume declined more than 50% due to meaningful softness in the broader crypto market trading activity. While these are positive headline numbers, we recognize where our share price currently sits. The price of Bitcoin is down roughly 30% since our IPO. And as a crypto native business, we are tied to that cycle to some degree.

But we do not believe that Gemini today is 1/6 of the Gemini that IPO'd. When we went public in September, we did not have a predictions marketplace. We do now. We were a crypto company. Today, we are building the foundation for so much more. Our ability to launch and scale market infrastructure is rooted in more than a decade of experience building Gemini's crypto marketplace. We have demonstrated this with our predictions product, which we chose to build in-house instead of partnering like some of our competitors.

Now with our recently acquired DCO license from the CFTC, which Tyler will discuss shortly, we're even better equipped to bring this vision to life. This license, combined with our experience building marketplaces will help enable us to fully own the customer experience and deliver a best-in-class predictions marketplace. We truly believe that when you create value by offering more options to customers across multiple asset classes, crypto predictions, credit card rewards and soon we expect stocks, you build a company that is indexed to markets broadly, not just to a single cycle. That is what Gemini is working toward becoming, and we believe the foundation we built this quarter is a meaningful step in that direction. For these reasons, we think Gemini's stock is significantly undervalued, which is why we made a strategic investment of $100 million into Gemini via Winklevoss Capital at a price of $14 per share of the company's Class A common stock with the investment funded in Bitcoin.

We strongly believe this investment will allow us to set up the company for its next phase of growth. With that, I'd like to turn it over to Tyler to discuss some of our business highlights this quarter and how they will shape our future.

Thanks, Cameron. Tyler here. This quarter, Gemini achieved product and regulatory milestones that will help set us up for success going forward. In April, Gemini received a derivatives clearing organization license from the CFTC. I want to spend a moment on what this is, why it matters and what it unlocks. The DCO or derivatives clearing organization allows us to act as a clearing house, the entity that clears and settles derivatives contracts, prediction market contracts, event-based contracts and down the road, futures, options and perpetual contracts. The DCO uses the same clearing structure that has underpinned traditional derivatives markets for decades. This DCO follows our DCM, our designated contract market license, which we received in December 2025.

A DCM allows you to list derivatives contracts. We started with events contracts for our prediction marketplace. The DCO is the other half of the puzzle. Together, DCM plus DCO represent key milestones as we seek to build an end-to-end marketplace in-house without material third-party dependencies.

This combination is rare. Most of our competitors have moved into derivatives through acquisition. Gemini built its DCM and DCO in-house, the same way we built our crypto exchange over the past decade. Our regulatory positioning is foundational, not bolted on. Holding the DCM and DCO ourselves helps unlock our ability to clear prediction market and event contract trades through our own infrastructure today. It also better positions us for what comes after predictions, which we believe is perpetual contracts. Perps are the most traded product in global crypto markets by a significant margin.

Most of the price discovery for Bitcoin happens in perpetuals markets, not spot. And right now, all of that volume and price discovery happens offshore on unregulated exchanges, largely because there has been no regulated path for Perps in the United States. The crypto story in terms of regulated onshore price discovery does not fully start in America until perpetuals are permitted here.

We believe that will happen in the United States soon based on the CFTC's public comments. And we expect Gemini to be among the platforms best positioned to win in this arena when it arrives. In addition to securing our DCO, Gemini made strides this quarter in what we think will be the next frontier for trading, which is agentic trading.

We launched the first agentic trading tool available directly through a regulated U.S.-based exchange. Agentic trading allows customers to connect AI agents, including Claude, ChatGPT and others directly to Gemini's full API to place trades, monitor markets and manage risk autonomously. While we are still in early innings for agentic trading, we have long believed that Gemini will one day have more machines as customers than humans. Humans may have built crypto, but crypto is not so much money for humans as it is money for machines.

Taken together, we believe our DCO license and Agentic trading launch represents the first steps to building out our long-term vision of being the go-to super app for the future of money and markets in the United States. With that, I'll turn over the call to our interim CFO, Danijela, to discuss our financial results for the quarter in greater detail.

Thank you, Cameron and Tyler. Good morning, everyone, and thank you for joining us today. I'll start with a few key takeaways from the quarter, then walk you through the results in detail and close with our financial outlook for the year. Let me highlight 3 things upfront.

First, revenue grew 42% year-over-year to $50.3 million. That growth was broad-based, driven by the credit card, our OTC business and our first full quarter contribution from Prediction markets. Importantly, this revenue growth was achieved against the backdrop of materially lower crypto trading volumes than Q1 of 2025.

Second, services revenue and interest income continued its structural shift, reaching $24.5 million and now representing 49% of total revenue, up from 31% in Q1 of 2025.

This diversification is central to our strategy of building a business that is less dependent on crypto market cycles.

And third, our cost restructuring is taking hold. The roughly 30% workforce reduction completed in Q1 started flowing through the financials and will be more fully reflected in Q2 as we enter a lower run rate cost structure. Turning to revenue.

Total revenue was $50.3 million, up 42% year-over-year from $35.3 million in Q1 of 2025. Transaction revenue maintained stable year-over-year at $24.1 million. Within that, there were meaningful moving parts worth walking through. Exchange revenue was $17.2 million, down 27% year-over-year, reflecting the significant pullback in crypto market activity. Total spot trading volume declined to $6.3 billion from $13.5 billion in Q1 of 2025. That's a 53% decline in volume against only a 27% decline in exchange revenue, which reflects continued improvement in our fee economics. OTC revenue was $6.3 million compared to $0.1 million in Q1 of 2025. This performance reflects both opportunistic and structural tailwinds.

The quarter included meaningful onetime volume driven by episodic client demand, contributing to an elevated baseline not fully expected to repeat. Importantly, underlying business momentum remained strong. The eOTC API program added new institutional clients during the quarter, expanding the desk's recurring revenue base and supporting a more durable growth trajectory going forward.

And for the first time, prediction market contributed $0.4 million to transaction revenue, reflecting our first full quarter following the December 2025 launch. Adoption accelerated throughout the quarter and has continued to accelerate into Q2 with April volume up 78% month-over-month.

Since launch, the platform has surpassed 100 million contracts traded across more than 20,000 traders. As a reminder, this is still an early-stage product for us, and our focus today is on building liquidity, engagement and market depth on our own infrastructure. We expect monetization to scale over time as the platform matures.

Turning to services revenue and interest income, which was $24.4 million, up 122% year-over-year. The majority of this growth was driven by services, particularly the credit card, which I'll walk through now. Credit card revenue was $14.7 million, up nearly 300% year-over-year.

As of quarter end, we had over 154,000 open card accounts, up 111,000 year-over-year. Growth in Q1 of '26 remained steady, though sign-ups can vary quarter-to-quarter, particularly as we continue to refine acquisition channels and strengthen risk controls as the portfolio scales.

The expansion in the cardholder base is the primary driver of managed receivables growing from $69 million to $217 million over the same period, more than a tripling of the portfolio.

Advisory fee revenue was $2.7 million, consistent with the prior quarter, reflecting our ongoing advisory services agreement with a strategic customer entered into during Q3 of 2025. There was no comparable revenue in Q1 of 2025. Custodial fee revenue was $1.9 million, roughly flat year-over-year. Staking revenue was $2.1 million, down 31% year-over-year, reflecting lower asset prices and reduced staking yields relative to the elevated crypto market levels in the prior year period.

Turning to expenses. Total operating expenses were $144.5 million in Q1, up 73% year-over-year. I want to be direct about what's in those numbers because there are meaningful onetime items that create some noise relative to our ongoing cost structure. Salaries and compensation were $65.4 million. This includes $24.2 million of stock-based compensation and $6.5 million of severance and related payroll taxes associated with the Q1 workforce reduction, the latter being a onetime item that will not repeat.

Excluding those items, core cash compensation was $34.8 million. Though it's worth noting that figure still includes partial quarter salary costs for the approximately 30% of employees who departed during Q1. So the true run rate entering into Q2 is lower. Headcount at quarter end was approximately 441. Sales and marketing was $19.1 million, up 111% year-over-year, but down significantly from the $32.9 million and $39 million we spent in Q3 and Q4 2025, respectively. We are continuing to deploy marketing capital opportunistically, calibrated to market conditions and acquisition ROI. Within that figure, brand and performance marketing was $7.6 million and credit card rewards and promotional and referral incentives were $11.4 million.

Transaction losses were $11.1 million, up from $4.1 million in Q1 of 2025. The increase was driven by 3 items: our provision for expected credit losses on the credit card portfolio of $4.6 million, up from $2.5 million in Q1 of 2025 as the portfolio continues to scale; a credit card fraud reserve of $4.1 million, a new item with no comparable charge in Q1 of 2025 and ACH and other transaction losses of $2.4 million, up from $1.6 million in Q1 of 2025.

The provision and fraud reserve reflects seasoning dynamics on a rapidly growing portfolio and overall credit performance remains consistent with our expectations. We have also taken steps to further strengthen our fraud controls and monitoring.

Technology expenses were $22.1 million, up 32% year-over-year, reflecting infrastructure investments to support platform growth and new product launches. General and administrative expenses were $21.7 million, up 55% year-over-year, driven primarily by higher legal expenses. Combined, tech and G&A was $43.7 million for the quarter. On the bottom line, net loss was $109 million, an improvement of 27% year-over-year compared to a net loss of $149.3 million in Q1 of 2025. Adjusted EBITDA was a loss of $59.9 million compared to a loss of $92.2 million in Q4 of 2025 and a loss of $61.6 million in Q1 of 2025. The sequential improvement reflects the early impact of our cost actions, so the full benefit of the Q1 restructuring will begin to flow through in Q2. We are not satisfied with the current loss levels, but we believe the path forward is clear, scaling the card efficiently, growing predictions and continuing to build recurring services revenue that compounds regardless of trading volumes, while maintaining discipline on our expense base and leveraging the infrastructure we've built across the platform.

A few platform metrics worth noting. Monthly transacting users were 589,000, up 17% year-over-year. That growth is occurring despite a softer trading environment, which reflects the platform diversification we've been building across the card, staking and now prediction markets.

Assets on platform were $11.1 billion as of March 31, 2026, compared to $14.2 billion as of March 31, 2025. That decline reflects lower crypto asset valuations relative to the elevated market levels in the prior year period, not a reduction in user engagement or assets managed. Let me close with our outlook. We are not providing formal revenue guidance at this time, consistent with our approach last quarter, given the continued uncertainty in the macro environment. On expenses, the restructuring actions we announced in Q1 are expected to begin flowing fully through the cost structure in Q2.

The key parameters we shared last quarter remain unchanged. To briefly recap those, cash compensation, excluding stock-based compensation and restructuring charges, is expected to decline 15% to 20% relative to 2025 levels. Stock-based compensation is expected to total $100 million to $115 million for the full year. Technology and G&A combined is expected to range from $155 million to $190 million for the full year.

And marketing, excluding rewards and promotions, is expected to run at 10% to 15% of revenue. On liquidity, we ended the quarter with $215.6 million in cash and cash equivalents. As Cameron and Tyler noted, our founders have completed a $100 million direct investment into Gemini funded in Bitcoin, further strengthening our balance sheet as we execute on our 2026 priorities.

The through line across all of this is straightforward. We are growing revenue, diversifying away from digital asset trading, holding discipline on cost. And as our founders' commitment demonstrates, we have both the conviction and capital behind us to see it through. The focus for the balance of 2026 is about disciplined execution on each of these priorities.

To summarize, Q1 showed meaningful progress on the priorities we laid out. Revenue grew 42% year-over-year. Services revenue and interest income now represent nearly half of total revenue and our cost reset is underway. The momentum in the card, the early traction in predictions and the growth in our OTC business give us confidence that we are building a more durable platform.

We have more work to do on profitability, and we are moving with urgency. We are building a more diversified, more disciplined business, and we believe we are better positioned to scale as market conditions improve. And with that, I'll hand it back to Ryan to open up the Q&A.

We will now take questions from our research analysts. Questions were submitted to us in writing, and we will take one question per analyst. Our first question comes from Adam Frisch at Evercore, who asks, the $100 million private placement at $14 a share is a strong vote of confidence. Can you discuss the strategic rationale behind the investment and whether there are any commercial or product implications and how the additional liquidity affects your priorities across exchange, card predictions and derivatives?

Thanks for the question, Adam. This is Cameron. And so in regards to our $100 million investment, our belief is that the Gemini stock is significantly undervalued at current levels. And we believe this investment reflects our -- that belief and our conviction in Gemini.

With respect to the use of funds, so we're focused on being offensive and supporting existing as well as products that are hopefully coming to market soon, including equities. And when we look at the business, we really feel it's disconnected. The share price is disconnected from the underlying business. And when we look at where Gemini was when it launched in -- IPO'd in September of 2025, we don't believe that this is a business that's 1/6 of the value of that company that IPO'd. And in fact, quite the opposite.

We feel that we have since launched an entirely new marketplace of prediction markets, which we're really excited about. We're really encouraged with the growth so far. And we've acquired a DCM license as well as the DCO license along the way. And those licenses alone are trading north of $100 million in the open market each. And I don't think the share price reflects any of that underlying value, let alone the improvements in our product.

And so we're looking to continue to support existing products and focuses as well as future products and including equities, which we hope to launch soon.

The next question is from James Yaro at Goldman Sachs, who asks, could you comment on the status of the Clarity Act? How do you expect this bill to evolve? And what are your latest views on the impacts on your business?

So we've been building a regulated exchange and custodian for over a decade now in the U.S. via the state MTL path, and we will continue to do so until there is a federal framework such as Clarity. We -- it definitely feels like we're getting closer to Clarity.

It's hard to predict exactly what the timing will be. But we're definitely encouraged with the direction and the pace that things are moving. And so I think that we've always believed that a good bill, the right bill will be very positive for the market, and we welcome that. And we hope that is the case and continues to sort of make its way through the rounds. At the same time, if for whatever reason it does fall out, we are built and positioned in a very regulated posture, and we'll just continue building and doing what we're doing.

Our next question comes from Matt Coad at Truist, who asks, the Prediction markets cross-sell continues to progress well with 3.5% of your user base now putting in a trade since the product's inception last year. Could you provide some more detail on how you're driving this successful cross-sell, where you would expect the penetration rate to sit at the end of the year and how you're seeing engagement levels trend as well?

Thanks for this question, Matt. So the cross-sell, we're seeing a lot of good success there. We're very encouraged at the 3.4% so far. Hard to predict where that settles out. But I think that the story here is that we're very early with this product predictions within Gemini.

We continue to surface it within the app. It's one of our core tabs. We also surface it in different buy flows. And I think people -- there's a number of users who still just haven't found it yet and don't know that Gemini is in predictions and are discovering it on a daily basis or a weekly basis.

So we think that there's a lot of room to grow here, both within the Gemini ecosystem, but also people outside of it who are not currently customers today who are seeing our product on social media or hearing about it and curious to give a try. We're seeing some cool results. We have 78% month-over-month growth in total prediction market volume. I think we did almost approximately $30 million in notional last month. So far this month, we've crossed $20 million in notional. So we think we will beat last month and hopefully, by a considerable amount, we'll have to see.

But I think it's -- the key thing is, are we continuing to grow month-over-month and what is that growth rate? That's, I think, the name of the game right now. And we're seeing about half of that volume is coming from crypto contracts, which makes sense. We have obviously a very user base that's passionate about crypto contracts.

And we've been adding just a lot more durations with monthly touch contracts, weekly, daily, hourly, 15-minute, 5 minutes, starting with Bitcoin, Ether, Solana and XRP now.

And so we're just adding more contracts, more durations. We added a lot of real-world commodities in the past quarter, including oil, gold, silver. So we're -- the story is early, and it's hard to say exactly where that gets saturated, but we think that there's people that are discovering the product and really liking it.

Our next question comes from Dan Dolev from Mizuho, who asks, on credit card, can you walk through current credit performance versus expectations and how funding is evolving as receivables grow, including what changes if macro softens? And combining a follow-up question asked, can you speak to the higher provision for credit losses in the quarter? What happened there? And what is being done to prevent another incident of that size in the future?

Sure. Thanks so much, Dan, for the question. I'll try to walk through these questions one by one. So on credit performance broadly, the portfolio is performing in line with our expectations.

Our 30-plus day delinquency rate was 3.8% at quarter end, and our annualized charge-off rate is running around 3.5%. So both of which sort of represent meaningful improvement from where we were a year ago when the portfolio was in its really earliest and most delinquency prone stage. On the provision specifically, we don't see that $8.6 million figure you would have seen in our earnings release as a representative of the underlying credit trajectory. And I want to be really clear about why. So as we also disclosed, roughly $4.1 million of that charge related to a discrete fraud event that occurred during the quarter. That item, we believe, is nonrecurring.

And most importantly, we have taken real steps to strengthen our fraud controls to prevent a reoccurrence. Normalizing for that item, our core provision was approximately $4.6 million higher than Q4 and which does reflect some normal seasoning as the portfolio matures, but consistent with what we'd expect from a portfolio that has tripled in size over the past year.

In terms of what happened with that fraud incident, we're not going to discuss the exact mechanics or attack vector for security reasons. But what we can say is that the issue was identified, contained and fully reserved for during the quarter. Following that incident, we've definitely implemented additional controls and monitoring enhancements across the affected workflows. And I think what's important to note is fraud is not a static problem. So fraudsters continuously adapt their methods, particularly in digital financial ecosystems and our controls and monitoring frameworks evolve alongside that. And just to add also, our pre-provision net revenue reached a new high of $3.8 million this quarter, which is up over 150% year-over-year, and that's the signal on the underlying economics of the card business. You asked on funding.

So on funding, we have our warehouse facility in place that has scaled alongside receivables and provides us the capacity we need to support the portfolio today. Our funding costs are manageable, and we're actively evaluating our long-term funding mix as the portfolio continues to grow. We maintain an open and ongoing dialogue with our funding partners and continue to stress test the portfolio under different macro scenarios.

And stepping back, we continue to view the card less as a stand-alone product and more as a strategic engagement layer inside the Gemini ecosystem. So over half of our predictions traders are also holders of the Gemini credit card, and we remain very focused on credit discipline and portfolio economics as well as the broader value creation that comes from driving deeper multiproduct engagement across the platform. So while quarterly growth rates may moderate relative to the initial high-growth launch phase that we saw, we continue to believe that the card can be an engagement driver for the broader Gemini ecosystem and hopefully facilitate Gemini's long-term growth.

The next question comes from Michael Cyprys from Morgan Stanley. What drove the strong OTC performance? Is this a function of crypto market volatility and users opting for a different approach? Or is there something more structural going on? And should we expect that momentum to carry forward? And as a quick follow-up on staking, anything to call out on staking being lower than expected? Do you view this alongside a downturn in trading activity?

Sure. Thanks, Michael. So we're very pleased with the OTC performance this quarter. This quarter really reflected a combination of both market conditions and underlying business momentum. So I'll touch on both. On the market side, there was some episodic activity during the quarter tied to client positioning and periods of market volatility, which contributed to elevated volumes. We view the continued maturity of the platform itself as the most important trend, though. And over the last several quarters, we have expanded our electronic OTC capabilities onboarded additional API-driven institutional counterparties and also deepened engagement with existing clients.

And so we're increasingly seeing repeat flow from clients integrating Gemini into their trading infrastructure rather than approaching the desk opportunistically. And we will continue to look for ways to expand our OTC offerings and capabilities. In terms of sustainability, we would not necessarily extrapolate the exact Q1 growth rate or assume every quarter will benefit from the same level of episodic large trades. OTC can be naturally somewhat lumpy quarter-to-quarter.

But structurally, we do believe the business is stronger today than it was a year ago. Our client base is broader, electronic penetration is increasing and institutional engagement remains healthy. So while volatility can amplify activity in any given quarter, we think there is still meaningful underlying growth trajectory in the product itself. And I'll touch on staking as well. So staking was down 31% year-over-year, and there are 2 straightforward factors that's really driving that. The first is crypto asset prices. So the staking revenue is a direct function of the value of assets staked on our platform. And when ETH and Solana prices are lower relative to a year ago, the dollar value of rewards that we generate for customers and the fees we earn on that are proportionately lower.

That's really the majority of the year-over-year decline, and it's a dynamic that's fully correlated with the broader crypto market environment. And then the second factor is staking yields on the network themselves, which have moderated from the elevated levels that we saw in early 2025. We don't view this as a concerning signal for the staking business.

During the first quarter of '26, our team completed a full migration of our users to staking 2.0, which is a ground-up rebuild of our staking infrastructure that we believe fundamentally changes our ability to grow in this business going forward. The new architecture enables auto compounding for ETH validators. It reduces the redemption times from roughly 50 days to 8 days for the vast majority of staked funds and gives us the infrastructure foundation to rapidly onboard new networks and institutional customers. And lastly, we have also launched a fully rebuilt staking UX during the quarter. So while the revenue line is reflecting the macro environment, the underlying investment in the platform positions us well when asset prices and yields recover.

Our final question comes from John Todaro at Needham. Prediction markets are still in the early stage, but great to see 78% month-over-month growth in April. What type of clients are trading prediction markets? And more specifically, are there any specific categories within prediction markets that your clients are trading? And as a quick follow-up, are there any categories around these markets that are not currently offered to clients where you see long-term growth opportunities?

Thanks for the question. So the crypto contracts are one of our biggest categories. I think they account for about 50% of the contracts traded. As I mentioned earlier, we have all types of durations on various crypto contracts, starting with Bitcoin, Ether, Solana, XRP and Zcash. Zcash, in particular, has been really popular the last week or so with the recent price action and run up in price. And then we have a full suite of sport contracts. Those are also quite popular. And then we added in the past quarter a lot of real-world commodities, including oil, so the price of WTI, the price of Brent, and we have durations on that from monthly to weekly to daily contracts, and we'll continue to expand that outward.

We've added some weather contracts. We've seen interest there. And I think we'll continue to sort of go wider and deeper. I think we have hundreds of contracts trading per day, but I think that can easily scale into the thousands of all the different price levels. And we see continued interest from market makers and participants who are already in the space on other venues. -- who see sort of the growth in our marketplace and are curious to provide liquidity and trade it. So we're just getting started.

I think we're -- we got our -- we launched in December 15. So I think we're maybe less than perhaps 2 quarters or just shy -- just over 2 quarters since launch, and the product is sort of unrecognizable from the MVP that we launched in late 2025, and we continue to ship improvements multiple times a week. And so we're really excited about it. And I think our customers are realizing, "Oh, wow, you guys are really making a lot of progress here. I don't need to leave Gemini. I can do all my predictions here. So we're excited about that.

Thank you. This concludes today's conference. Thank you for your participation. You may now disconnect.

Good day, and thank you for standing by. Welcome to the Gemini's Fourth Quarter and Full Year 2025 Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to Ryan Todd, Head of Investor Relations. Please go ahead.

Thanks, operator, and thank you, everyone, for joining this morning for Gemini's Fourth Quarter and Full Year 2025 Earnings Call. My name is Ryan Todd, Head of Investor Relations at Gemini. Joining me on the call today are Gemini's founders, Cameron and Tyler Winklevoss; and Interim CFO, Danijela Stojanovic.

Yesterday, we released our fourth quarter and full year 2025 financial results. During today's call, we may make forward-looking statements, which may vary materially from actual results and are based on management's current expectations, forecasts and assumptions. Information concerning the risks, uncertainties and other factors that could cause these results to differ is included in our SEC filings. Our discussion today will also include certain non-GAAP financial measures. Reconciliations to the most directly comparable GAAP financial measures are provided in the shareholder letter on our Investor Relations website and on the SEC's website. Non-GAAP financial measures should be considered in addition to, not as a substitute for GAAP measures. We'll start today's call with prepared remarks and then take questions.

And with that, let me turn the call over to our founders, Cameron and Tyler.

Thanks, Ryan. Cameron here. 2025 was a remarkable year for Gemini. We crossed the threshold into the public markets and became a public company on September 12 after being a private company for over a decade. On that day, the price of Bitcoin was $115,000. Since then, Bitcoin has traveled down to $60,000 and then back up to around $70,000 where it hovers today.

A reminder that one of the biggest challenges for crypto builders and investors is its cyclical nature. And a reminder that in order to move beyond these cycles, you need to build beyond them. We started as a Bitcoin company. We became a crypto company. We are now becoming a markets company. If Gemini's first decade was building a bridge to the future of money, today, we are building a bridge to the future of money in markets via a super app. Our first foray into people's daily financial lives beyond buy, sell and store crypto began with the Gemini credit card, which delivered strong growth last year.

In 2025, card sign-ups grew nearly 15x and credit card revenue reached $33.1 million, up 185% year-over-year. Many of these Gemini credit card customers engage with Gemini multiple times a day to earn crypto rewards when they spend with the Gemini credit card. December marked a new era for Gemini with the launch of Gemini Predictions. We believe prediction markets will be as big or bigger than today's capital markets. They offer a profound and boundless opportunity to leverage the wisdom of the crowds and the power of markets to provide unique insights into the future.

Our investment in securing a designated contract market DCM license from the CFTC to launch our own prediction marketplace positions us as an early mover on this new and exciting frontier. We have been building and operating regulated marketplace infrastructure for over a decade: sequencers, matching engines, order books, real-time settlement, post-trade reporting, custody infrastructure and more. This is a big part of what we do best.

Our prediction markets are new instruments running on infrastructure we already know how to build and operate. As a result, we chose not to partner with a third party or license someone else's technology and instead build it ourselves. And in doing so, this also means we have chosen to invest in developing the unique operational capabilities for creating and resolving thousands of contracts on a daily basis, a new and fascinating challenge with growing complexity as we expect the cardinality of these markets to continue to explode over time. In short, we built Gemini predictions from the ground up because we want to own and operate our prediction markets end-to-end for the long term.

We believe in the power of markets. Bitcoin is a store of value that is a product of market forces. The best economies are market-based. Markets are truth over the long term, and we believe that we are just figuring out how to apply them to the world around us. From politics to economic indicators, business, tech, culture and sports, prediction markets are forecasting the future more accurately and more quickly than traditional posters, experts and the media. This is a profound change in the world's source of truth and an equally profound solution to the loss of trust in our institutions and resulting epistemological crisis.

The printing press created the fourth estate or the public press. The Internet created the fifth estate or decentralized public press. Prediction markets are creating the sixth estate. Decentralized information, combined with the integrity and accountability of markets [indiscernible] in the game. Like money, markets are an innovation and technology that continue to evolve thousands of years after they were first invented. From the birth of the bond markets in the Italian city states in the 12th century to the launch of the first stock market in Amsterdam in the 17th century to electronic trading replacing the open outcry of humans in trading pits on Wall Street in the 21st century, markets continue to grow and develop.

Just when you thought the money experiment had reached its terminal steady state, Bitcoin emerged. Just when you thought markets were done maturing, prediction markets caught fire. Gemini was founded to help build and shape a new era of money. Today, we have a similar opportunity to help build and shape a new era of markets. Unfolding in parallel is the meteoric ascent of AI. Once these strains of technology, money, markets and AI converge, we believe they will supercharge each other in dramatic and novel ways that generate new economic activity that we are uniquely positioned to be at the center of and help build and shape to. This caldron of Promethean fire could make progress in these fields up to this point appear rather quaint.

We have long felt that it is only a matter of time before we have more machines as customers than humans. Machines can't open a bank account, but they can easily plug into protocols and use crypto to become rational economic actors. Humans may have built crypto, but crypto is not so much money for humans as it is money for machines. We're just starting to see this take shape.

Here's one example. For the first decade, we had 3 API protocols: REST, WebSockets and FIX. We're now adding a fourth, Model Context Protocol, or MCP, an open-source API interface designed specifically for AI agents like large language models or LLMs. While we believe AI is going to change the composition of our customer base, it's already changing the composition of our workforce and how we work. Up until recently, the impact of software engineers could differ by an order of magnitude or 10x. Great engineers would have 10x more impact than good engineers. AI has completely changed the game, expanding this paradigm by another order of magnitude at a minimum, making a 10xer, now a 100xer.

Critically, we are seeing that this step change holds true for every engineer who adopts AI in their workflows. And it also holds true for non-engineering work as well. Doing more with less has never been more true or possible, and we believe this trend line is only just beginning. Notably, the force multiplier effect of AI for Gemini and our workforce is quite new. It wasn't until the end of last year that AI agents for coding and software development had a splitting of the atom moment. While different pockets of our technology organization have been experimenting with AI and their workflows for a while, AI was not core to them.

For example, late last summer, when we were in the middle of our IPO roadshow, AI was used in only 8% of the code being written and shipped to production. In December, however, the future arrived. Models hit an inflection point and in combination with the internal tools we built for [indiscernible] management, AI is now too powerful not to use at Gemini. Today, AI is used in more than 40% of our production code changes, and we expect that number to climb close to 100% in the not-too-distant future. Not using AI at Gemini will soon be the equivalent of showing up to work with a type writer instead of a laptop.

As a result, we have reduced the size of our workforce by roughly 30% since the start of 2026. We believe that a smaller organization leveraging the right tools isn't just more efficient, it's actually faster. Gemini started in America in 2015. Since then, we expanded our areas of operation to more than 60 countries. These foreign markets proved hard to win in for various reasons, and we found ourselves stretched thin with a level of organizational and operational complexity that drove our cost structure up and slowed us down. And we didn't have the demand in these regions to justify them.

The reality is that America has the world's greatest capital markets and America has always been where it's at for Gemini. Furthermore, we are encouraged by the stated goals of the current SEC and CFTC and their efforts thus far to make the super app possible in America and usher in a new golden age of markets. So we decided it was time for us to focus and double down on America. This will allow us to build more meaningful and powerful relationships with new and existing customers.

To that end, in addition to reducing the size of our workforce, we have reduced the areas in which we operate by exiting the U.K., EU and Australian markets. We expect this will help reduce our total expenses in line with our headcount reduction and meaningfully accelerate our path to profitability even in the backdrop of the current crypto market, simplify, consolidate, then accelerate.

We love being a public company, perhaps a somewhat surprising statement when looking at the performance of our share price over the past 6 months since we've been public. But rather than being dispirited, we are motivated. And while it's never fun to see your stock drop, we love the feedback loop. It forces us to confront what is working and what is not working, and it makes us sharper. It's challenging, but absolutely the right challenge. We view this feedback loop as one of the greatest benefits of being a public company as growers losing a race provided invaluable feedback on the changes you needed to make in order to win. The path to the Olympics is paved in lost races and the invaluable learning that comes from them. So we welcome the feedback and love the challenge.

2025 marked the end of Gemini 1.0 and 2026 marks the beginning of Gemini 2.0. This starts with our shift into becoming a markets company with Gemini predictions and using the same infrastructure to power our perpetual futures contracts once these contracts are allowed in the U.S. And it continues with our plan to launch U.S. equities as the next phase of our platform, giving our customers access to the largest, most liquid markets in the world. Altogether, we have developed the foundation and building blocks for a super app, where users will be able to fulfill their existing and future financial needs all in one place, amazing awaits.

Thank you, Cameron and Tyler, and great to speak with everyone. Before I turn to the numbers, I'll briefly note that I stepped into the interim CFO role earlier this year after serving as Gemini's Chief Accounting Officer since May of 2025. I've been closely involved in the company's financial reporting, the IPO process and the prior 2 quarters as a public company. The broader finance organization remains fully in place, and there has been no disruption to our financial reporting or operational execution.

I will begin with a few key takeaways from the quarter before walking through the results in more detail. First, revenue grew sequentially despite a materially weaker crypto trading environment in Q4. Second, the business continued to diversify meaningfully. Services revenue more than doubled year-over-year and now represent over 1/3 of our revenue. And third, the restructuring actions we announced earlier this year repositioned the company with a significantly lower cost base going into 2026.

Now turning to the results. Net revenue for the fourth quarter was $56.4 million, up 13% from $49.8 million in Q3. This growth occurred despite a more challenging market backdrop. The biggest driver of that change was volatility in the crypto market. Bitcoin fell nearly 47% from its October high, and that environment put real pressure on trading volumes and transaction fees. The credit card business kept growing through it, which helped offset some of that, but Q4 was a harder macro quarter than Q3. I'll walk through the key components.

Transaction revenue was $26.7 million, up slightly from $26.3 million in Q3 on spot volumes of $11.5 billion compared to $16.4 billion in Q3. Retail volumes came in at $1.6 billion and institutional at $9.9 billion. As a reminder, we earn fees from both retail and institutional customers with rates varying by order type, instant orders at the top of the range and active trader orders lower. While volumes declined, transaction revenue proved relatively resilient. This reflects improvements in fee economics across both retail and institutional trading as well as a mix shift in retail trading towards higher fee order types.

Services revenue for the quarter was $26.5 million, up 33% sequentially from $19.9 million in Q3. This category continues to grow quickly and represents one of the most important structural shifts in our business. A few things worth calling out here.

Credit card revenue was $16 million, up 87% from Q3's $8.5 million. We added nearly 30,000 new card sign-ups in the quarter compared to 64,000 in Q3, and receivable balances grew to $219.8 million. Staking revenue was $5.1 million, down 13% from Q3's $5.9 million, largely reflecting lower crypto asset prices during the quarter. However, we continue to see adoption of staking across the platform, including through auto staking features integrated with the credit card rewards program.

Q4 was our first full quarter with Card Auto staking rewards live, which came alongside the Solana card launch in October. That feature is a great example of natural multiproduct engagement in providing customers a way to stake organically. They pick a stakable reward. It gets staked automatically on every card transaction and their staking customer without any extra steps. Staking balances at quarter end were approximately $509 million. Staking fee rate adjustment we made in Q3 also ran through a full quarter for the first time.

Let me turn to expenses. Total operating expenses for Q4 were $171.7 million, essentially flat compared to Q3. Compensation and headcount expenses declined to $72.3 million from $82.5 million in Q3, reflecting lower stock-based compensation expense. Stock-based comp in Q4 was $36 million. Headcount at quarter end was 650 compared to 677 in Q3. Importantly, the roughly 30% workforce reduction that occurred in early 2026 is not yet reflected in those numbers. That impact starts flowing through in Q1 of 2026 with the full run rate savings expected to be reflected by Q3 and beyond.

As of March 1, total headcount was approximately 445. Sales and marketing was $39 million, up from Q3's $32.9 million, reflecting the continued growth and momentum of the credit card portfolio and increased cardholder spending, which drove higher crypto rewards during the fourth quarter. As we've said consistently, we treat marketing as a variable line and calibrate it to what we are seeing in acquisition performance and growth opportunities.

For the full year, sales and marketing was $97.1 million or $52.5 million, excluding credit card rewards and promotions, which remained in line with the $45 million to $60 million range we previously guided to. Transaction processing expenses were $7.3 million, down from Q3's $8.6 million, reflecting lower trading volumes during the quarter. Transaction losses were $6 million, down from Q3's $7.7 million. This includes a provision for credit losses on the card of $2.8 million, which remained broadly consistent with the prior quarter. Overall, credit quality across the card portfolio continues to remain stable as the book scales.

Technology and infrastructure was $22.3 million, up from Q3's $20.3 million, mainly reflecting higher cloud infrastructure and software licensing costs as the platform scaled. General and administrative was $24.9 million, up from Q3's $19.3 million, driven mainly by higher professional services and ongoing public company operating costs. Full year tech and G&A came in at $154.6 million, in line with our guidance range.

Now turning briefly on to full year metrics. We served approximately 601,000 MTUs as of December 31, up 17% year-over-year, reflecting continued growth in engagement as users adopt additional products across the platform. Full year net revenue was $174 million compared to $141 million in 2024, up 24% year-over-year. Transaction revenue for the year was $98 million, while services and interest revenue reached $76 million, representing a significant and growing portion of our overall revenue base. This shift towards services is a key structural change, reducing dependence on trading activity.

Services and interest revenue came in ahead of the $60 million to $70 million range we provided at our third quarter earnings call. This was driven primarily by stronger-than-expected card flows with more than 116,000 new card sign-ups during the year in response to card addition launches such as the XRP card. We saw growth across several other services categories. Custodial fee revenue increased 25% year-over-year, driven by higher average crypto assets under custody. We also recognized approximately $4.8 million of advisory revenue related to services provided to a strategic customer as well as $1.2 million from new on-chain offerings, including integrations and token listing services. As we continue expanding the platform, we see increasing opportunities to drive monetization across multiple services as users engage with additional products beyond trading.

Total operating expenses for the full year were $525 million versus $308 million in 2024. The year-over-year increase was driven largely by 3 main things: first, stock-based compensation tied to the IPO, including the Q3 bonus accrual that settled in equity; second, the significant marketing investments we made after going public to drive card growth; and third, continued spend in technology, compliance and public company infrastructure costs. These investments were deliberate and the restructuring actions we announced are designed to reset the company's cost structure going forward.

Full year adjusted EBITDA was a loss of $258 million, which is inclusive of $33.4 million of net realized and unrealized losses. On a GAAP basis, full year net loss was $582.8 million. It is important to note that a substantial portion of the net loss relates to noncash items. These include $178.5 million of fair value losses on our prior related party instruments and mark-to-market adjustments on crypto assets as well as $85 million of stock-based compensation expense associated with the equity awards issued in connection with our IPO. We believe that adjusted EBITDA is a useful way to look at the underlying performance of the business. That said, our adjusted EBITDA result is not where we want it to be, and we've made decisions since year-end that are designed to change that.

Now briefly on the balance sheet. We ended the year with approximately $252 million in cash and cash equivalents. The largest cash outflow in the quarter was the $117 million repayment of the Galaxy loan, which was completed in Q4 and removed that obligation from our balance sheet. As a result, we enter 2026 with a simpler balance sheet and lower debt levels.

Following the restructuring actions announced earlier this year, we expect our normalized operating cash losses to decline meaningfully. Going forward, our focus is on continuing to narrow the gap to profitability through disciplined cost management and growth in higher-margin services revenue. The card warehouse facility had $154.4 million outstanding at year-end against $188 million in pledged receivables, supporting capacity of $250 million. As the receivables book grows, we'll execute additional funding capacity to support expected growth.

On restructuring costs, the $11 million in pretax charges associated with the Gemini 2.0 plan will land almost entirely in Q1 of 2026 and are expected to be cash charges. They cover the U.K., EU and Australia wind down and the headcount reductions. Timing on some of the international pieces will depend on local consultation requirements, but we expect the full plan to be substantially complete by midyear. We expect these actions to simplify the organization and reduce our operating cost base going forward.

Before I turn to the full year outlook, let me share what we are seeing so far in Q1 2026. Through February, trading volume was approximately $5.3 billion, down from Q4 levels as broader trading activity has continued to soften. On the card, payment volume has exceeded $330 million with over 150,000 open card accounts. And on predictions, approximately 15,000 users have traded since launch across more than 12,000 listed contracts. Total monthly transacting users across the platform were approximately 606,000. As always, we urge caution in extrapolating partial quarter activity.

With that context, let me turn to how we're thinking about fiscal year 2026. At this time, we are not providing total operating expense guidance for the year. With the restructured cost base still taking shape and the macro environment that is difficult to forecast, we think the more useful approach is to frame the key expense categories individually.

The restructuring actions we implemented earlier this year began flowing through the cost structure in Q2. Since year-end, we have reduced headcount by approximately 30% from peak levels. Because 2025 compensation reflected the full year at pre-restructuring staffing levels, the year-over-year decline is more moderate than the underlying headcount reductions. We expect compensation, excluding stock-based comp and restructuring charges to decline 15% to 20% relative to 2025.

Stock-based compensation is expected to total $100 million to $115 million in 2026. 2025 included only 2 quarters of stock-based compensation at post-IPO levels following our September listing. The full year figure is higher in absolute terms, but the quarterly run rate is stabilizing as the IPO-related grant cycle normalizes. Technology and G&A is expected to range from $155 million to $190 million. The lower end reflects the post-restructuring normalized base. The width of the range reflects the variable costs that scale with card and trading activity, and we plan to narrow this range as we gain visibility through the year.

Marketing expenses, excluding rewards and promotions, are expected at 10% to 15% of revenue, depending on market conditions and the opportunities we see in our highest returning acquisition channels. On the revenue side, our credit card product remains the principal engine for acquisition and growth. Predictions are still early, but with more than 15,000 users since December, we see early traction as encouraging, and it is central to where we are taking the company.

While 2025 was the most expensive year in the company's history, given our IPO, the card investments and international expansion, the actions we've taken since then are designed to ensure that 2026 looks very different financially. Overall, we believe that the organization we enter 2026 with is leaner, more focused and positioned to drive improved operating leverage as we continue to scale our business. Together, we expect these dynamics to result in an improvement in adjusted EBITDA in 2026 as we operate with a more disciplined cost structure and a more diversified revenue base.

To summarize, 2025 was a year of significant transformation for Gemini. We went public, scaled our credit card program, expanded and diversified revenue through services, launched prediction markets and took decisive steps to reset our cost structure. We enter 2026 with a simpler organization, a lower expense base and a more durable business model. We see the core story of Gemini today as straightforward. The business is becoming less dependent on crypto trading volumes and increasingly driven by recurring and diversified platform revenue.

And with that, we will now turn to questions. Thanks, everyone.

[Operator Instructions]

Our first question comes from James Yaro at Goldman Sachs, who asks, could you update us on the drivers of the recent executive departures and how this fits into your new strategy?

Thanks for this question. So this summer was a different world. And when we IPO-ed in September, the price of Bitcoin was about $115,000 per coin. Of course, the markets dropped significantly from that point in time. But in addition, our ability to build a super app in America with predictions, there's now a path forward for that. And with the inflection point of AI, we have determined that we can move faster as a smaller, flatter AI-enabled organization that is still, of course, very much founder-led. So we think that we have the right team and the right organizational structure for today and tomorrow.

Our next question comes from Matt Coad at Truist, who asks, you continue to see traction growing your user base despite the rough crypto market backdrop. What do you believe is driving this user growth? And how do you plan to cross-sell prediction markets into this large and growing user base?

Thanks for the question. I think I can start here and then maybe kick it off to Cameron or Tyler to speak a little bit more on predictions. So we're very pleased by the continued growth we see in our user base, particularly given the broader market backdrop. I think one of the key drivers here is we're continuing to see meaningful user acquisition through our credit card program and just alongside broader engagement driven by new products that we're introducing and diversifying our revenue base, such as predictions. So we'll hand it over to see if Cameron or Tyler want to touch on predictions a little bit more.

So Gemini started -- when we started in 2015, we were a Bitcoin company. And people came to us and they could buy, sell and store Bitcoin. Over time, we became a crypto company, and we added additional money words like stake, where users could stake their assets with us. And then we added the Gemini credit card, and that's become an active part of people's financial lives who want to earn crypto back every time they swipe. And we're going to continue to add things to our product where users have reasons to do more with us over time.

And eventually, like a number of these activities will continue to be independent of crypto cycles. And I think that we're excited to see the engagement with prediction markets, our credit card and other things that we're going to bring to the Gemini app so that people don't have a reason to go elsewhere.

The next question comes from Adam Frisch at Evercore, who asks, can you help us frame the path to sustain positive stand-alone card economics, specifically the relative contributions from rewards optimization, lower acquisition costs, provision and credit normalization and cheaper broader funding capacity?

I can take this one. Thanks for the question, Adam. So we're really encouraged by the progress that we made in Q4, reaching near breakeven on the card. The card business has scaled really quickly, and we believe it has a clear path to profitability as the portfolio matures. There's a few primary levers that we think of.

So first, on the revenue side, we're seeing strong growth driven by interchange as spend increases. And then also important to note, interest income is still under earning relative to the size of the receivables space. So as the portfolio seasons and matures, interest income becomes a meaningful tailwind. And then on the cost side, we have several levers really. So rewards are the largest expense today, but these were intentional and front-loaded to drive adoption and really establish the credit card, and it worked. We went from roughly 30,000 open accounts at the start of '25 to now over 150,000 as of March 1.

And when you think about it, the Bitcoin card has only been out for about 9 months, XRP for about 5 months. So we're just getting started with this program. And rewards are really fully within our control, and we expect to optimize those over time. And to add to that, we've also really been pleased with the organic sign-up direction on a smaller spend base. We're still averaging well north of 100 sign-ups a day, which is more than double where we were a year ago.

And then we're also seeing improvements in bank fees as we scale, which will reflect better underlying economics. And then from a credit perspective, the performance is trending in the right direction. We see loss rates stabilizing and also continuing to improve as the book matures.

And then finally, on funding. So while funding costs are now coming into the model, we expect those to become more efficient as the portfolio grows and also as financing options expand. The expansion of the funding facility is really an important step. And longer term, we see opportunities to lower the cost of capital and diversify funding sources as the portfolio grows.

So putting it all together, we're already near breakeven on a pre-provision basis and the path to sustained profitability is driven really by a combination of portfolio seasoning, cost optimization and scale-driven efficiencies. So we don't need one single lever to do all the work. It's really incremental improvements across each of these areas that we believe will drive the card business into consistent profitability.

The next question comes from Michael Cyprys at Morgan Stanley. 15,000 users have used Prediction Markets through the end of February. How has that translated to revenue? Where do you see the growth potential from there? How do you compete versus peers that have a higher number of active users?

Thanks for this question, Michael. So we will provide an update on revenue in the near future, but it's very early at this point. But we are very encouraged with the fact that 15,000 customers have already engaged with this marketplace, which is brand new, and we did not have even a quarter ago. So we're very excited that our users are engaging with the product. We continue to grow that number on a daily basis and add many new contracts to the offering.

I think crypto is a great example. I think we started with monthly contracts. We are now down -- moved down to weekly, daily, hourly, 15-minute and just offering all these different types of intervals and ways for people to hedge and trade around the price of crypto, and we're just getting started. So we're very encouraged. I think that looking at the market as a whole, it's also very early for this market, and we see the pie only growing from here. And we think we're one of the few people who are building the full end-to-end marketplace for predictions. And we're excited that our customers -- it's resonating with them.

Great. And just to add on to that, we've been building technology trading systems in marketplaces for well over a decade. So this is -- this is -- these are the kind of things that we know how to do very well. We have a website, we have a mobile app. We have API interfaces. And we've been doing market surveillance. We know how to onboard customers, KYC them and build great trading and marketplace experiences. So this is very much an extension of the over a decade of experience and expertise that we've developed over the years.

The next question comes from John Todaro at Needham.

How are you thinking about capital raising and liquidity if we assume crypto volumes remain lower than 2025 levels through 2026 and 2027?

Thanks for the question, John. So we really appreciate it. And we're planning the business with a conservative set of assumptions, which include a scenario where volumes remain below '25 levels through '26 and '27 as well. And from a liquidity standpoint, we've taken really meaningful steps to reduce our cost base and improve cash efficiency. And really, we're focused on scaling a more durable recurring revenue streams that are less dependent on trading volumes. So our main focus is to execute on our operating plan with that discipline in mind.

But with that said, we're always evaluating opportunities to strengthen our balance sheet and support sustainable growth. And if there are opportunities for this on attractive terms, we would consider them. But we're, first and foremost, focused on demonstrating the operating improvements and letting the results really create the conditions for any future transaction or capital raise. But the key point is that we aim to build a model that can sustain itself across cycles and not one that depends on near-term recovery in volumes.

Yes. So look, as founders, we've been building Gemini for over a decade. We don't just have our skin in the game. We have our entire bodies in the game. We're deeply committed to Gemini and the mission and very excited to continue building it and as we expand the mission into the super app. And I think one of the things that we've talked about is that, that really helps us break free of the crypto cycles and give customers things that they can do throughout their daily financial lives, whether it's using a credit card or trading predictions.

We're hoping to launch U.S. equities as well, investing in U.S. capital markets and really building out a more durable story of revenue and engagement that moves beyond simply buy, sell, store or say, crypto, which is obviously very core to the business, but we want to build on that and give our customers more reasons to use Gemini. And we're seeing the beginnings of that. And I think we're really excited to keep doing that. So even if crypto prices do remain depressed for some prolonged period of time, we will be building other products that continue to drive engagement and growth of our business.

The next question comes from Pete Christiansen at Citi. What is Gemini's OpEx discipline going forward? And has management put in place guardrails that helps ensure eventual profitability at the EBITDA level?

Thanks for the question, Pete. So OpEx discipline is a core focus for us coming out of the restructuring. We've reset the business to a lower fixed cost base, and we put clear guardrails in place around any incremental spend. So that includes being very selective on headcount growth and tying it directly to revenue or strategic priorities and also continue to manage marketing as a variable lever really based on ROI and market conditions. And so that's a real lever that we can dial up or down depending on market conditions and requiring clear payback threshold for any new investments.

And just as importantly, we've become much more focused as an organization, so prioritizing a smaller set of high-impact initiatives and exiting or scaling back areas that just didn't meet our return thresholds. And that really allows us to concentrate our resources and our capital where we have the strongest product market fit and demand. So we believe that the organization is now structured to drive really operating leverage as volumes and engagement recovers.

And what's important to add is we don't need to meaningfully re-expand the cost base to achieve our growth target. A lot of the growth from here really comes from just better monetization of our existing user base and also just leveraging the infrastructure that we've already built. So I'd say the right way to think about this is we have a relatively stable OpEx base coming out of the restructuring with modest or highly targeted investments layered on top rather than us returning to a broad-based spending. And if 2025 was the year of investment, I'd say 2026 is really the year of focus and discipline.

The final question comes from Dan Dolev at Mizuho. Given the regulatory and competitive landscape in crypto and prediction markets, what are the biggest external risks you're managing against in 2026? And what would you point to as your most underappreciated competitive advantage?

Thanks for the question, Dan. So I think one of the things that we want to talk about is the fact that, obviously, there's a lot of effort to pass a crypto market structure bill. And I think what is very encouraging to see is the SEC and the CFTC in parallel are doing great work to bring about the super app era independent of a bill. And so while we are hopeful that a good bill will ultimately get passed, there is a lot of great work going on at both agencies to create a path for super apps in the event that a bill does not pass for whatever reason. So we believe like the future for crypto in America has never been brighter. And I think that sort of there is a lot of great work being done that we're excited about.

I think the second point that I'd like to make is that we are one of the, I think, the few end-to-end prediction marketplaces that also has a crypto marketplace within the same organization. And so we believe there's a lot of synergies for people who want to trade, for example, a Bitcoin event contract, but also be able to trade spot Bitcoin within the same place and hopefully eventually perpetual futures down the road in U.S. equities. And so I think that being an end-to-end marketplace for both predictions and spot as opposed to plugging into another marketplace, we believe that's an advantage for us going forward.

At this time, there are no more questions. Thank you all for listening, and we'll talk to you soon.

That concludes today's conference call. You may now disconnect.

Good day, and thank you for standing by. Welcome to Gemini's Third Quarter 2025 Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded.

I would now like to hand the conference over to Kate Freedman, Secretary. Please go ahead.

Good afternoon, and welcome to Gemini's Third Quarter 2025 Earnings Conference Call. I'm Kate Freedman, Gemini's Secretary. Joining me on the call today are Gemini's founders, Cameron and Tyler Winklevoss; Chief Operating Officer, Marshall Beard; and Chief Financial Officer, Dan Chen. We announced third quarter financial results today after the market closed.

Please note that during the course of this call, the Gemini team will make forward-looking statements, including statements relating to the future performance of Gemini, its business outlook and anticipated trends in our industry and their anticipated impact on our business, which are based on management's current expectations, forecasts and assumptions. These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from our expectations. For identification and discussion of these material assumptions, risks and uncertainties, please refer to our public filings with the SEC as well as the Investor Relations section on our website. We undertake no obligation to update these forward-looking statements unless expressly required to do so by law.

In addition, during this call, the Gemini team will be referring to certain non-GAAP financial measures during today's discussion. Important disclosures about this information and a reconciliation of the non-GAAP information to comparable GAAP information is included in our Shareholder Letter and is available on our Investor Relations website.

And with that, let me turn the call over to Cameron and Tyler.

Good afternoon, and thank you all for joining us on our inaugural earnings call as a public company. I'm Cameron Winklevoss, President and Co-Founder of Gemini. Tyler and I are equal parts thrilled and humbled to reach this milestone in Gemini's journey.

The end of Q3 marked our first quarter as a publicly traded company. And while that milestone is an important one, it represents only the beginning of our next journey When we founded Gemini over a decade ago, our goal was to build the trusted bridge to the future of money, connecting the world to the crypto frontier and helping grow that frontier into the crypto mainland.

Before Tyler and I outline our growth and business strategy, we want to take a moment to applaud the Gemini team. The hard work, creativity and determination of our people have brought us to this point. We are deeply grateful for the passion and grit you bring to our mission every day.

This quarter marked a significant step forward in our mission. We scaled our ecosystem, broadened our reach and continue to demonstrate the strength of the model we are building, one grounded in trust, engagement and liquidity.

Across the business, we achieved some of our strongest growth milestones in recent years. Trading volumes reached $16.4 billion, a multiyear quarterly high, primarily driven by expanding institutional activity and deeper engagement across the platform. The Gemini Credit Card delivered record performance, surpassing 100,000 open accounts and more than $350 million in quarterly transaction volume, more than doubling quarter-over-quarter. Together, these results reflected our strongest quarter of user acquisition in over 3 years and underscored the growing reach of our ecosystem.

We also built momentum for our next stage of growth by launching new Gemini credit card features and introducing the Gemini Wallet, a self-custody smart wallet designed for both crypto users and developers. At the same time, we broadened our global footprint by launching in Australia and securing our MiCA license in Europe, enabling us to offer staking, derivatives and tokenized stocks to customers across the European Union under a regulated framework. We believe this performance reinforces the strength of our model and the foundation that will continue to power Gemini's long-term growth.

Thanks, Cameron. When we founded Gemini, our goal was to make crypto simple, secure and accessible for everyone. That purpose underpins the trust, engagement and liquidity flywheel that fuels our business. From the very beginning, we chose to take the regulation forward path, asking for permission, not forgiveness. And we built Gemini with the goal of meeting the highest standards of security, licensing and compliance. We believed, and still believe, that long-term value in crypto will flow to the companies that earn it the right way.

This focus on trust has allowed us to create a durable model that we believe will compound over time. We believe this foundation of trust and transparency is what draws users of Gemini and what keeps them here. This regulation forward approach has allowed us to build a durable, powerful flywheel built on trust, engagement and liquidity that drives Gemini's business forward.

This flywheel starts with our exchange, a regulated crypto-native platform that combines the depth and sophistication institutions expect with the simplicity retail customers need. That foundation of trust and transparency is what draws users to Gemini in the first place and what keeps them here. From there, the Gemini Credit Card expands our reach. It's often the first step for customers who are new to crypto, a no annual fee card that earns Bitcoin or one of the 50-plus tokens available on our platform on everyday purchases. This brings them into the Gemini ecosystem in a simple rewarding way.

Over time, that relationship creates opportunities for customers to explore more of what Gemini offers from trading and saving to engaging with on-chain products as comfort and familiarity grow. As overall activity builds, it attracts institutional liquidity, market makers, asset managers and corporate treasuries that value Gemini's regulated framework. Their participation strengthens pricing and execution for everyone, creating a healthier, more efficient marketplace.

The final piece and really the backbone of the entire system is regulatory trust. Operating in a sound, compliant and transparent way doesn't just protect our users. It opens doors in new markets and makes Gemini a partner of choice for institutions and regulators alike. Each turn of this flywheel reinforces the next. Trust drives engagement, engagement builds liquidity and liquidity strengthens trust. It is an integrated model that compounds over time, expanding our reach, deepening relationships and strengthening the resilience of our business. That's the power of Gemini's flywheel, and it's why we believe we're positioned to lead as traditional finance and crypto continue to converge.

In Q3, we advanced our mission across 5 key areas that demonstrate the strength of this model: one, expanding our regulated global footprint; two, scaling crypto adoption through everyday spending; three, deepening trading activity and diversifying our revenue mix; four, enabling secure onchain access; and five, enhancing capital efficiency and balance sheet strength.

Our Chief Operating Officer, Marshall Beard, will discuss each of these areas in more detail. Back over to Cameron.

As we look ahead, the opportunity before us is enormous. Financial markets are moving on chain, and crypto is reshaping how we transact, store value and interact with money itself. Gemini is purpose-built for this transition, regulated, trusted and focused on building a globally integrated super app that connects traditional finance and crypto in one seamless experience.

Our mission has always been global. You should not have to live in any one country to access a stable currency, invest in great companies or participate in a modern financial system that works 24/7, just like the Internet and your e-mail. We pursue this mission by bringing dollars on chain through stablecoins, enabling trading and secure custody of tokenized assets and making it simple to buy Bitcoin and other crypto.

Gemini is positioned to help shape this future and ensure that everyone has access to it while maintaining the trust and security standards our customers have come to expect. We are proud of what we've accomplished in our first quarter as a public company and even more excited about what lies ahead. Thank you for joining us on this journey.

With that said, I'd like to hand it over to Marshall Beard, our Chief Operating Officer, to discuss Gemini's Q3 operating performance.

Thanks, Cameron. It's been an exciting first quarter as a public company as we made several improvements to the business to further advance our mission and improve our operations. The results we delivered in Q3 reflect the depth of execution across our teams and the continued momentum of our platform. Let me start with our expanding global footprint, where we made important progress in strengthening Gemini's goal of being a trusted regulated partner around the world.

We advanced licensing and registrations in key markets when we received our MiCA license from the Malta Financial Services Authority, enabling us to offer certain secure, reliable crypto services across all 30 European countries and jurisdictions. Following the close of Q3, we launched in Australia after obtaining AUSTRAC registration in August and completed key payments integrations to streamline onboarding in the region. In Singapore, we continue to engage with the Monetary Authority of Singapore to convert the in-principle approval through which we operate to a full MPI license.

Together, these milestones expand Gemini's license footprint across major global markets and strengthen our ability to operate under clear regulated frameworks. They also demonstrate how our commitment to compliance continues to open new opportunities for both retail and institutional customers.

As we strengthened our global reach, we also continue to scale one of the most important drivers of customer engagement and growth, the Gemini Credit Card. The Gemini Credit Card has quickly become our most powerful engine for customer acquisition and daily engagement. In Q3, we released an XRP edition of the Gemini Credit Card. And in October 2025, we released the Solana edition, introducing auto-staking rewards across all cards and unlocking the power of each network's community to drive growth.

These new additions helped us cross more than 100,000 total card accounts with 64,000 new card sign-ups in the third quarter and over $350 million in card transaction volume, up more than 100% quarter-over-quarter. This momentum drove our strongest quarterly card revenue performance to date with card revenue of $8.5 million in the quarter.

We believe that the Gemini Credit Card continues to serve as a leading acquisition wedge for Gemini in the United States. More than 55% of newly acquired U.S. transacting users across our products in Q3 first originated through card onboarding and 75% of open card accounts were active at quarter end. This steady flow of engaged transacting customers is helping drive higher lifetime value, deeper engagement and cross-product adoption across the platform.

As card adoption accelerates, it continues to deepen engagement across the Gemini platform. Every cardholder also opens a Gemini exchange account as part of the same integrated experience, giving customers a single unified platform to spend, earn and trade. On our exchange, trading momentum accelerated in Q3 as participation broadened across customer segments, reflecting a healthier, more liquid marketplace. Spot volumes reached $16.4 billion, up 45% quarter-over-quarter, including $14.6 billion from institutional customers, up 49% quarter-over-quarter and $1.8 billion from retail, up 20% quarter-over-quarter. Liquidity improved across order types, which we believe highlights the continued strength of our core exchange.

Our OTC business also expanded its client base and product range, contributing to greater market depth and scalability. At the same time, our revenue mix became more balanced and durable with services revenue, including credit card, custody and staking, accounting for nearly 40% of total revenue in Q3, up from less than 30% a year prior. Custody and staking assets benefited from both price appreciation and new regional launches with staking balances reaching $741 million at quarter end. These results illustrate how our card-led acquisition strategy and expanding exchange activity reinforce each other, creating a compounding flywheel of engagement, liquidity and trust that can help drive sustainable growth.

As liquidity and engagement on our exchange continue to grow, we also expanded access to the broader onchain economy, delivering new products and capabilities that make it easier, safer and more seamless for customers to engage directly with onchain opportunities. We continue to expand our onchain capabilities and invest in our native staking infrastructure during the quarter. In August, we introduced Gemini Wallet, a self-custody smart wallet designed for both crypto users and developers. The wallet allows customers to manage assets seamlessly across onchain applications while maintaining control and security, bridging the gap between embedded and portable onchain experiences.

We also launched Solana staking from custody for institutions and our own in-house Solana validator, providing clients with a secure and compliant way to participate in network validation directly through Gemini. In parallel, we expanded multi-network support across both EVM chains and emerging Layer-1 networks, enabling broader access to stablecoins on our platform. Under our MiFID license in Europe, we rolled out tokenized stocks to EU customers, offering EU customers a regulated path to gain exposure to traditional financial assets onchain.

We're also continuing to work on new products, including an expected upcoming prediction markets offering, which we expect to share more about in the future. Together, these initiatives strengthen Gemini's role as a trusted bridge to the onchain economy, reinforcing our vision to make crypto accessible to everyone through a single integrated experience.

Finally, as we continue to scale our platform and expand our product capabilities, we also strengthened our balance sheet and improved our capital efficiency. Following our IPO, we paid down debt and improved capital efficiency through new funding structures, including establishing a $150 million credit facility to finance credit card receivables. These actions strengthen liquidity, and we believe that it positions Gemini for scalable, sustainable growth.

Looking ahead, we remain focused on maintaining balance sheet strength while retaining the flexibility to fund strategic initiatives that drive scale and growth. We also plan to continue to thoughtfully utilize share-based compensation as a tool to align employee incentives with the long-term success of Gemini. Together, these priorities reinforce our commitment to disciplined capital management and the alignment of our people and financial resources around sustainable value creation.

Overall, we believe that Q3 demonstrated the breadth and resilience of Gemini's model in action. We executed across every part of our platform, expanding our global footprint, scaling card engagement, deepening trading activity, advancing our onchain strategy and improving capital efficiency. Each of these initiatives strengthens the flywheel of trust, engagement and liquidity that we expect to continue to power our growth.

With that, I'll turn the call over to Dan Chen, our Chief Financial Officer, to take you through our financial results for the quarter in more detail. Dan?

Thank you, Marshall, and good to speak to you all. It's great to be here today to discuss our third quarter results, our first quarter as a public company. I'll start with an overview of our financial performance and then provide a bit of color on trends across revenue and expenses before wrapping with adjusted EBITDA and outlook.

Net revenue for the third quarter was $49.8 million, up 52% quarter-over-quarter. This marks another strong step forward for Gemini as we continue to expand both the reach and resilience of our platform. Growth this quarter was broad-based, driven by stronger trading activity, increased user engagement across our credit card product and exchange, including increased traction in staking and custody. Taken together, we believe that these results highlight the expanding utility of the Gemini ecosystem and the growing diversification of our revenue streams.

Transaction revenue was $26.3 million, up 26% from last quarter. Spot trading volumes reached $16.4 billion, up 45% quarter-over-quarter, reflecting both higher user engagement and improving market conditions. Retail volumes grew 20% to $1.8 billion, while institutional volumes rose 49% to $14.6 billion. The increase in exchange activity came from both existing customers becoming more active and new clients onboarding to the platform.

As a reminder, transaction revenue is earned from fees charged to both retail and institutional users. These fees vary by transaction size, volume and order type with instant orders having the highest fee. This quarter's increase was partially offset by a lower average retail fee rate, reflecting a higher mix of lower fee order types. Overall, the growth in volume more than offset the mix effect, demonstrating the underlying health of our marketplace and the scalability of our exchange.

Turning to services revenue. The total for the quarter was $19.9 million, which includes credit card, staking and custody revenue as well as other activities related to the exchange business. Credit card revenue was $8.5 million, up $3.7 million from the prior quarter, driven by continued user growth and higher spend per active cardholder. We saw 64,000 new card sign-ups in Q3 compared to 17,000 in Q2, bringing receivable balances to $150.6 million, up 61% quarter-over-quarter.

The Gemini Credit Card continues to be a powerful customer on-ramp, helping new users enter the ecosystem and strengthening engagement among existing ones. Staking revenue also performed well, increasing $3.2 million to $5.9 million. This reflects our first full quarter of Solana staking in the U.S. and was further supported by an increase in staked assets and underlying price appreciation. We also recognized $2.1 million in advisory fee revenue from a onetime warrant arrangement, reflecting the value of our advisory capabilities. We expect services to continue to be a major growth driver going forward, particularly with the continued adoption of the Gemini Card and our staking products expand globally. These are high utility recurring revenue streams that we believe can strengthen the long-term stability of our business model.

On to expenses. Total operating expenses for the quarter were $171.4 million, up about $72.7 million sequentially. That step-up was primarily driven by IPO-related stock-based compensation, increased marketing spend and other nonrecurring items rather than a structural change in our cost base and underlying operating system expenses otherwise moved in line with recent quarterly trends. Breaking that down, compensation and headcount expenses were $82.5 million, up $45.7 million from Q2. Roughly $44 million of that increase came from stock-based compensation tied to IPO equity awards, including a $15.1 million bonus accrual recognized and settled in equity at the same time.

Compensation and headcount expenses otherwise tracked an increase to employee headcount, which was 677 employees at quarter end. We continue to invest selectively in engineering and compliance while keeping overall hiring disciplined. We expect compensation to normalize at this new post-IPO level as stock-based compensation becomes a recurring part of our expense base.

Turning to sales and marketing. Expenses were $32.9 million, up $16.8 million from last quarter. The majority of that increase reflects deliberate investments. About 2/3 of the increase was higher marketing and brand spend, while the remainder came from higher rewards and promotions consistent with elevated card activity. We believe that we've seen a clear payoff from that investment in terms of new account growth and card engagement. That said, we continue to view marketing as a flexible lever. We expect spend levels in upcoming quarters to depend on the performance opportunities we see in the market.

Transaction-related costs rose in the third quarter as well, reflecting both higher activity levels and a few isolated losses. Transaction processing expenses were $8.6 million, up $3.4 million from the prior quarter on stronger staking balances, while transaction losses totaled $7.7 million, up about $4 million sequentially. Those losses were generally in line with the continued scaling of the business.

The provision for credit losses on the card program, which is included in transaction losses increased by $1.5 million to $2.8 million, consistent with the continued growth in active accounts. We continue to see improvement in credit performance. Technology and infrastructure expenses were $20.3 million, up about $2.5 million, driven by higher software licensing and ongoing security and scalability investments. G&A expenses were $19.3 million, essentially flat, though that figure includes some nonrecurring IPO-related costs.

Turning to debt and liquidity. During the third quarter, third-party corporate debt increased by $75 million, reflecting a new borrowing facility. To execute that facility, we entered into a related party loan of 1,275 Bitcoin. At quarter end, that loan totaled $145 million. We also saw an increase in other related party crypto loans, up roughly $13 million, reflecting in part higher Bitcoin and Ethereum prices, partially offset by repayments of 133 Bitcoin and 13,070 Ether. At quarter end, we held 5,824 Bitcoin and 26,629 Ether received through these arrangements.

After the quarter closed, we returned $116.5 million of proceeds from the Galaxy loan and received the full Bitcoin and Ethereum collateral back. That loan remains outstanding for the 90-day notice period under the terms of the agreement.

Finally, we executed a warehouse financing facility to fund our Gemini Credit Card receivables. At quarter end, we had $49 million of debt outstanding and $68 million of pledged receivables sufficient to support borrowings of $59 million. This is an important step for the business. By financing the card portfolio through a warehouse structure rather than funding it entirely on the balance sheet, we believe that we're making the program more scalable and capital efficient.

In our view, this approach mirrors established practices in traditional consumer finance and provides flexibility to grow the card program responsibly while maintaining strong liquidity and risk management discipline. Overall, we believe that our balance sheet remains healthy with ample liquidity and diversified funding to support growth across our key products.

Looking ahead, our focus remains on driving disciplined growth, improving capital efficiency and maintaining flexibility to invest behind our highest conviction opportunities. Starting with our medium-term framework, we continue to expect monthly transacting users to grow at a 20% to 25% compound rate over the medium term and that growth to be supported by a mix of new retail customers coming through our credit card on exchange and expanding engagement from existing customers across trading, staking and onchain activity.

On the top line, we expect services revenue and interest income, which includes staking, custody and the Gemini Credit Card as well as interest income to reach $60 million to $70 million in fiscal 2025. We expect that growth to reflect continued momentum in our credit card program and increased engagement in non-trading activities, both of which we expect to contribute to deeper and more diversified customer relationships.

Turning to expenses. We expect technology and G&A expenses to total between $140 million and $155 million for fiscal 2025. We expect this to reflect ongoing investment in scalability, reliability and compliance infrastructure, balanced by expected efficiency gains across our core operations as we continue to scale the platform. On marketing, we expect a more meaningful step-up for full year 2025 with expenses of $45 million to $60 million. That increase reflects our decision to lean into growth following the IPO and build on momentum. We plan to continue to evaluate performance data closely and direct spend to the channels and products where we expect to see the strongest returns.

In other words, this isn't broad-based expansion. It's a targeted acceleration designed to drive durable user growth and strengthen brand equity. As we move forward, stock-based compensation will remain a structural component of our expense base, reflecting our transition to a market-based equity program aligned with long-term shareholder value creation. So while total operating expenses will remain elevated relative to pre-IPO periods, we believe that this reflects our intentional investment in both people and growth.

Stepping back, the key takeaway is that we believe that our expense growth is strategic and controlled. We believe that we are investing from a position of strength. We see a clear line of sight to scalable revenue streams, and we expect to continue generating operating leverage as those investments begin to mature. Q3 was another step forward for Gemini. We delivered strong top line growth. We deepened engagement across both retail and institutional users, and we continue to diversify revenue toward higher-quality recurring streams like card and staking.

We believe we are operating from a strong foundation, investing in growth, scaling responsibly and maintaining the discipline that underpins our long-term margin expansion goals. We're building a business that is larger, more durable and better balanced than ever before, one that can scale through market cycles and capture the long-term opportunity in onchain finance.

With that, we will now open the call for analyst Q&A. Thanks, everyone.

[Operator Instructions] Our first question is from Dan Dolev of Mizuho.

Really nice results here. Congrats on the first quarter. So 3Q really proves that Gemini is increasingly becoming a global financial super app with we're seeing higher engagement, massive card adoption and products like the Gemini Wallet and then you talk about the future of prediction markets, which makes it very exciting. So maybe for you, Tyler and Cameron, can you maybe shed some light on the new product road map and the super app that you're planning? That would be very helpful.

Thanks for the question. This is Cameron. So with respect to our product road map, we're really excited about building towards the super app, which we started. We launched our self-custodial smart wallet this summer. And our view is that markets are all going on chain. And so pretty soon, you will be able to hold a tokenized dollar via stablecoins, tokenized equity and digital commodities all within one app. Traditionally, that's been maybe multiple apps or a siloed experience, and we're working to bring that all together within one app, and we're making very good progress there.

We launched tokenized equities in Europe. We support many different stablecoins, and we support digital commodities like Bitcoin and the like. The other part of our road map that we're very excited about is the credit card. We had a very exciting quarter, but we feel that it is still very early. When we look at the size of the potential market, we're just really getting started. We're excited to have broken 100,000-plus cards. but it's really just the beginning when you think of the size of the market.

And we think that consumers are really understanding the power of earning crypto every time they swipe as opposed to points that expire and it's hard to determine the value. And what we're finding is that people are coming for the credit card and they're staying for everything else. And they're curious and they navigate through the app and go on to take other revenue-generating actions. We also have an upcoming small business card that we plan to launch soon. And we're also planning other co-branded card opportunities with other major projects.

And then lastly, we are working on prediction markets. We're very excited about these markets. We think it's very early days. It reminds us a lot of what Bitcoin felt like in 2012 when we first discovered it. And this idea that you can essentially build a market on anything, any kind of event is fascinating and really a boundless opportunity. So we have -- we're working to bring those live globally. We have an application with the CFTC to build a DCM, Designated Contract Market. And once the government opens back up, we hope to continue pursuing that application and hopefully bring these products to market soon thereafter.

Our next question comes from the line of Michael Cyprys with Morgan Stanley.

I echo the congratulations on the first quarter out of the gate here. I wanted to dig in on the card business, some very strong growth in terms of accounts you guys are putting up. I was hoping maybe you could unpack what you see is driving some of the strength. I know you also launched in October, the Solana addition of the Gemini card. I was hoping maybe you could help provide a little bit of color on what you're seeing so far as well as the XRP card, how that engagement is continuing here into October and November compared to the 64,000 card sign-ups that you had in the third quarter?

Yes. This is Marshall Beard, and I can take part of this question, and thank you for that question. It's a great one because credit card is one of the most exciting products that we have right now. We had tremendous growth in Q3. It's been one of the most exciting levers. I mean we're a market leader here. We're continuing to press and acquire new customers. One of the really interesting things is 55% of our U.S. new transacting users are actually coming through the credit card onboarding funnel, and it's one seamless experience, so they become exchange users as well.

With the Solana Card launch, there's also like a really great example here of how we're using product in UX to get these card customers to engage in other products and services on the platform. So when we launched the Solana card, we also launched a feature that you can auto stake your rewards if you choose Solana or any other stakable asset as your rewards. So what happens is we've seen a big increase in users that are now staking on Gemini, and these are all folks from the credit card that are auto staking their Solana rewards. So they're learning more about our products and services. They're engaging with other products and services, and it's one of the most exciting levers that we have right now.

Mike, that's a great question. This is Dan. I really appreciate the thoughtfulness of that. I think Marshall expressed it super well. And I think you heard earlier, Cameron and Tyler mentioned the work around the small business card. And I want to highlight that because the credit card is just this incredible acquisition vector for us, but we're not content to just have the product to be a prime consumer card. like we understand that the opportunity here is to take that vector because we manage the program ourselves, we can expand and land from there and add on other vectors.

So small businesses are an underbanked, underappreciated part of this economy that's so important to America thriving, and we really believe that this is part of our opportunity as well. Like we want to take this product, expand it to a group that's underserved and grow from there.

Great. If I could just ask a follow-up question on the card losses as you guys are leaning into the growth in terms of accounts. I was hoping maybe you could speak to the outlook for losses as well as on the fraud side. Maybe remind us what leads to those fraud losses? And what are some of the steps you can take to drive that lower over time?

Sure, Mike. This is Dan. I'm happy to take a first run of those questions. As far as losses go, transparently, losses in this quarter were really low. They showed meaningful improvement versus what we had in prior periods. We do believe that, that is a reflection of 2 things. The first and foremost, we think it's a reflection of the credit discipline we bring in making sure we underwrite the right customers where we provide credit to people who can afford it.

The second is there is a denominator effect to be transparent, like as we grow that program, losses will initially be a little bit lower as new customers onboard and use the product. And over time, there's a leveling off of charge-offs. So it's a great level. We believe we'll continue to keep losses strongly mitigated. We have a great team that manages the credit. They are really focused on deploying the best technology available to keep losses, whether it's credit or fraud tightly mitigated. So from our perspective, that's a central hypothesis. Like we can't get third-party financing. We can't scale the business if we extend credit to those who aren't able to afford it.

Our next question comes from the line of Matt Coad with Truist.

I really appreciate all the color on the new business wins that really impressive like you guys talked about. I was hoping that you could touch on some of the guardrails that you have in place, though, just to make sure that your unit economics remain strong while you look to regain and grow market share here.

Yes. This is Marshall Beard. I can take a stab at that. I mean, this year, and especially Q3 was one of our highest new user acquisition quarters that we've had in many years, as you can see with our lifetime transacting users and our MTU growth. And so we feel very confident in our ability to deploy capital now well below our CAC targets and well within our payback period still. So earlier this summer, we saw massive growth, and we saw great user acquisition tools, things like the XRP credit card brought user cost very low. We're still seeing that right now.

We feel very confident in our ability to deploy capital with the plan that we've had all year through at least the end of the year. But as our shareholder letter mentioned, we do view marketing spend as a lever, right? We're going to continue to press into heightened moments where we can capture users at as cheap a cost as we can, and we can pull back as quickly as we want as well. So we feel really good still about our ability to acquire users well within our range, well within our CAC and payback period. So we'll continue to do that as long as the market kind of shows us those numbers, and we feel good about it.

Super helpful there. And then, guys, just one other follow-up on the super app that you're looking to build here. Makes total sense to us. There's a clear market need for this kind of offering. I was just hoping you could touch on how you think about buy versus build versus partner as you look to build out that super app and kind of like round out all of your offerings? Just a little bit of color there would be helpful.

Sure. This is Cameron speaking. So we are building that super app in that future. It's an onchain feature. We're an onchain company, and this is our wheelhouse. So this is something that we will build as opposed to partner or buy.

Our next question comes from the line of James Yaro with Goldman Sachs.

I'd love to touch on the drivers of the medium-term 20% to 25% monthly transacting user guidance. Could you expand a little bit on the key building blocks of this guidance?

Yes. Sure, James. This is Dan. Great to hear from you. The drivers of that continued growth, I think, are really a continued focus on what we've been doing for the past 90-plus days, right? I think it's a continued motion of acquiring new customers, whether through the exchange directly or via that linkage, that really close linkage to the credit card product.

There's also, as you can tell from Marshall's earlier comments about auto staking and the activities we're doing there, like there's also just the increased engagement of customers already on the platform. So when you become a Gemini customer, we're not quite content with necessarily your activities in the exchange just being what you start out with. If you come in as a card customer, our real objective is to make sure that we make staking easier. we help introduce staking to you. We're really focused on building platform capabilities. We're focused on adding products and increasing engagement.

So the building blocks remain the same. The building blocks are that we will spend money to acquire customers within that CAC target that we have to make sure that we're acquiring targets in a unit economic way that makes sense. And from there, as we bring them into Gemini, getting them more and more engaged to choose us as their financial super app location of choice.

Excellent. Very clear. Just as a quick follow-up, I wanted to touch on something that happened during the IPO that I think was important to the story. But specifically around the Nasdaq partnership, anything that you could lay out for us in terms of the opportunity time frame and perhaps just the broader revenue possibility there?

Sure. Yes, James, this is Marshall. I can give a brief update. I don't have any material updates to share on that partnership other than the discussions are ongoing. We've been talking to some clients of Nasdaq as well already that they've introduced. We're working around 2 different businesses with a bunch of different clients and new products that we're building for them. So it's very positive. It's moving forward. It's still just very early in that journey.

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

Also, congrats on the IPO, guys. I was wondering if you could talk about or at least some of the attribution in the exchange side, particularly on the institutional volume. Was some of that growth there, which was really interesting there. Was that attributable to like MTU growth or just like deeper engagement with existing clients? Any other trends that you can tease out there would be helpful. Then I have a follow-up.

Yes. Pete, this is Marshall Beard. I could speak to that. We've put 10 years of work into our infrastructure to support institutions on the Gemini platform. And so with the mix of recent talent that we brought in and all of the capabilities that we have, we've seen an uptick in new trading firms coming on to Gemini, and we've been strategic with our fee rates for these institutions as well. So the majority of what you're seeing in the institutional volume uptick is our sales and business development team is doing great work, engaging with the community and getting firms back on and trading on Gemini and also being very competitive with our fees right now.

That's helpful. And should that read-through be the same for retail? I was going to ask that question. I mean you did discuss spreads down sequentially. If you could just attribute that. It sounds like it's really deliberate there in an effort to grab more share.

Yes. Sorry, this is Dan. Great to hear that question. I mean I think at the end of the day, the retail take rate did not move from our perspective materially from the prior quarter. It's still higher than where it was in the 2 quarters before that as well. So 3 quarters before that as well. So we think that the retail take rate changes were really the result more of the mix shift between active trader and instant trading and not really about any programmatic reduction in fees in order to gain volume.

Our next question comes from the line of John Todaro with Needham.

On the quarter. I guess the first one, just as it relates to cards, obviously, a lot of success there, but we are seeing a fair bit of competition now heating up in that segment. fintech I cover is now launching one. Just kind of do you think it starts to get crowded? How do you keep staying innovative there? And then I'll ask my follow-up.

Thanks for the question. This is Tyler. We think that other people entering into the card space is validating for what we're doing. We're a leader here. We've been here for years. And there's a lot of ways we can continue to expand our offering, both with front when we have with more co-branded cards. as well as, as we mentioned, going into small business and other verticals.

And we think that just the sheer size of the market is quite large for credit cards, both for individuals and businesses in America and especially when you have the novelty of earning crypto rewards back and all of the possible different rewards you can earn because of all the cryptos we support on Gemini. So we find the competition to be validating. And in many ways, we feel like we're just getting started with this product.

And this is Cameron. Just to build on that, our card has no annual fee. So it really is a ramp and an acquisition tool. We're trying to make the barriers as low as possible for people to sign up and start earning crypto. We don't require a subscription fee or any kind of membership. Anyone can apply, no annual fee, and we're just trying to create a very simple intuitive product for anybody to try.

Great. And then as my follow-up, and apologies if it was already asked, there's a couple of other ones going on right now. Eve trading volume on the platform looked like it shot up relative to Bitcoin. Just wondering if that was due to staking market dynamics or if there's like a customer profile changing on the platform.

Yes. This is Marshall Beard. I can answer this one. Nothing really too much to dig into here. No customer profile or anything that would have caused that. I think what you'll see is sometimes basically due to price appreciation or depreciation, you'll see some assets kind of overtake Bitcoin or some of the top trading assets over time. But most of that is just around price appreciation, not about customer segments or anything.

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

Congrats on the opening quarter out of the gate here. I wanted to ask about the credit card business a follow-up here. I saw that the 56% of the sort of new users came on the card first this quarter. That was, I think, closer to 40% in the first half of the year. Can you talk about how that should trend from here as you ramp up marketing? Do you still see card being the lead growth engine for the exchange? Or should that start to trend down here?

Yes, this is Marshall, and I can answer this quickly. I think for the near future, we're going to see similar growth rates for the credit card compared to the exchange. It's one of these products that has really caught on since we started marketing it, and it's found incredible product market fit. I think to an earlier question, the rise of other products that are potentially similar in nature has also brought more eyes to this space.

I mean we're not necessarily competing against other crypto rewards, but more of the broader credit card and the points game as a whole. And so even right now, though, we're seeing similar acquisition trends in Q4 around the card. So I think for the near term, we're going to see that. We're going to keep pressing into this product. And we're seeing incredible results so far of all these new cardholders going on to use the exchange products as well.

Awesome. Great. And then my follow-up question is on pricing. IPO roadshow, there was some discussion of taking some pricing opportunities in both staking and the card business. Has that happened already? Or is that still on the come?

Yes. We have adjusted our staking take rates. I think we've increased them from 15% to 25%, which is still lower than our competitors, but still near. So that has taken place. I don't think we've made any changes necessarily or material changes to our credit card take rates.

And I'm currently showing no further questions at this time. I'd now like to turn the conference back to Tyler and Cameron Winklevoss for closing remarks.

Great. Thank you. This is Cameron. We really appreciate the questions and engagement and interest. We're very excited to have this first earnings call. It's a great milestone for our company, our journey and our mission. And we feel like we're just getting started, and we're very excited to continue this journey, and we feel there's a lot of great things to come.

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