0002055592-26-000050
SEC filingRevenue grew 42% to $50.3M driven by credit card and OTC; net loss improved to $(109.0)M.
For the three months ended March 31, 2026, total revenue increased 42% to $50.3 million from $35.3 million in the prior year period. The growth was primarily driven by a 292% surge in credit card revenue to $14.7 million and a 4803% jump in OTC revenue to $6.3 million, partially offset by a 27% decline in exchange revenue to $17.2 million. Net loss improved to $(109.0) million from $(149.3) million, benefiting from a $28.0 million reduction in realized and unrealized losses on crypto assets and the absence of $63.7 million in fair value losses on related party convertible notes and loans that converted to equity upon IPO. However, operating loss widened to $(94.2) million from $(48.0) million, as operating expenses grew 73% to $144.5 million. Key drivers were a $31.2 million increase in salaries and compensation (including $22.7 million stock-based compensation from IPO awards and $6.5 million severance restructuring) and a $10.0 million rise in sales and marketing costs (credit card rewards and acquisition spend). Transaction losses more than doubled to $11.1 million due to higher credit card provisions and fraud reserves. Gross margin is not directly disclosed, but net revenue as a percentage of total revenue decreased to 97% from 99%.
Exchange revenue fell 27%, with retail down 34% on 28% lower volume and unfavorable trading mix, while institutional revenue rose modestly due to reduced market maker incentives. OTC revenue exploded 48x, driven by a handful of large institutional trades that may not recur. Prediction markets contributed $0.4 million from its December 2025 launch. Credit card revenue surged 292% as the user base expanded and cardholder activity increased. Staking revenue declined 31% on lower activity and asset prices. Advisory fee revenue of $2.7 million came from a new warrant-based arrangement. Custodial fee revenue was flat. The revenue mix shifted significantly: exchange fell from 66.6% to 34.2% of total revenue, while services revenue jumped from 24.7% to 43.4%, reflecting diversification.
Management highlighted several strategic priorities: expanding the Gemini Predictions platform, launching new onchain offerings, and continuing to grow the credit card program. The company completed a $100 million private placement of Class A common stock with WCF in May 2026 to strengthen liquidity. Restructuring actions to wind down international operations (UK, EU, Australia) are expected to deliver cost savings. No explicit revenue or earnings guidance was provided, but management believes existing cash, IPO proceeds, and the private placement will fund operations for at least 12 months. Key risks include crypto price volatility, regulatory changes, and competitive pressures. The company expects to continue investing in product innovation and user acquisition.
As of March 31, 2026, the company held $215.6M in unrestricted cash and equivalents, down from $252.2M at December 31, 2025, primarily due to operating cash burn of $54.4M in Q1. Restricted cash (including customer custodial funds) totaled $587.5M, but these are not freely available. Total debt stood at $468.4M, consisting of $252.6M related party loans (mainly crypto loans from Winklevoss Capital Fund), $140.5M funding debt (Ripple warehouse facility), and $75.3M third party loans (NYDIG repo). Net debt (total debt minus cash) was $252.8M. Shareholders' equity was $456.1M, down from $540.9M due to the net loss. The company also held $272.0M in crypto assets at fair value, a significant decline from $439.6M at year-end, driven by $100.0M in realized and unrealized losses.
The company has an ongoing commitment to purchase credit card receivables from its issuing bank; as of March 31, 2026, $218.1M of receivables had been purchased, with $184.0M pledged as collateral under the Ripple credit facility. Lease obligations total $25.7M (present value) with $6.2M due in the remainder of 2026. The company also has contingent liabilities related to legal proceedings, including a securities class action and a shareholder derivative suit, though no material losses are currently accrued beyond $1.1M in estimated loss contingencies.
The company did not repurchase any shares or pay dividends in Q1 2026. Capital expenditures were minimal at $2.1M (1.4% of revenue), primarily for internally developed software. Total debt decreased by $165.1M from year-end, driven by a $151.4M reduction in related party loans (net of new borrowings and repayments in crypto). The company drew $435.2M and repaid $449.3M under the Ripple warehouse facility, indicating active management of securitized debt. No new equity or debt issuances were completed during the quarter, though subsequent to quarter-end, the company entered into a $100.0M private placement with Winklevoss Capital Fund.
The company does not disclose operating segment information in the notes to the financial statements. Geographic revenue breakdown shows 90% from the U.S. ($45.2M) and 10% international ($5.1M), with no single international country exceeding 10% of total revenue.