BitGo Holdings Inc.
11/09/2026 | Press release | Distributed by Public on 11/09/2026 16:04
Quarterly Report for Quarter Ending September 30, 2026 (Form 10-Q)
Management's Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis of our results of operations and financial condition should be read in conjunction with our condensed consolidated financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q and our audited consolidated financial statements and the related notes disclosed in our Annual Report on Form 10-K for the year ended December 31, 2025. The following discussion contains forward-looking statements that are based on current plans, expectations and beliefs that involve risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including, but not limited to, those identified below and those discussed in the section titled "Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2025 and other sections, including the "Risk Factors" and "Note Regarding Forward-Looking Statements" of this Quarterly Report on Form 10-Q. Our historical results are not necessarily indicative of the results that may be expected for any period in the future.
For purposes of clarity and ease of presentation, numbers presented within this section may not sum precisely to the totals provided. The underlying data used in the calculations, including percentages, is not rounded.
Overview
We aim to be the institutional digital asset infrastructure company of choice, allowing our institutional clients to safely secure, manage, utilize and create digital assets through our holistic technology platform.
Over the last 12 years, we have grown to become a critical partner to digital asset ecosystems, financial institutions, technology platforms, corporations, and governments seeking secure, scalable and compliant access to digital assets. Our mission is to accelerate the transition of the financial system to a digital asset economy.
Our platform combines self-custody wallet, qualified custody, liquidity and prime, and infrastructure-as-a-service solutions, including stablecoin issuance and management. This unified suite of solutions is designed to meet the operational and regulatory demands of our clients. We supported over 2,800 digital assets as of September 30, 2026, and helped pioneer institutional-grade multi-signature ("multi-sig") security architecture and cold storage solutions. With a client base that includes digital asset ecosystem companies, financial institutions, technology platforms, corporations and government agencies, as well as high net worth individuals ("HNWIs"), our Number of Clients, who were located across over 100 countries, exceeded 6,600 as of September 30, 2026, and we had approximately $59.9 billion in Assets on Platform ("AoP") for the three months ended September 30, 2026. Our principal markets are the United States and other major financial centers in North America, Europe, and Asia. See "-Key Business Metrics" for a definition of "Number of Clients" and "Assets on Platform."
We believe we are uniquely positioned at the precipice of growing institutional adoption of digital assets. Today, our team is focused on building out our platform and financial services on top of the foundational technology that our institutional clients depend upon for their business. Our clients range from crypto native companies that use our self-custody wallet technology to traditional financial services firms that leverage our licensed custody, staking and trading capabilities within their own products and services.
We began as a specialized custodian, integrating directly with advanced blockchain technologies, eliminating the need for institutional and retail clients to compromise security for market access. We have continued to innovate in the space having been the first to commercially introduce self-custody wallets. Over time, we have added the BitGo Trust Companies, allowing us to become one of the first custodians purpose-built for digital assets. In 2020, we expanded our platform's capabilities through the introduction of BitGo Prime which introduced liquidity solutions on top of our custody and wallet layers. For the three months ended September 30, 2026, we had approximately $59.9 billion in AoP, including $10.5 billion in Assets Staked. See "-Key Business Metrics" for definitions of "Assets on Platform" and "Assets Staked."
Acquisition of NYDIG IF IHC Holdings, LLC
On August 27, 2026, we completed the acquisition of the institutional trading business and related assets of NYDIG IHC, LLC ("NYDIG"), a Delaware limited liability company. BitGo's acquisition of NYDIG's institutional trading business is expected to expand its institutional markets platform by enhancing capabilities and derivatives intended to enhance the Company's existing trading offerings while complementing BitGo's regulated custody, settlement, and wallet infrastructure. The transaction is expected to further strengthen BitGo's position as a comprehensive digital asset infrastructure company, enabling institutions to access a broader range of trading and capital markets services through an integrated platform. See Note
6 - "Business Combination" in the notes to condensed consolidated financial statements (unaudited) in Part I, Item 1 of this Quarterly Report on Form 10-Q.
Financial and Operational Highlights
Certain of our financial and operating results are summarized below:
•The fair value of AoP decreased from $104.0 billion for the three months ended September 30, 2025 to $59.9 billion for the three months ended September 30, 2026.
•Number of Clients increased from 4,988 as of September 30, 2025 to 6,640 as of September 30, 2026.
•The fair value of Assets Staked decreased from $28.6 billion for the three months ended September 30, 2025 to $10.5 billion for the three months ended September 30, 2026.
•Digital asset sales revenue decreased from $5,661.8 million for the three months ended September 30, 2025 to $2,720.0 million for the three months ended September 30, 2026.
•Total revenue decreased from $5,810.5 million for the three months ended September 30, 2025 to $2,851.9 million for the three months ended September 30, 2026.
•Net income was $22.7 million for the three months ended September 30, 2025, compared to net income of $44.1 million for the three months ended September 30, 2026.
•Adjusted EBITDA decreased from $13.5 million for the three months ended September 30, 2025 to an Adjusted EBITDA loss of $4.3 million for the three months ended September 30, 2026.
See "-Non-GAAP Financial Measures" for a definition of Adjusted EBITDA and related reconciliation to net income, the most directly comparable GAAP (as defined below) measure, and "-Key Business Metrics" for definitions of our key operational metrics.
Key Business Metrics
In addition to the measures presented in our consolidated financial statements, we use the following key business metrics to assess our operations, track performance, identify trends impacting our business and inform our strategic decision-making.
Assets on Platform
We define AoP as the median of the daily balances of total assets on our platform over the measured period, where daily balances represent the fair value of both fiat currency and digital assets, whether custodied or non-custodied, held by clients in their accounts on our platform at the end of each day, calculated based on the market price of the applicable assets at the end of such day. We believe that presenting a median of the daily balances of total assets on our platform over a measured period is a more accurate representation than presenting the sum of balances of total assets on our platform at the end of such measured period due, in part, to the volatility of the prices of digital assets, which may change significantly in any given day. AoP demonstrates the scale of balances held across our suite of products and services, as well as the underlying performance of the digital asset economy and corresponding trends in prices of digital assets.
We view AoP as a key measure of the fundamental health, direction and monetization opportunity of our platform. AoP also has a correlation with our total revenues as we earn revenues from the suite of products and services we provide in connection with the balances held by our clients on our platform. We have also found that increasing AoP tends to result in more client services being requested, since our institutional clients often go on to seek out other value added services that we offer, such as trading and staking.
Our AoP has fluctuated over time due, in part, to fluctuations in the digital asset economy and corresponding fluctuations in the prices of digital assets. For the three months ended September 30, 2026, our AoP was $59.9 billion, representing a decrease of 42.4% from the three months ended September 30, 2025, primarily driven by declines in digital asset prices.
AoP is influenced by multiple factors, including certain market-dependent factors, and thus can fluctuate based not only on the quantity of assets held on our platform, but also the price of such assets. For example, over the period from the three months ended September 30, 2025 to the three months ended September 30, 2026, the digital assets market capitalization fell 25% from a high of $3.98 trillion to $2.97 trillion. In comparison, AoP for the three months ended September 30, 2025 and 2026 were $104.0 billion and $59.9 billion, respectively, representing a 42.4% decrease.
| Three Months Ended September 30, | |||||||||||
| 2025 | 2026 | ||||||||||
| (in millions) | |||||||||||
| Assets on Platform | $ | 103,956 | $ | 59,909 | |||||||
The value of a majority of our AoP has been, and continues to be, concentrated in a few digital assets held by our clients, including Bitcoin, Ethereum, Sui, XRP, and Solana, which constituted 50.0%, 11.2%, 7.0%, 4.9%, and 3.9% of our AoP as of September 30, 2026, respectively. In addition to digital assets, our AoP includes a negligible amount of fiat currencies. In line with the historical market cap dominance of Bitcoin, Bitcoin has consistently been the largest single digital asset in our AoP. Our mix of digital assets does, however, fluctuate depending on the price performance of individual digital assets as well as the onboarding and offboarding of client accounts.
Number of Clients
We define Number of Clients as the cumulative number as of the end of the measured period of (i) institutional clients that have (A) an executed service agreement with us that has not been terminated as of the end of such measured period and (B) been onboarded to at least one of our core solutions (i.e., custody, wallet platform or trading) and (ii) HNWIs, which we define as any individual with a net worth of $1 million or more, who (A) have an executed service agreement with us that has not been terminated as of the end of such measured period and (B) have been onboarded to at least one of our core solutions (i.e., custody, wallet platform or trading). We frequently observe that our clients, who may initially begin by using one of our products or service offerings, expand into multiple products and/or services across our platform as we deepen our relationship with them. Therefore, we view Number of Clients as a key indicator of our market penetration, client adoption and platform monetization potential, and Number of Clients informs our client acquisition strategy.
| As of September 30, | |||||||||||
| 2025 | 2026 | ||||||||||
| Number of Clients | 4,988 | 6,640 | |||||||||
While our Number of Clients was less than 100 prior to January 1, 2017, as of September 30, 2026, our Number of Clients exceeded 6,600. Our Number of Clients has grown at a compound annual growth rate ("CAGR") of 88.0% over the past two years, through September 30, 2026, which does not represent new clients from acquisition or asset inflows.
Our Number of Clients is calculated on a cumulative basis commencing in 2013. Therefore, although our Number of Clients metric (i) indicates the number of institutional clients and HNWIs that have demonstrated an interest in our platform or a direct intent to transact with digital assets and (ii) removes institutional clients and HNWIs with terminated contracts as of the end of such measured period, it does not measure the type, frequency or duration of such clients' or HNWIs' interaction with our platform. Further, Number of Clients may also (i) include clients that have not interacted with our platform at all for extended periods of time and (ii) overstate the number of unique institutional clients who have entered into service agreements with us and been onboarded, since one client may enter into multiple service agreements (either for itself or through its affiliates). Nonetheless, we view Number of Clients as an indication of our scale and a representation of a potential revenue opportunity for us given these users have demonstrated an interest in our platform or intent to potentially perform revenue generating activities within our platform by executing service agreements with us.
Our Number of Clients is influenced by several factors, including broader digital asset market conditions, the highly speculative and volatile nature of digital assets, level of market adoption of digital assets, level of our investment in sales and marketing efforts, our ability to effectively compete with other digital asset market participants and the quality of our services and products.
As we continue to expand our platform, we intend to deepen our relationships with our existing clients to increase their adoption of additional products and services across our platform, and to onboard new institutional clients on our platform in
line with increased adoption of digital assets and new use cases on top of blockchain. We believe that this strategy, combined with increasing regulatory clarity and institutional demand for secure custody and capital-efficient trading solutions, positions us to capture a growing share of the expanding market. Just like traditional banking services, we have found that clients tend to prefer dealing with an entity registered and regulated in their local domain. To that end, we are constantly exploring ways in which we can responsibly expand our worldwide presence. To support these initiatives, we opened offices in Singapore and Dubai in 2024. We believe that tracking the Number of Clients on our platform assists us in executing effectively on the foregoing growth strategy.
Number of Users
We define Number of Users as the cumulative number as of the end of the measured period of (i) individuals authorized to access the account of any of our institutional clients on such institutional client's behalf, which institutional client (A) has an executed service agreement with us that has not been terminated as of the end of such measured period and (B) has been onboarded to at least one of our core solutions (i.e., custody, wallet platform or trading), (ii) HNWIs who (A) have an executed service agreement with us that has not been terminated as of the end of such measured period and (B) have been onboarded to at least one of our core solutions (i.e., custody, wallet platform or trading) and (iii) retail users that have registered an account with BitGo, in each case who have conducted at least one of the following activities at any point since onboarding onto our platform (through the applicable methods described above) and prior to the end of such measured period. We believe the following activities indicate meaningful interactions with our platform.
•An API Call, which is a programmatic interaction with our platform using our application program interfaces ("APIs") (e.g., initiating a transaction, querying wallet balance, or generating an address). Passive or system-generated pings (such as uptime monitoring) are excluded from our definition of "API Call."
•A UI Session, which is a web-based login session where a user accesses our wallet user interface. A session must include a successful login and at least one interaction (e.g., viewing wallet balances, initiating a transfer, or downloading reports) to be counted.
•An Event in Audit Logs, which includes user-initiated actions that are recorded in our audit logs, such as transaction approvals, policy changes or wallet configuration updates. These events are meaningful indicators of platform usage and exclude purely background or system-automated entries.
We view Number of Users as a key indicator of our scale as it portrays not only the number of institutional clients and HNWIs who have demonstrated an interest in our platform or direct intent to transact with digital assets (which we track through the Number of Clients metric), but also the number of retail users who have conducted at least one meaningful usage of, and meaningful activity with, our platform. Although we generally do not generate incremental revenue solely from an institutional client adding any one additional authorized user, we have observed that the number of users authorized by our institutional clients positively correlates with overall client activity, engagement with our solutions and revenue generated from such client. For example, with respect to institutional clients, there are typically many individuals who are authorized to interact with our platform through a single institutional client account. As of September 30, 2026, the average number of authorized individuals using our platform through a single institutional client was 5.24. By assessing the Number of Users, together with the Number of Clients, we can assess our total platform usage as well as the rate of the general market adoption of digital assets. In addition, because we generate revenue from certain activities by retail users (e.g., when retail users engage in transactional activities on our platform), the "Number of Users" metric provides meaningful insight into the revenue-generating retail activity on our platform.
| As of September 30, | |||||||||||
| 2025 | 2026 | ||||||||||
| Number of Users | 1,171,598 | 1,257,078 | |||||||||
However, because our Number of Users is calculated on a cumulative basis commencing in 2013, the Number of Users metric could include clients who have only had one meaningful interaction since onboarding onto the platform. Therefore, Number of Users does not measure the frequency or duration of such clients' interaction with our platform and may also include clients that have not interacted with our platform at all for extended periods of time. In addition, Number of Users may also overstate the number of unique individuals authorized to access accounts of institutional clients who have entered into service agreements with us and been onboarded, since one client may enter into multiple service agreements (either themselves or through their affiliates) and one individual could be authorized to access such multiple accounts. Our Number of Users
metric also includes individuals that may have not engaged in any economic activity (for example, where the individual has been authorized by an institutional client to access an account for operational purposes). A substantial majority of our Number of Users is comprised of the individuals who are authorized to access the account of any of our institutional clients on such institutional clients' behalf and HNWIs, particularly since the number of our retail users is currently relatively low, albeit growing in number. Accordingly, our Number of Users is largely an extension of our Number of Clients. Therefore, while our Number of Users is calculated on a cumulative basis since 2013, the regular interaction of a majority of our institutional clients and HNWIs with our platform as described under "-Number of Clients" can largely be attributed to our Number of Users.
Our Number of Users is influenced by several factors, including broader digital asset market conditions, level of market adoption of digital assets, level of our investment in sales and marketing efforts, our ability to effectively compete with other digital asset market participants and the quality of our services and products.
Assets Staked
We define Assets Staked as the median of the daily balances of total client assets actively delegated to proof-of-stake ("PoS") and restaking protocols through our staking solutions over the measured period. The daily balances of total client assets represent the fair value of digital assets staked by our clients on our platform at the end of each day, calculated by the market prices of the applicable assets at the end of such day. Assets Staked is a subset of our AoP and, similar to AoP, we believe that presenting a median of the daily balances of total staked assets on our platform over a measured period is a more accurate representation than presenting the sum of balances of total staked assets on our platform at the end of such measured period due, in part, to the volatility of the prices of digital assets, which may change significantly in any given day. We believe Assets Staked serves as a key indicator of our clients' engagement with our staking solutions and reflects the scale of assets entrusted to our secure and regulated platform. In addition, Assets Staked has a direct impact on our financial results in that we earn staking revenue by participating in proof-of-stake blockchain networks, as well as rewards in the form of the networks' digital assets by providing validation and block-creation services, and the more Assets Staked, the more staking revenue and rewards we earn.
| Three Months Ended September 30, | |||||||||||
| 2025 | 2026 | ||||||||||
| (in millions) | |||||||||||
| Assets Staked | $ | 28,621 | $ | 10,464 | |||||||
Similar to AoP, Assets Staked is influenced by multiple factors, including certain market-dependent factors, and thus can fluctuate based not only on the quantity of assets staked on our platform, but also the price of such assets. In addition, similar to AoP, the value of a majority of our Assets Staked has been, and continues to be, concentrated in a few digital assets held by our clients, namely Ethereum, Sui and Solana, which constituted approximately 37.9%, 31.7%, and 14.9%, of our Assets Staked as of September 30, 2026, respectively.
Non-GAAP Financial Measures
We collect and analyze operating and financial data to evaluate the health of our business, allocate our resources and assess our performance. In addition to total revenue, net income (loss) and net income (loss) margin, we utilize the non-GAAP calculation of Adjusted EBITDA. This non-GAAP measure is presented for supplemental informational purposes only, has limitations as an analytical tool, and should not be considered in isolation or as a substitute for financial information presented in accordance with accounting principles generally accepted in the United States ("GAAP"). In addition, other companies, including companies in our industry, may calculate Adjusted EBITDA differently or may use other measures to evaluate their performance, all of which could reduce the usefulness of our disclosure of such non-GAAP measure as a tool for comparison. Investors are encouraged to review the related GAAP financial measure and the reconciliation of net income (loss), the most directly comparable GAAP measure, to Adjusted EBITDA, and not to rely on any single financial measure to evaluate our business.
Adjusted EBITDA
We define Adjusted EBITDA as net income (loss), excluding (i) provision for income taxes, (ii) depreciation and amortization, (iii) stock-based compensation expense, (iv) employer payroll taxes on employee stock transactions, (v) net changes in unrealized appreciation (loss) on digital assets, (vi) certain non-recurring charges (which are specified in detail below), and (vii) restructuring charges.
The above items are excluded from our Adjusted EBITDA measure because they are non-cash in nature, their amount and timing are volatile and influenced by digital asset prices, they are unpredictable, or they are not driven by the core results of operations. In any case, including such items would reduce the comparability of our financial performance across periods and with industry peers. We believe that Adjusted EBITDA provides useful information to investors and others in understanding and evaluating our results of operations, as well as providing a useful measure for period-to-period comparisons of our business performance in a consistent manner. Moreover, Adjusted EBITDA is a key measure used by our management internally for financial, risk management and operational decision-making.
The following table provides a reconciliation of net income (loss), the most directly comparable GAAP measure, to Adjusted EBITDA for the periods presented (in thousands):
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Net income (loss) | $ | 44,084 | $ | 22,672 | $ | (35,614) | $ | 35,253 | |||||||||||||||
| Provision for (benefit from) income taxes | 15,543 | 6,149 | (7,101) | 14,020 | |||||||||||||||||||
| Depreciation and amortization expense | 2,761 | 1,008 | 6,609 | 2,749 | |||||||||||||||||||
| Stock-based compensation expense | 2,762 | 823 | 17,623 | 2,621 | |||||||||||||||||||
| Employer payroll taxes on employee stock transactions | 56 | - | 447 | - | |||||||||||||||||||
|
Net change in unrealized appreciation (loss) on digital assets (1)
|
(71,498) | (19,135) | 1,067 | (41,169) | |||||||||||||||||||
|
Legal, IPO-related and other costs (2)
|
2,022 | 1,948 | 5,552 | 6,855 | |||||||||||||||||||
| Restructuring charges | - | - | 1,300 | - | |||||||||||||||||||
|
Adjusted EBITDA (3)
|
(4,270) | 13,465 | (10,117) | 20,329 | |||||||||||||||||||
| Total revenue | $ | 2,851,864 | $ | 5,810,456 | $ | 10,954,832 | $ | 9,995,582 | |||||||||||||||
| Net income (loss) margin | 1.5 | % | 0.4 | % | (0.3) | % | 0.4 | % | |||||||||||||||
_______________
(1)Fluctuating and volatile digital asset prices primarily drive net change in unrealized appreciation (loss) on digital assets, which we exclude from the definition of Adjusted EBITDA because (i) such net change is not driven by the core results of the Company's operations; (ii) removing such net change illustrates the way in which the Company's products and services, instead of fluctuating and volatile digital asset prices, drive the sustainability of the Company's operations, margins and growth; and (iii) digital assets on our balance sheet and our investing activities in digital assets are not part of our revenue generating activities, which are based on transactions on our platform, staking revenue, subscriptions and services revenue and revenue generated from our Stablecoin-as-a-Service solution. Accordingly, net change in unrealized appreciation/loss on digital assets is materially all related to proprietary digital assets held for investment.
(2) Legal, IPO-related and other costs include (i) litigation costs of $2.0 million and $6.5 million in the three and nine months ended September 30, 2025, respectively, and $0.7 million and $1.5 million in the three and nine months ended September 30, 2026, respectively, associated with our ongoing suit against Galaxy alleging that Galaxy breached and wrongfully repudiated the terms of the Merger Agreement, by terminating Galaxy's proposed $1.2 billion acquisition of the Company, (ii) legal settlement of nil and $0.1 million in three and nine months ended September 30, 2026, respectively (iii) one-time bonus payment of nil and $0.5 million made in the three and nine months ended September 30, 2026, respectively, in connection with the IPO, (iv) IPO-related expense borne by us of nil in the three and nine months ended September 30, 2025, and nil and $0.3 million in the three and nine months ended September 30, 2026, respectively, and (v) legal and professional fees borne by us of $1.4 million and $3.1 million in the three and nine months ended September 30, 2026, respectively, related to entity wind-down costs and acquisition related costs. See the section titled "Business-Legal Proceedings" in our Annual Report on Form 10-K for the year ended December 31, 2025 and Note 15-"Commitments and Contingencies" in Part I, Item 1 of this Quarterly Report on Form 10-Q for more information relating to our ongoing litigation with Galaxy.
(3) May not foot due to rounding.
Key Factors Impacting Our Performance
Price and Volatility of Digital Assets
Our core business revolves around providing custody, security, and trading and infrastructure solutions for a range of digital assets. Accordingly, our business correlates to trends in the broader digital assets market, including client sentiment and macroeconomic developments.
These factors largely impact the price and volatility of digital assets, which underlie the foundation of our business model. Significant price increases or declines in digital assets can substantially influence the value of the assets on our platform, directly impacting our revenue due to our percentage-based fee model. Similarly, high volatility in the digital assets market continues to impact our operations, generating user and investor uncertainty that may potentially lower transaction volumes on
our platform and revenue outcomes. In addition, while we support a wide range of digital assets, the digital assets, whether custodied or non-custodied, held by our clients in their accounts on our platform have historically been, and continue to be, concentrated in a small number of distinct digital assets (including Bitcoin, Ethereum, Sui, Solana and XRP). Therefore, declines in demand for such digital assets or in the prices of such digital assets could negatively impact our operating performance and financial condition.
While we have experienced fluctuations in our business related to these pricing and volatility uncertainties, we believe that the fundamentals of our business continue to be strong and resilient over time, which has resulted in trading activity on our platform progressively increasing since our inception.
Adoption of Digital Assets
Our origin story and go-forward mission have closely tracked the development of the digital asset economy. Increased adoption of digital assets and new use cases on top of blockchain in the past decade have translated to higher demand for secure custody, trading infrastructure and other related solutions that we provide.
Our business has expanded rapidly over time, and our conviction in the strength of the digital assets market is unwavering. The digital assets market has grown over 52.0% in size over the last five years to reach a total market capitalization of approximately $2.97 trillion as of September 30, 2026, with use cases continuing to expand. We believe that our unified suite of solutions: self-custody wallet, qualified custody, liquidity and prime, and infrastructure-as-a-service, will enable us to offer a variety of products and services to a growing total addressable market. In addition, we support over 2,800 digital assets as of September 30, 2026 and have helped pioneer institutional-grade multi-sig security architecture and cold storage solutions, which we believe provide a strong foundation for success.
Regulation in United States and International Markets
Our business is subject to various regulations in both the United States and international markets. In addition, the rules and regulations surrounding digital assets continue to evolve and the international regulatory landscape remains fragmented. As a result, we monitor regulatory changes closely and we expect to continue to invest significant resources in our legal, compliance, product and engineering teams to ensure our business practices comply with, and plan and prepare for, current and future regulations.
Client Acquisition, Retention and Expansion
Our business is significantly impacted by our ability to acquire, retain and expand our client base, which presents several risks for us. Expanding our client base and increasing the services used by existing clients are essential for our revenue growth as our total revenues are driven by the use of our services and products by our clients. Successfully managing user acquisition, retention and expansion strategies is crucial for our sustained growth and market leadership in the digital asset industry.
We have an ambitious goal to onboard a significant percentage of the institutional market, and believe that this is an achievable target even as institutional digital asset stakeholders proliferate with increasing digital asset adoption. Although the customer acquisition cost for institutional clients is generally higher than retail clients, we believe there is significantly more upside potential in deepening our relationship with institutional clients and in turn, offering additional solutions to them once they are within our ecosystem.
Types and Number of Assets that We Provide Services for on Platform
Our business is significantly influenced by the types and number of digital assets we custody, presenting several associated risks. Not only does AoP correlate with our total revenues, but the range of digital assets supported also directly impacts our market appeal and potential client base. If we support fewer digital assets than our competitors, we risk losing clients to platforms that offer broader custody options. Conversely, supporting obscure or illiquid assets could expose us to increased operational and regulatory complexities, without a commensurate increase in revenue.
Adding new digital assets to our custody platform necessitates significant investment in research, development and security protocols. Failure to adequately protect these digital assets could result in breaches and loss of client assets, leading to financial loss and reputational damage. Furthermore, regulatory classifications of different digital assets are not uniform across jurisdictions. Uncertainty surrounding the legal status of certain assets could also limit our ability to custody them in specific regions, impacting our global reach.
Successfully navigating the challenges and unknowns related to the breadth and nature of custodied digital assets is crucial for our long-term viability and competitive positioning, and we believe that we have a demonstrated track record of success in this regard. We were one of the first to commercialize the multi-sig wallet, one of the first to introduce a trust structure to keep our clients' assets safe from theft and loss, and one of the first to introduce prime brokerage services to allow our clients to better access the broader digital asset market. In addition, when the broader digital asset industry undergoes downturns, we are often chosen as the distributor of assets in bankruptcies due to our strong reputation and track record of "getting it right." We played a key role in the Mt. Gox bankruptcy in 2014 by facilitating the distribution of digital assets during its bankruptcy process, and in 2024, we were selected by FTX Trading Ltd. ("FTX") and its affiliated debtors to assist in distributing recoveries to retail and institutional clients in supported jurisdictions, per the U.S. bankruptcy court-approved FTX Chapter 11 Plan of Reorganization.
Competitive Landscape
Our success as a business is dependent on our ability to win market share against our competitors and to keep pace in an ever-evolving competitive landscape. The digital assets services industry is increasingly crowded and also seeing increasing competition from new entrants, along with ongoing risk from traditional finance institutions that are increasingly entering the digital assets markets. We believe we must continually invest in research and development to enhance our service offerings, maintain a competitive advantage, and reliably differentiate ourselves in the market. While we are confident in our ability to continue to lead across custody, staking, and our broad range of products and services, our ability to do so is subject to certain limitations and risks.
Critical Accounting Policies and Estimates
Our condensed consolidated financial statements and the related notes thereto included elsewhere in this Quarterly Report on Form 10-Q are prepared in accordance with GAAP. The preparation of condensed consolidated financial statements in accordance with GAAP requires us to make certain estimates, judgments, and assumptions that affect the reported amounts of assets and liabilities and the related disclosures at the date of the financial statements, as well as the reported amounts of revenue and expenses during the period presented. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Actual results could differ significantly from our estimates. To the extent that there are differences between our estimates and actual results, our future financial statement presentation, financial condition, results of operations, and cash flows could be affected.
There have been no material changes to our critical accounting policies and estimates as described in our Annual Report on Form 10-K for the year ended December 31, 2025, filed with the SEC on March 26, 2026, other than as described in Note 2 - "Summary of Significant Accounting Policies" in our condensed consolidated financial statements in this Quarterly Report on Form 10-Q.
Key Components of Results of Operations
Revenue
Digital Assets Sales Revenue
Digital assets sales revenue consists of (i) the gross sales proceeds from the sales of digital intangible assets on our platform, expressed in U.S. dollar equivalent value, (ii) the net gain or loss, if any, recognized in connection with the purchase and sales of certain stablecoins that are classified as financial assets, and (iii) the net gain or loss recognized on derivative contracts under ASC 815. We present digital assets sales revenue on a gross basis (other than the portion of digital assets sales revenue recognized in connection with sales on our platform of certain stablecoins that are classified as financial assets, which is recognized on a net basis). See the section titled "-Critical Accounting Policies and Estimates" for further information on how we recognize and present digital assets sales revenue, including gross revenue reporting.
Digital assets sales revenue is primarily driven by overall market dynamics, such as digital asset pricing, volatility and macroeconomic trends.
Staking Revenue
Staking revenue consists of the total rewards earned in connection with our staking solutions. Through our staking solutions, our clients may stake their digital intangible assets by delegating such assets to us or a third-party staking validator selected by us. The decision to use a third-party validator is based primarily on providing our clients with the ability to leverage a variety of providers or where we do not yet provide internal support for a newly launched network. We or such third-party staking validator participate in PoS blockchain networks on behalf of our clients, and earn rewards in the form of the networks' native tokens in exchange for providing validation or block creation services to such networks. We present staking revenue on a gross basis. See the section titled "-Critical Accounting Policies and Estimates" for further information on how we recognize and present staking revenue, including gross revenue reporting.
Subscriptions and Services Revenue
Subscriptions and services revenue consists primarily of providing digital intangible asset wallet solutions to institutional and retail customers in exchange for certain up-front, plus monthly fees for providing access to our platform for multi-sig wallets that provide security and custody for digital assets. Subscriptions and services revenue is recognized monthly based on usage each month, with any onboarding fees recognized ratably over the contract duration, commencing when the service is made available to the customer (generally upon onboarding).
Subscriptions and services revenue also encompasses our Crypto-as-a-Service offering, which allows clients to issue and manage the issuance of their own digital assets. Subscriptions and services revenue also consists of interest income from loan receivables and fee income from digital intangible assets loan receivables. Interest income generated from our loan receivables is accrued when interest payments become contractually due. Fee income from digital intangible asset loans includes revenue generated from lending digital intangible assets. In some instances, we may charge a fee for loan origination.
In addition, subscriptions and services revenue also includes fees related to our Wrapped Bitcoin ("WBTC") solution. Fee income is recognized when the performance obligation of issuing a WBTC, referred to as a mint event, occurs. Fee income is also recognized upon the redemption of the WBTC, referred to as a burn event.
Stablecoin-as-a-Service Revenue
Revenue from our Stablecoin-as-a-Service offering, which we launched in 2025, allows institutional clients to issue U.S. dollar-backed stablecoins using our regulated trust infrastructure. We earn implementation and ongoing service fees for the issuance, reserve management, and transaction processing of white-labeled stablecoins. These fees can be paid based on the interest earned on the reserve management as defined in the fee schedule of the agreement.
Interest Income
Interest income consists primarily of interest earned on the portion of our cash and cash equivalents in our treasury that is held in money market accounts and money market funds.
Expenses
Digital Assets Sales Costs
Digital assets sales costs represent the cost basis of the digital intangible assets transferred corresponding to our digital assets sales revenues.
Staking Fees
Staking fees consist primarily of rewards earned by, and distributed to, customers utilizing our validation infrastructure corresponding to our staking revenues.
Stablecoin sponsor fees
Stablecoin sponsor fees primarily consist of interest income earned on fiat reserves owed to institutional clients that issue U.S. dollar-backed stablecoins through our Stablecoin-as-a-Service solution.
Interest Expense
Interest expense includes charges related to servicing our borrowing obligations to support our lending product.
Compensation and Benefits
Compensation and benefits expenses consist primarily of employees' salaries, bonuses, travel, amortization of equity awards, and other items, such as benefits.
General and Administrative Expenses
General and administrative expenses consist of professional fees, equipment and technology, occupancy, insurance, marketing, sales-related and other expenses.
Depreciation and Amortization
Depreciation and amortization expenses consist of depreciation of equipment and software and amortization of acquired intangible assets.
Restructuring Charges
Restructuring charges primarily consist of employee severance and benefits continuation associated with the restructuring plan that we initiated in June 2026. Refer to Note 21 - "Restructuring Charges" of our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for additional information.
Other Income
Net Change in Unrealized Appreciation (loss) on Digital Assets
Net change in unrealized appreciation (loss) on digital assets reflects the remeasurement of our owned and controlled digital assets to fair value at each financial reporting date.
Gain (Loss) on Disposal of Digital Assets
Gain (loss) on disposal of digital assets represents the net proceeds from the sale of digital assets and assets associated with an asset purchase agreement.
Provision for (Benefit from) Income Taxes
Provision for (benefit from) income taxes includes the provision for (benefit from) income taxes in the United States and other jurisdictions. As we expand our international business activities, any changes in a jurisdiction's taxation of such activities may increase our overall provision for income taxes in the future.
Results of Operations
The following table summarizes our results of operations for the periods presented and as a percentage of our total revenue for those periods. The period-to-period comparison of financial results is not necessarily indicative of financial results to be achieved in future periods.
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| (in thousands) | |||||||||||||||||||||||
| Revenue | |||||||||||||||||||||||
| Total revenue | $ | 2,851,864 | $ | 5,810,456 | $ | 10,954,832 | $ | 9,995,582 | |||||||||||||||
| Expenses | |||||||||||||||||||||||
| Digital assets sales cost | 2,715,832 | 5,650,715 | 10,554,112 | 9,526,839 | |||||||||||||||||||
| Staking fees | 64,194 | 81,106 | 166,418 | 290,638 | |||||||||||||||||||
| Stablecoin sponsor fees | 34,490 | 23,628 | 105,537 | 38,877 | |||||||||||||||||||
| Interest expense | 5,497 | 2,738 | 17,360 | 5,675 | |||||||||||||||||||
| Compensation and benefits | 28,892 | 28,416 | 99,222 | 76,244 | |||||||||||||||||||
| General and administrative expenses | 19,434 | 18,963 | 60,825 | 51,988 | |||||||||||||||||||
| Depreciation and amortization | 2,761 | 1,008 | 6,609 | 2,749 | |||||||||||||||||||
| Restructuring charges | - | - | 1,300 | - | |||||||||||||||||||
| Total expenses | 2,871,100 | 5,806,574 | 11,011,383 | 9,993,010 | |||||||||||||||||||
| Income (loss) from operations | (19,236) | 3,882 | (56,551) | 2,572 | |||||||||||||||||||
| Other income | |||||||||||||||||||||||
| Net change in unrealized appreciation (loss) on digital assets | 71,498 | 19,135 | (1,067) | 41,169 | |||||||||||||||||||
| Gain (loss) on disposal of digital assets | 7,365 | 5,804 | 14,903 | 5,532 | |||||||||||||||||||
| Total other income | 78,863 | 24,939 | 13,836 | 46,701 | |||||||||||||||||||
| Income (loss) before income taxes | 59,627 | 28,821 | (42,715) | 49,273 | |||||||||||||||||||
| Tax provision for (benefit from) income taxes | 15,543 | 6,149 | (7,101) | 14,020 | |||||||||||||||||||
| Net income (loss) | $ | 44,084 | $ | 22,672 | $ | (35,614) | $ | 35,253 | |||||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| (as percentage of revenue) | |||||||||||||||||||||||
| Revenue | |||||||||||||||||||||||
| Total revenue | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | |||||||||||||||
| Expenses | |||||||||||||||||||||||
| Digital assets sales cost | 95.2 | 97.3 | 96.3 | 95.3 | |||||||||||||||||||
| Staking fees | 2.3 | 1.4 | 1.5 | 2.9 | |||||||||||||||||||
| Stablecoin sponsor fees | 1.2 | 0.4 | 1.0 | 0.4 | |||||||||||||||||||
| Interest expense | 0.2 | - | 0.2 | 0.1 | |||||||||||||||||||
| Compensation and benefits | 1.0 | 0.5 | 0.9 | 0.8 | |||||||||||||||||||
| General and administrative expenses | 0.7 | 0.3 | 0.6 | 0.5 | |||||||||||||||||||
| Depreciation and amortization | 0.1 | - | 0.1 | - | |||||||||||||||||||
| Restructuring charges | - | - | - | - | |||||||||||||||||||
|
Total expenses (1)
|
100.7 | 99.9 | 100.5 | 100.0 | |||||||||||||||||||
| Income (loss) from operations | (0.7) | 0.1 | (0.5) | - | |||||||||||||||||||
| Other income | |||||||||||||||||||||||
| Net change in unrealized appreciation (loss) on digital assets | 2.5 | 0.3 | - | 0.4 | |||||||||||||||||||
| Gain (loss) on disposal of digital assets | 0.3 | 0.1 | 0.1 | 0.1 | |||||||||||||||||||
| Total other income | 2.8 | 0.4 | 0.1 | 0.5 | |||||||||||||||||||
| Income (loss) before income taxes | 2.1 | 0.5 | (0.4) | 0.5 | |||||||||||||||||||
| Tax provision for (benefit from) income taxes | 0.5 | 0.1 | (0.1) | 0.1 | |||||||||||||||||||
| Net income (loss) | 1.5 | % | 0.4 | % | (0.3) | % | 0.4 | % | |||||||||||||||
_______________
(1) May not foot due to rounding.
Comparison of the three months ended September 30, 2026 and September 30, 2025
Total Revenue
| Three Months Ended September 30, | Change | ||||||||||||||||||||||
| 2026 | 2025 | $ | % | ||||||||||||||||||||
|
(in thousands, except %)
|
|||||||||||||||||||||||
|
Digital assets sales
|
$ | 2,719,997 | $ | 5,661,815 | $ | (2,941,818) | (52.0) | % | |||||||||||||||
|
Staking
|
68,186 | 89,848 | (21,662) | (24.1) | % | ||||||||||||||||||
| Subscriptions and services | 25,563 | 33,880 | (8,317) | (24.5) | % | ||||||||||||||||||
| Stablecoin-as-a-Service | 37,360 | 24,501 | 12,859 | 52.5 | % | ||||||||||||||||||
|
Interest income
|
758 | 412 | 346 | 84.0 | % | ||||||||||||||||||
|
Total revenue
|
$ | 2,851,864 | $ | 5,810,456 | $ | (2,958,592) | (50.9) | % | |||||||||||||||
Digital assets sales revenue
Digital asset sales revenue decreased by $2,941.8 million, or 52.0%, for the three months ended September 30, 2026 compared to the same period in the prior year.
The decrease was primarily attributable to lower digital asset trading activity as activity in the digital asset space declined the third quarter of fiscal 2026, as well as a shift in trading mix toward a higher proportion of lower margin stablecoin transactions relative to the same period in the prior year. We present digital assets sales revenue on a gross basis (other than the portion of digital assets sales revenue recognized in connection with sales and purchases on our platform of certain stablecoins that are classified as financial assets, which is recognized on a net basis, and net gain or loss recognized on derivative contracts
under ASC 815) because of our role as principal for accounting purposes in sales of digital assets, as we control the digital assets prior to transfer to the customer, are primarily responsible for fulfilling the transaction, and have discretion in pricing, including the ability to incorporate spreads relative to market prices. As a result, the significant volume of digital asset transactions on our platform results in significant digital assets sales revenue with corresponding digital assets sales costs. Digital assets sales costs decreased by $2,934.9 million, or 51.9%, for the three months ended September 30, 2026 compared to the same period in the prior year.
Staking revenue
Staking revenue decreased by $21.7 million, or 24.1%, for the three months ended September 30, 2026 compared to the same period in the prior year, primarily driven by lower staked digital asset volume on our platform and a decline in digital asset prices. We present staking revenue on a gross basis because of our role as principal for accounting purposes in connection with our clients' staking activities. As a result, the significant volume of staking activities on our platform results in staking revenue with corresponding staking fees. Staking fees decreased by $16.9 million, or 20.9%, for the three months ended September 30, 2026 compared to the same period in the prior year.
Subscriptions and services revenue
Subscriptions and services revenue decreased by $8.3 million, or 24.5%, for the three months ended September 30, 2026 compared to the same period in the prior year. The decrease was primarily driven by lower nonrecurring engagement and onboarding-related revenue, as well as a decline in wallet solution revenue. In addition, the mix of new business shifted toward our trading and staking offerings.
Stablecoin-as-a-Service revenue
Stablecoin-as-a-Service revenue increased by $12.9 million, or 52.5%, for the three months ended September 30, 2026 compared to the same period in the prior year. The increase reflects continued growth from the launch of this new service in March 2025. We earn interest on stablecoin reserve assets and recognize that revenue on a gross basis. We recognize related stablecoin sponsor fees as an expense. Stablecoin sponsor fees increased by $10.9 million, or 46%, for the three months ended September 30, 2026 compared to the same period in the prior year.
Interest income
Interest income increased by $0.3 million, or 84.0%, for the three months ended September 30, 2026 compared to the same period in the prior year. The increase was primarily attributable to an increase in fiat treasury investments.
Expenses
| Three Months Ended September 30, | Change | ||||||||||||||||||||||
| 2026 | 2025 | $ | % | ||||||||||||||||||||
|
(in thousands, except %)
|
|||||||||||||||||||||||
|
Digital assets sales cost
|
$ | 2,715,832 | $ | 5,650,715 | $ | (2,934,883) | (51.9) | % | |||||||||||||||
|
Staking fees
|
64,194 | 81,106 | (16,912) | (20.9) | % | ||||||||||||||||||
| Stablecoin sponsor fees | 34,490 | 23,628 | 10,862 | 46.0 | % | ||||||||||||||||||
|
Interest expense
|
5,497 | 2,738 | 2,759 | 100.8 | % | ||||||||||||||||||
|
Compensation and benefits
|
28,892 | 28,416 | 476 | 1.7 | % | ||||||||||||||||||
|
General and administrative expenses
|
19,434 | 18,963 | 471 | 2.5 | % | ||||||||||||||||||
|
Depreciation and amortization
|
2,761 | 1,008 | 1,753 | 173.9 | % | ||||||||||||||||||
| Restructuring charges | - | - | - | - | % | ||||||||||||||||||
|
Total expenses
|
$ | 2,871,100 | $ | 5,806,574 | $ | (2,935,474) | (50.6) | % | |||||||||||||||
Digital Assets Sales Costs
Digital assets sales costs decreased by $2,934.9 million, or 51.9%, for the three months ended September 30, 2026 compared to the same period in the prior year. The decrease was primarily attributable to lower transaction volumes as activity in the digital asset space declined in the third quarter of fiscal 2026.
Staking Fees
Staking fees decreased by $16.9 million, or 20.9%, for the three months ended September 30, 2026 compared to the same period in the prior year. The decrease was primarily driven by lower staked digital asset volume on our platform and a decline in digital asset prices.
Stablecoin Sponsor Fees
Stablecoin sponsor fees increased by $10.9 million, or 46%, for the three months ended September 30, 2026 compared to the same period in the prior year. The increase was driven by the continued growth from the launch of this new service in March 2025.
Interest Expense
Interest expense increased by $2.8 million, or 100.8%, for the three months ended September 30, 2026 compared to the same period in the prior year. The increase in interest expense was primarily attributable to higher borrowings and related interest costs incurred to support the expansion of our lending product.
Compensation and Benefits
Compensation and benefits expenses increased by $0.5 million, or 1.7%, for the three months ended September 30, 2026 compared to the same period in the prior year, primarily driven by higher stock-based compensation expense.
General and Administrative Expenses
General and administrative expenses increased by $0.5 million, or 2.5%, for the three months ended September 30, 2026 compared to the same period in the prior year. The increase was driven primarily by higher audit and accounting fees, conference and event costs, and dues and subscriptions.
Depreciation and Amortization Expenses
Depreciation and amortization expenses increased by $1.8 million, or 173.9%, for the three months ended September 30, 2026 compared to the same period in the prior year. The increase was driven primarily by depreciation and amortization charges related to intangible assets acquired, as well as higher capital expenditures and capitalized development costs incurred.
Other Income
| Three Months Ended September 30, | Change | ||||||||||||||||||||||
| 2026 | 2025 | $ | % | ||||||||||||||||||||
|
(in thousands, except %)
|
|||||||||||||||||||||||
|
Net change in unrealized appreciation on digital assets
|
$ | 71,498 | $ | 19,135 | $ | 52,363 | 273.7 | % | |||||||||||||||
|
Gain on disposal of digital assets
|
7,365 | 5,804 | 1,561 | 26.9 | % | ||||||||||||||||||
|
Total other income
|
$ | 78,863 | $ | 24,939 | $ | 53,924 | 216.2 | % | |||||||||||||||
Net Change in Unrealized Appreciation on Digital Assets
Net change in unrealized appreciation (loss) on digital assets increased by $52.4 million, or 273.7%, for the three months ended September 30, 2026 compared to the same period in the prior year. The increase in net change in unrealized appreciation (loss) of digital assets was primarily driven by the appreciation in digital asset prices.
Gain on Disposal of Digital Assets
Gain on disposal of digital assets increased by $1.6 million, or 26.9%, for the three months ended September 30, 2026 compared to the same period in the prior year. The increase was primarily attributable to the sale of treasury digital assets with historical costs that were significantly lower than their fair values at the time of sale, resulting in higher realized gains.
Provision for Income Taxes
| Three Months Ended September 30, | Change | ||||||||||||||||||||||
| 2026 | 2025 | $ | % | ||||||||||||||||||||
|
(in thousands, except %)
|
|||||||||||||||||||||||
|
Provision for income taxes
|
$ | 15,543 | $ | 6,149 | $ | 9,394 | 152.8 | % | |||||||||||||||
Provision for income taxes changed by $9.4 million, or 152.8%, for the three months ended September 30, 2026 compared to the same period in the prior year primarily due to the income from operations during the three months ended September 30, 2026, driven by the change in fair value of digital assets, as well as our annualized effective income tax rate of 26.1% for the three months ended September 30, 2026 compared to the effective income tax rate of 21.3% for the three months ended September 30, 2025. The higher effective income tax rate was primarily due to state, local, and foreign taxes and the limitations on the deductibility of executive compensation, partially offset by research and development credits.
Comparison of the nine months ended September 30, 2026 and September 30, 2025
Total Revenue
| Nine Months Ended September 30, | Change | ||||||||||||||||||||||
| 2026 | 2025 | $ | % | ||||||||||||||||||||
|
(in thousands, except %)
|
|||||||||||||||||||||||
|
Digital assets sales
|
$ | 10,577,022 | $ | 9,545,445 | $ | 1,031,577 | 10.8 | % | |||||||||||||||
|
Staking
|
182,271 | 326,706 | (144,435) | (44.2) | % | ||||||||||||||||||
| Subscriptions and services | 78,686 | 82,245 | (3,559) | (4.3) | % | ||||||||||||||||||
| Stablecoin-as-a-Service | 114,341 | 40,160 | 74,181 | 184.7 | % | ||||||||||||||||||
|
Interest income
|
2,512 | 1,026 | 1,486 | 144.8 | % | ||||||||||||||||||
|
Total revenue
|
$ | 10,954,832 | $ | 9,995,582 | $ | 959,250 | 9.6 | % | |||||||||||||||
Digital assets sales revenue
Digital asset sales revenue increased by $1,031.6 million, or 10.8%, for the nine months ended September 30, 2026 compared to the same period in the prior year.
The increase was primarily attributable to higher digital asset trading activity resulting from the expansion of trading pairs on the platform, increased activity from existing clients, and an expanding client base. We present digital assets sales revenue on a gross basis (other than the portion of digital assets sales revenue recognized in connection with sales and purchases on our platform of certain stablecoins that are classified as financial assets, which is recognized on a net basis, and net gain or loss recognized on derivative contracts under ASC 815) because of our role as principal for accounting purposes in sales of digital assets, as we control the digital assets prior to transfer to the customer, are primarily responsible for fulfilling the transaction, and have discretion in pricing, including the ability to incorporate spreads relative to market prices. As a result, the significant volume of digital asset transactions on our platform results in significant digital assets sales revenue with corresponding digital assets sales costs. Digital assets sales costs increased by $1,027.3 million, or 10.8%, for the nine months ended September 30, 2026 compared to the same period in the prior year.
Staking revenue
Staking revenue decreased by $144.4 million, or 44.2%, for the nine months ended September 30, 2026 compared to the same period in the prior year, primarily driven by lower staked digital asset volume on our platform and a decline in digital asset prices. We present staking revenue on a gross basis because of our role as principal for accounting purposes in connection with our clients' staking activities. As a result, the significant volume of staking activities on our platform results in staking revenue with corresponding staking fees. Staking fees decreased by $124.2 million, or 42.7%, for the nine months ended September 30, 2026 compared to the same period in the prior year.
Subscriptions and services revenue
Subscriptions and services revenue decreased by $3.6 million, or 4.3%, for the nine months ended September 30, 2026 compared to the same period in the prior year. The decrease was primarily driven by lower nonrecurring engagement and lending-related revenue.
Stablecoin-as-a-Service revenue
Stablecoin-as-a-Service revenue increased by $74.2 million, or 184.7%, for the nine months ended September 30, 2026 compared to $40.2 million in the same period in the prior year. The increase results from the launch of this new service in March 2025. We earn interest on stablecoin reserve assets and recognize that revenue on a gross basis. We recognize related stablecoin sponsor fees as an expense. Stablecoin sponsor fees increased by $66.7 million, or 171.5%, for the nine months ended September 30, 2026 compared to the same period in the prior year.
Interest income
Interest income increased by $1.5 million, or 144.8%, for the nine months ended September 30, 2026 compared to the same period in the prior year. The increase was primarily attributable to an increase in fiat treasury investments.
Expenses
| Nine Months Ended September 30, | Change | ||||||||||||||||||||||
| 2026 | 2025 | $ | % | ||||||||||||||||||||
|
(in thousands, except %)
|
|||||||||||||||||||||||
|
Digital assets sales cost
|
$ | 10,554,112 | $ | 9,526,839 | $ | 1,027,273 | 10.8 | % | |||||||||||||||
|
Staking fees
|
166,418 | 290,638 | (124,220) | (42.7) | % | ||||||||||||||||||
| Stablecoin sponsor fees | 105,537 | 38,877 | 66,660 | 171.5 | % | ||||||||||||||||||
|
Interest expense
|
17,360 | 5,675 | 11,685 | 205.9 | % | ||||||||||||||||||
|
Compensation and benefits
|
99,222 | 76,244 | 22,978 | 30.1 | % | ||||||||||||||||||
|
General and administrative expenses
|
60,825 | 51,988 | 8,837 | 17.0 | % | ||||||||||||||||||
|
Depreciation and amortization
|
6,609 | 2,749 | 3,860 | 140.4 | % | ||||||||||||||||||
| Restructuring charges | 1,300 | - | 1,300 | 100.0 | % | ||||||||||||||||||
|
Total expenses
|
$ | 11,011,383 | $ | 9,993,010 | $ | 1,018,373 | 10.2 | % | |||||||||||||||
Digital Assets Sales Costs
Digital assets sales costs increased by $1,027.3 million, or 10.8%, for the nine months ended September 30, 2026 compared to the same period in the prior year. The increase was primarily attributable to higher transaction volumes driven by the expansion of trading pairs on the platform, increased activity from existing clients, and growth in the overall client base.
Staking Fees
Staking fees decreased by $124.2 million, or 42.7%, for the nine months ended September 30, 2026 compared to the same period in the prior year. The decrease was primarily driven by lower staked digital asset volume on our platform and a decline in digital asset prices.
Stablecoin Sponsor Fees
Stablecoin sponsor fees increased by $66.7 million for the nine months ended September 30, 2026 compared to the same period in the prior year. The increase was driven by the launch of this new service in March 2025.
Interest Expense
Interest expense increased by $11.7 million, or 205.9%, for the nine months ended September 30, 2026 compared to the same period in the prior year. The increase in interest expense was primarily attributable to higher borrowings and related interest costs incurred to support the expansion of our lending product.
Compensation and Benefits
Compensation and benefits expenses increased by $23.0 million, or 30.1%, for the nine months ended September 30, 2026 compared to the same period in the prior year, primarily driven by increased headcount as a result of our continued investments in research and development initiatives and go-to-market teams, as well as higher stock-based compensation expense, primarily related to the satisfaction of the performance vesting condition on outstanding RSUs upon completion of our IPO.
General and Administrative Expenses
General and administrative expenses increased by $8.8 million, or 17.0%, for the nine months ended September 30, 2026 compared to the same period in the prior year. The increase was driven primarily by higher audit and accounting fees, legal fees, conference and event costs, and dues and subscriptions.
Depreciation and Amortization Expenses
Depreciation and amortization expenses increased by $3.9 million, or 140.4%, for the nine months ended September 30, 2026 compared to the same period in the prior year. The increase was driven primarily by depreciation and amortization charges related to intangible assets acquired, as well as higher capital expenditures and capitalized development costs incurred.
Restructuring Charges
Restructuring charges of $1.3 million for the nine months ended September 30, 2026, consisted of employee severance and termination benefits related to the restructuring plan that we initiated in June 2026.
Other Income
| Nine Months Ended September 30, | Change | ||||||||||||||||||||||
| 2026 | 2025 | $ | % | ||||||||||||||||||||
|
(in thousands, except %)
|
|||||||||||||||||||||||
|
Net change in unrealized appreciation (loss) on digital assets
|
$ | (1,067) | $ | 41,169 | $ | (42,236) | (102.6) | % | |||||||||||||||
|
Gain on disposal of digital assets
|
14,903 | 5,532 | 9,371 | 169.4 | % | ||||||||||||||||||
|
Total other income
|
$ | 13,836 | $ | 46,701 | $ | (32,865) | (70.4) | % | |||||||||||||||
Net Change in Unrealized Appreciation ( Loss) on Digital Assets
Net change in unrealized appreciation (loss) on digital assets decreased by $42.2 million, or 102.6%, for the nine months ended September 30, 2026 compared to the same period in the prior year. The decrease in net change in unrealized loss of digital assets was primarily driven by decline in digital asset prices.
Gain on Disposal of Digital Assets
Gain on disposal of digital assets increased by $9.4 million, or 169.4%, for the nine months ended September 30, 2026 compared to the same period in the prior year. The increase was primarily driven by the sale of treasury digital assets with historical costs that were substantially lower than the proceeds received upon sale, resulting in higher realized gains.
Provision for (Benefit from) Income Taxes
| Nine Months Ended September 30, | Change | ||||||||||||||||||||||
| 2026 | 2025 | $ | % | ||||||||||||||||||||
|
(in thousands, except %)
|
|||||||||||||||||||||||
| Provision for (benefit from) income taxes | $ | (7,101) | $ | 14,020 | $ | (21,121) | (150.6) | % | |||||||||||||||
Provision for (benefit from) income taxes changed by $21.1 million, or 150.6%, for the nine months ended September 30, 2026 compared to the same period in the prior year, from a tax expense of $14.0 million to a tax benefit of $7.1 million. The
change was primarily due to the loss from operations during the nine months ended September 30, 2026, as well as our annualized effective income tax rate of 16.6% for the nine months ended September 30, 2026 compared to the effective income tax rate of 28.5% for the nine months ended September 30, 2025. The lower effective tax rate was primarily due to the pre-tax loss in 2026, against which state, local, and foreign taxes and the limitations on the deductibility of executive compensation reduced the tax benefit, partially offset by research and development credits and the benefit recognized upon the settlement of employee stock-based awards.
Liquidity and Capital Resources
Prior to our IPO, we financed our operations primarily through issuances of preferred stock, cash generated from operations, and holdings in our Bitcoin treasury reserve. As of September 30, 2026, our primary sources of liquidity were our cash and cash equivalents of $143.2 million, excluding cash and cash equivalents segregated for the benefit of stablecoin holders - restricted. As of September 30, 2026, our digital assets included both treasury and borrowed Bitcoin. Our Bitcoin treasury holdings as of September 30, 2026 were 2,399 Bitcoin with a fair value of $200.4 million based on observable market prices, representing approximately 3.4% of our total assets.
In January 2026, we completed our IPO, in which we sold 11,026,365 shares of Class A common stock, resulting in net proceeds of $174.0 million after deducting underwriting discounts and other offering costs.
Upon the closing of the IPO, all shares of the Company's then outstanding convertible preferred stock were automatically converted into a total of 60,778,788 shares of Class A common stock. Additionally, we issued 594,862 shares of our Class A common stock upon settlement of the restricted stock units ("RSUs") for which a liquidity-event performance-based vesting condition was satisfied upon the completion of the IPO and for which the service-based vesting condition had also been satisfied as of that date. Of the shares issued, 270,700 shares were withheld to satisfy employee tax withholding obligations. Based on the IPO price of $18.00 per share, we paid approximately $4.0 million in taxes on net share settlement of these RSUs.
In June 2026, the Board of Directors authorized and approved a share repurchase program, which permits the Company to repurchase up to $50.0 million of its common stock (the "Share Repurchase Program"). Repurchases may be made from time-to-time in open market, in privately negotiated transactions or as may otherwise be determined by the Company in its discretion. The Share Repurchase Program has no expiration date, does not obligate the Company to repurchase any specific amount of common stock, and may be suspended, recommenced, or terminated at any time without prior notice. The timing and amount of any shares repurchased will be determined by the Company based on its evaluation of market conditions, applicable legal requirements and other factors. During the three months ended September 30, 2026, the Company repurchased 3,770,059 shares under the Share Repurchase Program for an aggregate purchase price of $24.7 million. As of September 30, 2026, $25.3 million remained available for future repurchases under the Share Repurchase Program.
Our material cash requirements from known contractual and other obligations consist of our obligations under operating leases for office space and contractual obligations for hosting services to support our business operations. See Note 15- "Commitments and Contingencies" of the notes to our condensed consolidated financial statements in Part I, Item 1 of this Quarterly Report on Form 10-Q for additional discussion of our principal contractual commitments.
We believe our available cash and cash collected from our revenue will be adequate to meet our future liquidity needs for at least the next twelve months. Our future capital requirements will depend on many factors, including, but not limited to, the price and volatility of digital assets, the adoption of digital assets, our growth rate, client acquisition, retention and expansion, our ability to increase our Bitcoin holdings as part of our Bitcoin treasury strategy, our headcount, our sales and marketing activities, the introduction of new products and offerings, and potential merger and acquisition activity and other strategic initiatives.
We may be required to seek additional equity or debt financing from time to time. In the event that we require additional financing, we may not be able to raise such financing on terms acceptable to us or at all. If we are unable to raise additional capital or generate cash flows necessary to expand our operations and invest in continued innovation, we may not be able to compete successfully, which would harm our business, results of operations and financial condition.
Off-Balance Sheet Arrangements
As of September 30, 2026, we did not have any relationships with unconsolidated organizations or financial partnerships, such as structured finance or special purpose entities that would have been established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes.
Operating Activities
Net cash used in operating activities was $54.7 million for the nine months ended September 30, 2026, primarily driven by net loss generated during the period of $35.6 million, partially offset by non-cash adjustments totaling $7.0 million. These adjustments primarily consisted of fair value changes related to digital assets, stock-based compensation, and depreciation and amortization. Additionally, changes in working capital contributed to operating cash flow, including $25.8 million generated from the sale of digital assets, offset by net cash use of $36.1 million from changes in accounts receivable (net), other assets, accounts payable and other liabilities.
Net cash provided by operating activities was $3.6 million for the nine months ended September 30, 2025, primarily driven by non-cash adjustments totaling $113.3 million, which primarily consisted of fair value changes related to digital assets, stock-based compensation, and depreciation and amortization. These were partially offset by net income generated during the period of $35.3 million. Additionally, changes in working capital contributed to operating cash flow, including $63.8 million generated from the sale of digital assets, offset by net cash use of $17.7 million from changes in accounts receivable (net), other assets, accounts payable and other liabilities.
Investing Activities
Net cash used in investing activities was $46.7 million for the nine months ended September 30, 2026. This cash outflow was primarily driven by $4.1 million in net loan originations and repayments, $25.3 million invested in digital assets, $10.1 million related to an acquisition, and $7.2 million in equipment and software purchases.
Net cash used in investing activities was $83.0 million for the nine months ended September 30, 2025. This cash outflow was primarily driven by $75.8 million in net loan originations and repayments, $0.2 million invested in digital assets, and $7.0 million in equipment and software purchases.
Financing Activities
Net cash provided by financing activities was $1,241.3 million for the nine months ended September 30, 2026, primarily driven by net proceeds of $174.0 million from our initial public offering, $1,103.1 million in deposits from stablecoin holders, $69.1 million in proceeds received from borrowings, net of repayment, to support loan originations, $24.8 million in proceeds to settle derivative contracts, and $1.8 million in proceeds from stock option exercises, offset by $49.4 million related to customer activity pending settlement, $3.9 million in net fiat currency received and returned as collateral, $24.7 million related to repurchase and retirement of common stock, $3.6 million for tax payment related to net settlement of RSUs, and $0.6 million attributable to non-controlling interest in a joint venture.
Net cash provided by financing activities was $2,757.9 million for the nine months ended September 30, 2025, primarily driven by $2,688.4 million in deposits from stablecoin holders, $76.2 million in proceeds received from borrowings to support loan originations, and $1.2 million in proceeds from stock option exercises, offset by $11.7 million from fiat currency returned as collateral, $4.0 million related to customer activity pending settlement, and $0.3 million attributable to non-controlling interest in a joint venture.
Recent Accounting Pronouncements
Refer to Note 2 - "Summary of Significant Accounting Policies" of the notes to our condensed consolidated financial statements in Part I, Item 1 of this Quarterly Report on Form 10-Q for a full description of recent accounting pronouncements.
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