Securitize Corp.
11/13/2026 | Press release | Distributed by Public on 11/13/2026 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 should be read together with Securitize's unaudited condensed consolidated financial statements and the related notes thereto included elsewhere in this Quarterly Report on Form 10-Q. Some of the information contained in this discussion and analysis or set forth elsewhere in this Quarterly Report on Form 10-Q, including information with respect to Securitize's plans and strategy for its business, includes forward-looking statements that reflect plans, estimates and beliefs and involve numerous risks and uncertainties, including but not limited to those described in Part II, Item 1A, "Risk Factors" of this Quarterly Report on Form 10-Q and in the "Risk Factors" and other sections of the Company's Registration Statement on Form S-1 filed with the SEC on July 31, 2026 (File No. 333-297848) (the "Form S-1" or "S-1"), including "Cautionary Statement Regarding Forward-Looking Statements." Therefore, actual results may differ materially from those contained in any forward-looking statements. Unless the context otherwise requires, references in this section to "Securitize," the "Company," "we," "our" or "us" refer to Securitize Corp. (f/k/a Securitize Holdings, Inc.) and its consolidated subsidiaries following the consummation of the Business Combination and, for periods prior to the consummation of the Business Combination, to Securitize, Inc. (now known as Securitize I, Inc.) ("Old Securitize") and its consolidated subsidiaries, which was treated as the accounting acquirer in the Business Combination. Capitalized terms used but not defined in this section have the meanings given to them in the notes to the unaudited condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q. Certain amounts in the tables below may not foot, crossfoot, or recalculate, as applicable, due to rounding.
Securitize Overview
Securitize was the first digital securities issuance platform, coming to market in January 2018. We believe Securitize and its subsidiaries have built the most comprehensive and trusted infrastructure for tokenizing financial assets on-chain. The Company operates a fully regulated, end-to-end platform for the issuance, trading and servicing of tokenized securities. Securitize is the only vertically integrated tokenization provider with SEC-registered entities across a transfer agent, broker-dealer, alternative trading system ("ATS") and investment adviser (registered in July 2026), which, together with our fund administration services, enables a complete lifecycle for tokenized assets. These registrations enable Securitize to legally issue, manage, and trade digital securities in the United States under the same framework that governs traditional equities and bonds, while leveraging the efficiency and transparency of blockchain technology.
Key Factors Affecting Our Operating Performance
Growth of the Internet financial system
The Internet financial system is increasingly being built on blockchain infrastructure, and represents a fundamental shift that we believe will result in a profound change to the existing financial system by materially improving efficiency, reducing costs, expanding accessibility, and accelerating innovation. While the Internet financial system has grown rapidly, it remains in its infancy and is very small relative to the legacy financial system. We believe we are well positioned to benefit from the growth of this emerging, transformative space, and we expect increased adoption and expansion of the Internet financial system to be a key driver of growth in all our products and services, and hence of our overall financial performance.
Growth in Tokenized Assets on Platform
We believe our long-term revenue growth is linked to our ability to grow Tokenized Assets on Platform, which depends on our ability to expand our direct and indirect distribution channels and partnerships, launch new tokenized products with existing and new asset managers, and increase the utility of tokenized securities, including through compliant integrations with decentralized finance ("DeFi") protocols. Currently, our tokenization revenue is driven primarily by fees for blockchain integration and related maintenance and support services. Fees that vary with
the value of Tokenized Assets on Platform or with transaction activity in those assets are not yet a significant source of revenue. Over time, we seek to increase the revenue we generate from Tokenized Assets on Platform, including through asset-based and transaction-based fees and by expanding adjacent services, such as fund administration and trading, lending and borrowing activities. Changes in investor demand for tokenized products, including demand for tokenized U.S. Treasury and money market products as interest rates change, could affect Tokenized Assets on Platform and our results of operations.
Government regulation
At Securitize, we have always had a "regulation-first" philosophy, which has led to significant investments in compliance infrastructure for the tokenization of real-world assets ("RWAs"). We expect to continue allocating significant resources to keep our practices aligned with evolving regulations in the U.S. and in the European Union, where our investment firm license from the Spanish regulator has been passported to 15 other EU countries and we have applied for a license under the EU's DLT Pilot Regime. Other major jurisdictions, including Hong Kong, Japan, Singapore and the United Arab Emirates, are also developing frameworks that govern tokenized assets.
In the U.S., the GENIUS Act, enacted in July 2025, established a federal framework for payment stablecoins, and in December 2025 SEC staff clarified the conditions under which broker-dealers may custody crypto asset securities. Securitize Markets, our broker-dealer subsidiary, subsequently received FINRA approval to custody tokenized securities. On September 17, 2026, the SEC issued a temporary, conditional exemptive order (the "Innovation Exemption") to facilitate on-chain trading of tokenized National Market System ("NMS") stock through September 17, 2031, while market structure legislation, the Digital Asset Market Clarity Act of 2025, did not advance in the U.S. Senate in September 2026. We believe increased regulatory certainty will accelerate adoption of tokenized assets; however, regulatory developments may also impose new compliance obligations or increase competition.
Growth in TradFi market
We believe the continued adoption of tokenized real-world assets and blockchain-enabled financial infrastructure will support long-term demand for our platform and servicing capabilities. Over the medium term, we intend to expand into the traditional finance ("TradFi") market, which we estimate at over $400 trillion. TradFi investors have historically faced barriers to adopting tokenized securities, including the need to use digital wallets and connect to multiple blockchains, and limited support from broker-dealers and custodians. We intend to address these barriers by integrating with TradFi platforms and simplifying the user experience, including through custody of tokenized securities by our broker-dealer, and by offering tokenized products, including issuer-led tokenized public equities, that provide more efficient fractional ownership, lower minimum investment thresholds, self-directed management capabilities and additional liquidity options.
Price and volatility of digital assets
Values of certain digital assets have been highly volatile. Speculation about future changes in the value of digital assets can increase that volatility, which may materially and adversely affect the value of the digital assets we hold, including digital assets received as consideration from operations and digital assets held for investment. Changes in investor confidence and the resulting price fluctuations may also reduce trading volumes and activity across the digital asset ecosystem, where many of our tokenized products are distributed and used, which could negatively affect our business and results of operations.
Adoption of digital assets
The digital asset ecosystem has matured significantly since the rapid growth of 2021 and the contraction that followed in 2022, through ongoing technological innovation, expanding commercial applications, increasing regulatory engagement, and growing participation by institutional investors and enterprises. Tokenization in particular has begun to shift from experimentation to production, as leading financial institutions build and deploy tokenization infrastructure to support live, revenue-generating products.
Adoption of digital assets has evolved beyond an initially retail-driven user base to include asset managers, financial institutions, corporations, and other organizations utilizing digital assets and blockchain technology for investment, operational, and commercial purposes. The launch of spot-based digital asset exchange-traded funds ("ETFs") in the United States in 2024 contributed to broader accessibility and increased participation by traditional financial market participants. In addition, according to data published by RWA.xyz, the value of tokenized real-world assets distributed on public blockchain networks increased from approximately $25 billion at the end of 2025 to approximately $39 billion as of September 30, 2026, reflecting increasing adoption of tokenization across asset classes including government securities, private credit, commodities, equities, and real estate. Over the same period, the number of holders of tokenized real-world assets increased from approximately 0.6 million at the end of 2025 to more than 5.0 million as of September 30, 2026.
However, historical trends are not indicative of future adoption, and it is possible that adoption of digital assets, tokenization technologies, and blockchain-based infrastructure may slow, take longer to develop, or never achieve broad acceptance, which could negatively impact our business and operating results.
Other challenges and risks
We are operating in new industries that are highly innovative, rapidly evolving and characterized by intense competition, experimentation, changing customer needs, and the frequent introduction of new products and services. We are subject to uncertain and evolving industry and regulatory requirements. While we believe we are well-positioned to capitalize on market opportunities made possible by the rapid evolution of the digital assets ecosystem, due to the relatively nascent stage of our industries and other challenges that we face, our business model also presents certain material risks.
Participants in the digital asset industry, including investors, consumers and providers of goods and services, may incur higher costs than participants in established markets, including elevated legal and financial advisory fees, significant resources to monitor and maintain compliance with applicable laws and regulations, and elevated and unpredictable costs of custody, transactions, insurance and theft. Other material risks specific to our industry include limited liquidity in secondary markets for tokenized securities; reliance on blockchain networks and smart contracts, which may experience outages, coding errors or network congestion; exposure to cybersecurity incidents, malicious actors and platform vulnerabilities; and uncertainties in the tax and accounting treatment of digital assets.
Key Indicators of Performance and Financial Condition
The Company uses a variety of operating and financial metrics, including a non-U.S. GAAP ("non-GAAP") financial measure, to evaluate the performance of its business and assess its financial condition. Key financial metrics include total revenue, net income (loss), and Adjusted EBITDA. Key operating metrics include average Tokenized Assets on Platform (previously referred to as assets under management, or "AUM"), assets under administration ("AUA"), and transaction volume, as defined below.
Average Tokenized Assets on Platform
Average Tokenized Assets on Platform refers to the total value of assets tokenized by Securitize across both funds and equities, presented on an average basis during a period. This metric was previously referred to as AUM or Tokenized Assets Under Management. The renaming does not reflect any changes to underlying data, historical figures, or the calculation methodology, which remains consistent with how AUM was previously presented. It serves as an indicator of Securitize's operational scale and market traction, reflecting both investor confidence and the platform's ability to attract and retain high-quality issuers. The following table presents Securitize's Average Tokenized Assets on Platform for the periods indicated:
| (in billions) | Average Tokenized Assets on Platform | ||||
| During the three months ended September 30, 2026 | $ | 5.0 | |||
| During the nine months ended September 30, 2026 | $ | 4.2 | |||
| During the three months ended September 30, 2025 | $ | 3.6 | |||
| During the nine months ended September 30, 2025 | $ | 3.0 | |||
Average Tokenized Assets on Platform for the three months ended September 30, 2026 was $5.0 billion, an increase of $1.4 billion, or 39%, compared to $3.6 billion for the three months ended September 30, 2025. Average Tokenized Assets on Platform for the nine months ended September 30, 2026 was $4.2 billion, an increase of $1.2 billion, or 39%, compared to $3.0 billion for the nine months ended September 30, 2025.
Assets Under Administration
Assets under administration ("AUA") represents the aggregate value of assets for which the Company provides fund administration services, including subscription and redemption processing, recordkeeping, and related fund servicing functions, as of the measurement date. As of September 30, 2026, AUA was $25.2 billion, administered across 669 funds, compared to $35.2 billion across 670 funds as of September 30, 2025.
Aggregate Transaction Volume
Aggregate transaction volume represents the aggregate volume of investments, redemptions, dividends, and cross-chain movements of assets issued on the Securitize platform during the period. Aggregate transaction volume for the three months ended September 30, 2026 was $4.3 billion, an increase of $0.7 billion compared to $3.6 billion for the three months ended September 30, 2025. Aggregate transaction volume for the nine months ended September 30, 2026 was $10.6 billion, an increase of $2.7 billion, compared to $7.9 billion for the nine months ended September 30, 2025. In connection with preparing our third quarter 2026 results, we revised previously reported quarterly aggregate transaction volume, including for the three months ended June 30, 2026, which was revised to $4.4 billion from $5.3 billion as previously reported in our Current Report on Form 8-K/A filed with the SEC on August 13, 2026, due to administrative errors; revisions to other periods were not significant and did not affect the Company's financial statements.
Significant Transactions
Business Combination
On July 1, 2026, the Company completed the Business Combination with CEPT, a special purpose acquisition company, with both Old Securitize and CEPT becoming wholly owned subsidiaries of Securitize Corp. (formerly Securitize Holdings, Inc.), whose common stock began trading on the NYSE under the ticker symbol "SECZ" on July 2, 2026. The Business Combination has been accounted for as a reverse recapitalization, with Old Securitize treated as the accounting acquirer. Together with the PIPE Financing, the Business Combination provided the Company with net cash of $319.4 million after redemptions, SPAC service provider fees and transaction costs paid at the Closing.
At the Closing, all of Old Securitize's outstanding convertible promissory notes, SAFEs and redeemable convertible preferred stock converted into shares of Old Securitize common stock, which were exchanged for shares of the Company's common stock, resulting in a loss on settlement of convertible instruments, net, of $20.6 million during the three months ended September 30, 2026. In addition, up to 6,250,000 Securitize Earnout Shares may be issued to holders of Old Securitize common stock, warrants and equity awards, and 1,800,000 Sponsor Earnout Shares held by the Sponsor are subject to forfeiture, in each case based on the trading price of the Company's common stock during the Earnout Period, which ends on July 1, 2031. The portion of the Securitize Earnout Shares allocable to holders of equity awards and warrants who provide services to the Company is accounted for as share-
based compensation, and the remaining portions of the earnout arrangements are classified as liabilities and remeasured at fair value each reporting period. Refer to Note 3, Mergers & Acquisitions, of the unaudited condensed consolidated financial statements for further details.
In connection with becoming a public company, we have hired and expect to continue to hire additional personnel and to implement procedures and processes to address public company regulatory requirements and customary practices. We have incurred and expect to incur additional annual expenses as a public company for, among other things, hiring of new personnel and fees to outside consultants, and costs related to implementation of an appropriate internal control framework, insurance, and investor relations.
MG Stover Acquisition
On April 15, 2025, the Company completed the acquisition of all outstanding equity interests of MG Stover, a fund administrator for digital asset funds, for cash consideration of $21.1 million, net of cash acquired. MG Stover's results of operations have been included in our consolidated results from the acquisition date. Refer to Note 3, Mergers & Acquisitions, of the unaudited condensed consolidated financial statements for further details.
Convertible Promissory Notes Payable Issuance and Conversion
During 2024 and 2025, the Company issued the 2024 Notes and the 2025 Notes, which had an aggregate principal amount outstanding of $79.9 million as of December 31, 2025. On July 1, 2026, in connection with the Closing, the 2024 Notes and the 2025 Notes converted, together with accrued interest, into shares of Old Securitize common stock, which were exchanged for shares of the Company's common stock. As a result, no convertible promissory notes were outstanding as of September 30, 2026. Refer to Note 3, Mergers & Acquisitions, of the unaudited condensed consolidated financial statements for further details.
Lending and Collateralization Arrangements Involving Tokens
Beginning in November 2024 and throughout 2025, the Company was party to lending arrangements, governed by Master Loan and Security Agreements, with certain investors in tokenized funds. Under these arrangements, the Company made advances of digital assets to those investors, secured by tokenized assets they transferred as collateral, and used that collateral to borrow digital assets, primarily from decentralized finance protocols, to fund the advances. Following the public release of the related smart contracts, which allow investors to access these strategies directly without the Company's facilitation, the Company wound down all of these arrangements during the final months of 2025 and early 2026, and no related amounts remained on the unaudited condensed consolidated balance sheet as of September 30, 2026. Refer to Note 15 to the unaudited condensed consolidated financial statements.
Secondary transactions and exchange of Common stock for Series B-4 redeemable convertible preferred stock
During the nine months ended September 30, 2025, certain former employees, co-founders and related parties sold shares of Old Securitize common stock and redeemable convertible preferred stock to new and existing investors at prices in excess of the estimated fair value of the shares in the 2025 secondary transactions. As a result, the Company recognized $8.3 million of share-based compensation expense, included in 'Compensation and benefits' for the nine months ended September 30, 2025, and a deemed dividend of $1.5 million. In connection with these transactions, a preferred stockholder also exchanged shares of common stock for shares of Series B-4 redeemable convertible preferred stock with a fair value of $6.3 million. There were no secondary transactions during the nine months ended September 30, 2026. Refer to Note 11, Stockholders' Equity (Deficit), of the unaudited condensed consolidated financial statements for further details.
Sale of Securitize for Advisors
On November 26, 2025, the Company completed the sale of its Securitize for Advisors business for base sale consideration of $2.9 million. The business is presented as discontinued operations in the unaudited condensed
consolidated statements of operations and comprehensive income (loss) for the three and nine months ended September 30, 2025. Refer to Note 4, Discontinued Operations, of the unaudited condensed consolidated financial statements for further details.
Certain Components of Results of Operations
Revenue
We generate revenue from two offerings, Tokenization and Asset Servicing. Tokenization revenue consists primarily of fees for blockchain integration services related to ecosystem expansion, together with ongoing maintenance and support, placement and distribution, fund management and trading fees. Asset Servicing revenue consists of fees for ongoing operational and administrative services provided to issuers, asset managers and investors, including recordkeeping and transfer processing, fund accounting, compliance support and investor onboarding. Refer to Note 18, Revenue, of the unaudited condensed consolidated financial statements for further details.
Operating costs and expenses
Cost of revenue (exclusive of items shown below)
Cost of revenue consists of direct costs to provide services to our customers, primarily labor costs for employees and contractors directly involved in delivering our Tokenization and Asset Servicing offerings, such as blockchain and protocol engineers and fund administrators, as well as software, systems and market data costs, validator fees, sub-advisory fees and other costs incurred as a direct result of customer transactions. Cost of revenue excludes depreciation and amortization, which is included in selling, general & administrative expenses, and any allocation of rent or utilities.
Selling, general & administrative
Selling, general & administrative expenses consist of operating costs not included in the other operating cost and expense captions, primarily professional fees, share-based compensation related to warrants issued for promotional services, software, marketing, depreciation and amortization, insurance, facilities and travel, as well as acquisition-related transaction costs, including Business Combination costs required to be expensed rather than charged against additional paid-in capital.
Compensation and benefits
Compensation and benefits consist of salaries, wages, bonuses and commissions, share-based compensation (including compensation cost related to the Securitize Earnout Shares), contractor costs, payroll taxes, benefits and other employee-related costs, other than labor costs included in cost of revenue or capitalized as internal-use software.
Provision for expected credit losses
Provision for expected credit losses consists of credit loss expense on our trade receivables, including amounts recognized to adjust our allowance for expected credit losses to management's current estimate of expected credit losses and receivables written off.
Loss on digital assets from operations, net
Loss on digital assets from operations, net reflects changes in the fair value of, and realized gains and losses on, digital assets received as payment from customers, which the Company generally sells or converts shortly after receipt.
Other income (expense)
Other income (expense) consists of income and expenses not directly related to our core operations, including interest expense; interest income; dividend income; loss on digital assets held for investment, net; net losses from investments held by our consolidated VIE; other income (expense), net, which consists primarily of realized and unrealized gains and losses on the Company's other investments and foreign currency gains and losses; changes in the fair value of the option liability, SAFEs, derivative liability and earnout liabilities; and loss on settlement of convertible instruments, net.
Provision for income taxes
Provision for income taxes includes income taxes related to foreign jurisdictions and U.S. federal and state income taxes. As we conduct business activities internationally, any changes in the U.S. and foreign taxation of such activities may affect our overall provision for income taxes in the future.
Net loss from discontinued operations
Net loss from discontinued operations consists of the results of the Securitize for Advisors reporting unit, which was sold in the fourth quarter of 2025 and is presented as discontinued operations for the three and nine months ended September 30, 2025.
Other comprehensive income (loss)
Other comprehensive income (loss) consists of foreign currency translation adjustments arising from translating the financial statements of our subsidiaries in Japan, Spain and Israel into U.S. dollars.
Results of Operations
Three Months Ended September 30, 2026 Compared to Three Months Ended September 30, 2025
The following table summarizes the results of operations for the periods indicated.
| Three Months Ended September 30, | ||||||||||||||||||||
| 2026 | 2025 | $ Change | % Change | |||||||||||||||||
| Revenue | $ | 18,610,270 | $ | 16,500,042 | $ | 2,110,228 | 12.8 | % | ||||||||||||
| Operating costs and expenses: | ||||||||||||||||||||
| Cost of revenue (exclusive of items shown below) | 4,536,706 | 3,513,882 | 1,022,824 | 29.1 | % | |||||||||||||||
| Selling, general & administrative | 20,801,135 | 6,734,775 | 14,066,360 | 208.9 | % | |||||||||||||||
| Compensation and benefits | 16,457,551 | 4,433,132 | 12,024,418 | 271.2 | % | |||||||||||||||
| Provision for expected credit losses | 341,259 | 108,877 | 232,381 | 213.4 | % | |||||||||||||||
| Loss on digital assets from operations, net | 46,183 | 133,405 | (87,222) | (65.4) | % | |||||||||||||||
| Total operating costs and expenses | 42,182,833 | 14,924,072 | 27,258,761 | 182.6 | % | |||||||||||||||
| Income (loss) from operations | (23,572,563) | 1,575,970 | (25,148,533) | n/m | ||||||||||||||||
| Other income (expense): | ||||||||||||||||||||
| Interest expense | - | (2,029,981) | 2,029,981 | (100.0) | % | |||||||||||||||
| Interest income | 10,849 | 239,361 | (228,512) | (95.5) | % | |||||||||||||||
| Dividend income | 1,974,701 | 18,045 | 1,956,656 | 10,843.2 | % | |||||||||||||||
| Loss on digital assets held for investment, net | (412,225) | - | (412,225) | n/m | ||||||||||||||||
| Net (losses) from investments held by consolidated VIE | (746,827) | - | (746,827) | n/m | ||||||||||||||||
| Other income (expense), net | 399,568 | (729,574) | 1,129,142 | n/m | ||||||||||||||||
| Change in fair value of option liability | - | 511,000 | (511,000) | (100.0) | % | |||||||||||||||
| Change in fair value of simple agreements for future equity | - | 755,000 | (755,000) | (100.0) | % | |||||||||||||||
| Change in fair value of derivative liability | - | 8,339,000 | (8,339,000) | (100.0) | % | |||||||||||||||
| Loss on settlement of convertible instruments, net | (20,649,813) | - | (20,649,813) | n/m | ||||||||||||||||
| Change in fair value of earnout liabilities | (23,223,354) | - | (23,223,354) | n/m | ||||||||||||||||
| Total other income (expense), net | (42,647,103) | 7,102,851 | (49,749,953) | n/m | ||||||||||||||||
| Net income (loss) from continuing operations before income taxes | (66,219,666) | 8,678,821 | (74,898,487) | n/m | ||||||||||||||||
| Provision for income taxes | (44,090) | (81,138) | 37,048 | (45.7) | % | |||||||||||||||
| Net income (loss) from continuing operations | (66,263,756) | 8,597,683 | (74,861,439) | n/m | ||||||||||||||||
| Discontinued operations: | ||||||||||||||||||||
| Net loss from discontinued operations | - | (4,511,799) | 4,511,799 | (100.0) | % | |||||||||||||||
| Net income (loss) | $ | (66,263,756) | $ | 4,085,884 | $ | (70,349,640) | n/m | |||||||||||||
Revenue
Revenue for the three months ended September 30, 2026 was $18.6 million, an increase of $2.1 million, or 12.8%, compared to $16.5 million for the three months ended September 30, 2025, reflecting approximately $2.5 million of higher tokenization revenue, partially offset by $0.4 million of lower asset servicing revenue.
Tokenization revenue for the three months ended September 30, 2026 was $11.5 million, an increase of approximately $2.5 million compared to $8.9 million for the three months ended September 30, 2025. The increase was primarily attributable to higher integration fees from on-chain integrations completed during the current-year period (stemming from one large integration of approximately $9.0 million in Q3 2026) and growth in other tokenization services, including partner distribution, implementation, and fund management and placement fees.
Asset servicing revenue for the three months ended September 30, 2026 was $7.2 million, a decrease of $0.4 million compared to $7.6 million for the three months ended September 30, 2025. The decrease reflected $0.9 million of lower fund administration and accounting fees on lower assets under administration ($25.2 billion as of September 30, 2026 compared to $35.2 billion a year earlier), partially offset by $0.5 million of higher transfer agent fees.
Operating costs and expenses:
Cost of revenue (exclusive of items shown below)
Cost of revenue for the three months ended September 30, 2026 was $4.5 million, an increase of $1.0 million compared to $3.5 million for the three months ended September 30, 2025. The increase was primarily due to higher software, systems and market data costs, as well as an increase in revenue-generating employees and contractors.
Cost of revenue as a percentage of revenue was 24.4% for the three months ended September 30, 2026, compared to 21.3% for the three months ended September 30, 2025. This increase was primarily attributable to the higher software, systems and market data costs described above, which outpaced revenue growth in the current-year period.
Selling, general & administrative
Selling, general & administrative expenses for the three months ended September 30, 2026 were $20.8 million, an increase of approximately $14.1 million compared to $6.7 million for the three months ended September 30, 2025. The increase was primarily driven by $6.4 million of share-based compensation expense related to the J Digital 6 Warrants, of which $6.0 million related to the second tranche, which became probable of vesting in July 2026, and $0.4 million was recognized at the Closing for the vested tranche (refer to Notes 3 and 11). Transaction costs added $4.0 million, comprising $2.7 million of equity issuance costs allocated to the liability-classified earnout arrangements and expensed at the Closing and $1.3 million related to the Company's acquisition of an institutional asset-backed financing platform (refer to Notes 3 and 20). Legal, accounting and consulting fees increased $3.2 million, of which $1.8 million related to patent litigation (including a $0.4 million accrued settlement) and the remainder to the Business Combination and operating as a public company. Advertising, promotion and public relations costs increased $1.0 million and insurance costs increased $0.5 million. These increases were partially offset by a $1.7 million decrease in software and subscription costs.
Selling, general & administrative expenses represented approximately 111.8% of revenue for the three months ended September 30, 2026, compared to approximately 40.8% for the three months ended September 30, 2025. The increase as a percentage of revenue was primarily due to share-based compensation expense related to the J Digital 6 Warrants, transaction costs and higher legal, accounting and consulting fees associated with operating as a public company, which outpaced revenue growth in the current-year period.
Compensation and benefits
Compensation and benefits expense for the three months ended September 30, 2026 was $16.5 million, an increase of approximately $12.0 million compared to $4.4 million for the three months ended September 30, 2025. The increase was primarily driven by $6.7 million of higher share-based compensation expense, which included $5.3 million of compensation cost recognized in connection with the closing of the Business Combination associated with Securitize Earnout Shares allocated to holders of equity awards assumed in the Business Combination (refer to Note 3), and $5.3 million of higher salaries, bonus, contractor, payroll tax and benefits costs resulting from increased headcount, including corporate hiring associated with becoming a public company.
Compensation and benefits expense represented approximately 88.4% of revenue for the three months ended September 30, 2026, compared to approximately 26.9% for the three months ended September 30, 2025. The increase as a percentage of revenue was primarily driven by the higher share-based compensation expense and increased headcount described above, which outpaced revenue growth in the current-year period.
Provision for expected credit losses
Provision for expected credit losses for the three months ended September 30, 2026 was $0.3 million, an increase of $0.2 million compared to $0.1 million for the three months ended September 30, 2025. The increase primarily reflected higher accounts receivable balances, consistent with the growth in revenue during the period.
Loss on digital assets from operations, net
Loss on digital assets from operations, net was less than $0.1 million for the three months ended September 30, 2026, compared to $0.1 million for the three months ended September 30, 2025. The amounts in both periods reflect changes in the fair value of digital assets received as consideration from operations, and the lower current-period loss reflects a lower volume of such digital assets, as a greater portion of the Company's digital assets are now classified as held for investment.
Other income (expense):
Interest expense
Interest expense was nil for the three months ended September 30, 2026, compared to $2.0 million for the three months ended September 30, 2025. The decrease was primarily attributable to the closing of the Business Combination, upon which our outstanding convertible notes were automatically converted into shares of Old Securitize common stock, which were then immediately exchanged into shares of Company common stock, effective July 1, 2026. As a result, no interest expense was incurred on the convertible notes during the three months ended September 30, 2026, compared to a full quarter of interest and accretion of debt discount in the same period in the prior year.
Interest income
Interest income was less than $0.1 million for the three months ended September 30, 2026, compared to $0.2 million for the three months ended September 30, 2025. The decrease primarily reflected lower interest earned on the Company's cash equivalents, as cash received in connection with the Business Combination was held primarily in dividend-bearing investments (see Dividend income below).
Dividend income
Dividend income was $2.0 million for the three months ended September 30, 2026, compared to less than $0.1 million for the three months ended September 30, 2025. The increase resulted from a higher average balance of dividend-bearing investments, reflecting the investment of cash received in connection with the Business Combination.
Loss on digital assets held for investment, net
Loss on digital assets held for investment, net, was $0.4 million for the three months ended September 30, 2026, compared to nil for the three months ended September 30, 2025, as the Company did not hold any digital assets for investment during the prior-year period. The current-period loss reflects the decrease in value of the Company's digital asset holdings, consistent with broader market price declines, particularly among alternative coins ("altcoins") in which the Company is invested.
Net (losses) from investments held by consolidated VIE
Net (losses) from investments held by consolidated VIE were $0.7 million for the three months ended September 30, 2026, with no comparable amount for the three months ended September 30, 2025, as HINC was created and first consolidated by the Company in 2026. The amount reflects $1.0 million of net realized and unrealized losses on HINC's investments, partially offset by $0.2 million of interest and other income earned on those investments (refer to Note 14).
Other income (expense), net
Other income (expense), net was net income of $0.4 million for the three months ended September 30, 2026, compared to a net expense of $0.7 million for the three months ended September 30, 2025. The $1.1 million favorable change was primarily due to realized and unrealized gains on the Company's investments and lower other expenses in the current-year period, partially offset by lower foreign currency exchange gains.
Change in fair value of simple agreements for future equity
No amount was recognized in 'Change in fair value of simple agreements for future equity' for the three months ended September 30, 2026. The SAFEs were remeasured to fair value immediately before their conversion into shares of Old Securitize common stock at the Closing on July 1, 2026, and the resulting $2.1 million loss is included in 'Loss on settlement of convertible instruments, net' (see below). For the three months ended September 30, 2025, the change in the fair value of the SAFEs resulted in a gain of $0.8 million.
Change in fair value of derivative liability
No amount was recognized in 'Change in fair value of derivative liability' for the three months ended September 30, 2026. The derivative liability bifurcated from the 2025 Notes was remeasured to fair value immediately before the conversion of those notes at the Closing on July 1, 2026, and the resulting $1.1 million loss is included in 'Loss on settlement of convertible instruments, net' (see below). For the three months ended September 30, 2025, the change in the fair value of the derivative liability resulted in a gain of $8.3 million.
Change in fair value of option liability
No amount was recognized in 'Change in fair value of option liability' for the three months ended September 30, 2026. The option liability was remeasured to fair value immediately before the Series Option redeemable convertible preferred stock was issued at the Closing on July 1, 2026, and the resulting $6.7 million loss is included in 'Loss on settlement of convertible instruments, net' (see below). For the three months ended September 30, 2025, the change in the fair value of the option liability resulted in a gain of $0.5 million.
Loss on settlement of convertible instruments, net
Loss on settlement of convertible instruments, net was $20.6 million for the three months ended September 30, 2026, with no comparable loss for the three months ended September 30, 2025. The loss was recognized in connection with the conversions at the Closing and consisted of an $11.8 million loss on the extinguishment of the 2025 Notes (including a $1.1 million loss on the final remeasurement of the related derivative liability), which
converted through a bifurcated conversion feature and were settled in shares of the Company's common stock measured at the Closing Date share price of $11.78 per share; a $6.7 million loss on the final remeasurement of the option liability immediately before the issuance of the Series Option redeemable convertible preferred stock; and a $2.1 million loss on the final remeasurement of the SAFEs at settlement. No gain or loss was recognized on the conversion of the 2024 Notes, which converted at the conversion price established under their existing terms. Refer to Note 3.
Change in fair value of earnout liabilities
The change in fair value of earnout liabilities resulted in a loss of $23.2 million for the three months ended September 30, 2026, with no comparable amount for the three months ended September 30, 2025, as the earnout arrangements were entered into in connection with the Business Combination. The loss consisted of a $17.5 million increase in the fair value of the Securitize Earnout liability and a $5.7 million increase in the fair value of the Sponsor Earnout liability from the Closing to September 30, 2026, primarily reflecting the increase from the Closing Date share price of $11.78 to the $14.59 closing price of the Company's common stock as of September 30, 2026. Refer to Notes 3 and 7.
Provision for income taxes
The provision for income taxes for the three months ended September 30, 2026 was less than $0.1 million, compared to a provision of $0.1 million for the three months ended September 30, 2025. The income tax provision for the 2026 period primarily relates to the portion of tax-deductible goodwill that increases our deferred tax liabilities which is not fully offset by our deferred tax assets related to new operating losses due to limitations on net operating loss utilization. The provision for the 2025 period reflected the same deferred tax impact, as well as current U.S. federal and state income tax expense, after utilization of available net operating loss carryforwards and subject to applicable limitations on their utilization.
Net loss from discontinued operations
There were no losses from discontinued operations for the three months ended September 30, 2026, compared to a loss of $4.5 million for the three months ended September 30, 2025, which included a $4.1 million goodwill impairment charge. The Company sold its discontinued operations, the Securitize for Advisors reporting unit, in the fourth quarter of 2025; accordingly, there were no operations or results from this business in the current period.
Nine Months Ended September 30, 2026 Compared to Nine Months Ended September 30, 2025
The following table summarizes the results of operations for the periods indicated:
| Nine Months Ended September 30, | ||||||||||||||||||||
| 2026 | 2025 | $ Change | % Change | |||||||||||||||||
| Revenue | $ | 52,524,581 | $ | 45,796,237 | $ | 6,728,344 | 14.7 | % | ||||||||||||
| Operating costs and expenses: | ||||||||||||||||||||
| Cost of revenue (exclusive of items shown below) | 12,987,718 | 8,793,163 | 4,194,555 | 47.7 | % | |||||||||||||||
| Selling, general & administrative | 36,756,487 | 13,579,862 | 23,176,625 | 170.7 | % | |||||||||||||||
| Compensation and benefits | 36,106,032 | 24,438,206 | 11,667,826 | 47.7 | % | |||||||||||||||
| Provision for expected credit losses | 1,941,846 | 295,150 | 1,646,696 | 557.9 | % | |||||||||||||||
| Loss on digital assets from operations, net | 415,480 | 1,243,975 | (828,495) | (66.6) | % | |||||||||||||||
| Total operating costs and expenses | 88,207,563 | 48,350,357 | 39,857,206 | 82.4 | % | |||||||||||||||
| Income (loss) from operations | (35,682,982) | (2,554,120) | (33,128,862) | 1,297.1 | % | |||||||||||||||
| Other income (expense): | ||||||||||||||||||||
| Interest expense | (3,374,490) | (4,870,039) | 1,495,549 | (30.7) | % | |||||||||||||||
| Interest income | 424,353 | 754,654 | (330,301) | (43.8) | % | |||||||||||||||
| Dividend income | 2,215,734 | 103,192 | 2,112,542 | 2,047.2 | % | |||||||||||||||
| Loss on digital assets held for investment, net | (1,845,307) | - | (1,845,307) | n/m | ||||||||||||||||
| Net (losses) from investments held by consolidated VIE | (746,827) | - | (746,827) | n/m | ||||||||||||||||
| Other income (expense), net | 2,135,365 | (297,897) | 2,433,262 | n/m | ||||||||||||||||
| Change in fair value of option liability | (29,176,000) | 24,000 | (29,200,000) | n/m | ||||||||||||||||
| Change in fair value of simple agreements for future equity | (5,678,000) | 306,000 | (5,984,000) | n/m | ||||||||||||||||
| Change in fair value of derivative liability | 19,842,000 | 5,295,000 | 14,547,000 | 274.7 | % | |||||||||||||||
| Loss on settlement of convertible instruments, net | (20,649,813) | - | (20,649,813) | n/m | ||||||||||||||||
| Change in fair value of earnout liabilities | (23,223,354) | - | (23,223,354) | n/m | ||||||||||||||||
| Total other income (expense), net | (60,076,339) | 1,314,910 | (61,391,249) | n/m | ||||||||||||||||
| Net income (loss) from continuing operations before income taxes | (95,759,321) | (1,239,210) | (94,520,111) | 7,627.4 | % | |||||||||||||||
| Provision for income taxes | (126,289) | (243,413) | 117,124 | (48.1) | % | |||||||||||||||
| Net income (loss) from continuing operations | (95,885,610) | (1,482,623) | (94,402,987) | 6,367.3 | % | |||||||||||||||
| Discontinued operations: | ||||||||||||||||||||
| Net loss from discontinued operations | - | (5,702,653) | 5,702,653 | (100.0) | % | |||||||||||||||
| Net income (loss) | $ | (95,885,610) | $ | (7,185,276) | $ | (88,700,334) | 1,234.5 | % | ||||||||||||
Revenue
Revenue for the nine months ended September 30, 2026 was $52.5 million, an increase of $6.7 million, or 14.7%, compared to $45.8 million for the nine months ended September 30, 2025. The increase was primarily driven by growth in asset servicing revenue of $5.4 million, partially driven by a full nine months of revenue from MG Stover, which was acquired in April 2025, and higher tokenization revenue of $1.4 million.
Tokenization revenue for the nine months ended September 30, 2026 was $30.4 million, an increase of approximately $1.4 million compared to $29.1 million for the nine months ended September 30, 2025. The increase was primarily attributable to one large blockchain integration completed in the current-year period.
Asset servicing revenue for the nine months ended September 30, 2026 was $22.1 million, an increase of $5.4 million compared to $16.7 million for the nine months ended September 30, 2025. The increase was primarily driven by $4.4 million of higher fund administration and accounting fees, partially reflecting a full nine months of revenue from MG Stover, which was acquired on April 15, 2025 and expanded the Company's fund administration and related asset servicing capabilities, and $1.0 million of higher transfer agent fees.
Operating costs and expenses:
Cost of revenue (exclusive of items shown below)
Cost of revenue for the nine months ended September 30, 2026 was $13.0 million, an increase of $4.2 million compared to $8.8 million for the nine months ended September 30, 2025. The increase was primarily due to $3.4 million of higher software, systems and market data costs and $1.0 million of higher costs of revenue-generating employees, contractors, and third-party vendors incurred to deliver services to customers, reflecting increased headcount including a full nine months of MG Stover operations.
Cost of revenue as a percentage of revenue was 24.7% for the nine months ended September 30, 2026, compared to 19.2% for the nine months ended September 30, 2025. This increase was primarily attributable to the higher software, systems and market data costs and personnel costs described above.
Selling, general & administrative
Selling, general & administrative expenses for the nine months ended September 30, 2026 were $36.8 million, an increase of $23.2 million compared to $13.6 million for the nine months ended September 30, 2025. The increase was driven primarily by $6.9 million of higher legal, accounting and consulting fees, of which $2.2 million related to patent litigation (including a $0.4 million accrued settlement) and the remainder to the Business Combination, public-company readiness efforts and operating as a public company; $6.9 million of share-based compensation expense related to the J Digital 6 Warrants (refer to Note 11); and $4.0 million of transaction costs recognized during the three months ended September 30, 2026, as discussed above. Other operating costs also increased, primarily $1.9 million of advertising, promotion and public relations costs and $1.5 million of conference and industry event costs, along with higher insurance, recruiting, travel and depreciation and amortization, partially offset by a $0.6 million decrease in software and subscription costs. The nine months ended September 30, 2025 included $0.3 million of costs related to the acquisition of MG Stover.
Selling, general & administrative expenses represented approximately 70.0% of revenue for the nine months ended September 30, 2026, compared to approximately 29.7% for the nine months ended September 30, 2025. The increase as a percentage of revenue was primarily due to higher legal, accounting and consulting fees, including investments in public-company readiness, and share-based compensation expense related to the J Digital 6 Warrants and transaction costs, which outpaced revenue growth in the current-year period.
Compensation and benefits
Compensation and benefits expense for the nine months ended September 30, 2026 was $36.1 million, an increase of $11.7 million compared to $24.4 million for the nine months ended September 30, 2025. The increase was primarily driven by $12.7 million of higher salaries & wages, bonus, contractor, payroll tax and benefits costs, reflecting a full nine months of MG Stover personnel as well as generally increased headcount across the business associated with becoming a public company, including at the corporate function, partially offset by $1.0 million of lower share-based compensation expense. Share-based compensation expense for the nine months ended September 30, 2025 included $8.3 million attributable to non-recurring secondary transactions, while share-based compensation expense for the nine months ended September 30, 2026 included $5.3 million of compensation cost recognized in connection with the closing of the Business Combination associated with Securitize Earnout Shares allocated to holders of equity awards assumed in the Business Combination (refer to Note 3).
Compensation and benefits expense represented approximately 68.7% of revenue for the nine months ended September 30, 2026, compared to approximately 53.4% for the nine months ended September 30, 2025. This increase as a percentage of revenue was driven by increased headcount, which outpaced revenue growth during the current-year period, partially offset by lower share-based compensation expense.
Provision for expected credit losses
Provision for expected credit losses for the nine months ended September 30, 2026 was $1.9 million, an increase of $1.6 million compared to $0.3 million for the nine months ended September 30, 2025. The increase primarily reflected the write-off of a specific customer's accounts receivable balance during the second quarter of 2026.
Loss on digital assets from operations, net
Loss on digital assets from operations, net, was $0.4 million for the nine months ended September 30, 2026, a decrease of $0.8 million compared to $1.2 million for the nine months ended September 30, 2025. The decrease was primarily attributable to a lower volume of digital assets from operations in the current period, as a greater portion of the Company's digital assets are now classified as held for investment.
Other income (expense):
Interest expense
Interest expense was $3.4 million for the nine months ended September 30, 2026, a decrease of approximately $1.5 million compared to $4.9 million for the nine months ended September 30, 2025. The decrease was primarily attributable to the closing of the Business Combination, upon which our outstanding convertible notes were automatically converted into shares of Old Securitize common stock, which were then immediately exchanged into shares of Company common stock, effective July 1, 2026. As a result, no interest expense was incurred on the convertible notes during the three months ended September 30, 2026, resulting in only two quarters of interest expense recognized during the nine months ended September 30, 2026, compared to three full quarters during the same period last year, partially offset by a higher average outstanding balance of convertible notes during the first half of 2026, driven by the convertible promissory notes issued in September and October 2025.
Interest income
Interest income was $0.4 million for the nine months ended September 30, 2026, a decrease of approximately $0.3 million compared to $0.8 million for the nine months ended September 30, 2025, primarily reflecting lower interest earned on interest-bearing cash equivalents.
Dividend income
Dividend income was $2.2 million for the nine months ended September 30, 2026, an increase of $2.1 million compared to $0.1 million for the nine months ended September 30, 2025. The increase resulted from a
higher average balance of dividend-bearing investments, primarily reflecting the investment of cash received in connection with the Business Combination during the three months ended September 30, 2026.
Loss on digital assets held for investment, net
Loss on digital assets held for investment, net, was $1.8 million for the nine months ended September 30, 2026, compared to none for the nine months ended September 30, 2025, as the Company did not hold any digital assets for investment during the prior-year period. The current-period loss reflects the decrease in value of the Company's digital asset holdings, consistent with broader market price declines, particularly among alternative coins ("altcoins") in which the Company is invested.
Net (losses) from investments held by consolidated VIE
Net (losses) from investments held by consolidated VIE were $0.7 million for the nine months ended September 30, 2026, all of which was recognized during the three months ended September 30, 2026, as described above, with no comparable amount for the nine months ended September 30, 2025, as HINC was created and first consolidated by the Company in 2026.
Other income (expense), net
Other income (expense), net was net income of $2.1 million for the nine months ended September 30, 2026, compared to a net expense of $0.3 million for the nine months ended September 30, 2025. The $2.4 million favorable change was primarily due to unrealized gains on certain tokenized investments and other assets held by the Company in the current-year period.
Change in fair value of simple agreements for future equity
'Change in fair value of simple agreements for future equity' was a $5.7 million loss for the nine months ended September 30, 2026, all of which was recognized prior to the Closing, compared to a $0.3 million gain for the same period in 2025. The current-period loss was primarily driven by the increase in the estimated fair value of the Company's common stock in the period leading up to the Business Combination and the finalization of the number of shares to be issued based on the Company's final capitalization immediately prior to the Closing. The $2.1 million loss recognized on the final remeasurement of the SAFEs at the Closing is included in 'Loss on settlement of convertible instruments, net'.
Change in fair value of derivative liability
'Change in fair value of derivative liability' was a $19.8 million gain for the nine months ended September 30, 2026, all of which was recognized prior to the Closing, compared to a $5.3 million gain for the same period in 2025. The current-period gain was primarily driven by the 2024 Notes, as the increase in the estimated fair value of the Company's common stock in anticipation of the Business Combination resulted in holders being expected to convert at the fixed conversion price, which reduced the fair value of the associated derivative to nil. The $1.1 million loss recognized on the final remeasurement of the derivative liability related to the 2025 Notes immediately before their conversion at the Closing is included in 'Loss on settlement of convertible instruments, net'.
Change in fair value of option liability
'Change in fair value of option liability' was a $29.2 million loss for the nine months ended September 30, 2026, all of which was recognized prior to the Closing, compared to a gain of less than $0.1 million for the nine months ended September 30, 2025. The current-period loss was primarily driven by the increase in the estimated fair value of the Company's common stock in the period leading up to the Business Combination. The $6.7 million loss recognized on the final remeasurement of the option liability immediately before the issuance of the Series Option redeemable convertible preferred stock at the Closing is included in 'Loss on settlement of convertible instruments, net'.
Loss on settlement of convertible instruments, net
Loss on settlement of convertible instruments, net was $20.6 million for the nine months ended September 30, 2026, all of which was recognized during the three months ended September 30, 2026, as described above, with no comparable loss for the nine months ended September 30, 2025.
Change in fair value of earnout liabilities
The change in fair value of earnout liabilities resulted in a loss of $23.2 million for the nine months ended September 30, 2026, all of which was recognized during the three months ended September 30, 2026, as described above, with no comparable amount for the nine months ended September 30, 2025.
Provision for income taxes
The provision for income taxes for the nine months ended September 30, 2026 was $0.1 million, compared to $0.2 million for the nine months ended September 30, 2025. The income tax provision for the 2026 period primarily relates to the portion of tax-deductible goodwill that increases our deferred tax liabilities which is not fully offset by our deferred tax assets related to new operating losses due to limitations on net operating loss utilization. The provision for the 2025 period reflected the same deferred tax impact, as well as current U.S. federal and state income tax expense, after utilization of available net operating loss carryforwards and subject to applicable limitations on their utilization.
Net loss from discontinued operations
There was no loss from discontinued operations for the nine months ended September 30, 2026, compared to a loss of $5.7 million for the nine months ended September 30, 2025, which included a $4.1 million goodwill impairment charge. The Company sold its discontinued operations, the Securitize for Advisors reporting unit, in the fourth quarter of 2025; accordingly, there were no operations or results from this business in the current-year period.
Non-GAAP Financial Measures
Adjusted EBITDA
To provide investors with additional information regarding our financial results, we have disclosed here and elsewhere in this Quarterly Report on Form 10-Q the measure of Adjusted EBITDA, a non-GAAP financial measure that we calculate as Net income (loss) from continuing operations excluding: Depreciation and amortization, Provision for expected credit losses, Share-based compensation expense, Provision for income taxes, Interest income, Interest expense, Dividend income, Loss on digital assets held for investment, net, Net (losses) from investments held by consolidated VIE, Other income (expense), net, Change in fair value of simple agreements for future equity, embedded derivatives, and option liability, Loss on settlement of convertible instruments, net, Change in fair value of earnout liabilities, and Transaction, litigation and public company transition costs1. We have provided a reconciliation below of Adjusted EBITDA to Net income (loss) from continuing operations, the most directly comparable GAAP financial measure.
We present Adjusted EBITDA because it facilitates meaningful external comparisons of our overall business performance to the historical operating results of other companies that may have different capital structures or operating histories, and because management uses it to assess our operating performance. Accordingly, we believe Adjusted EBITDA provides useful information to investors and others in understanding and evaluating our operating results. The above items are excluded from our Adjusted EBITDA measure because they are non-cash in nature, or because their amount and timing are unpredictable, are not reflective of the core results of our operations, and would otherwise render comparisons with prior periods and competitors less meaningful.
We believe it is useful to exclude non-cash charges, such as Depreciation and amortization and Share-based compensation expense, from Adjusted EBITDA because the amount of such expenses in any specific period may not directly correlate to the underlying performance of our business operations. We also exclude Provision for income taxes, Interest income and Interest expense because they reflect our capital structure, tax position and treasury activities rather than our operations.
Adjusted EBITDA has limitations as a financial measure, and you should not consider it in isolation or as a substitute for analysis of our results as reported under GAAP. Some of these limitations are:
▪Although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future, and Adjusted EBITDA does not reflect capital expenditure requirements for such replacements or for new capital expenditures;
▪Adjusted EBITDA does not reflect share-based compensation and related taxes. Share-based compensation expense has been, and will continue to be for the foreseeable future, a recurring expense in our business and an important part of our compensation strategy;
▪Adjusted EBITDA does not reflect changes in, or cash requirements for, our working capital;
▪Adjusted EBITDA excludes non-routine items; and
▪Other companies, including companies in our industry, may calculate Adjusted EBITDA differently, which reduces its usefulness as a comparative measure.
Because of these limitations, you should consider Adjusted EBITDA alongside other financial performance measures, including various cash flow metrics, net income (loss), and our other GAAP results.
The following tables reconcile Adjusted EBITDA to Net income (loss) from continuing operations, the most directly comparable GAAP financial measure for the periods presented:
| Three Months Ended September 30, | ||||||||
| (Unaudited) | 2026 | 2025 | ||||||
| Net income (loss) from continuing operations | $ | (66,263,756) | $ | 8,597,683 | ||||
| Adjustments to exclude: | ||||||||
| Depreciation and amortization | 639,080 | 441,521 | ||||||
| Provision for expected credit losses | 341,259 | 108,877 | ||||||
| Share-based compensation expense | 13,408,358 | 265,203 | ||||||
| Provision for income taxes | 44,090 | 81,138 | ||||||
| Interest income | (10,849) | (239,361) | ||||||
| Interest expense | - | 2,029,981 | ||||||
| Dividend income | (1,974,701) | (18,045) | ||||||
| Loss on digital assets held for investment, net | 412,225 | - | ||||||
| Net (losses) from investments held by consolidated VIE | 746,827 | - | ||||||
| Other income (expense), net | (399,568) | 729,574 | ||||||
| Change in fair value of simple agreements for future equity, embedded derivatives, and option liability | - | (9,605,000) | ||||||
| Loss on settlement of convertible instruments, net | 20,649,813 | - | ||||||
| Change in fair value of earnout liabilities | 23,223,354 | - | ||||||
|
Transaction, litigation and public company transition costs1
|
7,201,058 | 1,222,410 | ||||||
| Adjusted EBITDA | $ | (1,982,808) | $ | 3,613,981 | ||||
(1) Transaction, litigation and public company transition costs consist of (i) costs related to the Business Combination and the Company's transition to a public company, (ii) acquisition-related costs and (iii) costs related to patent litigation, included primarily in professional fees within SG&A. The 2026 period includes $4.1 million of costs related to the Business Combination and the Company's transition to a public company, $1.3 million of acquisition-related costs and $1.8 million of costs related to patent
litigation (including a $0.4 million accrued settlement); the 2025 period relates primarily to public company transition costs associated with the Business Combination process. This line was previously presented as "Professional fees and other one-time public company readiness costs" and "Acquisition related transaction costs"; the two have been combined and prior periods recast, with no change to Adjusted EBITDA.
| Nine Months Ended September 30, | ||||||||
| (Unaudited) | 2026 | 2025 | ||||||
| Net income (loss) from continuing operations | $ | (95,885,610) | $ | (1,482,623) | ||||
| Adjustments to exclude: | ||||||||
| Depreciation and amortization | 1,744,512 | 1,355,854 | ||||||
| Provision for expected credit losses | 1,941,846 | 295,150 | ||||||
| Share-based compensation expense | 14,782,132 | 8,943,186 | ||||||
| Provision for income taxes | 126,289 | 243,413 | ||||||
| Interest income | (424,353) | (754,654) | ||||||
| Interest expense | 3,374,490 | 4,870,039 | ||||||
| Dividend income | (2,215,734) | (103,192) | ||||||
| Loss on digital assets held for investment, net | 1,845,307 | - | ||||||
| Net (losses) from investments held by consolidated VIE | 746,827 | - | ||||||
| Other income (expense), net | (2,135,365) | 297,897 | ||||||
| Change in fair value of simple agreements for future equity, embedded derivatives, and option liability | 15,012,000 | (5,625,000) | ||||||
| Loss on settlement of convertible instruments, net | 20,649,813 | - | ||||||
| Change in fair value of earnout liabilities | 23,223,354 | - | ||||||
|
Transaction, litigation and public company transition costs1
|
10,604,185 | 1,512,409 | ||||||
| Adjusted EBITDA | $ | (6,610,307) | $ | 9,552,480 | ||||
(1) Transaction, litigation and public company transition costs consist of (i) costs related to the Business Combination and the Company's transition to a public company, (ii) acquisition-related costs and (iii) costs related to patent litigation, included primarily in professional fees within SG&A. The 2026 period includes $7.1 million of costs related to the Business Combination and the Company's transition to a public company, $1.3 million of acquisition-related costs and $2.2 million of costs related to patent litigation (including a $0.4 million accrued settlement). The 2025 period relates primarily to the Business Combination process and the acquisition of MG Stover. This line was previously presented as "Professional fees and other one-time public company readiness costs" and "Acquisition related transaction costs"; the two have been combined and prior periods recast, with no change to Adjusted EBITDA.
Liquidity and Capital Resources
We have experienced recurring net losses and negative cash flows from operations from inception through December 31, 2025. The Company is in a net loss position for the nine months ended September 30, 2026 with a net loss of $95.9 million. The Company has an accumulated deficit of approximately $261.3 million on September 30, 2026. Historically, we have primarily relied on raising capital through debt and equity financings to support our operations, most recently through the Business Combination and the concurrent PIPE Financing, which closed on July 1, 2026 and significantly increased our cash position, as described below.
As of September 30, 2026, we had total liquidity sources consisting of cash and cash equivalents of $298.9 million. As of December 31, 2025, we had cash and cash equivalents of $24.9 million. The increase primarily reflects the consummation of the Business Combination on July 1, 2026, in connection with which the Company received proceeds of $342.2 million, net of redemptions and SPAC service provider fees, consisting of $144.4 million released from CEPT's trust account and cash and $197.8 million from the concurrent PIPE Financing, and net cash of $319.4 million after $22.8 million of transaction costs paid at the Closing. See Note 3 - Mergers &
Acquisitions to our unaudited condensed consolidated financial statements included in this Quarterly Report on Form 10-Q for additional information.
On November 6, 2026, we entered into a definitive agreement to acquire an institutional asset-backed financing platform for consideration payable in a combination of cash and shares of our common stock. Also on November 6, 2026, our Board of Directors authorized the repurchase of up to $50 million of our common stock through December 31, 2027, to be funded from available cash on hand (refer to Note 20). We believe our total liquidity sources on hand, including cash and cash equivalents of $298.9 million as of September 30, 2026, will be sufficient to meet our working capital and capital expenditure requirements for a period of at least 12 months from the date of this filing, notwithstanding our history of negative cash flows from operations.
Cash Flows For the Nine Months Ended September 30, 2026 and 2025
Cash flows from operating, investing and financing activities, as reflected in the accompanying unaudited condensed consolidated statements of cash flows, are summarized in the following table:
| Nine Months Ended September 30, | ||||||||||||||
| 2026 | 2025 | |||||||||||||
| Net cash flows used in operating activities | $ | (30,995,479) | $ | (11,089,204) | ||||||||||
| Net cash flows used in investing activities | (37,559,752) | (1,305,704) | ||||||||||||
| Net cash flows provided by financing activities | 342,582,836 | 7,607,609 | ||||||||||||
| Effect of exchange rate changes on cash | (28,643) | 432,977 | ||||||||||||
| Net increase (decrease) in cash and cash equivalents | $ | 273,998,962 | $ | (4,354,322) | ||||||||||
Operating Activities
Net cash used in operating activities was $31.0 million for the nine months ended September 30, 2026, compared to net cash used in operating activities of $11.1 million for the nine months ended September 30, 2025, representing an increase in cash used of $19.9 million. Our largest source of cash provided by operating activities are revenues generated from Tokenization and Asset Servicing. Our primary uses of cash in operating activities include payments to employees for compensation, professional services, and other operating costs such as software subscriptions, insurance, and marketing, among others.
Although the net loss increased by $88.7 million, the increase was largely offset by a $75.4 million increase in non-cash adjustments to reconcile net loss to net cash used in operating activities. The increase in non-cash adjustments primarily consisted of the $23.2 million change in fair value of earnout liabilities, the $20.6 million loss on settlement of convertible instruments, net, a $20.6 million increase in the aggregate changes in the fair values of simple agreements for future equity, the derivative liability and the option liability, $5.8 million of higher share-based compensation expense, $2.7 million of transaction costs allocated to the earnout liabilities and $1.0 million of higher losses on digital assets.
Changes in working capital resulted in $1.4 million of additional operating cash outflows compared to the prior-year period. The change primarily reflected a $10.7 million increase in cash used for prepaid expenses and other current assets, including payments under the Company's strategic partnership agreement (refer to Note 17), a $3.5 million decrease in the amount of deferred revenue recorded as the related revenue is being recognized and a $3.3 million increase in digital assets receivable and digital assets received as consideration from operations, which represent amounts not settled in cash, partially offset by a $12.5 million decrease in contract assets as our right to the underlying payments become unconditional with the passage of time and a $8.0 million increase in accrued expenses and other current liabilities recorded. Changes in customer escrow funds and the related customer escrow funds payable substantially offset each other in both periods.
There was no cash used in operating activities from discontinued operations for the nine months ended September 30, 2026, compared to $0.5 million for the nine months ended September 30, 2025, because the Company disposed of the discontinued operation during the fourth quarter of 2025. There were no cash flows related to investing or financing activities from discontinued operations during either of the periods presented.
Investing Activities
Net cash used in investing activities was $37.6 million for the nine months ended September 30, 2026, compared to $1.3 million for the nine months ended September 30, 2025, representing an increase of $36.3 million. For the nine months ended September 30, 2026, the primary uses of cash were $31.8 million in purchases of investments held by the consolidated variable interest entity, $9.9 million in purchases of investments in marketable securities, $2.8 million in originations of and disbursements for notes receivable to related parties, $1.5 million in purchases of equipment and other long-lived assets and $1.1 million in purchases of strategic equity investments. These outflows were partially offset by $5.1 million in proceeds from redemptions of tokenized securities and fund investments, $2.6 million in proceeds from sales and redemptions of investments held by the consolidated variable interest entity, $1.2 million in proceeds from sales and redemptions of investments in marketable securities and $0.7 million in partial repayments received on notes receivable from related parties.
For the nine months ended September 30, 2025, the primary use of cash was the $21.1 million acquisition of MG Stover, net of cash acquired. This outflow was substantially offset by $22.8 million in proceeds from participation in and closing positions in DeFi activities. Additional uses of cash included $1.8 million in investment activities in DeFi involving the use of cash equivalents, $1.2 million in purchases of investments in marketable securities, $0.7 million in purchases of tokenized securities and fund investments, and $0.5 million in net originations of notes receivable to related parties, consisting of $0.8 million in originations partially offset by $0.3 million in partial repayments received. These outflows were partially offset by $1.1 million in proceeds from sales and redemptions of investments in marketable securities.
Financing Activities
Net cash provided by financing activities was $342.6 million for the nine months ended September 30, 2026, compared to $7.6 million for the nine months ended September 30, 2025.
For the nine months ended September 30, 2026, cash provided by financing activities was primarily driven by $342.2 million in proceeds from the Business Combination and the PIPE Financing, net of redemptions and SPAC service provider fees, and $20.0 million in proceeds received from a lead investor in connection with the exercise of a preferred stock option, recorded as an option prepayment liability as of June 30, 2026 as the related shares had not yet been issued. Additionally, the Company received $4.7 million in contributions from the redeemable noncontrolling interest, net of redemptions, and $0.9 million in proceeds from the exercise of stock options. These inflows were partially offset by $25.2 million in payments of offering costs incurred in connection with the Business Combination.
For the nine months ended September 30, 2025, cash provided by financing activities consisted of approximately $10.0 million in proceeds from the issuance of convertible promissory notes, net of issuance costs, $0.9 million in proceeds from the issuance of a note payable to a related party and $0.1 million in proceeds from the exercise of stock options, partially offset by $3.4 million in repayments of notes payable to related parties.
Debt
Simple Agreements for Future Equity
During 2021, we received $4.8 million of proceeds from the issuance of SAFEs to investors. The SAFEs were classified as liabilities and carried at fair value, with changes in fair value recognized in earnings. In connection with the Closing on July 1, 2026, the SAFEs converted into shares of Old Securitize common stock,
which were exchanged for shares of the Company's common stock. No SAFE liabilities remained outstanding as of September 30, 2026. The conversion did not require any cash payment. Refer to Note 3 to the unaudited condensed consolidated financial statements for further details.
Hamilton Lane SF6
During 2024, we received $6.0 million, on an interest-free basis, from investors to be transferred to Hamilton Lane SF6 - Securitize Tokenized Feeder Fund, Ltd. (the "SF6 Feeder Fund") as that fund made capital calls. The outstanding obligation was $2.5 million as of December 31, 2024, and was fully settled in July 2025 through transfers to the SF6 Feeder Fund. No amounts were outstanding as of September 30, 2026 or December 31, 2025.
Margin Lending Facility
We maintain a margin lending facility with UBS Financial Services Inc. secured by the assets held in our UBS investment account. As of September 30, 2026, up to $13.4 million was available under the facility, subject to standard margin lending requirements, including maintaining sufficient eligible collateral in the account. The amount actually available for borrowing fluctuates with the market value and eligibility of the assets in the account and with deposits and withdrawals, and is not a committed amount. Borrowings under the facility would bear interest at a variable rate of one-month SOFR plus 65 basis points (4.40% at September 30, 2026 and 4.44% at December 31, 2025). There were no borrowings under the facility during the nine months ended September 30, 2026 or the year ended December 31, 2025, and no amounts were outstanding as of September 30, 2026 or December 31, 2025.
Convertible Promissory Notes Payable
During the years ended December 31, 2025 and 2024, we issued convertible promissory notes to certain investors with aggregate principal amounts of $30.0 million (the "2025 Notes") and $49.9 million (the "2024 Notes"), respectively. The notes accrued interest at 5% per annum and were scheduled to mature 36 months from issuance. On July 1, 2026, in connection with the Closing, all of the notes converted, together with accrued interest, into shares of Old Securitize common stock, which were exchanged for shares of the Company's common stock. The 2024 Notes converted at the conversion price under their existing terms, through a conversion feature that had not been bifurcated, and their carrying amount was reclassified to equity with no gain or loss. The 2025 Notes converted through a conversion feature that had been bifurcated and carried as a derivative liability, so their conversion was accounted for as an extinguishment, resulting in an $11.8 million loss included in 'Loss on settlement of convertible instruments, net'. Neither conversion required a cash payment, and no convertible promissory notes were outstanding as of September 30, 2026. Refer to Note 3 to the unaudited condensed consolidated financial statements for further details.
NHTV Side Letter Option
In connection with our Series B-1 preferred stock financing, we granted a lead investor an option to purchase up to $20.0 million of preferred stock (the "NHTV Side Letter Option"). The option was carried as a liability at fair value. The investor elected to exercise the option in full, and we received the $20.0 million exercise price in June 2026. In connection with the Closing on July 1, 2026, the related preferred stock was issued and immediately converted into shares of Old Securitize common stock, which were exchanged for shares of the Company's common stock, and we recognized a $6.7 million loss on the final remeasurement of the option liability within 'Loss on settlement of convertible instruments, net'. No related liabilities remained outstanding as of September 30, 2026. Refer to Notes 3 and 11 to the unaudited condensed consolidated financial statements for further details.
Contractual Obligations and Commitments
As of September 30, 2026, our material contractual obligations consisted of the remaining $4.0 million contribution payable under our strategic partnership agreement, which we paid in October 2026 (refer to Note 17). We are also committed to fund capital calls under credit facilities we have extended to two related-party funds, Securitize KKR Platform SPC, Ltd. and Securitize Capital Hamilton Lane Equity Opportunity Fund LP, up to the remaining commitment amounts described in Notes 13 and 17. We had not recorded a liability for these commitments as of September 30, 2026 because it was not probable that we would be required to fund the full amounts.
Critical Accounting Estimates
Our critical accounting estimates are described under the heading "Critical Accounting Estimates" in Securitize's Management's Discussion and Analysis of Financial Condition and Results of Operations for the three and six months ended June 30, 2026, which was filed as Exhibit 99.2 to our Current Report on Form 8-K/A filed with the SEC on August 13, 2026 (the "Form 8-K/A"). Except as described below, there have been no material changes to our critical accounting estimates, or to the methods and significant assumptions underlying them, from those described in the Form 8-K/A. The updates described below primarily reflect the impact from the consummation of the Business Combination on July 1, 2026.
Share-based compensation
Prior to the Business Combination, in the absence of a public trading market, our management and board of directors considered various objective and subjective factors to determine the fair value of Old Securitize's common stock as of each grant date, including the value determined by a third party valuation firm. Following the Business Combination, the fair value of our common stock is based on its closing price on the New York Stock Exchange, and we no longer rely on third-party valuations to determine the fair value of our common stock for purposes of measuring share-based awards. We continue to use the Black-Scholes option pricing model to estimate the grant-date fair value of option grants, using the assumptions described in the Form 8-K/A.
In addition, compensation cost related to the Securitize Earnout Shares allocable to holders of assumed equity awards and warrants is measured using a Monte Carlo simulation, which requires management to make assumptions including the expected volatility of our common stock, the risk-free interest rate, the remaining term of the earnout period and the derived or requisite service period over which the related compensation cost is recognized, as appropriate. Changes in these assumptions could materially affect the fair value of these awards and the amount and timing of the related stock-based compensation expense.
Valuation of Liability Classified Financial Instruments
Prior to the Business Combination, our liability classified financial instruments measured at fair value consisted of bifurcated derivatives related to our convertible notes, an option to purchase preferred stock, and SAFEs, each of which was settled at the Closing. Following the Business Combination, these instruments consist of the liability-classified portions of the Securitize Earnout and Sponsor Earnout arrangements, which are remeasured at fair value at each reporting date using Monte Carlo simulations. We believe the estimate of fair value of these financial instruments requires significant judgment. The significant inputs used in the Monte Carlo simulations include, but are not limited to:
•the price of our common stock, based on its closing price on the New York Stock Exchange;
•expected volatility of our common stock;
•the risk-free interest rate; and
•the remaining term of the earnout arrangements, which extend through July 1, 2031.
Expected volatility is the significant unobservable input, and an increase in our share price or in expected volatility would increase the fair value of the earnout liabilities. Changes in fair value are recognized in 'Change in fair value of earnout liabilities', within other income (expense) in the unaudited condensed consolidated statements of operations and comprehensive income (loss), in each reporting period following the Closing until the related
shares are issued or released or the earnout period ends. As a result, changes in our share price may cause significant fluctuations in our reported results.
Recently Issued Accounting Standards
See Note 2, Summary of Significant Accounting Policies, to the unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for recently issued and adopted accounting standards and recently issued accounting standards not yet adopted as of September 30, 2026.
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