Gemini Space (GEMI) Q1 2026 Earnings Call Transcript

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DATE

Friday, May 15, 2026, at 8:30 a.m. ET

CALL PARTICIPANTS

• Co-Founder & President — Cameron Winklevoss
• Co-Founder & CEO — Tyler Winklevoss
• Chief Financial Officer — Danijela Stojanovic
• Head of Research — Ryan Todd

TAKEAWAYS

• Total Revenue -- $50.3 million, up 42% year over year, primarily from credit card, OTC, and inaugural prediction market contributions.
• Transaction Revenue -- Held steady year over year despite a 53% decline in spot trading volume to $6.3 billion, as disclosed by Cameron Winklevoss.
• Exchange Revenue -- $17.2 million, a 27% decrease year over year linked to broader crypto market softness.
• OTC Revenue -- $6.3 million, attributed to new institutional client onboarding and market volatility.
• Prediction Markets Revenue -- $0.4 million for the first full quarter since launch, with 3.4% of users participating and 78% month-over-month volume growth in April.
• Services Revenue and Interest Income -- Now 49% of total revenue, up from 31% in Q1 2025, highlighting a shift in revenue composition.
• Monthly Transacting Users -- 589,000, a 17% increase year over year.
• Operating Expenses -- $144.5 million, a 73% increase year over year, including $24.2 million stock-based compensation, $6.5 million in severance from a 30% workforce reduction, and $19.1 million in sales and marketing.
• Net Loss -- $109 million, a 27% year-over-year improvement.
• Adjusted EBITDA Loss -- $59.9 million, with improvement versus the prior year.
• Liquidity -- $215.6 million at quarter-end, further supported by a $100 million Bitcoin-funded founder investment at $14 per share.
• Credit Card Portfolio -- 3.8% delinquency rate; $8.6 million provision included a $4.1 million one-time fraud-related event, with enhanced controls implemented after.
• Pre-provision Net Revenue (Credit Card) -- $3.8 million, up 150% year over year, marking a quarterly high.
• Derivatives Clearing Organization (DCO) License -- Granted by the CFTC in April, enabling Gemini to clear derivatives and event-based contracts alongside its existing Designated Contract Market (DCM) license.
• AI Trading Tool -- Launched autonomous API trading on a regulated U.S. exchange, supporting integration with agentic tools like Anthropic’s Claude and OpenAI’s ChatGPT.
• Product Adoption (Prediction Markets) -- $30 million notional traded last month; $20 million reached mid-month, with half of contracts being crypto-linked and the addition of new categories including real-world commodities and weather.
• Staking -- Revenue down 31% due to lower asset prices/yields; completion of Staking 2.0 migration has reduced redemption times from 50 to eight days and enabled auto-compounding.
• Workforce Reduction -- 30% headcount reduction completed, as referenced in severance costs and discussed by Danijela Stojanovic.

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RISKS

• Net loss of $109 million, though improved, reflects ongoing significant negative profitability.
• 53% decline in spot trading volume, contributing to a 27% decrease in exchange revenue and signaling continued crypto market softness.
• Operating expenses rose 73% year over year, driven by restructuring and growth initiatives, potentially pressuring future profitability.
• Credit card portfolio provision included a $4.1 million discrete fraud-related event, described as "non-recurring," but highlights exposure to operational risks.

SUMMARY

Gemini Space Station (NASDAQ:GEMI) reported a 42% revenue increase to $50.3 million, driven by the launch of prediction markets and expansion in OTC and credit card services. Management emphasized successful attainment of both DCO and DCM licenses, enabling an end-to-end derivatives platform without third-party reliance. Services and interest income composition grew significantly, indicating a broadening from traditional exchange reliance. New strategic initiatives included the debut of autonomous AI trading and ongoing cross-sell traction between prediction markets and cardholders. A $100 million founder-funded capital infusion, priced well above current market value and funded in Bitcoin, was undertaken to advance growth and product launches.

• Management asserted, "we believe the stock is significantly undervalued," supporting the rationale for the founder-led $100 million investment at $14 per share in Bitcoin.
• Prediction marketplace user volume saw rapid scaling, with 78% month-over-month growth in April and penetration of 3.4% of the user base.
• Staking 2.0 migration introduced auto-compounding and drastically shortened redemption times, marking a key operational enhancement, as noted by Danijela Stojanovic.
• DCO and DCM licensing allows Gemini to build an end-to-end marketplace in-house without third-party dependencies, positioning the company for the introduction of perpetual contracts.
• The AI-enabled trading capability targets future machine-driven trading, with management stating, "We believe Gemini will one day have more machines as customers than humans."

INDUSTRY GLOSSARY

• Designated Contract Market (DCM): A CFTC-licensed U.S. exchange that may list futures, options, and swaps, subject to regulatory oversight.
• Derivatives Clearing Organization (DCO): A CFTC-permitted clearinghouse that manages the settlement of derivatives trades and guarantees counterparties’ performance.
• OTC (Over-the-Counter): Bilateral crypto or financial transactions executed directly between parties, outside of the exchange order book.
• Staking: The process of locking up crypto assets to earn network rewards and yield, sometimes subject to redemption or lockup periods.
• Agentic Trading Tool: AI software or agent capable of autonomously executing trades via API on a regulated exchange.

Full Conference Call Transcript

Cameron Winklevoss: Good morning. Thank you all for joining us. Since announcing Gemini 2.0, we have made meaningful progress towards building Gemini into a markets company. We started as a Bitcoin company, became a crypto company, and are now building the super app for the markets economy. This quarter, we grew revenue 42% and transaction revenue held steady year-over-year, even as trading volume declined more than 50% due to softness in the broader crypto market.

We recognize where our share price sits. The price of Bitcoin is down roughly 30% since our IPO, and we are tied to that cycle. However, we do not believe the Gemini of today is 1/6 of the Gemini that IPO’d. We have launched a predictions marketplace and are building a foundation for crypto, predictions, credit card rewards, and soon, stocks. Because we believe the stock is significantly undervalued, we made a strategic investment of $100 million into Gemini via Winklevoss Capital at $14/share, funded in Bitcoin.

Tyler Winklevoss: This quarter, Gemini achieved product and regulatory milestones that set us up for success. In April, we received a Derivatives Clearing Organization (DCO) license from the CFTC. This allows us to act as a clearinghouse for derivatives, event-based contracts, and down the road, futures and perpetual contracts. This follows our Designated Contract Market (DCM) license received in late 2025.

Together, DCM plus DCO allow us to build an end-to-end marketplace in-house without third-party dependencies. This positions us for perpetual contracts, which we believe will be permitted in the U.S. soon. We also launched the first agentic trading tool on a regulated U.S. exchange, allowing AI agents like Claude and ChatGPT to connect to our API to place trades autonomously. We believe Gemini will one day have more machines as customers than humans.

Danijela Stojanovic: Thank you. Revenue grew 42% year-over-year to $50.3 million, driven by the credit card, our OTC business, and our first full quarter from prediction markets. Services revenue and interest income now represents 49% of total revenue, up from 31% in Q1 of 2025.

Total revenue was $50.3 million. Exchange revenue was $17.2 million, down 27% year-over-year, as spot trading volume declined 53% to $6.3 billion. OTC revenue was $6.3 million, and prediction markets contributed $0.4 million in their first full quarter. Monthly transacting users were 589,000, up 17% year-over-year.

On the expense side, total operating expenses were $144.5 million, up 73% year-over-year. This includes $24.2 million of stock-based compensation and $6.5 million in severance from our 30% workforce reduction. Sales and marketing was $19.1 million. Net loss for the quarter was $109 million, an improvement of 27% year-over-year. Adjusted EBITDA loss was $59.9 million. We ended the quarter with $215.6 million in liquidity, further bolstered by the $100 million founder investment.

Ryan Todd: We will now take questions from our research analysts. Our first question comes from Adam Frisch at Evercore regarding the strategic rationale behind the $100 million investment.

Cameron Winklevoss: Our belief is that Gemini stock is undervalued. We are disconnected from the underlying business. We have launched an entirely new predictions marketplace and acquired DCM and DCO licenses, which are trading north of $100 million each in the open market. We are being offensive and supporting future products, including equities.

Ryan Todd: Next question is from James Yaro at Goldman Sachs on the status of the CLARITY Act.

Cameron Winklevoss: It feels like we are getting closer to clarity, and we welcome a federal framework. If it stalls, we are already positioned in a very regulated posture and will continue building.

Ryan Todd: Matt Coad at Truist asks about prediction markets cross-sell success.

Cameron Winklevoss: We are encouraged that 3.4% of our user base has already placed a trade. Volume grew 78% month-over-month in April. We did approximately $30 million in notional last month and have already crossed $20 million so far this month. Half of that volume is crypto contracts, but we have added commodities like oil, gold, and silver.

Ryan Todd: Dan Dolev from Mizuho asks about credit card performance and the higher provision for credit losses.

Danijela Stojanovic: The portfolio is performing in line with expectations, with a 3.8% delinquency rate. The $8.6 million provision included a $4.1 million discrete fraud event which we believe is non-recurring. We have since strengthened our fraud controls. Pre-provision net revenue reached a new high of $3.8 million, up 150% year-over-year. Over half of our predictions traders are also Gemini cardholders.

Ryan Todd: Michael Cyprys from Morgan Stanley asks about OTC and staking performance.

Danijela Stojanovic: OTC performance was driven by a mix of market volatility and onboarding new institutional clients. Staking revenue was down 31% due to lower crypto asset prices and moderated network yields. However, we completed the migration to Staking 2.0, which enables auto-compounding and reduced redemption times from 50 days to eight days.

Ryan Todd: John Todaro at Needham asks about prediction market categories.

Cameron Winklevoss: Crypto contracts account for about 50%. Real-world commodities like oil and Brent are popular, and we’ve added weather contracts. We are just getting started and continue to ship improvements multiple times a week.

Operator: This concludes today’s conference. Thank you for your participation. You may now disconnect.

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