CoinShares (CSHR) Q2 2026 Earnings Call Transcript

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DATE

Monday, Sept. 14, 2026 at 8:30 a.m. ET

CALL PARTICIPANTS

• Chief Executive Officer - Jean-Marie Mognetti
• Interim Chief Financial Officer - Richard Nash
• Investor Relations - Jeri-Lea Brown

TAKEAWAYS

• Total Revenue -- $51.4 million in the first half of 2026, a 35.7% decrease from $80 million in the first half of 2025.
• Net Flows -- $27.6 million in total net inflows, despite a significant contraction in broader digital asset market values during the period.
• Total AUM -- $5.5 billion as of June 30, 2026, declining from $7.4 billion at the end of December 2025.
• Physical Platform Inflows -- $155.9 million in net inflows to CoinShares Physical, representing the company's core European growth engine.
• Legacy XBT Outflows -- $104.6 million in net outflows from the legacy XBT Provider platform during the first half of 2026.
• Segment EBITDA -- $21.6 million, which included approximately $4.9 million in non-recurring costs associated with the company's Nasdaq listing.
• Available Capital -- $413.9 million as of June 30, 2026, including approximately $284.6 million in earned and accrued management fees.
• GAAP Operating Loss -- $5.1 million, compared to operating income of $75.9 million in the first half of 2025, driven by unrealized valuation adjustments.
• Asset Management Revenue -- $40 million for the half, a 32.9% decline primarily reflecting lower average AUM due to falling digital asset prices.
• Capital Markets Segment Revenue and Gains -- $14.9 million, down from $26.5 million in the prior year period as the company adopted a conservative risk posture.
• Staking Revenue -- $6.6 million, compared to $9.8 million last year, reflecting the lower valuation of staked assets like Ethereum.
• Lending Revenue -- $2.4 million, a decrease from $4.9 million in the first half of 2025 due to a deliberate reduction in capital deployment.
• Adjusted Operating Expenses -- $20.7 million, excluding one-time listing and accounting conversion costs of approximately $4.9 million.
• AUM Recovery -- $6.9 billion as of Aug. 31, 2026, a 25% increase from June 30 following a recovery in digital asset prices.
• Blended Fee Yield -- 128 basis points for the first half of 2026, down from 156 basis points in 2025 due to shifting product mix.
• Block Index AUM -- $1.56 billion as of June 30, 2026, up from $1.3 billion at the end of 2025, driven by the performance of underlying equities.
• Net Loss -- $23.9 million for the half, impacted by $15.4 million in unrealized treasury losses and XBT pricing differentials.
• Share Repurchase Program -- Proposed authority for up to 32.9 million shares, representing 25% of the shares outstanding.
• Debt Status -- Zero long-term debt as of June 30, 2026, following the full repayment of a $28.3 million loan facility.
• Available Liquid Assets -- $116.7 million in cash and cash equivalents within the total available capital position.

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RISKS

• Nash stated that a "$34.7 million unfavorable swing in the XBT Pricing Differential" from 2025 to 2026 was the primary driver for the shift from operating income to an operating loss.
• Mognetti warned that digital asset markets experienced one of their sharpest contractions in recent years, with Bitcoin and Ethereum declining approximately 32% and 48% respectively in the first half.

SUMMARY

CoinShares PLC (NASDAQ:CSHR) reported its first results as a U.S. Nasdaq-listed company, emphasizing its resilience through a significant contraction in digital asset markets. Management reported that the company maintained positive net flows of $28 million during the first half of 2026, even as total assets under management fell to $5.5 billion due to market pricing movements. The company strengthened its balance sheet by repaying all long-term debt and ending the period with $413.9 million in available capital. Strategic diversification through the Block Index and new European UCITS products helped mitigate the impact of lower cryptocurrency prices, while the company prepared for potential expansion in active strategies and new geographic markets following the acquisition of Bastion.

• Mognetti indicated that the board proposed a share repurchase program for up to 25% of shares because the "current share price does not fully reflect the value and earnings potential of the business."
• The company noted that potential inclusion in Russell indices could "result in a meaningful increase in passive institutional ownership relative to our current trading liquidity."
• Nash clarified that the decline in blended fee yield from 156 to 128 basis points was predominantly a portfolio mix effect, as product-level yields remained stable.
• Management integrated the Bastion Asset Management team to offer alpha-generating strategies alongside traditional beta exposure, aiming for global distribution.
• Management reduced lending activity to manage counterparty risk, stating the company will deploy capital when "risk-adjusted opportunity is attractive."
• The launch of the company's first UCITS ETF in July 2026 marks an expansion into the digital asset value chain through Bitcoin mining exposure.
• Post-period data through Aug. 31, 2026, showed AUM recovering to $6.9 billion, with high-fee products increasing to 43% of the total mix.

INDUSTRY GLOSSARY

• AUM (Assets Under Management): The total market value of the investments that a person or entity manages on behalf of clients.
• Basis Point: A unit of measure for interest rates and other percentages in finance, where one basis point equals 0.01%.
• ETP (Exchange Traded Product): A type of security that tracks underlying security, index, or financial instrument and trades on an exchange.
• Staking: The process of participating in a proof-of-stake blockchain by locking up digital assets to support network security and earn rewards.
• UCITS (Undertakings for Collective Investment in Transferable Securities): A regulatory framework that allows for the sale of mutual funds across the European Union.
• XBT Pricing Differential: An unrealized accounting difference between the price of certificate liabilities and the market value of the digital assets held as hedges.

Full Conference Call Transcript

Operator: Thank you for standing by, and welcome to the CoinShares H1 2026 earnings broadcast. All participants dialing in are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. You can submit your questions via the post box below the video on the platform. Please be advised that today's conference is being recorded. I'd now like to hand the conference over to your host, Jeri-Lea Brown. Thank you.

Jeri-Lea Brown: Good morning, everyone, and thank you for joining us. Before we begin, CoinShares would like to remind everyone that statements made on today's call and webcast will include forward-looking statements, including statements about plans, goals, expectations, and aspirations for the company. Such forward-looking statements are based on current expectations and assumptions and are not guarantees of future performance or success. The statements are subject to risks and uncertainties, and actual results may and often do materially differ from those expressed or implied in the forward-looking statements. For a discussion of these risks and uncertainties, please refer to the CoinShares annual report on Form 20-F for the fiscal year ended December 31st, 2025, and other filings with the SEC.

CoinShares undertakes no obligation to update any forward-looking statements except as may be required by law. In addition, during this call, CoinShares will refer to certain non-GAAP financial measures. The non-GAAP measures may not be comparable to similar measures disclosed by other companies because not all companies and analysts calculate these measures in the same manner. Management believes these measures provide useful supplemental information, but they should not be considered substitutes for financial measures prepared in accordance with the U.S. GAAP. Reconciliations of these non-GAAP measures to the most directly comparable GAAP measures are included in our earnings press release and investor presentation, which has been filed with the SEC and are available on our investor relations website.

Today's earnings call will be delivered by Jean-Marie Mognetti, Chief Executive Officer, and Richard Nash, Interim Chief Financial Officer. Jean-Marie, over to you.

Jean-Marie Mognetti: Thank you, Jeri, for this legal disclaimer. This is a particularly significant release for CoinShares. It is our first result presentation since completing our U.S. listing, and it marks the beginning of our ongoing communication with the market as we settle into our life as a U.S. Nasdaq-listed company. I'm going to start with the headline story of the first half, and then Richard will take you through the numbers in more detail. The first half of 2026 was, in many ways, a stress test for our business model. Digital asset markets experienced one of their sharpest contractions in recent years. Bitcoin, indeed, the period down approximately 32% since the beginning of the year.

Ethereum was down approximately 48%, and our asset under management declined by approximately 25%. But what matters to me is how the business performs through that environment, and I think there are six proof points worth double-clicking on. First point, our clients stayed with us, and we generated positive net flows. Despite a significant decline in asset values, CoinShares recorded approximately $28 million of net inflows during the period. That distinction matters. Our AUM declined because market declined, not because clients were leaving the platform. Second point, our flows materially outperformed the market. While the broader industry experienced meaningful redemptions, CoinShares generated positive organic growth.

Within that, our physical platform in Europe, our growth engine, attracted approximately $156 million of net inflows, demonstrating the continued migration and strength of our core European franchise. Third point, the economics of our asset management business remain resilient. We generated $14 million of management fees during the half. Revenue declined primarily because lower digital asset price reduced average AUM. We also continue to see the product mix of our European business shift from our legacy XBT products toward our newly physical platform and BLOCK Index, continuing our product diversification. In other words, the principal pressure on asset management revenues came from the market environment and associated change in product mix, not from a deterioration of the franchise.

Fourth point, capital market remains strong through an exceptionally difficult environment. Capital markets generated approximately $15 million of segment revenue and gains during the half. That result reflects the way we manage this business. We reduced lending activity and maintained a conservative approach to balance sheet deployment as market conditions deteriorated. Fifth point, the underlying operating businesses remained profitable despite the severity of the market correction. We generated $21.6 million of segment EBITDA during the first half. This figure also includes several one-off costs not taken through equity in association with the listing and U.S. GAAP conversion totaling a circa $4.9 million. Segment EBITDA adjusted for this amount would be closer to $26.5 million.

The difference between that underlying segment performance and our reported GAAP loss is important. The reported result includes the unrealized loss on the group XBT Pricing Differential, costs associated with completing our Nasdaq listing and transition to U.S. GAAP, the settlement of our historic share option plan, and below operating income, the mark-to-market impact of our digital asset treasury position. And sixth point, we entered the second half with both the balance sheet and the platform position to benefit from a recovery. On June 30th, we had approximately $453 million of net asset, no long-term debt, having repaid our loan to Intesa Sanpaolo, and approximately $414 million of available capital. Since then, digital asset market has begun to recover.

Bitcoin increased approximately 34% between June 30th and August 31st, and our AUM had recovered to approximately $6.9 billion by the end of August, moving back toward December 2025 levels. So when I step back from the individual numbers, the message from the first half is relatively simple. The market contracted sharply, and we weathered the storm well, as we have done many times in the past. Clients continue to allocate to us. Our core asset management segment remained profitable. Our capital market segment remained profitable. We preserved capital when condition warranted it, and we finished the period with a very strong balance sheet.

That is what we mean when we talk to our investors during the pre-IPO roadshow about our resilience, not avoiding market cycle, but having a business model built to navigate through them. Importantly, we are not standing still. We are continuing to build beyond passive listed product across active strategies, staking on-chain infrastructure, and new investment exposures with one objective, to make the frontier investable. It is again that backdrop and with that balance sheet strength that our board has put forward a proposal for a multi-year share repurchase program of up to 25% of shares outstanding. We will ask shareholder to approve this at our upcoming AGM tomorrow.

With that, I will hand it over to Richard to take you through the financial performance in more detail. Richard, over to you.

Richard Nash: Thank you very much, JM. Now let me take you through the key financial results for the first half of the year, and importantly, how the market environment interacted with our business model during this time. As JM mentioned, the first half saw a significant contraction in digital asset prices. Against that backdrop, our assets under management ended the period at $5.5 billion, down from $7.4 billion at December and $8 billion as of June last year. The important point is the composition of that decline. During the first half of 2026, approximately $1.9 billion of the reduction in AUM was attributable to market movements, while the group generated approximately $28 million of positive net flows across our various platforms.

As previously mentioned, the decline in AUM was overwhelmingly market driven rather than the result of client redemptions. Looking at the income statement, our total GAAP revenue for the period was $51.4 million, compared with $80 million in the prior year period. Within asset management, the contribution to that top-line figure was $40 million, down 33%, principally reflecting lower average AUM in the period. The remaining revenue is attributable to our capital markets lending and staking activities, with further trading gains generated by the operating segment of $3.5 million, bringing the top line to $14.9 million of segment revenue and gains, compared to $26.5 million in the prior year period.

As previously mentioned, we deliberately maintained a conservative approach to capital deployment during the period, including reducing lending activity as market conditions deteriorated. Segment EBITDA for the period was $21.6 million, compared with $59 million for the first half of 2025. The decline reflects the operating leverage inherent in our model. Management fees respond relatively quickly to changes in AUM, while a significant proportion of our operating cost base is fixed in the short term. Reported expenses were also elevated by costs that we do not expect to recur at the level incurred in the first half of the year, principally costs attributable to the completion of the Nasdaq listing and transition to U.S. GAAP.

The quantum of the non-recurring fees impacting our segment EBITDA in H1 totaled circa $4.9 million. As an illustration, had we not incurred such fees, our segment EBITDA would have been $26.5 million for the period. While profitability contracted materially, the underlying operating business remained profitable through a very difficult market environment. Looking past our segment EBITDA into our operating loss for the period, compared to last year, we have swung from a gain of $75.9 million to a loss of $5.1 million in H1 2026, driven principally by two items outside of day-to-day operations.

A $6.1 million share-based compensation charge on settlement of the group's historic option scheme in connection with the Nasdaq listing, and a $34.7 million unfavorable swing in the XBT Pricing Differential from an $18.1 million gain in 2025 to a $16.6 million loss in 2026. The latter is a meaningful but unrealized swing, which has a significant impact on our financials. It arises from temporary valuation differences between underlying spot digital assets held and the trading price of our XBT certificate liabilities, and hence is always adjusted for in our segment EBITDA accordingly, regardless of whether it is resulting in a gain or a loss.

Turning to capital allocation, during the first half of the year, we undertook a capital repayment of 100% of our long-term debt of $28.3 million, paid approximately $21.5 million in dividends, and incurred approximately $18.7 million of cash costs settling a portion of our historic share option plan. This is the same settlement referred to before that resulted in a $6.1 million charge to the P&L. Despite those uses of capital, we ended June with $413.9 million of available capital, inclusive of the accrued XBT fees, of course, alongside approximately $453 million of net assets and no long-term debt. The financial picture for the first half is relatively straightforward. Lower digital asset prices reduced our AUM and therefore our revenue.

The operating leverage in our model amplified that impact on profitability, but client flows remained positive. Both operating segments remained profitable, and we exited the period with a very strong balance sheet. That provides us with considerable flexibility as we move into the second half of the year. Okay, now I just want to spend a moment putting our flow performance into context because I think this is one of the most important indicators of the underlying health of the business. While the net inflow figure of approximately $28 million may not look particularly significant in isolation, the context, of course, matters here.

As you can see from the chart, most of our major peers experienced significant redemptions during the same period. Across the group shown here, there were more than $7 billion of net outflows, equivalent to approximately 6% of the combined opening assets of these peers. CoinShares, by contrast, remained in positive territory. While falling digital asset prices affected everyone in the industry, our clients' behavior was materially different. And underneath that group number, there is another important development. CoinShares Physical generated approximately $156 million of net inflows during the first half of the year, despite the severity of the market correction. And that more than offset a significant proportion of the outflows from our legacy XBT platform.

Within Europe, capital continues to be allocated towards a platform we have been building for the future. For us, this chart is not simply about outperforming peers on flows, it is evidence that the business retained client capital through a severe market correction, while our strategic physical platform continued to attract new assets. Now let's take a bit of a closer look at the mechanics behind that decline in AUM, because there is an important distinction between losing assets through market and losing assets through clients. As you can see on the left, Bitcoin declined approximately 33% during the first half, and Ethereum approximately 47%.

Of course, that market correction has flowed directly through to the value of a significant portion of our AUM. We have then divided the portfolio into two broad categories, our high fee generating products and our access products. In our high fee generating products, net flows were approximately flat, just under 1% negative, while market movements reduced AUM by approximately 42%. So almost the entire contraction in that part of the business came from asset prices rather than redemptions. The picture is slightly different again in the access products. Here we generated approximately 2% positive net flows while the market impact was much more limited at around 10%. The significant reason for that resilience was the Block Index.

While our digital asset ETPs were affected directly by falling Bitcoin and Ethereum prices, Block benefited from the performance of its underlying equities, helping offset some of the broader weakness across digital assets. That diversification matters, but there is a trade-off. Access products generally carry lower management fees than our legacy higher fee products. So as the mix of our AUM shifts towards access from physical products, that creates some pressure on our blended fee yield. I will come back to that in a moment, but from an AUM and business perspective, the message is very clear. We did not lose $1.9 billion of AUM because clients withdrew $1.9 billion. We generated positive net flows.

That distinction matters on the way back up just as much as it does on the way down. Assets lost through redemptions, you have to win them back. But the assets reduced by market prices participate directly when those markets recover. We are already seeing that effect. By the end of August, the group AUM had recovered to approximately $6.9 billion, compared with $5.5 billion as of the 30th of June. So the first half decline in AUM tells you much more about what happened in digital asset prices in the market than it does about what happened to CoinShares.

I mentioned Block previously on the previous slide, so let's just take a little bit of a closer look at that because it illustrates an important part of the diversification within the asset management platform. For those less familiar with the product, the CoinShares Blockchain Global Equity Index, or Block as we refer to it, provides exposure to listed companies participating in the blockchain and digital asset ecosystem. Invesco does the distribution and product wrapping and the maintenance, while we focus on the portfolio management piece. The product carries a 65 basis point management fee, which we share with Invesco, resulting in approximately 32.5 basis points of management fee revenue for CoinShares.

What is particularly interesting is what happened during the first half of the year. As you can see here on the left, Block performed very differently from the underlying digital asset markets. By the end of June, Block was up approximately 18%, while Bitcoin and Ethereum obviously moved in the other direction. That relative performance had a meaningful impact on the composition of our overall AUM. At the end of December 2025, Block represented approximately 18% of the overall AUM, and that rose to 28% by the end of June. In dollar terms, the AUM increased from $1.3 billion-$1.56 billion, despite approximately $24 million of net outflows on the product.

The increase was therefore entirely driven by appreciation in the underlying equities. This illustrates something important about the architecture of CoinShares. We are not building a business dependent on a single product, a single digital asset, or even a single form of exposure. Our clients can access the asset class directly through products such as our physical platform or through listed equities participating in the broader digital asset ecosystem through Block. Those exposures have different return drivers, and in the first half, that diversification materially improved the resilience of our overall AUM. There is, as I mentioned earlier, a fee mix consequence, however. Block generates a lower fee yield for CoinShares than some of our legacy products.

Strategically, this is exactly why we have been broadening the platform. We want to give investors multiple ways to participate in the digital asset ecosystem because the different parts of that system will perform differently at different points in the cycle. Given the change in product mix we have just discussed, I want to spend a moment on our asset management fee yield because the distinction between pricing and mix is very important. Our blended fee yield declined from approximately 156 basis points in 2025 to 128 in the first half of 2026, but that decline does not reflect broad-based fee compression across our products. You can see that on the left-hand side.

At the individual product category level, yields have remained remarkably consistent. Our high fee generating products have remained broadly within a 255-284 basis point range, while our access products have remained between approximately 22 and 27 basis points. We have not seen a material deterioration in the pricing of the underlying products. What has changed is their relative weight within the overall AUM, and the bridge on the right shows this clearly.

Starting from an average fee yield of 156 basis points in 2025, approximately 25 basis points of the movement into 2026 is attributable to the increased weighting of Block, with a further seven basis points attributable to the changing mix of the CoinShares Physical Bitcoin product and CoinShares US. Actual changes in product level fee rates account for only approximately four basis points. I think the most useful way to understand that is to look at the constant mix calculation. Had our product mix remained unchanged, our fee yield would have been approximately 163 basis points. The conclusion is quite straightforward. The reduction in our blended fee yield is predominantly a portfolio mix effect, not evidence of structural pricing pressure.

When assessing pricing power within asset management, I would encourage you to look at both the underlying product level yields and the evolution of our AUM mix rather than interpreting movements in the blended yield as prices changing. Okay, turning now to capital markets. This is obviously a very important part of the CoinShares model because it gives us multiple ways to generate returns from digital assets beyond simple management fees. During the first half, we deliberately operated this business conservatively as market conditions deteriorated, particularly around the deployment of our balance sheet. Despite that environment, the capital markets operating segment generated $14.9 million of revenue and gains, compared to $26.5 million in the prior year period.

We are referring to this as segment revenue and gains as the figure is adjusted to remove the impact of the movement on the XBT Pricing Differential, which we disregard in our operating segments due to its nature as mentioned previously. Anyone who wants any further detail on that can look within our MD&A and the notes to our unaudited interim financials that go into a lot more detail. Let me walk through the components of the $14.9 million for you. Staking generated $6.6 million compared with $9.8 million last year. This decline primarily reflects the reduction in the value of the assets being staked during the period rather than a fundamental change in the economics of the activity.

Lending generated $2.4 million compared with $4.9 million last year, and this is an area where the reduction was much more deliberate. As market conditions became less attractive, we reduced the amount of capital we were prepared to deploy into lending and prioritize preservation and counterparty risk management. Other revenue and trading gains contributed approximately $7.6 million, compared with $11.7 million in H1 2025, reflecting gains from liquidity provisioning on the group's XBT product line and a range of delta neutral trading activities with the overall amount moving broadly in line with the wider contraction across capital markets activities during this period. Taken together, capital markets generated $14.9 million of segment revenue and gains.

I think the important point here is not simply that this was lower than last year. The capital market segment remained profitable while we were deliberately reducing risk and balance sheet deployment, and that's how we think about this business. We don't have a revenue target that requires us to deploy capital irrespective of the market conditions. We deploy capital when we believe the risk-adjusted opportunity is attractive, and when we don't, we preserve it. As market conditions, liquidity, and opportunity sets evolve, we have the balance sheet and the infrastructure to increase that deployment again.

Capital markets, as it always has done, provides a complementary earnings engine to asset management while giving us discretion over how much capital we put at risk through different parts of the cycle. Okay, let me now turn to our cost base because as mentioned previously, the reported expenses in the first half don't tell the full story of the underlying operating cost base of the business. On an adjusted basis, excluding depreciation, amortization, and share-based comp, operating expenses were approximately $25.6 million during the first half. Within that, we have identified approximately $4.9 million of costs that are associated primarily with becoming a U.S. listed company and other non-recurring items.

While these are non-recurring in nature, we do see these as important investments we made to complete the transition to Nasdaq and establish CoinShares as a U.S. listed public company. Excluding those items, first-half adjusted operating expenses would've been approximately $20.7 million. For context, simply annualizing that first half number would equate to approximately $41.3 million for the year. Although I want to be clear that we're showing that purely as an illustration of the underlying H1 cost base of the present business rather than providing any forward cost guidance. A significant portion of our cost base is relatively fixed in the short term, while the asset management revenues move with AUM.

That worked against us during the first half of the year as digital prices and AUM declined, but equally, we do not need to rebuild the operating platform for revenues to participate in an increase in AUM. The key takeaway from this slide is that the first half reported cost base included a meaningful concentration of expenditure associated with completing our U.S. listing and our financial reporting transition rather than representing a comparable underlying operating run rate. Looking ahead, we will continue to monitor actively our cost base and identify opportunities for further efficiency.

As part of that discipline, we have already taken a decision to close a number of underperforming product lines in the second half of the year, and that is just a routine part of managing a product suite of the size we have now, and one that helps ensure our cost base stays aligned with where we see genuine client demand. This next slide is intended just to help illustrate the operating leverage embedded in our business model.

I want to be very clear up front here, these are not forecasts or guidance, they are illustrative scenarios, just showing how changes in digital asset prices could translate through AUM revenue and then as a result, ultimately profitability using assumptions shown on the slide. Starting on the left, we take our June 30th AUM and ask a relatively simple question: What would that AUM look like if asset prices returned to previous reference points while holding the other assumptions in the model constant? At June 2026 pricing, as we have already mentioned, the group AUM was approximately $5.5 billion, comprising approximately $2.1 billion of high fee generating products and $3.5 billion of access products.

At December 2025 reference prices, that illustrative AUM increases to approximately $7.4 billion, and going back to June 2025, it would increase to $8.1 billion. But importantly, the recovery is not uniform across the portfolio. Our high fee generating products have significantly greater sensitivity to Bitcoin and Ethereum prices, so they increase much more rapidly under those scenarios than the access products, and that has two effects. Yes, AUM increases, nice and simple, but also the mix of AUM also shifts back towards higher fee products. And the right-hand side illustrates what that could mean for revenue under the assumptions shown.

On an annualized first half basis, the model produces approximately $113 million of revenue and gains, being a combination of asset management fees and a capital market segment revenue and gains. At December 2025 reference pricing, that increases to approximately $162.2 million and further increases if we use the June 2025 reference pricing to $185.6 million. What we are trying to show here is rather than guidance, we are just trying to illustrate the two sources of operating leverage in the model. First, dead simple, higher asset prices increase the AUM.

The second is less obvious, but equally as important, because our higher fee products have greater sensitivity to crypto prices, a recovery can also improve the mix of our AUM and therefore the blended economics of the asset management segment. Again, these are purely illustrative scenarios rather than forecasts. Their purpose is simply to show the sensitivity of the model to different market environments. When we also consider the relatively fixed cost base of the underlying business, and if this is to remain the case, a significant portion of the benefits from market recovery go directly to our segment EBITDA.

While the scenarios we have discussed are purely illustrative, the first part of some of that mechanism, the relationship between digital asset prices and our AUM is already visible in the post-period data. Between June 30 and August 31, digital asset markets recovered fairly materially. Solana increased approximately 57%, Ethereum approximately 40%, and Bitcoin approximately 34%, and that recovery translated directly into our AUM. We have increased from $5.5 billion as of June 30 to approximately $6.9 billion as of the end of August. That is an increase of approximately 25% in two months. Also, as of the 31st of August, we had reversed the majority of the treasury loss seen in the first half of the year.

Importantly, during this period, clients have also continued to allocate capital with approximately $74 million of positive net flows through to the end of August. We are beginning to see that mix effect that we illustrated on the previous slides. High fee generating products were 37% of overall AUM at June 30th, but at the end of August, that has increased to 43%, reflecting their greater sensitivity to the recovery in digital asset prices. What we are seeing since June is consistent with the mechanics that we have just described. Higher digital asset prices are increasing AUM, the mix is beginning to shift back towards higher fee products, and clients have continued to add net new capital.

I would, however, emphasize that much of this market recovery occurred relatively late in the period. Please do not read the August 31 AUM position as a representation of what the entire quarter will be like. It does provide a useful indication of how quickly the economics of the business can change as the market conditions change. We entered the second half with $5.5 billion. We are now at $6.9 billion, and we have not had to replace any assets lost through client redemptions. That brings us back to the central message from the first half of the year, right? The market contracted sharply. It has impacted our financials.

We have got some below the line items that we are hitting on the bottom-line basis, but our AUM has seen net inflow. We have got positive segment EBITDA, and that AUM retention really matters when the markets begin to recover. Finally, let me finish the financial section by just looking at our capital position, our available capital position in a little bit more detail. We began the year with approximately $453 million of available capital. That is net of the liability owing for our long-term borrowings, which we have now repaid. We have ended June with approximately $414 million. The important question is, what happened to the capital during that period that has caused that decrease?

We completed our U.S. listing, which generated approximately $3.9 million of proceeds, but we have had a number of outgoings in relation to this period. We repaid the long-term debt, which I already mentioned, of $28.3 million. We returned approximately $21.5 million to shareholders through the 2025 dividend prior to closing the transaction. We incurred approximately $18.7 million of cash costs associated with settling a portion of our historic share option plan, which was triggered by the listing. The decline in digital asset prices has resulted in approximately $15.4 million of unrealized losses on our treasury digital asset holdings, which as mentioned, has since rebounded post-period end.

We also paid approximately $4.3 million of bonuses in the period relating to 2025, and we had net finance costs representing a further $4.2 million, alongside several smaller items. After all of these movements, we ended June with approximately $413.9 million of available capital, alongside approximately $453 million of net assets and no long-term debt. I think that's the important takeaway from this bridge. We entered an extremely difficult market environment, completed our U.S. listing, repaid all of our long-term debt, returned capital to the shareholders, settled a significant portion of our historic option obligations, and we still exited the half with a very strong available capital position.

That leaves us in a very good position moving forward and illustrates how flexible we are and how we can allocate capital as we continue. I will now hand back over to JM.

Jean-Marie Mognetti: Well, thank you, Richard. That was the lion's share of the presentation, but let me continue for a few minutes on more investor relation matter. I want to spend a moment on valuation, because valuation is an important part of how the board thinks about capital allocation. Based on the pro forma share count of approximately 138.1 million shares on our closing share price of $5.60 on September 2nd, CoinShares had a market capitalization of approximately $738 million. Against that, we end in June with approximately $413.9 million of available capital. If you use available capital position as an adjustment to market capitalization, that implies a value of approximately $324.1 million for the operating business.

Our June available capital represent approximately $3.14 per share, compared with the September 2nd share price of $5.60. A significant portion of the current equity value is represented by capital already on the balance sheet, while shareholder return exposure to the earnings power of the operating functions. That matters for valuation and that matters for capital allocation. We have a strong balance sheet, no long-term debt, and significant available capital. At the same time, the board believes the current share price does not fully reflect the value and earnings potential of the business.

That is why the board believe having the ability to repurchase shares at appropriate prices and times can represent one example of an attractive use of capital for shareholder, which we'll be asking our shareholder to vote upon at the upcoming AGM tomorrow. Finally, I want to touch briefly on another consequence of our transition to the U.S. public market, potential index inclusion. Based on our current understanding of the applicable criteria, CoinShares may become eligible for inclusion in certain Russell indices at a future reconstitution, subject of course to the relevant eligibility, ranking, and free float requirements.

There is no certainty here that CoinShares will be included, and any potential weighing or associated passive demand would ultimately be determined by the index provider. However, based on external investment banking analysis, potential inclusion could result in a meaningful increase in passive institutional ownership relative to our current trading liquidity. I think the broader point here is more important than any specific estimate. One of the reasons we moved CoinShares to Nasdaq was to broaden access to the company among U.S. institutional investors. Index inclusion is another potential step in that process.

Over time, we believe the combination of increased research coverage, we already have KBW and working on others, greater institutional accessibility, potential index participation, and improved liquidity can help broaden and diversify our shareholder base and support healthier price discovery. These are developments that will take time. We are actively working on it, but at the same time, we remain focused on building the underlying business rather than predicting short-term share price movements. With that, we will open the call to analysts for questions.

Jeri-Lea Brown: Okay. Turning to questions now. We would like to invite Joe Vafi from Canaccord to ask the first round of questions. Joe.

Joe Vafi: Hi. Good afternoon, everyone. Thanks for having me on your call here, your very first earnings call, and congrats on this milestone. Congrats on that very much. Could we maybe just start maybe at a high level on some of the trends going on in the industry? There is a broad push to tokenize real-world assets. Just wondering how CoinShares views this expansion of the digital asset ecosystem and how it may see that as an opportunity for growth, and then I will have a quick follow-up.

Jean-Marie Mognetti: Hi, Joe. Thank you for joining us. Tokenization didn't escape us. It has been a trend which has been pushing quite strongly over the last six months, especially with all the legislation moving ahead in the U.S. When it comes to CoinShares, as usual, we get our two segments. We get capital market and asset management. Capital market is always ahead in that sense versus asset management because we can experiment much more. Capital market has been at the forefront of tokenization in the sense that we trade in more RWA in general in H1 than we trade in Bitcoin or Ethereum, as an example.

So we've been very much involved or getting our hands dirty with it and taking advantage of different opportunities which are there, and these opportunities continue to be there right now and in the foreseeable future. That's kind of part of our, I would say, capital management exposure to it. So you can see us being exposed to Hyperliquid, being exposed to different protocols, on the tokenization side. On the asset management side, we are not a tokenizer, so we're not going to go in an activity like Securitize, an activity like Superstate, or what DTCC and Ondo Finance are doing.

However, we are very much planning to find ways to leverage this tokenization movement, which is happening, so that we can create new products. And that's very much the sense of the partnership we discussed, in one of our release, in H1 with Kiln and Railnet, which is to allow us to effectively start, create composability, and I would say a new product on top of the tokenization trend. So instead of being locked up in one ecosystem, which is like, for instance, Morpho, people will go through CoinShares to be able to have a composability of asset management product. So we're very much looking at it and making sure we are coming to the market with an offering.

Jeri-Lea Brown: Joe, did you have a follow-up question?

Joe Vafi: Yeah, just one quick follow-up. Thank you. Just, now that you're a public company, I would imagine that maybe M&A is a little bit more part of your playbook. I know you're contemplating some share buybacks as well. Just balancing M&A versus acquiring in some of the existing CoinShares outstanding. Thank you.

Jean-Marie Mognetti: Yeah. It's a board discussion about capital allocation. The board is very focused on how this capital is being allocated. When the stocks trade where it's trading right now, obviously, a share buyback is an obvious kind of a mechanism, and that's why the board is seeking authority from the shareholder at an AGM tomorrow. Depending on the result of this AGM, we'll see if we can do and how we do it, and which format we'll do some share buyback. That's the second part of your question. To the first part of your question, this is to balance with M&A activity.

M&A is definitely something we are extremely focused on, and I personally spend a lot of time reviewing a lot of opportunities. We just want to make sure we are pulling the trigger on the right, I would say, opportunity, knowing that it's extremely time-consuming, and so, a small deal or bad deal can be detrimental to our performance. So we're really trying to make sure we're going in the right direction on that, given also the fact that a lot of these companies which are today on the market, has been, I would say, packaged with a lot of pref share, and so on.

So the capital are rarely clean, so it makes the discussion always a bit more complicated than a straight of M&A.

Jeri-Lea Brown: Thanks, JM. Thank you very much for your questions, Joe. We're now going to move over to Alex Bond from KBW. Alex, please join the call.

Alex Bond: Hi, everyone. Thanks for taking the questions and strong results in what was a challenging market backdrop. Obviously, a lot of moving parts in the first half results, but wondering if you could maybe speak at a high level to your outlook for the second half and how demand for some of the asset management products has evolved here as the digital asset pricing backdrop has improved, in the months since the first half. Then maybe a bigger picture question as well. But if you can also just walk us through what you all are most focused on from a growth and a new product perspective at the moment, I thought would be helpful as well. Thanks.

Jean-Marie Mognetti: Thanks, Alex. A lot to unpack. Without going too far in what I can say and cannot say, as you said, the market has improved, in Q3. As a result, our AUM has recovered. The volatility has picked up a little bit as well, which give us new trading opportunities. All in all, I would say that it has been a positive environment for CoinShares. We saw some demand in H1 despite the market going down. We see the demand still there, in Q3.

Albeit a little bit slower by the summer, which has been, for some reason, an extremely long summer, maybe due to the FIFA World Cup, which take a lot of people attention away and other sports event. But we saw some demand coming back at the CoinShares level. In term of what we are prioritizing, our efforts, we are still launching some ETF. We are still launching some innovative things. We launched our first UCITS platform, which is public information, in July, or I think it is July, yeah. That is kind of part of our growth story in Europe. I would say, capital markets keeps working on tokenization, how tokenization is impacting what we are doing.

We are still working on this tokenization aspect of bringing to market tokenization product. I will discuss with Joe before your question. All in all, we are extremely busy from an organic perspective. And we hope the market is going to continue to sustain that effort by having price action, which is constructive of the people demand.

Jeri-Lea Brown: Thanks, JM. Alex, I think you had a second question.

Alex Bond: Yes. Yeah. Thanks, JM. That was helpful. Maybe just one more. You all have spoken to your desire to continue to evolve the platform into more of a diversified digital asset and really asset manager in general. In that light, can you just spend a little bit of time talking through the Bastion Asset Management acquisition and the potential you see for actively managed strategies as a part of the overall product suite?

Jean-Marie Mognetti: Yeah. Bastion is an acquisition we did. Well, it is an acquisition we closed last year in September. We completed only in September of this year because there was some regulatory hurdle to clear before we can complete. However, we did not wait to integrate the team, so the team is fully integrated now into the CoinShares ecosystem. I think it brings a different type of offering to CoinShares. CoinShares was coming from a hedge fund background, had been stepping into the ETF world in 2015, 2016, without much knowledge about it. So learned very quickly how to run an ETF asset manager due to the market opportunities there.

But that is kind of only catering for effectively the beta side of the market. As the market is evolving, there is more and more demand for a bit of alpha on top. So obviously beta, if you look at the overall asset management markets, the passive funds are always much bigger than the alpha offering. But there is more and more demand coming up, and people are asking us to get some beta exposure with some alpha on top of it. So being able to offer both solution within a CoinShares ecosystem is very interesting from us. It is also opened up the channel of distribution.

What we do on the beta side is listed product, but we do today on the alpha side is non-listed. So that is open different channel distribution. There is also open different market which can travel a bit easily. So for instance, we can have a bit more, I would say, a push in Asia. You can even imagine having some push in the U.S. There are some new CFTC rules around derivatives in the U.S. which need to be analyzed before that can take some stronger foothold. But there is definitely an idea that Bastion can be a globally distributed suite of product, versus the European offering or the American offering of the ETF side.

Alex Bond: Got it. Okay. No, that's helpful. Thanks for taking the questions.

Jean-Marie Mognetti: You're very welcome. Jeri, I think we have another analyst asking question, which is Kevin Dee, if we can just let him come online because I don't see him on the app.

Kevin Dee: Thanks. Jean, can you hear me?

Jean-Marie Mognetti: I can hear you, Kevin. How are you?

Kevin Dee: Great. Thank you. Thanks for letting me queue up. Jean, I have lost track of how many years I have been on your calls. It is certainly over three. I am just kind of curious about, I guess, the strategic direction. I know you talked about expanding markets, and your press release talked about developing more of your core European presence, as well as talking to the active blockchain investment capabilities. I was wondering if you would not mind expanding on that first, and then going on to talk a little bit more about expanding in new markets. You just mentioned Asia. I am wondering if you might add a little more color to that, please.

Jean-Marie Mognetti: Okay. Thanks for following us for so long, Kevin. To start, I think we are celebrating our 25th earning call with Richard today. It has been definitely a little bit of a ride. When it comes to how we position ourselves. We were born in Europe. We started effectively as a hedge fund, saw the opportunity in the wider ETF market, and that is where we focused our attention from 2015. The market is evolving, the market is changing, and CoinShares always had an ambition to be a global asset management company, not just a European franchise.

How do we build a global franchise at the forefront of what we are thinking about, hence why if we can distribute our product in Europe, in Asia and in the U.S., it is a much better position for us than having product which are just for the U.S. Bastion, to some degree, not perfectly, but to some degree, help us answer that narrative. When it comes to different product offering we have, we still have our legacy products in Europe. We have our growth platform as well, in Europe, which is CoinShares Physical. We added a UCITS franchise in Europe as well, which allow us to distribute product a bit more widely around the globe.

We still have the question of how we are going to keep scaling in the U.S. and something we are strategically considering and discussing. Does that answer your question, Kevin?

Kevin Dee: You mentioned UCITS. I think it was a Bitcoin mining ETF that's been released.

Jean-Marie Mognetti: Correct.

Kevin Dee: How do you think that positions you within the regulating authorities for following on with further releases of those types of funds, and how does it create perhaps a moat against other ETF providers?

Jean-Marie Mognetti: In terms of regulatory positioning, it's a UCITS platform on the CBI, which is Central Bank of Ireland. There is a clear pass-through to effectively keep adding new product to the platform within the CBI constraint. Every regulator in Europe has their own list of dos and don'ts, and the CBI are the ought. As long as we follow the rules of the CBI, we can definitely add more product to the narrative. It's just a question of finding more prospectives and having the right ideas to find the prospectives.

When it comes to moat, effectively, you were trying to discuss our moat is really about our capacity to generate new product, which are interesting for the market and not just new product for new product. In general, you're not going to see us kind of spraying the market with untouched release of new product. We'll be much more tactical about the product we launch and trying to see how we can build something which is much more interesting for the market.

We will keep adding the value of CoinShares by having our analyst team and our research team working hand-in-hand for distribution team to figure out what is interesting to the market and how can we bring the CoinShares knowledge and the CoinShares know-how on top of it to go a bit further than just a simple basket that an AI can do for you.

Kevin Dee: I know you recently renamed WGMI from Bitcoin Mining to Bitcoin Mining and Digital Power. I am wondering if you have seen any reception to that change in the market, especially U.S., and whether or not

Jean-Marie Mognetti: The renaming was really driven by two things. One, the Bitcoin mining company are changing very fast, and a lot of them are adding a lot of HPC power, or HPC capacity to their own balance sheet. We have to also be able to reflect that. Second of all, the mandate of WGMI was also very restrictive, because in the early days it was purely Bitcoin. We have to upgrade that, to be able to keep having a wide enough universe, effectively.

The reception from the market has been, we are glad you are clarifying effectively, the positioning because a lot of people were asking us, what was the positioning of the WGMI product vis-a-vis more and more of this company going into HPC and AI.

Kevin Dee: It begs another question, JM, what is your view and CoinShares view, short-term and long-term of Bitcoin mining?

Jean-Marie Mognetti: Well, Bitcoin mining is the security of the network, so we cannot do without Bitcoin mining. Are the Bitcoin miner of today will be the Bitcoin miner of tomorrow? Maybe not. Because, and we saw it before in every single cycle, you get people which are very big in Bitcoin mining, which are slowly and surely disappearing to be replaced by other company or morphing in different companies. The universe keep expanding, and the universe keep changing. You have very small, you have phenomenal mining company in the U.S. which people don't know yet, like Cormint. You have phenomenal mining company in Europe that people don't know about, like some company in the Northern Alps in Italy.

They are not a big company yet, but one day they certainly will be. So it is a question of the universe is evolving, and we just need to make sure we are able to capture this evolving universe. When it comes to, is Bitcoin mining important for Bitcoin? Well, it's fundamental, so we can't discuss the need of Bitcoin mining. Bitcoin mining will stay anyway, as long as Bitcoin remain a proof-of-work protocol.

Kevin Dee: Last question from me, JM.

Jean-Marie Mognetti: We're running out of time, Kevin.

Kevin Dee: Yeah. Sorry about that. Maybe for Richard.

Jean-Marie Mognetti: I knew by the tone you go, we'll be struggling. Go on, give me the last one.

Kevin Dee: Okay. Thank you. The press release mentioned accrued XBT fees in the order of $285 million. I'm just wondering what it takes to recognize them through the P&L.

Richard Nash: I can take that question.

Kevin Dee: Give that to Richard. Thank you, Richard.

Richard Nash: Yes, sure. No problem. These accrued fees, they are already recognized through the P&L, Kevin. It is revenue that has been generated by XBT Provider over time. It sits in accrued fee on the balance sheet as we elect to keep those accrued fees held in digital asset until such a time that individuals redeem them. So it feeds into our available capital position. If you look in our MD&A, you will see our available capital position. It is split into our liquid assets and our accrued fee element. It is already revenue that has gone through the P&L. If your question is when will they be converted to cash, that is at our election.

But we tend to follow the model of when the notes are redeemed, we convert them into cash.

Kevin Dee: Thank you, Richard, for anticipating what my real question was. I appreciate that.

Richard Nash: Yeah.

Kevin Dee: Thanks very much, JM. It is good to talk to you again.

Jean-Marie Mognetti: No problem. And conversation for the new job, Kevin.

Jeri-Lea Brown: Thank you, Kevin. Now just turning to some of the questions that we've received via the portal. We've got a few questions from Marko Stanković. The first one is for you, JM. Today's material describes Richard Nash as interim CFO. However, the 2025 financial year-end that's listed in 20-F has him listed as the CFO. Can you explain the change and the timeline for a permanent appointment?

Jean-Marie Mognetti: Yeah, I think it's probably an omission because in the prospectus, Richard was always described as interim CFO. That's Richard's decision, but he's still on the call with me for 2025 call, and he decided that 2025 was probably too many. So there is no kind of bad situation. It's just Richard wants to stay within CoinShares and do something a bit different than just doing earnings call with me. We want to help him do this transition. In parallel of that, we finalized the search for our next CFO, and we will make sure to announce that to the market when the time is right.

Jeri-Lea Brown: Thanks, JM. A couple for you, Richard. The debt classifies BTC as an asset product and defines high fee-generating products as XBT plus physical XBTI BITC. XBT was 73% of management fees in 2025, and certificate liabilities fell 44.9% in that half. What replaces XBT as your fee engine, and on what timeline?

Richard Nash: Thanks, Marko, for the question. There isn't a single replacement for XBT, and we don't think there necessarily needs to be. This strategy's always been more about diversification rather than straight substitution. You're correct that it fell 44.9% in the half, but pretty much everything in the industry did the same during that period. If you look at the composition of our fees and our AUM over time, you can see how it's been developing already, and it's kind of speaking for itself. Three or four years ago, XBT was probably something like the mid 90%, mid 90 percentage for the AUM and the revenue.

Today we're in a much more balanced position with CoinShares Physical, Block Index, and US all contributing. Physical is obviously the clearest next leg of growth. It's been the fastest growing platform for a number of years. It's the only one that generated material inflow in the first half of 2026, over 150 million. There's other products doing the work as well, right? The Block Index performance, as you saw in the deck, is a good proof point for why the diversification matters. We had 17% AUM growth in the period while digital asset prices were going down. To be honest, the answer isn't product X replaces XBT by date Y.

It's more that the wider platform is being built deliberately so that no single product needs to replace XBT, with the mix shift already underway being the evidence that it's working. It's a long road by virtue of the fact that XBT is just such a large product with a long legacy.

Jeri-Lea Brown: Great. Thank you, Rich. I know Jean mentioned the potential share buyback slightly, but can you just comment on this question? You have $116.7 million of liquid assets and are seeking authority for 32.9 million shares, which would be roughly $184 million at the current price. How would that be funded, and will repurchases be open market only, or do you contemplate privately negotiated blocks from existing shareholders?

Richard Nash: Okay, sure. Sorry if I repeat some of the things that Jean said. Just to be clear on the mechanics, it's an authority that we're seeking from shareholders at the EGM tomorrow, not a spending commitment. If it passes, the actual repurchases remain entirely at the board's discretion, executed over a multi-year window. The size of the authority, which as you stated, is 32.9 million, is not necessarily a target we're aiming to reach. It's the ceiling that we want to have available to us, so we have the flexibility to act opportunistically over the life of the program without having to bother coming back to shareholders for another EGM every time market conditions change.

As for how those purchases would be funded and whether they're open market or privately negotiated, they're exactly the kinds of decisions the board will make at the time based on market conditions, our financial position at the time, other investment opportunities available. Just obviously all being consistent with what's been set out in the EGM materials for the meeting tomorrow.

Jeri-Lea Brown: Thank you, Richard. One more for you, JM. Zcash has exploded in volume and popularity. Has the company been looking into offering Zcash as a product?

Jean-Marie Mognetti: The good old Zcash. Look, Zcash is not promoting privacy. Anonymity is promoting privacy, and privacy is something we should consider as an important feature. Now, listing Zcash is not exactly the simplest thing to do in Europe, albeit it is in our prospectus. So the day it will be available for APs, for exchanges, for clearers and for other counterparties to look at it, we will certainly review the opportunity.

Jeri-Lea Brown: Perfect. Thank you. I think we've actually run out of time now. We've got a couple more questions that we'll respond to separately, but thank you everyone for joining today's call.

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