Gemini (GEMI) Q3 2026 Earnings Call Transcript

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DATE

Fri, Nov. 13, 2026

CALL PARTICIPANTS

• Head of Investor Relations - Ryan Todd
• Co-Founder - Cameron Winklevoss
• Co-Founder - Tyler Winklevoss
• Interim Chief Financial Officer - Danijela Stojanovic

TAKEAWAYS

• Total Revenue -- $40.9 million, down 19% year over year and 10% sequentially, due to lower retail trading and fewer large over-the-counter transactions.
• Exchange Revenue -- $13.4 million, representing a 47% decrease year over year, as total platform trading volume fell from $16.4 billion to $4.5 billion.
• Total Trading Volume -- $4.5 billion, increasing 18% from the second quarter though declining 73% year over year.
• Services and Interest Income -- $23.3 million, representing 59% of net revenue compared with 47% in the prior year quarter.
• Adjusted Operating Loss -- $39.0 million, representing the fourth consecutive quarter of improvement and a 21% narrowing from the second quarter.
• Net Loss -- $58.6 million, narrowing 63% year over year from a loss of $159.5 million.
• Operating Expenses -- $119.9 million, down 30% year over year and 2% sequentially, primarily driven by lower salaries and reduced marketing spend.
• Salaries and Compensation (excluding SBC) -- $23.7 million, down 36% year over year, reflecting the benefits of the February 2026 workforce reduction.
• Stock-Based Compensation -- $32.7 million, increasing from $20.3 million in the second quarter due to annual equity bonuses granted in July.
• Sales and Marketing Expenses -- $8.3 million, down 75% year over year, reflecting a deliberate pullback in brand and acquisition spending.
• Credit Card Revenue -- $15.5 million, up 82% year over year, reflecting portfolio growth and customers continuing to carry balances.
• Card Charge-Offs -- $11.5 million, increasing from $3.4 million in the second quarter, as the company accelerated charge-offs related to a first quarter fraud event.
• Nonfraud 30-plus-day Delinquency -- 3.4%, slightly higher than the 3.3% reported in the second quarter, reflecting the seasoning of accounts added in 2025.
• Monthly Transacting Users -- 577,000, down 1% sequentially, as softer retail activity and lower acquisition spend impacted user growth.
• Assets on Platform -- $13.4 billion, increasing from $8.4 billion at the end of the second quarter, driven primarily by price appreciation in underlying crypto assets.
• Prediction Markets Revenue -- $0.8 million, up 52% sequentially, as the company prioritized marketplace liquidity and infrastructure investment.
• Custodial Fee Revenue -- $0.9 million, down 70% year over year, driven by lower average asset valuations and net institutional outflows.
• Cash and Cash Equivalents -- $194.1 million, compared with $188.6 million at the end of June, supported by proceeds from Bitcoin sales and PIPE financing.
• Full-Year Stock-Based Compensation Guidance -- $100 million to $105 million, revised from the previous range of $100 million to $115 million.
• Full-Year Technology and G&A Guidance -- $160 million to $170 million, reflecting an increase of $5 million to the lower end of the previous range.
• Affiliated Market-Maker Activity -- 26% of spot volume, representing transactions with a newly operational affiliate that facilitates liquidity but produces lower consolidated fee revenue.

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RISKS

• Winklevoss acknowledged that "in the case that" a federal licensing regime does not confirm the company has the appropriate licenses for sports contracts, the prediction market offering would be forced to rely on other categories.
• Stojanovic stated that "retail activity remains softer," noting that attracting new traders has been a challenge following the reduction in marketing spend.
• Stojanovic warned that account growth for the Gemini Credit Card has been "broadly flat for a few quarters," as available funding capacity and corporate capital requirements constrain expansion.

SUMMARY

Gemini Space Station, Inc. (NASDAQ:GEMI) reported a third consecutive quarterly decline in operating expenses as management prioritized cost discipline amid a 19% year-over-year revenue decline. The company stated it is transitioning from adding new products to deepening relationships with customers across its integrated crypto, equities, and prediction market platform. Management reported that services revenue and interest income now represent 59% of net revenue, up from 47% in the prior year, as transaction revenue remains pressured by lower retail trading activity. To support future growth, the company increased its credit facility with Galaxy by $35 million subsequent to the end of the quarter.

• The company signed a nonbinding letter of intent with Apex Fintech Solutions to become the exclusive venue for crypto event contracts distributed to Apex's brokerage customers.
• Management integrated Multiparty Computation (MPC) infrastructure as the standard for all new custody accounts and exchange balances to enhance security.
• Stojanovic noted that while institutional volume rose, a major challenge has been attracting new traders after a substantial reduction in marketing acquisition and brand spend.
• The company expanded its developer platform by releasing a Model Context Protocol server for AI agents to access real-time market data directly on third-party AI platforms.
• Winklevoss stated, "We want to earn a bigger presence in each of our customers' financial lives," through increased cross-product engagement and trust.
• The company reported that credit cardholders generally show stronger retention than customers without a card, though capital requirements have limited portfolio expansion.

INDUSTRY GLOSSARY

• Assets on Platform: The total value of digital assets in custody, staking, exchange products, user custodial fiat, and GUSD reserve assets.
• eOTC: Electronic Over-The-Counter trading, facilitating large institutional transactions outside of the public order book.
• Event Contracts: Derivative contracts that allow users to trade based on the outcome of specific real-world events, such as elections or economic data.
• MPC: Multiparty Computation, a cryptographic security method that splits private keys among multiple parties to prevent a single point of failure.
• MTU: Monthly Transacting User, defined as any user who engaged in revenue-generating activity on the platform in the trailing 30 days.
• PIPE financing: Private Investment in Public Equity, a mechanism where private investors purchase stock directly from a public company.
• Preprovision Net Revenue: Revenue remaining after accounting for interest expense and rewards, but before deducting credit loss provisions.

Full Conference Call Transcript

Operator: Good day, and thank you for standing by. Welcome to the Gemini Third Quarter 2026 Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to Ryan Todd, Head of Investor Relations. Sir, please go ahead.

Ryan Todd: Good morning, and thank you for joining Gemini's Third Quarter 2026 Earnings Call. My name is Ryan Todd, Head of Investor Relations at Gemini. Joining me on the call today are Gemini's Co-Founders, Cameron and Tyler Winklevoss, and our Interim CFO, Danijela Stojanovic. Yesterday, we released our third quarter 2026 financial results. During today's call, we may make forward-looking statements, which may vary materially from actual results and are based on management's current expectations, forecasts and assumptions. Information concerning the risks, uncertainties and other factors that could cause these results to differ is included in our SEC filings. Our discussion today will also include certain non-GAAP financial measures.

Reconciliations to the most directly comparable GAAP financial measures are provided in the earnings presentation on our Investor Relations website and on the SEC's website. Non-GAAP financial measures should be considered in addition to, not as a substitute for, GAAP measures. We'll start today's call with prepared remarks and then turn to questions. And with that, let me turn the call over to our founders, Cameron and Tyler.

Cameron Winklevoss: Thanks, Ryan. Good morning, everyone. When we introduced Gemini 2.0 earlier this year, we said we were building a super app for the future of money and markets. The idea is one place to buy, sell, hold, earn and spend, built on regulated infrastructure that we own and operate ourselves. That hasn't changed. A platform of this breadth takes time to build, and we believe we're making real progress toward it. Over the past year, we've delivered much of what we set out to do. We launched our own prediction marketplace as well as stood up our own derivatives exchange and clearinghouse, which now clears every Gemini event contract.

We also added commission-free U.S. stock trading, margin trading, a rebuilt advanced trading experience and new tools for developers and AI agents. All of that sits alongside our core products, which we continue to enhance: our crypto exchange, custody, staking and the Gemini Credit Card. That said, we're very clear-eyed about where the business is today and the road still ahead of us. Revenue declined this quarter, and we believe our results don't yet fully reflect what we've built this year. Broadening a crypto exchange into a platform people use for more of their financial lives doesn't happen in a quarter, and it doesn't happen without discipline.

It also takes the willingness to change what isn't working, and we're demonstrating that willingness. Operating expenses declined for a third consecutive quarter, helped by keeping marketing spend to a minimum. As we invest in growth, we expect some of that spending will return, and we intend to be disciplined about where it goes. Distribution also continues to be a key focus of ours, bringing our markets and the regulated exchange and clearinghouse behind them to more customers through new partners.

In August, we announced a nonbinding letter of intent with Apex Fintech Solutions, and we're in active discussions with a number of other brokerages, FCMs and trading platforms that want regulated access to event contracts and derivatives, which we believe we're well positioned to provide. Now over to Tyler.

Tyler Winklevoss: Thanks, Cameron. Tyler here. For most of the past year, we viewed our job as builders. It was a demanding year, and we are grateful to our team, our customers and our shareholders for their commitment throughout it. With much of the product and licensing work behind us, our focus now shifts from adding products to deepening our relationships with the people who use them. We want to earn a bigger presence in each of our customers' financial lives. In practice, that means more customers actively using more than one Gemini product and more customers proactively choosing Gemini as the place they want to keep their money and assets. We continue to believe that starts with trust.

People consolidate their financial lives with the institutions they rely on most, and earning that trust has been foundational to Gemini since 2014. That work is never finished, and we hold ourselves to that standard. This quarter, we made MPC Infrastructure standard for every new Gemini custody account and for exchange balances. It's one more step toward being the account people can count on with their money and assets. We know the measure of all this is results, not just launches. On our next call, we'll share our priorities for 2027 and the measures we'll use to track our progress. With that, I'll turn the call over to our interim CFO, Danijela, to walk through the quarter in more detail.

Danijela Stojanovic: Thanks, Cameron and Tyler. Good morning, everyone. Our third quarter results reflect continued progress in reducing our operating expenses alongside ongoing pressure on revenue. Total revenue was $40.9 million, down 19% year-over-year and 10% sequentially. Stronger institutional exchange activity was offset by lower retail trading and fewer large OTC transactions. Services revenue also declined, partly because the advisory warrant arrangement we discussed last quarter reached the end of its recognition period. Operating expenses declined for the third consecutive quarter, reaching $119.9 million. GAAP operating loss was $79 million, up 3% from $76.9 million in the second quarter as the decline in revenue exceeded the reduction in operating expenses.

Adjusted operating loss narrowed to $39 million, an improvement of 42% year-over-year and 21% sequentially. I'll now walk through the principal drivers. Net revenue was $39.2 million. Transaction revenue was $15.9 million, down 40% year-over-year and 10% sequentially. Exchange revenue increased 7% sequentially to $13.4 million, although it remained 47% below the prior year quarter. Trading volume was $4.5 billion, up 18% from the second quarter and down 73% year-over-year. Institutional trading volume increased sequentially, while retail volume declined. The composition of that volume matters. Approximately 26% involved transactions between external customers and our affiliated market maker, which began operating during the quarter.

This activity supports liquidity and facilitates customer trading but generally produces lower consolidated exchange fee revenue per dollar of volume because fees charged to the affiliate are eliminated in consolidation. OTC revenue was $1.7 million, up 60% year-over-year and down 64% sequentially. As we discussed on our last call, this business can vary significantly with the timing and size of institutional transactions. We saw fewer large trades in this quarter than in the first half of the year. Prediction markets revenue increased 52% sequentially to approximately $0.8 million net of incentives. Revenue remains modest relative to the broader business, and our focus is on translating the investment in marketplace liquidity and infrastructure into greater participation and fee generation.

Turning to services revenue and interest income, which totaled $23.3 million, down 10% sequentially and 1% year-over-year. Most of that sequential decline came from advisory fee revenue, which fell from $2.7 million to $0.6 million. This was the expected conclusion of the compensatory warrant recognition period, which we discussed last quarter. These revenue sources continue to represent 59% of net revenue compared with 47% a year ago. Credit card revenue was $15.5 million, up 82% year-over-year and down 4% sequentially. Card transaction volume declined 10% sequentially, while card interest revenue increased 3% as customers continue to carry balances. Receivables ended the quarter at $202.2 million, down 8% sequentially.

Card pre-provision net revenue, which represents card revenue less funding interest expense and crypto rewards, increased 6% sequentially to $5.8 million. After provision expense, this contribution measure was a loss of $3.4 million compared with a loss of $10.6 million in the second quarter. The improvement primarily reflects lower provision expense, which declined to $9.2 million from $16.1 million. Card MTUs were approximately 102,000 at quarter end, down 4% sequentially and up 13% year-over-year. Staking revenue was $4.2 million, down 29% year-over-year, primarily reflecting lower underlying asset prices and up slightly sequentially. Custodial fee revenue was $0.9 million, down 70% year-over-year, reflecting lower average asset valuations and net asset outflows.

Sequentially, custodial fee revenue increased from $0.6 million in the second quarter. Interest income declined to $2 million from $2.4 million in the second quarter. Now turning to expenses. Total operating expenses declined 2% sequentially and 30% year-over-year to $119.9 million. Salaries and compensation totaled $56.4 million, including $32.7 million of stock-based compensation. The increase in stock-based compensation from $20.3 million in the second quarter reflected annual equity bonuses granted to company employees in the quarter. Compensation, excluding stock-based compensation, declined 15% sequentially and 36% year-over-year to $23.7 million, reflecting the continued benefit of our lower headcount base.

Sales and marketing expenses declined 6% sequentially and 75% year-over-year to $8.3 million, reflecting a deliberate pullback in broad-based acquisition spending and promotional costs. As we discussed last quarter, we prioritized product development, marketplace liquidity and regulated infrastructure while remaining selective about acquisition spending in a softer trading environment. We expect a measured increase in marketing investments in the fourth quarter to support adoption across our product offerings. Credit card rewards and promotional and referral incentives were $7.6 million, while marketing acquisition, brand spend and other costs were approximately $0.7 million. Transaction losses declined to $10.6 million from $20.1 million in the second quarter. Of that, credit card provision expense was $9.2 million, down from $16.1 million.

Card charge-offs increased to $11.5 million from $3.4 million. Most of that increase related to the first quarter fraud event. Those accounts contributed to elevated fraud-related delinquency in the second quarter, and we accelerated their charge-off during the quarter. Total 30-plus day delinquency declined to 6% from 9.4%, partly reflecting the accelerated charge-off of confirmed fraud balances. Excluding the identified fraud accounts, delinquency was broadly stable at 3.4% compared with 3.3% in the second quarter. Technology and general and administrative expenses together were $39.4 million, broadly consistent with the second quarter. Turning to the bottom line. Net loss narrowed to $58.6 million from $107.7 million in the second quarter and a loss of $159.5 million a year ago.

Adjusted EBITDA was a loss of $11.6 million compared with a loss of $74 million in the second quarter and a loss of $52.4 million in the prior year. A large contributor to that sequential improvement was the swing from $25 million of net losses on crypto assets and related party crypto loans in Q2 to $25.7 million of net gains in Q3. Our adjusted EBITDA measure includes these gains and losses, which can create substantial quarterly volatility. Adjusted operating loss narrowed to $39 million from $49.3 million in the second quarter, reflecting lower operating expenses, excluding the adjustments detailed in our non-GAAP reconciliation provided on our Investor Relations website.

Monthly transacting users were 577,000 and assets on platform increased to $13.4 billion from $8.4 billion at the end of the second quarter, mainly reflecting price appreciation in underlying assets. We ended the quarter with $194.1 million in cash and cash equivalents compared with $188.6 million at June 30. Proceeds from sales of Bitcoin received and our May PIPE financing offset cash used in operations during the quarter. Subsequent to quarter end, we increased our credit facility with Galaxy by $35 million, providing additional flexibility to support planned product expansion. Turning to our outlook. We continue to expect cash compensation, excluding stock-based compensation and restructuring charges to decline 15% to 20% from 2025 levels.

With greater visibility into fourth quarter expenses, we now expect full year stock-based compensation of $100 million to $105 million from $100 million to $115 million previously. We now expect full year tech and G&A expenses of $160 million to $170 million, raising the lower end of our previous range by $5 million while maintaining the upper end. On marketing, we expect a measured increase in brand and performance spending in the fourth quarter while remaining selective about expected returns. For the full year, we are lowering our marketing expense guidance, excluding rewards and promotions to approximately 7% to 10% of revenue from 10% to 15% previously. Before I turn it back to Ryan, let me close with some perspective.

We've made meaningful changes to Gemini this year. We have reduced our cost base, broadened our product offering and brought more of our market infrastructure in-house. Translating those changes into sustainable growth takes time. We're continuing to refine where we focus, how we reach customers and where we commit resources as we learn what is gaining traction. Some investments will need more time to prove out and others may need to change. We take our responsibility as stewards of shareholder capital seriously, and we intend to be disciplined in those decisions and candid about our progress.

There is more work ahead of us, but we have a broader set of capabilities to build on and a clear view of the financial progress we are accountable for delivering. Thanks so much for listening. We appreciate your continued engagement, and we welcome your questions. And with that, I'll hand it back to Ryan to open up the Q&A.

Ryan Todd: Thanks, Danijela. We'll now turn to Q&A. Questions were submitted in writing yesterday after the release of our third quarter results. Due to Outlook outages yesterday, we unfortunately had limited participation this quarter, so we will take a couple of follow-up questions from analysts to round out the questions. Our first question comes from Michael Cyprys from Morgan Stanley. On crypto trading and market share, crypto volumes have improved, but most of that was driven by institutional activity, while retail was down for the quarter. Are you seeing any stabilization in activity on retail? What do you think needs to change to get that growing again?

Danijela Stojanovic: Yes, I can take that one. Thank you for the question. The sequential improvement in volume was primarily institutional, while retail activity remains softer, as you note. I will say one encouraging sign is that the proportion of existing traders returning the following quarter has remained relatively consistent. And so the larger challenge has really been attracting new traders, particularly following the substantial reduction in acquisition spending this year. So our response really is to rebuild acquisition through targeted marketing while doing more to activate and reengage our existing customers. And that includes customers with funded accounts who are not trading as well as card and prediction users who could benefit from our broader offering.

Likewise, most of our retail exchange revenue comes from the simple trading experience. So that gives us a clear focus for product improvements. We are working to simplify that experience, and we'll continue to evaluate pricing to support conversion and repeat activity. And lastly, of course, a stronger market would help, but we need to drive customer growth and engagement without relying on a market recovery.

Ryan Todd: As a follow-up question for Michael, good to see revenue up on card year-over-year. Customer acquisition has slowed. We've seen pressure on fraud losses and delinquencies. How are you thinking about accelerating growth while maintaining attractive economics? And to what extent are you seeing the card translate into more activity across the broader platform?

Danijela Stojanovic: Thanks, Michael. You're right that account growth has been broadly flat for a few quarters. Available funding capacity as well as the corporate capital required to support receivables have in part constrained expansion. And so we also have to balance capital committed to the card with investments in new products and the broader platform, while then at the same time, fraud losses have also reinforced the need to really prioritize fraud controls, credit quality and returns. And so revenue growth really reflects the portfolio expansion last year, but revenue alone does not establish necessarily attractive economics. And so we want to grow where expected revenue supports an acceptable return.

That includes after rewards, funding costs, credit losses as well as acquisition and servicing costs. And as we've mentioned previously as well, every cardholder is also a Gemini platform customer with crypto rewards providing a natural connection to our broader offering. We are evaluating how to make those rewards more competitive and effective at attracting customers, encouraging regular card use and deepening that deeper engagement across Gemini while maintaining disciplined rewards cost. And while we do not disclose specific cohort metrics, cardholders generally do show stronger retention and greater cross-product engagement than customers without a card. So our priority remains to build on that engagement and ensure that those relationships generate attractive returns in the long run.

Ryan Todd: Our next question comes from John Todaro at Needham. How do you view regulatory risk around predictions, specifically related to sports, given the latest rulings in some states against this category?

Tyler Winklevoss: Thanks for the question. This is Tyler speaking. So with respect to our prediction market offering, we have sports as a category, but it's just one category of many categories we offer for predictions. We have crypto, we have politics, we have economics or economy, we have culture, weather and many other prediction market categories. And so the future or success of Gemini predictions will not rise and fall on one category alone. With respect to sports as a category specifically, we are confident and believe in the federal licensing regime that we have. We have licenses with the CFTC.

We believe that long term, the law will resolve in our favor and confirm that we have the appropriate licenses to offer sports contracts and predictions. But like I said, in the case that, that does not happen, the -- our prediction market offering is much greater than sports. It's just getting started. And so if we don't offer sports, we still believe we'll have a very large and exciting offering for our customers.

Ryan Todd: Our final questions come from James Yaro from Goldman Sachs. The first question, Gemini has meaningfully reduced its expense base in 2026 year-to-date. What levers can Gemini continue to pull to generate incremental efficiency from here? And how do you balance that versus investments for growth?

Danijela Stojanovic: Thanks, James. The expense reduction is a tangible accomplishment this year, particularly as we expanded the product offerings with fewer resources. And so revenue growth has been the harder part for us, and we recognize that cost discipline needs to be paired with stronger customer acquisition and adoption. There are further efficiency opportunities amongst others in cloud and infrastructure usage, working on simplifying processes and really focusing on how we allocate resources across products. We are also evaluating partnerships and potentially less capital-intensive operating models that could improve returns. And at the same time, this year's marketing spend should not be viewed as a sustainable run rate if we want to grow.

And so we acknowledge that, and we need to reinvest selectively in distribution and acquisition while measuring conversion, retention and customer contribution as we increase that spending. And so our objective is really to preserve the benefits of a leaner organization while directing investment towards growth. And that means sequencing spending carefully and adjusting resources and investments as we learn what delivers results.

Ryan Todd: And the final question from James. As Gemini continues to expand on offerings across prediction markets and equities, what metrics should investors monitor to assess adoption? And how are you weighing the long-term ROI of these asset class expansions?

Danijela Stojanovic: Yes, there are really several metrics to focus on, and we would focus on whether customers fund their accounts, leave more money on the platform and return to use the product regularly. So really funded accounts, customer balances and net inflows, repeat usage and adoption of multiple products, excuse me, are more meaningful indicators than account openings or initial trial alone. And so for prediction, we would also look at active traders and revenue net of rebates alongside just liquidity and incentive costs. For equities, that would mean assets on the platform and repeat trading that will help us assess whether the offering is becoming part of customers' ongoing financial activity.

And the long-term investment case is that, again, a broader offering can attract customers, retain more of their assets and deepen the engagement across Gemini, but we need to translate that into attractive economics, and we assess direct revenue and incremental contribution across products against that acquisition cost as well as operating expenses and the capital requirements while scaling investments as adoption and returns justify it.

Operator: Ladies and gentlemen, this will conclude our question-and-answer session. This will also conclude today's conference call. Thank you for your participation.

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