Fold Holdings Inc (FLD) Earnings

Management highlights

- Industry Context * Q1 2026 was a challenging quarter for the broader Bitcoin industry, as Bitcoin prices fell nearly 50% from the all-time high set in October 2025, pressuring transaction volumes, trading activity and consumer engagement. February 2026 marked a bottom for most of Fold's core KPIs, and early signs of a rebound have emerged alongside recovering Bitcoin prices. * Management reaffirmed its belief in the long-term fundamental value, technological strength and network effects of Bitcoin, and focused on controllable product development and customer service efforts during the downturn. - Fold Credit Card * The Fold credit card launched in early access in March 2026 and as of the call has over 1,000 cardholders. The rollout is intentionally phased to validate systems, economics, underwriting, servicing and risk frameworks before scaling, and is currently ahead of schedule. There are over 80,000 potential users on the product waitlist. * Early user data confirms the card drives cross-ecosystem engagement, attracts new customers and deepens engagement with existing Fold users. Many users are adopting it as their primary everyday spending card, including for large categories like travel, validating management's hypothesis that it can compete as a mainstream financial product, not just a niche Bitcoin offering. * The full reward structure, merchant experiences, benefits and platform integrations are still to be rolled out. The product did not materially contribute to Q1 2026 results, but management expects it to become an increasingly large contributor to transaction volume, customer acquisition, engagement and revenue growth as access expands. The company is actively securing additional capital facilities to support large-scale scaling of the program and expects to share updates soon. - Bitcoin Gift Card * The Bitcoin gift card remains a core growth driver that has on-boarded thousands of high-quality new customers and re-engaged existing users, many of whom go on to use other Fold products. The flagship partnership with Kroger has been a success, and management plans to scale the model nationally to additional retailers. * The company is restructuring gift card economics with distribution partners to reduce customer friction and improve retail placement. Going forward, the gift card business will be cost neutral upfront, with value created over time as users move to higher-value products like credit, exchange, rewards and debit. * Upfront customer fees for Bitcoin gift cards are being reduced to zero to remove the top barrier to adoption and distribution. - Bitcoin Bonus Program * The new Fold Bitcoin Bonus Program for employers launched this quarter with Steak Shake and other partners. The program lets employees earn Bitcoin bonuses alongside regular wages as a long-term retention and savings tool, not a payroll replacement or speculative trading product. * Early demand from businesses of all sizes (from small businesses to large publicly traded firms) has been strong. The product positions Fold to expand its consumer-proven infrastructure into the large business market, with long-term opportunities to expand into payroll, employee benefits, corporate treasury, corporate rewards and corporate spending tools. - Strategic Outlook * Management believes Fold's opportunity extends far beyond niche Bitcoin rewards, and the company is positioned to evolve into a leading general financial rewards platform for the Bitcoin era, competing directly with established incumbents across payments, rewards, savings, credit and broader financial services. Fold's integrated ecosystem combines Bitcoin access, rewards, spending, saving, credit and business services, with all products reinforcing the broader platform.

Guidance

- Management did not issue formal full-year 2026 financial guidance in this call, but confirmed the phased credit card rollout is currently ahead of internal expectations. - Management expects to expand Fold credit card access through the waitlist (over 80,000 potential users) and full existing user base by the end of 2026, barring unforeseen issues, with scaling pace contingent on securing additional non-dilutive revolving capital facilities for customer receivables and validating full billing cycle performance. - Multiple upcoming product launches that were delayed to prioritize the credit card launch will occur in close succession through the summer of 2026, marking the start of Fold's expansion into a broader financial rewards leader, with new announcements, product launches and partnerships expected throughout the period. - Management expects the Bitcoin Bonus Program to begin measurable growth and add meaningful transacting users over the next several quarters, with new participant announcements planned.

Segment performance

Fold Holdings does not break out formal segment revenue figures in this call. The company's overall Q1 2026 financial results are as follows: Total revenue decreased 21% year-over-year. Transaction volumes decreased 31% year-over-year. Operating expenses totaled $13.4 million, a 19% decrease from $16.6 million in Q1 2025, driven by 21% lower year-over-year direct revenue costs, reduced share-based compensation, and lower professional services fees. Net loss for the quarter was $29.2 million, compared to a $48.9 million net loss in Q1 2025. Adjusted EBITDA, the company's core operational metric, was negative $5.8 million, compared to negative $4.2 million in the prior year period, with the expanded loss driven by $1 million higher payroll from year-over-year headcount growth, and increased product development and marketing expenses. Ending cash and cash equivalents were $11.5 million, up from $7.7 million at the end of 2025. The company held 826 Bitcoin in its investment treasury valued at ~$67 million as of the call, with 430 Bitcoin held as collateral for its prime credit facilities. All existing Fold product lines currently generate positive contribution margins.

Risks & headwinds

- Broad industry risk: Bitcoin price volatility directly impacts consumer engagement, transaction volumes and revenue, and the company operates in a nascent, high-risk industry that is subject to significant cyclical downturns. - Credit card scaling risks: Large-scale expansion of the credit card program is contingent on securing sufficient third-party capital facilities, successfully managing fraud risk, maintaining strong underwriting and servicing standards, and realizing expected user engagement and credit performance that supports profitable scaling. - Business expansion risk: The Bitcoin Bonus Program and business segment expansion are new, unproven initiatives, and it is uncertain how quickly the market will adopt these products or what level of revenue and profit they will ultimately generate. - Net loss and liquidity risk: The company is currently operating at a net loss, and continued market downturns could impact access to additional capital needed for expansion.

Analyst Q&A

• Q: An analyst asks whether early credit card rollout performance will lead management to speed up or slow down the planned phased rollout. /

  A: Management confirms the rollout is already ahead of schedule, with over 1,000 cardholders reached faster than expected. Early performance around fraud management, underwriting, servicing and user engagement has met or exceeded all internal hypotheses. Management will complete a full billing cycle to get a 360-degree view of program performance before accelerating to tens of thousands and eventually hundreds of thousands of cardholders, with updates on new capital facilities for scaling expected soon. They now expect to scale faster than originally planned, given strong early results.

• Q: An analyst asks for an update on the top of the funnel and sales cycle for the new Bitcoin Bonus Program for employers. /

  A: Management notes the program is still very early (launched less than a month before the call), but feedback from participating employees, employers like Steak and Shake, and interested prospective businesses has been extremely positive. Demand spans small businesses all the way to large publicly traded firms with thousands of employees. Unlike direct Bitcoin corporate treasury products, which require C-suite belief in Bitcoin, the bonus program as a benefit is sold primarily on its ability to improve employee recruitment and retention, opening the funnel to a much larger set of potential businesses. Management expects to see visible program growth over the coming quarters and will announce new participants as they come on board.

• Q: An analyst asks for details on the economic restructuring of the Bitcoin gift card program to support better distribution. /

  A: The primary friction for both customers and retail partners was upfront fees, which were a barrier to broader adoption and distribution. Based on data showing gift card-acquired customers mature into high-value users of other Fold products (credit, exchange, etc.), management decided to eliminate upfront customer fees, working with retailers to reduce embedded distribution costs. The business will now be cost neutral upfront, with value captured as users move to higher-margin products across the ecosystem. This change is expected to accelerate user acquisition and national retail scaling of the product.

• Q: An analyst asks for internal targets for credit cardholder count by September 30 and end of 2026. /

  A: Management has not released public targets, but expects to scale through the entire 80,000+ person waitlist and full existing user base within 2026 if current performance holds. Scaling is contingent on completing a full billing cycle to confirm credit performance metrics (charge-offs, revolving balances, average spend) and securing additional revolving warehouse capital facilities to fund customer receivables (which is non-dilutive, unlike equity financing). Management will share updates once these milestones are completed.