Gemini Space Station, Inc. Class A Common Stock Q1 FY2026 earnings call

• Strategic Direction and Vision

• Gemini is transitioning from a crypto-native company to a broader markets super app, aiming to become a bridge to the future of money and markets, with reduced reliance on crypto market cycles via multi-asset class diversification.
• Co-founders believe Gemini stock is significantly undervalued relative to its current business progress and regulatory assets, leading Winklevoss Capital to make a $100 million strategic investment in Class A common stock at $14 per share, funded in Bitcoin, to support the next phase of growth.

• Regulatory Milestones

• Received a Derivatives Clearing Organization (DCO) license from the CFTC in April 2026, following the December 2025 award of a Designated Contract Market (DCM) license.
• The DCM + DCO combination allows Gemini to build an end-to-end in-house derivatives and prediction marketplace without third-party dependencies, a rare position among competitors that typically enter via acquisition.
• This regulatory positioning prepares Gemini to capture market share in onshore U.S. crypto perpetual contracts, which management expects to be approved imminently and currently represent the largest segment of global crypto trading volume that all occurs on unregulated offshore exchanges.

• Product and Operational Milestones

• Launched the first agentic AI trading tool directly through a regulated U.S. exchange, allowing customers to connect third-party AI agents (Claude, ChatGPT, etc.) to Gemini's API for autonomous trade execution, risk management and market monitoring.
• Prediction markets, launched in December 2025, reached 100 million contracts traded across more than 20,000 traders by Q1 end, with 78% month-over-month volume growth in April 2026.
• Gemini credit card reached over 154,000 open accounts (up 111,000 YoY), with managed receivables tripling to $217 million YoY; over half of prediction market traders are also Gemini credit card holders.
• Completed a 30% workforce reduction in Q1 2026, with cost savings expected to fully flow through to financials starting in Q2. End-of-quarter headcount was 441.
• Completed full migration to Staking 2.0, a ground-up infrastructure rebuild that reduces redemption times and supports faster onboarding of new networks and institutional clients.

• Platform Metrics

• Monthly transacting users grew 17% YoY to 589,000, despite lower crypto trading volumes.
• Assets on platform totaled $11.1 billion as of March 31, 2026, down from $14.2 billion YoY, a decline driven entirely by lower crypto asset valuations rather than reduced user engagement.

Total Q1 2026 revenue was $50.3 million, up 42% year-over-year (YoY):

• Transaction revenue: $24.1 million, flat YoY, contributing 47.9% of total revenue. Within this segment:
  • Exchange revenue: $17.2 million, down 27% YoY, contributing 34.2% of total revenue
  • OTC revenue: $6.3 million, up from $0.1 million YoY, contributing 12.5% of total revenue
  • Prediction markets revenue: $0.4 million, the first full quarter of contribution post-launch, contributing 0.8% of total revenue
• Services revenue and interest income: $24.4 million, up 122% YoY, contributing 48.5% of total revenue (up from 31% in Q1 2025). Within this segment:
  • Credit card revenue: $14.7 million, up nearly 300% YoY, contributing 29.2% of total revenue
  • Advisory fee revenue: $2.7 million, flat quarter-over-quarter, no comparable YoY
  • Custodial fee revenue: $1.9 million, roughly flat YoY
  • Staking revenue: $2.1 million, down 31% YoY

Total operating expenses were $144.5 million, up 73% YoY, including one-time severance costs for the Q1 workforce reduction. Net loss was $109 million, a 27% improvement YoY from a $149.3 million net loss in Q1 2025. Adjusted EBITDA loss was $59.9 million, compared to a $61.6 million loss in Q1 2025.

• No formal full-year 2026 revenue guidance is provided, consistent with last quarter, due to ongoing macroeconomic and crypto market uncertainty. • Cost guidance parameters from last quarter are maintained:

• Cash compensation (excluding stock-based compensation and restructuring charges) is expected to decline 15% to 20% relative to 2025 levels
• Full-year 2026 stock-based compensation is expected to total $100 million to $115 million
• Combined full-year technology and general & administrative expenses are expected to range from $155 million to $190 million
• Marketing (excluding rewards and promotions) is expected to run at 10% to 15% of total revenue • Full benefits of the Q1 2026 cost restructuring are expected to begin flowing through the income statement in Q2 2026.

• Gemini's financial performance and asset valuations remain correlated to crypto market cycles, with Q1 2026 seeing a more than 50% decline in spot trading volume YoY and a 30% drop in Bitcoin price since Gemini's IPO. • The rapidly growing credit card portfolio carries increasing credit and fraud risk, with a $4.1 million discrete fraud reserve recorded in Q1 2026, and growing provisions for expected credit losses as the portfolio seasons. • Regulatory clarity for U.S. crypto markets (via the Clarity Act) remains uncertain in timing, even if the legislative direction is viewed as positive. • OTC revenue is inherently lumpy quarter-to-quarter, and the elevated Q1 2026 OTC results driven by episodic client activity are not expected to repeat at the same level in future quarters. • Staking revenue remains exposed to crypto asset price volatility and network yield fluctuations, both of which were down relative to elevated 2025 levels.

Q: What is the strategic rationale for the $100 million founder private placement, and how will the new capital change Gemini's priorities across existing and upcoming products?

A: The investment reflects the founders' conviction that Gemini stock is significantly undervalued at current prices, as the share price does not reflect the business's progress since the September 2025 IPO, including new prediction markets and valuable DCM/DCO licenses that each trade above $100 million on the open market. The additional capital will be used to support continued investment in existing core products (exchange, credit card, prediction markets, derivatives) as well as the upcoming launch of equities trading.

Q: Prediction market cross-sell to existing Gemini users has hit 3.4% to date with strong volume growth. How is Gemini driving this adoption, and what is the growth outlook for penetration?

A: The product is still in very early stages, with growth driven by in-app promotion (it is now a core navigation tab) and incremental discovery by existing users, plus new user acquisition from social media and word of mouth. Gemini has rapidly expanded the range of available contracts, adding multiple time durations for major crypto assets and new contracts for real world commodities. Management expects significant room for continued growth, as most users have not yet discovered the product, and the 78% month-over-month April volume growth indicates accelerating traction.

Q: What explains the strong Q1 OTC performance, is the growth structural or just temporary, and what is driving lower staking revenue?

A: Q1 OTC performance reflected a combination of temporary episodic client activity driven by market volatility, and strong structural growth from expanded electronic OTC API capabilities that have added new institutional clients and increased repeat flow. While the high Q1 growth rate is not expected to repeat due to the naturally lumpy nature of OTC trading, the business has a stronger underlying structural trajectory than a year ago. Lower staking revenue is fully explained by lower crypto asset prices (which reduce the dollar value of staked assets and associated fees) and moderated network staking yields relative to 2025 levels. However, Gemini completed a full rebuild of its staking infrastructure this quarter that positions the business for growth when market conditions improve.

Q: What is current credit performance of the Gemini credit card, what caused the higher Q1 loss provision, and how is funding for growing receivables managed?

A: The overall credit card portfolio is performing in line with expectations, with a 3.8% 30+ day delinquency rate and 3.5% annualized charge-off rate, both improvements from the portfolio's early launch stage. The higher Q1 provision included $4.1 million from a one-time discrete fraud event that has already been contained and fully reserved, with new controls added to prevent recurrence. Normalizing for this event, the higher provision reflects normal seasoning for a portfolio that tripled in size over the past year. Gemini has an existing warehouse facility that provides sufficient funding capacity for current receivables, and is actively evaluating long-term funding options as the portfolio grows, with ongoing stress testing for softer macro scenarios.