EXOD

• Strategic Transformation

  • Exodus is executing a strategic transformation from a leading self-custodial crypto wallet provider to a diversified fintech and payments company, following the completed acquisition of Monovate and Banks (Banks brand is retired, all folded into Monovate as the combined payments segment).
  • The acquisition was completed at a favorable valuation due to prior operational constraints at Monovate, opening access to the large enterprise payments market with revenue streams largely independent of crypto prices.
  • The combination creates cross-sell opportunities: Monovate enterprise clients gain access to Exodus's self-custody and digital asset infrastructure, while Exodus's 1.4 million existing consumer users gain new payments functionality via Exodus Pay.

• Operational Progress

  • The company reduced headcount by ~25% to align the organizational structure with the new payments-focused strategy, generating $10 to $13 million in annualized operating expense savings that will reach full monthly run rate by Q4 2026.
  • Meaningful progress has been made to resolve Monovate's paused new card issuance in Europe; a new issuing arrangement is on track to be established in Q4 2026. Exodus has assumed rights to acquire Tixi Pay, which holds the required licenses to resume scaled European operations, pending Bank of Latvia approval.
  • Monovate is transitioning to a new domestic US banking partner to accelerate domestic payments capabilities for Exodus Pay and enterprise clients.
  • Integration of the two organizations is ongoing, with priorities set on maintaining uninterrupted customer service, advancing technology integration, and capturing commercial synergies.

• Strategic Market Opportunity

  • Management is positioned to capitalize on growing demand for regulated infrastructure that bridges traditional fiat and on-chain digital assets, driven by the rise of stablecoins and emerging agentic payments use cases.
  • Monovate's full-stack platform offers core value-added services including card issuing, processing, settlement, bin sponsorship, stablecoin settlement, compliance, and multi-jurisdictional support, serving a diversified base of traditional and on-chain enterprise clients.
  • Near-term focus is on deepening relationships with existing users to grow revenue, with new customer growth initiatives (including UFC and DirecTV partnerships) also underway.

• No formal full-year financial guidance was issued, but management confirmed the $10 to $13 million in annualized operating expense savings from headcount reductions will reach full run rate in Q4 2026, with partial cash savings beginning to accrue in Q4. Full annual savings will be realized in 2027.
• Management expects full operational capability for new card issuance in Europe to be restored in Q4 2026, following regulatory approval of the Tixi Pay acquisition by the Bank of Latvia.
• Long-term guidance focuses on transitioning the combined business to sustainable profitability and positive cash flow, leveraging the new diversified revenue base and leaner cost structure.
• Management maintains that core Monovate transaction volume will continue growing, with over 50% year-over-year growth in H1 2026 excluding the reduced large client volume.

1. Legacy Exodus (Self-Custody Wallet): Reported revenue of $21.2 million for the quarter. Monthly active users held steady at 1.4 million, and quarterly swap volume was $1.13 billion. This segment contributes approximately 81% of the combined company's total reported Q2 revenue. Revenue from this segment is cyclical and correlated with broader cryptocurrency market conditions.

2. Monovate (Payments Infrastructure): Reported revenue of $5 million for the quarter, contributing approximately 19% of combined total reported Q2 revenue. Year-to-date 2026 gross transaction volume was $1.8 billion, with $900 million in Q2 2026. On a normalized basis, core client base transaction volume grew 60% quarter-over-quarter. Excluding one large client that reduced volume after transitioning processing in-house, transaction volume grew over 50% year-over-year in the first half of 2026. As of Q2 end, Monovate supports ~40 active enterprise customers, 1.4 million active cards, and has processed over $8.5 billion in cumulative transactions since inception.

• The integration of two acquired businesses is still ongoing, and there is uncertainty around the timeline and full magnitude of cost synergies to be captured.
• Restoration of full Monovate card issuance capabilities in Europe is dependent on regulatory approval of the Tixi Pay acquisition by the Bank of Latvia, which could take longer than the expected 60 to 90 day timeline from submission.
• Legacy Exodus revenue remains cyclical and dependent on cryptocurrency market prices, even after diversification into payments.
• The strategic transformation is a fundamental shift in the company's core business model, creating execution risk as the company reorients teams and operations around payments.
• Monovate previously faced a regulatory setback in Europe that required pausing new client onboarding, and future regulatory changes or inspections could create additional operational constraints.

Q: How much of Q2's elevated G&A was one-time acquisition-related cost versus ongoing run rate, and what will the updated cost structure look like after headcount reductions?

A: Approximately $17 million in transaction incentive costs and $5.8 million in professional services are one-time items that make up the bulk of Q2's elevated G&A. Integration is still ongoing, and the company is continuing to identify synergies and efficiencies in the combined organization, with more updates to come as work progresses.

Q: What ancillary service opportunities does Monovate see with its existing client base?

A: Ancillary opportunities fall into two buckets: first, existing value-added core services including KYC, sanctions checking, and chargeback management offered via the single Monovate One platform that eliminates the need for multiple vendor integrations for clients. Second, Exodus's institutional digital asset and self-custody products will be added to the Monovate stack, enabling cross-sell of combined end-to-end fiat and crypto solutions to existing clients, which is well aligned with industry growth in stablecoins and agentic payments.

Q: What is the timeline and key steps to restart Monovate's European card issuance, and will legacy Exodus RWA products like prediction markets and tokenized equities still launch amid the payments pivot?

A: The main required step is regulatory change of control approval for the Tixi Pay acquisition from the Bank of Latvia, which will be filed imminently and is expected to take 60 to 90 days from submission; other required processes are shorter and less material. While product development for legacy RWA features continues behind the scenes, near-term focus is fully prioritized on restoring card issuance in Europe and the US, so these features will launch at a later date.

Q: What will the quarterly operating expense reduction be in Q3, ahead of the full $10-$13 million annual savings run rate in Q4?

A: Quarterly run rate savings will equal roughly one quarter of the total annual amount, or $2.5 million to $3.25 million per quarter. Full cash savings are delayed until Q4 due to severance payment timing for the workforce reduction, with the full annual benefit realized in 2027.