Antalpha Platform Holding Company (ANTA) Earnings Call Transcript & Summary

Good day, and thank you for standing by. Welcome to Antalpha's Fourth Quarter and Full Year 2025 Earnings Conference Call. Today's call is being recorded. [Operator Instructions] I would now like to turn the call over to Mr. Chris Mammone, Managing Director of the Blueshirt's Group and representative for Antalpha's Investor Relations team. Mr. Mammone, please go ahead.

Thank you, operator. Please note that our remarks today will include forward-looking statements based on current expectations. These statements involve risks and uncertainties that could cause actual results to differ materially. For a discussion of these risks, please refer to Antalpha's filings with the SEC. We do not undertake any obligation to update forward-looking statements, except as required by law. This call also contains references to unaudited non-GAAP financial measures. Reconciliation to the most comparable GAAP measures can be found in our press release and SEC filings. I'll now turn the call over to Herman Yu, Head of Strategy at Antalpha. Herman will provide key operational highlights, followed by Paul Liang, who will provide financial highlights. On the call today, both Herman and Paul will discuss our results on a year-over-year basis, unless I mention otherwise. Herman, please go ahead.

Welcome, everyone. Thank you for joining our call today. Antalpha delivered a strong fourth quarter to wrap up a milestone year, reflecting the continued execution across our long-term road map. Revenue growth accelerated every quarter throughout 2025 with fourth quarter revenue reaching $28 million, up 110% year-over-year. Despite Bitcoin prices declining 23% in the fourth quarter, Antalpha revenue remained resilient. For the year, Antalpha revenue was $80 million, up 68% year-over-year. Total loan book grew at a consistent steady pace with prudent risk management. Total value loan Antalpha Prime reached $2.8 billion at the end of 2025, up 59% year-over-year. Bitcoin pledge on the total loan book was $3.7 billion. Loan-to-value or LTV on supply chain loans was 57%, representing our disciplined approach to underwriting and collateral management. Loan balance per client grew 43% and new client adds increased 12% year-over-year. At the end of December, our clients generated 81.3 exahash, approximately 7.3% of global hash rate. For the fourth quarter, adjusted EBITDA was $18.4 million, up 802% year-over-year. And adjusted EBITDA margin reached 66%, up 51 points from the prior year. For 2025, adjusted EBITDA was $33.2 million, up 460% year-over-year and adjusted EBITDA margin reached 42%, up 30 points for the year. As a crypto-native financing platform with tokenized gold upside, and Antalpha revenue and profitability reached a historical high in the fourth quarter. Our mining and financing business is aligned with the economics of compute, energy and collateral-based lending. Our clients are more long-term focused, and they rely on Antalpha's risk management capabilities to better equip them in navigating macro volatility. In addition, by embracing Tether Gold and acquiring XAUt as part of our long-term road map, such risk management strategy not only improves our balance sheet resilience and funding source but also provides our shareholders with the upside to gold appreciation. In an industry susceptible to volatility and large market swings, it is important for us to solidify our current strength while seizing new opportunities in adjacent industries. When we look at large global financial institutions, we often find market leaders that have solid balance sheets to weather market turbulence and be ready for market opportunities as they arise. To us, this means having an active risk management strategy to weather the market volatility and leveraging our marketing position and competitive moat to build on new market opportunities. Let me talk about our risk management and product innovation. Let's start with risk management. Antalpha's operating philosophy of risk management first has been prevalent since our inception. We require overcollateralization on day 1 instead of relying on clients' credit rating for loan origination. We require our clients to store their machines at a data center where we know the operator and all the BTCs our clients' mine are deposited in our wallet during the term of the loan, which allows our clients' collateral pool to accumulate. With Bitcoin down approximately 50% from its peak last October, we have been in conversation with our clients to review the current market situation. There have been 4 other periods in BTC's 17-year history with a drawdown of 50% or more and the market rally back each time. From a risk management perspective, it's important to be in conversations with our clients to discuss potential scenarios and options with them. Helping our clients navigate market volatility and maintaining a stable financial position is crucial to our clients' long-term participation in the Bitcoin mining industry. This not only brings tremendous value to our clients, it also strengthens our own business overall. Let me turn to product innovation and seizing new market opportunities. Our competitive moat comes from our ability to serve clients. We work closely with our clients to understand their needs and offer new financing solutions in anticipation of new market opportunities. For example, it has almost been a year since we foresaw the importance of tokenized gold in serving the mining community and the crypto industry at large. Initially, we acquired $20 million in Tether Gold. Last October, we acquired NASDAQ-listed Aurelion, anchoring its $100 million PIPE and purchasing $134 million in Tether Gold, which further strengthened our balance sheet while building for gold appreciation upside. As of year-end, total accumulated unrealized gain on Tether Gold was $16.6 million. $9.5 million of that is attributed to Antalpha. Year-to-date, gold prices have gone up another 22% as of last Friday. Aside from treasury gains, our involvement with Tether Gold and launching Antalpha RWA hub have also allowed our customers to diversify into Tether tokenized gold and improve the resilience of their crypto holdings. Starting in Q4, a client can purchase XAUt from us and redeem London Bullion Gold in both Singapore and Hong Kong. As our long-term road map, it's important to incorporate tokenized gold into our risk management strategy. Gold has low correlation with Bitcoin and low volatility. Tokenized gold is well suited for the use as a collateral and as a store of value. We are looking into offering XAUt collateralized loans to our clients for resilience and diversification. With the strong supply of HPC coming to market, the backdrop suggests that AI agents are expected to drive demand for inference compute. With the advent of AI engines, we see financing opportunities that in the past were not possible due to the high administrative costs are now opportunities for us, such as agent-led financing solutions. 2026 will be an exciting year for us as we align and Antalpha with new AI capabilities and market opportunities as well as adjusting the way we operate to become an AI-driven company. We will brief you more on how we approach AI when we are ready to share more details. With that, let me turn the call over to Paul to walk through our financial highlights.

Thank you, Herman. I will walk you through Antalpha's financial performance for the fourth quarter of 2025, focusing on the underlying drivers of our results. We closed the acquisition of Aurelion and their $100 million PIPE raising on October 10 last year with 73% of Aurelion's share voting rights. We started consolidating Aurelion's operating results subsequent to the deal closing. We released the Q4 earnings release earlier today. As you can see, our Q4 earnings release show Alpha's operating results at 3 levels. The first, Antalpha combined and consolidated. And second, Antalpha Prime, which is the N Antalpha business prior to the acquisition of Aurelion, and third, Aurelion. Herman summarized Antalpha's consolidated results. Let me now give you more color on Antalpha Prime and Aurelion. Let me talk about Antalpha Prime first. Fourth quarter revenue on our Prime business was $28 million, which reached the high end of our guidance, growing 110% year-over-year. All revenue derived in Q4 was organic. There was no contribution from Aurelion. Tech financing fees on supply chain loans was $18.5 million, up 79% year-over-year, driven by continuous strengthen in [ asset ] loans. Tech platform fees on margin loan was $6 million, up 98% year-over-year. Other revenue was $3.5 million. This was mainly related to pilot loans, which did not have such revenues in prior years. Turning to net fee margin or NFM. Total NFM increased 25 basis points year-over-year, driven by margin loan improvements. Margin loan NFM increased 30 bps year-over-year to 1.49%. For supply chain loans, funding costs increased slightly faster than revenue growth due to the redeployment of $40 million as part of our investment in the Aurelion PIPE. Turning to non-GAAP operating expense, excluding funding costs. Antalpha Prime nonoperating OpEx, excluding funding costs was $8.5 million, up 45% year-over-year, which grew slower than the 110% year-over-year revenue growth, reflecting continued operating leverage from Antalpha Prime technology platform. With Prime operating expense on a non-GAAP basis, tech and development fee increased 32% and G&A expenses increased 35% year-over-year, which reflects operating efficiency. Sales and marketing increased 121% year-over-year or $1.6 million, mostly due to increase in industrial event sponsor and to a lesser extent, due to the increase in personnel-related expense. Prime adjusted EBITDA was $9 million compared to $2 million last year. Prime adjusted margin was 32% compared to 15% last year. Q4 Prime adjusted EBITDA includes $3 million unrealized gain on Tether Gold. Turning to Aurelion. Aurelion did not have any revenue in Q4. Adjusted EBITDA of Aurelion for the Q4 was $9.4 million, which includes $10.4 million in unrealized gain on Tether Gold. Let me decompose our current valuation. Aurelion's net asset value at 31st December was $106.8 million, not counting the gold appreciation since. Antalpha's economic interest of 32% in Aurelion would be worth approximately $34 million. When you add back -- take this out from Antalpha's market cap of $208 million using last Friday's closing price. Antalpha's being valued at roughly 2.2x of 2025 revenue and 9.3x of 2025 net income attributed to Antalpha. We have built a very sizable crypto-native lending platform with strong risk management, which positions us in a very unique position to take advantage of new blockchain lending scenarios, including inference compute and AI agent lending opportunities. Turning to Q1 guidance. We expect revenue for the first quarter of 2026 to range between $20 million and $23 million, representing an increase between 47% to 69% year-over-year. This assumes that market conditions remain consistent with what we see today for the remaining period of the quarter. With that, I will turn over to Herman for closing.

We exited 2025 with strong execution across our strategic priorities, growing consistently across Bitcoin up cycles and down cycles. We have scale and alpha prime lending. At year-end, our loan book stood at $2.6 billion, and our client provided $3.7 billion in Bitcoin collateral, which is an amazing feat for a 3-year-old company like us. Looking ahead in 2026, our priorities are threefold. First, we will remain focused on active risk management and continue to work closely with our clients to manage market volatility. Having a sound balance sheet position, our clients -- having a sound balance sheet positions our clients to expand mining activities in the future. Second, as a crypto-native lending platform established trust and brand in the industry, we are well positioned in the mining industry and leveraging Antalpha Prime to branch into new areas. We are super excited about using our platform to tap into AI and the tremendous opportunities that AI agents will bring to the industry. And lastly, we'll continue to innovate in the area of Tether Gold, including RWA Hub and other opportunities to release the value of tokenized gold. Real-world assets will be an important category in the crypto industry. Tether announced in January that they have acquired $23 billion in gold, which tees them up to make tokenized Gold a very big business. With that, let's go into Q&A. Operator, please go ahead.

[Operator Instructions] Our first questions come from the line of Ed Engel from Compass Point.

Do you mind just talking about the performance of the loan book, whether or not there was any write-offs or provisions in the fourth quarter? And I guess, just quarter-to-date, how that's been holding up?

Paul, you want to talk about loan provisions?

Sorry, I was on mute just now. For the fourth quarter, we don't have any write-off on the loans but we do calculate provision based on the CECL, which is a normal practice for assessing the provision of our -- can you hear me?

Yes, we could hear you.

Yes.

Okay. Yes, yes, yes. So basically, it's calculated based on the loan book, yes.

You can see LTV, it's at 57%, which is pretty healthy.

And I guess just in the first quarter, would you expect continued no write-offs either?

We're managing our loan book now, as I mentioned in the prepared remarks that we're talking to clients and monitoring them and working with them. So I think at this point, we are managing our thing, and we are obviously -- as we mentioned, the way we work our business is we want our clients to have sound balance sheet, right? So that with new versions of machines that come out, they can participate in the next upgrade that they could continue to have hash rate financing and so forth. So we're working with them right now, and that's what we apply with our risk management. So we're managing this. And so far, we haven't seen any major issues with these bad debt write-offs and so forth. So we're going to have to manage the situation because the situation is fluid, as you know, with so many events that happened just in the last few weeks.