Exodus Movement, Inc. (EXOD) Earnings Call Transcript & Summary

Greetings. Welcome to Exodus Q2 2026 Earnings Webcast and Conference Call. [Operator Instructions] Please note that this conference is being recorded. I will now turn the conference over to Benjamin Marcos from Exodus. Please go ahead.

Hi, everyone. Welcome to Exodus Second Quarter 2026 Earnings Call. I'm your host, Ben Marcos, and with us today are Exodus Co-Founder and CEO, JP Richardson; Monavate's CEO, Michael Rolph; and CFO, James Gernetzke. During today's call, we might make forward-looking statements. The company cautions investors that any forward-looking statement involves risks and uncertainties and is not a guarantee of future performance. Actual results may vary materially from those expressed or implied due to a variety of factors described in our earnings release, Form 10-K and other SEC filings. We undertake no obligation to update forward-looking statements. As always, we encourage investors to submit questions through X or Reddit following today's call. Today's call is our first opportunity to report on the combined Exodus and Monavate organization. JP will begin with a strategic transformation underway at Exodus. Michael will explain the payments platform, the combined market opportunity and James will review the quarter's financial performance and the steps we're taking to build a more durable financial model. With that, please go to you, JP.

Thanks, Ben, and thank you, everyone, for joining us. If there's 1 takeaway from today's call, it's this, Exodus is becoming a payments company. And this quarter, the transformation moved from plan to execution. Over the last few months, Exodus began to execute on the strategy we presented to you in past calls, turning our company from 1 of the industry's leading self-custodial wallets to a diversified financial services platform built to help individuals and businesses manage and move money. Everything we'll discuss today builds on that theme. During the second quarter, we completed the most strategic acquisition in our company's history throughout the purchase of Monavate and Baanx. We spent the second quarter focused on integrating the businesses and creating a new combined organization that is optimized around the payments business. This is a strategic transformation. Again, we are becoming a payments company. We are fundamentally expanding our infrastructure and our enterprise capabilities to be a payments provider and a full-service fintech solution. Monavate opens the door to a new enterprise payments market with associated revenue streams that are largely independent of the crypto markets. So Exodus gains capabilities to tap into and potentially monetize many billions of dollars of self-custodial wallets currently held by our users. Finally, the combination of our core wallet and Monavate's payment infrastructure enables us to build novel solutions for new markets, most notably Agentic payments. Our product road map is built around 1 goal, make Exodus more useful in our customers' financial lives and earn a stronger economic relationship with them over time. As a part of this transformation, we've made some fundamental changes to align with our long-term payment strategy and position Exodus for future profitability. A few weeks ago, I had to make the difficult decision to reduce the size of our team by approximately 25%. And we expect $10 million to $13 million in annualized operating expense savings with a fully full monthly run rate in place in the fourth quarter of this year. I want to say, I'm deeply grateful to everyone affected. They helped build this company and create a product that millions of people use to self-custody their digital assets. But as I looked ahead, I realize that our team was organized around who we were and not where we are headed. You're going to hear from Michael in a bit. We are working closely with Monavate to bring our businesses together and create a new company purpose built for the opportunities ahead. This quarter, we faced costs associated with business transformation, revenue was $26 million, the net loss of $19 million. Two key headlines about our financials. First, on revenue. Our revenue has remained relatively consistent over the past 6 months. This is despite the continued weakness in the crypto market and the incredible amount of time spent acquiring and integrating Monavate into Exodus. I am confident that our platform of direct users and enterprise partners is stable. It is the foundation for growth ahead. Second, our net loss largely reflects the onetime operational expenses connected with combining the organizations. Looking forward, I believe our revised operating platform can support our growth plans without an associated increase in cost structure. Shortly, James will take you through this in more detail. Now I want to take a few minutes to orient you on the road ahead for Exodus. Historically, we have been known as a self-custodial wallet company. We are modeled in wallet metrics viewed as a place to hold and manage digital assets. And that made sense because it's the company we originally built. Our customers' trusted Exodus to manage their assets, but our platform is limited. This is changing. Exodus Pay is a first example, moving beyond holding assets into everyday money movement. And the Monavate acquisition gives us the infrastructure to take that much further. These efforts are directed at our core base of 1.4 million active users with the goal of deepening our financial relationship with them. And while we are actively exploring ways to build our customer base such as partnerships with UFC and direct TV, our greatest near-term opportunity is with our existing users who already trust our platform. For Monavate, whose existing business is built around supporting both traditional commercial enterprises and on-chain finance clients, we see a significant opportunity for growth. Before they can be achieved, we are focused on strengthening Monavate's payments infrastructure and restoring capabilities that have been constrained for the past year. Specifically, Monavate's inability to issue new cards for new clients in Europe. This issue was known at the time of our purchase, it was a principal reason we were able to make this acquisition at such a favorable price, relative to substantially higher valuations seen in other transactions such as rein, reap and bridge. We always believe we can solve the issue. And the improvements we're making today operationalize the same capabilities we saw as significant untapped value when we acquired the business. I will let Michael from Monavate provide some additional details, but I'm pleased to say we've made meaningful progress over the past couple of months. And we are on track to establish a new issuing arrangement during the fourth quarter. At the same time, we're also transitioning to a new domestic banking partner in the United States, which will accelerate our domestic capabilities to support interest in Exodus Pay and enterprise payment clients. Exodus Pay growth is gated on the same issuance fixes, which is why are we holding off from reporting adoption metrics until the product is fully available. Together, these initiatives represent an important milestone unlocking Monavate's full potential and position the business to contribute much more meaningfully as we move forward. One final point before I hand over to Michael. I've used the term Monavate throughout my remarks. When we say Monavate, we mean the combined teams, businesses and relationships from both the Monavate and Baanx acquisitions. The Baanx brand is being retired. Its team and technology are folding into Monavate and Monavate is our payments business going forward. Michael, over to you.

Thanks, JP. I'm pleased to be joining my first earnings call as part of Exodus. Over the past several months, I've spent considerable time with JP, James and the broader leadership team. What stands out is the alignment around a clear long-term vision, building infrastructure that bridges traditional financial services to on-chain finance powering instant, borderless and programmable movement of value for the world. Stablecoins are accelerating the modernization of financial services with near real-time settlement, continuous availability and borderless interoperability, they are improving how value moves across remittance, global payments and tokenized assets. Combined with the coming revolution of commerce due to the proliferation of Agentic payments use cases, both consumers and enterprises increasingly expect financial products to operate seamlessly across Fiat and on-chain environments. That shift is driving demand for regulated infrastructure that enables these experiences to be delivered securely, efficiently and at scale. That is precisely where Monavate is positioned. For those less familiar, Monavate provides regulated payments infrastructure that enables enterprises to launch and operate modern payment programs. Our platform includes card issuing, processing, settlement, BIN sponsorship, stablecoin settlement, compliance oversight and multi-jurisdictional operational support, allowing clients to move money safely and efficiently. As JP noted, we experienced a regulatory setback in Europe in late 2025, following a bank of Lithuania inspection of Monavate UAB. Whilst Monavate UAB was not part of the Exodus transaction, it is important context. The outcome required us to tighten controls as new program onboarding in Europe and offboard a limited number of programs while enhancements were implemented. Importantly, Monavate UAB has continued to service the majority of its existing customers throughout this period as we continue our work on the remediation. Europe remains a key strategic market and in July 2026, Exodus assumed W3C rights and obligations under its existing agreement to acquire ZixiPay, subject to regulatory approval by the Bank of Latvia. As a result, Exodus is positioned to acquire ZixiPay Pay, which holds the licenses required to help resume scaled business development across Europe, and we view this as an important step in restoring and expanding our regional presence. As of the end of Q2, Monavate supports approximately 40 active enterprise customers. Since inception, we have issued more than 6 million cards and processed over $8.5 billion in transactions. Year-to-date, we have processed over $1.8 billion in gross transaction volume across more than 50 countries, supported by approximately 1.4 million active cards. Our customer base spans fintech, payroll, insurance, logistics and on-chain businesses. Excluding the impact of 1 large concentrated decline, transaction volumes grew by over 50% in the first half of 2026 compared to the prior year. I will return to that client in a moment. The strategic rationale for Exodus' acquisition of Monavate is straightforward. We provide the infrastructure layer for using money. Our customers include CreaCard, MarTrust, ShipMoney, [ Biplayer ], OKX, Kraken, and [ Notice ] to name a few. We span both traditional payment use cases and the digital asset ecosystems. Equally important is what Exodus enables for Monavate. Our enterprise clients now gain access to Exodus' capability in self-custody and digital asset infrastructure, creating meaningful opportunities for cross-sell and the development of integrated end-to-end solutions that bridge Fiat and Crypto. Integration is progressing well. Our priorities remain clear: maintaining uninterrupted service for customers, advancing technology integration and executing on commercial synergies. Finally, on the large enterprise client referenced earlier, we supported a fintech in scaling what became a successful buy now, pay later platform in the U.K. As they mature, they transitioned card processing in-house. They remain a client today, albeit at reduced volume. However, with potential to expand the relationship into new product categories over time. While this impacts concentration, it also demonstrates our ability to incubate and scale high-growth programs. Importantly, our business today is well diversified and not dependent on any single customer. With that, I'll hand over to James to talk through the financials.

Thanks, Michael. The second quarter represented the first quarter operating as a combined organization following the acquisition of Monavate and Baanx. As JP and Michael discussed, this transaction fundamentally expands our strategic opportunity. From a financial perspective, however, acquisitions of this scale require a transition period as organizations integrate systems, align operations and begin realizing efficiencies. Accordingly, we believe investors should evaluate this quarter through 2 lenses: first, the resilience of the legacy Exodus business; and second, how we're positioning the combined company to generate stronger and more diverse financial performance over the coming years. Revenue reported for the quarter totaled $26.2 million and a net loss of $18.6 million. Revenue was split approximately $21.2 million from Exodus and $5 million from Monavate. On a non-GAAP basis, our total revenue for the quarter would be slightly higher, around $29 million. However, our reported results reflect Exodus' ownership of Monavate only for May and June. The non-GAAP total would be in line with the pro forma Q1 2026 combined revenue we published in July. For Exodus, both monthly active users and quarterly swap volume held generally constant from Q1 to Q2, at $1.4 million and $1.13 billion, respectively. Our swap volume is down year-over-year, but not inconsistent with continued price pressure we are seeing across the broader cryptocurrency market. Our other programs are relatively new and continue to scale. Once fully launched, we look to report adoption usage metrics along the lines of our swap volume. As Michael mentioned, Monavate has processed, $1.8 billion in gross transaction volume year-to-date with Q2 accounting for approximately $900 million. On a normalized basis, this represents a 60% quarter-over-quarter increase across Monavate's core client base. Moving down the P&L. We had a net loss of $18.6 million and an EBITDA loss of $21.5 million. Both numbers reflect activities connected with combining 2 companies and accounting for acquisition-related expenses, technology integration and restructuring costs. As such, we view these as transitional rather than structural. So we've also produced an adjusted EBITDA to highlight the strength of the core operating business. For the quarter, our adjusted EBITDA is a loss of $6.7 million with the primary adjustments coming from transaction expenses and unrealized gains on digital holdings. Looking at the balance of the year, our operating budget will begin to reflect the organizational changes we announced last month. And with that, I'll turn it back to JP.

Thanks, James. Q2 marked the beginning of our transformation, not as completion. From here, we have 3 priorities: first, complete the integration of Exodus and Monavate while maintaining the service and trust our customers expect; second, complete the operational and process improvements of Monavate to reactivate their global capabilities; and third, convert our more diversified revenue base and leaner cost structure into sustainable profitability and positive cash generation. We are not moving away from what made Exodus successful. We are building on it. The trust, technology and direct customer relationships established through the Exodus wallet are now the foundation for a much broader financial platform, one that can power financial experiences for customers, businesses and AI agents. We understand that investors will judge us on execution. Our responsibilities to demonstrate progress consistently in our products, our operating performance and ultimately, in our financial results. With these changes, we also believe we have the potential to fundamentally change how investors think about Exodus. Historically, we've been largely viewed as a company whose financial performance was closely tied to the crypto markets. While crypto will always remain central to who we are, that's no longer the complete picture. By expanding into payments and broader financial infrastructure, we're building a business with significantly larger addressable market and more diverse revenue streams and opportunities to generate growth that are less dependent on digital asset prices. We're leveraging the technology, regulatory expertise, customer relationships and distribution, we've spent more than a decade building allowing us to expand into adjacent markets from a position of strength. For investors, the practical change is how you model us. Exodus is now 2 segments. One is cyclical swap and transaction revenue that moves with crypto markets. One is durable, payments volume for Monavate, which grows with usage rather than asset prices. Exodus is becoming a payments company. We're incredibly excited about the direction we're headed. And although we do not believe the opportunity is fully reflected in how the market values the company, we remain focused on executing our strategy. Thank you all for your continued support. Okay. Operator, now let's open the line for questions.

[Operator Instructions] And our first question comes from the line of Gareth Gacetta with Cantor Fitzgerald.

I just wanted to touch on the cost structure first. Could you maybe provide any color as to how much of the step-up in G&A this quarter was more of these onetime transaction-based expenses versus what may continue out on a run rate basis? And also on top of that, could you maybe weigh how you're thinking about the updated cost structure once some of the head count reductions start flowing in as compared to kind of this newer cost structure?

Yes. Thanks, Gareth. So I would say there's about $17 million in pure transaction-related incentive costs, there's about $5.8 million related to some professional services. And those are going to be the bulk of the 1x items there. If you're thinking about or as we think about the cost structure going forward, I'll just point out that the integration is not fully complete yet. So we had the reduction in force that JP mentioned and that we conducted last month. And we are still actively working towards finding those synergies and efficiencies as part of a go-forward organization, combined organization. And so definitely more to come on that. I think I would just highlight that, that we're not finished yet with that integration.

Great. That's really helpful. And I'd love to have Michael on the call, and that was some great color on kind of the profile there. But I'm wondering if you could touch on maybe what are some of those ancillary services outside of processing where you guys see kind of the greatest opportunity among the current client base?

Yes. So in terms of the ancillary services, I guess you kind of can fall into 2 buckets ready, the services that make up the core offering of Monavate, which would be things like KYC, PEPs and sanctions checking, chargeback management and sort of -- those sort of value-added services that fundamentally through MonavateOne platform, we provide those services through that one integration, which means that as a customer, you don't have to have multiple different partner or supplier integrations as part of your product mix. The second bucket of ancillary services are the ones that we're obviously looking to now start to embed as we move forward, which will be the institutional products of Exodus into the Monavate stacks so that we can offer those to our existing customer base. And I think it's fair to say with the way we look at, obviously, the development of the industry overall with the emergence of stablecoins and Agentic payments that we feel that there is a good opportunity for us to go to the existing customer base with that enhanced product offering in time as well as obviously expand the opportunity that we see in our overall market -- go-to-market strategy with that combined end-to-end offering. It's worth noting that from my perspective, I think that if you look at that stack end-to-end of what Monavate has and what Exodus brings to the table on the institutional side as well, that there are very few companies out there that actually have that as a fully built service all under 1 roof.

I'm going to add a little bit to what Michael just said there. Absolutely right about owning the stack end-to-end, so having card issuing processing, the ability to give these businesses wallets all over the world, the ability for them to hold stablecoins all over the world take advantage of the efficiencies of stablecoins. And then not to mention, if you include swaps on top of that, that just makes the enterprise offering all the more sweet as well.