Gemini Space Station, Inc. (GEMI) Earnings Call Transcript & Summary

Hello everyone, and thanks for being here on Gemini's call for the first quarter of 2026 earnings. I'm Ryan Todd, and I lead Investor Relations here at Gemini. With me today are Gemini's Co-Founders, Cameron and Tyler Winklevoss, plus Danijela Stojanovic, our Interim CFO. Our first quarter 2026 financial results came out yesterday. On this call, we might make forward-looking statements, and those could differ materially from what actually happens, since they rest on management's present expectations, forecasts and assumptions. Details about the risks, uncertainties and other factors that might make these results come out differently appear in our SEC filings. Today we'll also talk about certain non-GAAP financial measures. You can find reconciliations to the GAAP financial measures that are most directly comparable in the earnings presentation posted on our Investor Relations website and on the SEC's website. Non-GAAP financial measures ought to be viewed alongside GAAP measures, not in place of them; we'll begin today's call with prepared remarks and afterward take questions; so with that, I'll hand things over to our founders, Cameron and Tyler.

Hello everyone, and thanks for being here on our Q1 2026 earnings call this morning. Cameron Winklevoss here — I serve as President and Co-Founder of Gemini. After we announced Gemini 2.0, we feel we've achieved substantial movement toward the objective of turning Gemini into a markets company; our beginning was as a Bitcoin company. Then we evolved into a crypto company, and at present we're creating the super app for the markets economy — our idea of serving as the bridge to what money and markets will become. During this quarter, we advanced considerably toward that idea. There's still plenty of work in front of us, yet revenue rose 42% this quarter and transaction revenue stayed flat compared to the same period last year, even though trading volume fell over 50% because of notable weakness in trading activity across the broader crypto market. Those headline figures are encouraging, but we're aware of where our share price stands right now. Bitcoin's price has dropped about 30% since the day of our IPO. Being a crypto native business, we're connected to that cycle to a certain extent. Still, we don't think Gemini as it stands today amounts to 1/6 of the Gemini that IPO'd. Back in September when we went public, a predictions marketplace didn't exist for us. Now it does. We used to be a crypto company. Now we're laying the groundwork for far more. Our capacity to launch and scale market infrastructure comes from over a decade of know-how gained building Gemini's crypto marketplace; we've shown this through our predictions product, which we decided to develop in-house rather than partnering the way a few of our rivals did; and now, thanks to the DCO license we recently acquired from the CFTC, which Tyler will cover soon, we're in an even stronger position to make this vision real. Pairing that license with our marketplace-building know-how should let us completely control the customer experience and provide a best-in-class predictions marketplace. We genuinely think that creating value by giving customers additional choices across several asset classes — crypto predictions, credit card rewards, and soon, we expect, stocks — results in a company indexed to markets at large rather than to one single cycle. That's the direction Gemini is striving toward, and we think the groundwork laid this quarter represents a significant move along that path. Given all this, we view Gemini's stock as substantially undervalued, so we made a strategic investment of $100 million into Gemini through Winklevoss Capital at $14 per share of the company's Class A common stock, with that investment funded in Bitcoin. We firmly believe this investment lets us position the company for its next stage of growth. With that, I'll hand things over to Tyler to go through a few of our business highlights from this quarter and how they'll influence our future.

Appreciate that, Cameron. Speaking is Tyler. During this quarter, Gemini hit product and regulatory milestones that should position us well moving forward. Back in April, Gemini obtained a Derivatives Clearing Organization license from the CFTC. Let me take a moment to explain what that is, why it's significant, and what it opens up. The DCO, or Derivatives Clearing Organization, permits us to function as a clearing house — the entity responsible for clearing and settling derivatives contracts, prediction market contracts, event-based contracts, and eventually futures, options and perpetual contracts. This DCO relies on the very clearing framework that has supported traditional derivatives markets for decades. The DCO follows the DCM — that's our Designated Contract Market license — which we secured in December 2025. A DCM lets you list derivatives contracts. Our starting point was events contracts for the prediction marketplace. Now the DCO finishes the job. Taken together, the DCM and DCO represent significant milestones as we work toward an end-to-end marketplace built internally, with no meaningful reliance on third parties. Having both is rare. Competitors typically got into derivatives by buying companies. Gemini built its DCM and DCO internally, the same way we spent the past decade building our crypto exchange. Regulation is a foundation for us, not something added later. Having DCM and DCO ownership in-house opens the door for us to clear trades in prediction markets and event contracts using our own infrastructure right now. It also puts us in a stronger spot for whatever comes next after predictions — and in our view, that's perpetual contracts. When you look at global crypto markets, perps are far and away the most heavily traded product. Bitcoin's price discovery mostly takes place in perpetuals markets rather than on spot. And as things stand, that entire volume and price discovery is happening offshore on exchanges that aren't regulated, mainly because the United States has never had a regulated route for perps. When it comes to regulated price discovery happening onshore, the full crypto narrative won't really take off in America until perpetuals get the green light here. Based on what the CFTC has said publicly, our belief is that approval is coming to the U.S. before long. Once that moment arrives, we think Gemini will be one of the platforms sitting in the strongest position to come out ahead. In addition to getting our DCO squared away, Gemini achieved meaningful progress during this quarter in what we see as trading's next big frontier: agentic trading. Through a regulated U.S.-based exchange, we rolled out the very first agentic trading tool offered directly to users. With agentic trading, clients can link up AI agents — Claude, ChatGPT and others among them — straight into the complete Gemini API, enabling them to execute trades, keep an eye on markets and handle risk on their own. We're only in the opening stages of agentic trading, yet our belief has been longstanding that a day will come when machines outnumber humans among Gemini's customers. Crypto may have been created by people, but in the end it amounts to money built for machines rather than for people. If you consider both of those developments together—the DCO license we obtained and Agentic trading going live—they represent, in our view, the first steps on the path toward the long-term goal we've described before: turning into the super app that Americans reach for first when it comes to the future of money and markets. Having said that, I'll now pass it to Danijela, our interim CFO, who will take everyone through the financial results for the quarter in greater detail.

Thanks, Cameron and Tyler. Morning, everybody, and I appreciate you being with us today. I'll kick off with several main points from the quarter, after that take you through the results thoroughly, and finish up with our financial guidance for the year. Let me call out 3 items right away. To begin with, revenue rose 42% compared with the same period a year earlier, reaching $50.3 million. That expansion came from many areas, powered by the credit card, our OTC business and our initial complete quarter of contribution from prediction markets. Crucially, we delivered this revenue increase even as crypto trading volumes were substantially below those seen in Q1 of 2025. Next, services revenue and interest income kept up its structural transformation, hitting $24.5 million and accounting for 49% of total revenue, compared with 31% in Q1 of 2025. This diversification sits at the heart of our approach to create a company less exposed to crypto market cycles. And lastly, our cost restructuring is gaining traction. The workforce reduction of roughly 30% finished in Q1 began moving through the financials and will show up more completely in Q2 as we shift into a lower run rate cost structure. Now on to revenue. Total revenue came in at $50.3 million, rising 42% versus a year ago from $35.3 million in Q1 of 2025. Transaction revenue stayed flat year-over-year at $24.1 million. Inside that figure, there were significant components in motion that deserve attention. Exchange revenue totaled $17.2 million, falling 27% year-over-year, which mirrors the large retreat in crypto market activity. Total spot trading volume dropped to $6.3 billion from $13.5 billion in Q1 of 2025. That works out to a 53% drop in volume versus just a 27% drop in exchange revenue, showing our fee economics keep getting better. OTC revenue reached $6.3 million, versus $0.1 million in Q1 of 2025. This result mirrors both opportunistic and structural tailwinds. The quarter contained significant onetime volume from episodic client demand, adding to a raised baseline that we don't fully anticipate recurring. Crucially, fundamental business momentum stayed solid. The eOTC API program brought on additional institutional clients during the quarter, growing the desk's recurring revenue base and underpinning a sturdier growth path ahead; and for the very first time, prediction market added $0.4 million to transaction revenue, marking our initial complete quarter after the December 2025 launch. Adoption picked up speed across the quarter and has kept accelerating into Q2, with April volume climbing 78% month-over-month. Since launch, the platform has exceeded 100 million contracts traded among over 20,000 traders. As a reminder, this remains an early-stage product for us, and our priority today is on developing liquidity, engagement and market depth on our own infrastructure. We anticipate monetization will grow over time as the platform matures. Now to services revenue and interest income, which totaled $24.4 million, an increase of 122% year-over-year. Most of this growth came from services, especially the credit card, which I'll go through now. Credit card revenue reached $14.7 million, climbing nearly 300% year-over-year. At quarter end, we had more than 154,000 open card accounts, an increase of 111,000 year-over-year. In the first quarter of 2026, growth held at a consistent pace, even though the number of new sign-ups tends to fluctuate from one quarter to the next, especially while we keep honing how we bring in customers and tighten up our risk guardrails as the portfolio gets bigger. Managed receivables rose from $69 million to $217 million across that same span, which works out to the portfolio more than tripling, and the main force behind that is the growth of our cardholder base. Advisory fee revenue came in at $2.7 million, matching what we saw the previous quarter, which mirrors the advisory services agreement we have in place with a strategic customer that we signed in the third quarter of 2025. During the first quarter of 2025, we had no revenue of that kind to compare against. Custodial fee revenue reached $1.9 million, essentially unchanged versus a year earlier. Staking revenue totaled $2.1 million, a drop of 31% compared with a year ago, which reflects softer asset prices and lower staking yields against the unusually high crypto market levels seen in that earlier period. Now on to expenses. Operating expenses overall came to $144.5 million in the first quarter, which is 73% higher than a year ago. Let me be straightforward about what sits inside those figures, since there are significant one-time items in there that add some distortion when you look at our normal cost base. Salaries and compensation amounted to $65.4 million. That figure contains $24.2 million in stock-based compensation along with $6.5 million of severance and related payroll taxes tied to the workforce reduction we carried out in the first quarter, and that second piece is a one-time item that won't come back. Once you strip those out, core cash compensation stood at $34.8 million. That said, it's important to point out that this number still reflects salary costs for only part of the quarter for the roughly 30% of employees who left during the first quarter. As a result, the actual run rate we're carrying into the second quarter is lower. We ended the quarter with headcount of about 441. Sales and marketing came to $19.1 million, which is 111% higher than a year ago, yet it's well below the $32.9 million and $39 million we spent in the third and fourth quarters of 2025, respectively. We'll keep putting marketing dollars to work where opportunities arise, adjusting to market conditions and the return we get on acquisition. Inside that number, brand and performance marketing accounted for $7.6 million, while credit card rewards plus promotional and referral incentives made up $11.4 million. Transaction losses totaled $11.1 million, which is up from $4.1 million in the first quarter of 2025. Three things drove that increase: our provision for expected credit losses on the credit card portfolio, which was $4.6 million, up from $2.5 million in the first quarter of 2025 as the portfolio keeps expanding; a credit card fraud reserve of $4.1 million, which is a new item with nothing comparable charged in the first quarter of 2025; and ACH and other transaction losses of $2.4 million, up from $1.6 million in the first quarter of 2025. Both the provision and the fraud reserve reflect seasoning patterns on a portfolio that's growing quickly, and credit performance on the whole is tracking in line with what we expected. We've also made moves to further bolster our fraud controls and monitoring. Technology expenses were $22.1 million, 32% higher than a year ago, which reflects infrastructure investments meant to support platform growth and the launch of new products. General and administrative expenses came to $21.7 million, up 55% versus a year ago, mostly because of higher legal expenses. Taken together, tech and G&A amounted to $43.7 million for the quarter. Looking at our bottom line, we posted a net loss of $109 million. That's a 27% improvement from a year ago, when we lost $149.3 million in Q1 of 2025. On adjusted EBITDA, we saw a loss of $59.9 million. For comparison, that figure was a loss of $92.2 million in Q4 of 2025 and a loss of $61.6 million in Q1 of 2025. The improvement we're seeing quarter over quarter comes from the early effects of the cost measures we've taken, so the complete benefit from the Q1 restructuring should start showing up in Q2. We're not happy with where our losses stand right now, but we think the way ahead is obvious: scale the card in an efficient way, expand predictions, and keep growing recurring services revenue that compounds no matter what happens with trading volumes, all while staying strict about our expense base and making the most of the infrastructure we've already constructed across the platform. There are a few platform metrics I want to call out. We had 589,000 monthly transacting users, which is a 17% increase from a year ago. That expansion is happening even with a weaker trading environment, and it speaks to the platform diversification we've been developing through the card, staking, and now prediction markets. As of March 31, 2026, assets on platform totaled $11.1 billion, down from $14.2 billion as of March 31, 2025. What's behind that decrease is lower crypto asset valuations compared with the high market levels seen in the same period last year — it's not a drop in user engagement or in the assets we manage.

I'll wrap up by talking about what lies ahead. We aren't offering formal revenue guidance right now, which matches what we did a quarter ago, because the macro backdrop is still uncertain. Turning to expenses, the restructuring moves we told you about in Q1 should start working their way fully into our cost base during Q2. The main assumptions we gave you three months ago haven't changed. Let me quickly run through them again: cash compensation, once you strip out stock-based compensation and restructuring charges, should fall 15% to 20% versus 2025 levels. Stock-based compensation should come to $100 million to $115 million across the whole year. Technology and G&A taken together should land somewhere between $155 million and $190 million for the full year. And marketing, once rewards and promotions are excluded, should run at 10% to 15% of revenue; as for liquidity, we finished the quarter holding $215.6 million in cash and cash equivalents. As Cameron and Tyler mentioned, our founders have wrapped up a $100 million direct investment into Gemini funded in Bitcoin, which further bolsters our balance sheet as we work toward our 2026 priorities. The common thread running through all of it is simple. Revenue is climbing, we're diversifying beyond digital asset trading, and we're staying disciplined on cost. And as our founders' commitment shows, we've got both the conviction and the capital behind us to carry this through. What matters for the rest of 2026 is executing on each of those priorities with discipline. In short, Q1 delivered meaningful progress against the priorities we set out. Revenue was up 42% year-over-year. Services revenue and interest income together now account for almost half of total revenue, and our cost reset is in motion. The momentum in the card, the early traction in predictions and the growth in our OTC business give us confidence that we're building a more durable platform; there's more work ahead on profitability, and we're moving with urgency. We're building a business that's more diversified and more disciplined, and we think we're better positioned to scale as market conditions improve. With that, I'll turn it back to Ryan to kick off the Q&A.

We're going to start the Q&A portion with our research analysts now. You sent your questions in ahead of time in written form, and each analyst gets to ask one. Up first is Adam Frisch from Evercore. His question is this: that private placement of $100 million priced at $14 per share represents a big show of confidence. Could you walk through the strategic reasoning for this investment, and are there any implications on the commercial side or for products, plus how does this extra liquidity change where you're focusing your efforts in exchange, card predictions and derivatives?

Appreciate that question, Adam. Cameron here. So when it comes to that $100 million we're putting in, we think Gemini's stock is priced way below what it's actually worth right now; that investment, in our view, captures that thinking and how strongly we feel about Gemini. On what the money gets used for, we're aiming to play offense and back what already exists along with offerings we hope reach the market shortly, equities among them. Looking at this business, it genuinely strikes us as out of sync. The share price bears no relation to what's actually underneath. Thinking back to where Gemini stood at its launch — its IPO in September of 2025 — we don't see this as a company worth just 1/6 of what that IPO'd entity was worth. Honestly, it's the reverse. Since then, we've rolled out a whole new prediction markets marketplace, and we're genuinely thrilled about it. The early growth has us very optimistic; along the way we picked up both a DCM license and a DCO license. On their own, each of those licenses changes hands for over $100 million on the open market. None of that underlying worth, as far as I can tell, shows up in the share price — never mind the gains we've made on the product side. So our plan is to keep backing current offerings and priorities, plus whatever comes next, equities included, which we're hoping to roll out before long.

James Yaro from Goldman Sachs has the next question, and he's asking whether we could give an update on where things stand with the Clarity Act, how we think this bill will develop, and what our current thinking is regarding the effects on our business.

For more than 10 years, we've been developing a regulated exchange and custodian in the United States through the state MTL route, and that work will keep going until a federal framework like Clarity exists. We — it truly seems as though Clarity is drawing nearer; predicting the exact timing is difficult; yet the direction and speed of progress have us clearly encouraged. And so I think our long-held view is that a solid bill, the correct bill, would be extremely beneficial for the market, and we'd welcome it. We hope that happens and that it keeps working its way through the process. Meanwhile, should it fail for any reason, we are constructed and situated with a strongly regulated stance, and we'll simply keep building and carry on with what we're doing.