Gemini Space Station, Inc. Class A Common Stock 2026 Q2 Earnings Call

Good morning, and thank you for joining Gemini second quarter 2026 earnings call. My name is Ryan Todd, Head of Investor Relations at Gemini. Joining me on the call today are Gemini's co-founders, Cameron and Tyler Winklevoss, and our interim CFO, Daniela Stojanovic. Yesterday, we released our second quarter 2026 financial results. During today's call, we may make forward-looking statements which may vary materially from actual results and are based on management's current expectations, forecasts, and assumptions. Information concerning the risks, uncertainties, and other factors that could cause these results to differ is included in our SEC filings. Our discussion today will also include certain non-GAAP financial measures. Reconciliations to the most directly comparable GAAP financial measures are provided in the earnings presentation on our investor relations website and on the SEC's website.

Non-GAAP financial measures should be considered in addition to, not as a substitute for, GAAP measures. We will start today's call with prepared remarks and then take questions. With that out of the way, let me turn the call over to our founders, Cameron and Tyler.

Thanks, Ryan. Good morning, everyone. With the close of Q2, we are approaching the one-year anniversary of Gemini going public. In September 2025, the price of Bitcoin touched $117,000, and the market we were entering looked much different from the market we operate in today, with Bitcoin closing Q2 below $60K. Despite these headwinds, we have been head down building for the Gemini of tomorrow. The Gemini platform has changed more in the past nine months than it did in the past decade. Last quarter, we spoke about the launch of prediction markets in December 2025, and last month, following the close of Q2, we launched commission-free U.S. stock trading. With the addition of stocks, customers in eligible states in the U.S. can now trade thousands of U.S. equities with 0% commission, participate in prediction markets, and trade crypto all from the Gemini app.

Since the end of Q2, we also began operating our derivatives clearing house and settling our own prediction markets contracts following the DCO license we received from the CFTC in April. This quarter, we continued to focus on rapidly evolving our predictions business. While Q1 was largely product and feature-focused, this quarter, we invested in marketplace liquidity and improving the overall trader experience on our prediction marketplace. Since Q1, we tripled the number of contracted market makers on the platform, launched three new maker and taker incentive programs, and expanded trading infrastructure with several improvements to our predictions API. On the product side, we shipped personalized insights powered by AI and a rebuilt interface with unique category-specific experiences across the contract markets we offer.

Looking ahead, we continue to see predictions as the largest near-term growth opportunity on the platform, especially heading into the upcoming sports season in the second half of the year. We've recently certified a wide range of new product filings and continue to deliver new experiences to directly capture that activity. With our clearing house now live and clearing our own contracts, which keeps those economics in-house, we are now focused on adding distribution partners to our DCM and expect to have more updates on our progress here shortly. Through all of it, the focus stays on continuing to improve the health of both sides of the order book. Deeper taker flow attracts more makers, which tightens spreads and lets customers trade with greater capital more predictably. We believe that this is the next unlock in driving prediction activity higher at Gemini.

With that, I'll turn it over to Tyler to discuss our recent business highlights.

Thanks, Cameron. Tyler here. In Q1, we laid out our strategy for Gemini 2.0, and Q2 was our first full quarter operating under it. As we march ahead in the second half of 2026, the shape of the business is visibly different. More products, a leaner cost base, less dollars going out the door, and revenue that leans less on spot crypto trading every quarter. Daniela will take you through the financials in detail shortly. I'm going to spend my time on what we built this quarter and what we intend to do with it. We've operated through crypto market cycles for over a decade, and the rule has held every time. Bear markets are for building. The first half of 2026 was a focus on building by design.

We put our dollars and our focus into shipping new products and securing regulated infrastructure rather than overspend on acquisition in an environment where we felt paid acquisition wasn't going to earn the right returns. We continue to believe That was the right sequencing.

It put us on pace to complete and operationalize our regulated derivatives stack. Our designated contract marketplace at the start of this year, our derivatives clearinghouse launched earlier this month, and our FCM application filed in June. Very few firms in this country hold that combination of licenses, and we built ours in-house rather than spending significant capital to acquire it. The stack was built for more than predictions. Most price discovery in crypto happens in perpetual futures, not spot. Today, the vast majority of that volume sits outside the U.S. We already offer perpetual contracts to customers in Singapore, so the product and the technology are built and running. We own the DCM and the DCO and have filed our FCM application.

If and when we receive the approvals we need, we are ready and intend to launch perpetual futures for U.S. customers. On the product side, this year, we have dramatically expanded what customers can actually trade at Gemini. With commission-free U.S. equities and ETFs launched in July, the platform now offers more than 5,000 tradable markets across equities, crypto, and event contracts, up from less than 100 a year ago. We also rebuilt our advanced trading experience on mobile, so customers can trade directly from the chart or the order book with positions, open orders, and margin all visible in one place. We expanded the assets available for margin trading, and we continue to improve our developer platform and API trading capabilities for programmatic and agentic traders.

Taken together, the first half of this year was about building the products and licensing the structure needed to support a financial super app. We feel confident we've never had a better mousetrap, and it's driving better engagement, with multi-product users nearly doubling year over year. The focus now shifts to distribution and growing revenue by getting more customers and more activity on the platform while holding the cost discipline we established this year. With that, I'll turn over the call to our interim CFO, Daniella, to discuss our financial results for the quarter in greater detail.

Thank you, Cameron and Tyler. Good morning, everyone, and thank you for joining us today. I will start with a few key takeaways from the quarter, then walk you through the results in further detail and close with our updated financial outlook for the year. Three things I want to highlight upfront. First, total revenue grew 37% year-over-year to $45.5 million, driven by continued growth in services revenue and our OTC business. This growth came despite a 38% year-over-year decline in exchange revenue as crypto market volumes remained under pressure throughout the quarter. Second, services revenue and interest income reached $26 million, up 117% year-over-year and now representing 59% of net revenue, up from 50% in Q1, reflecting both the continued growth of the card and staking businesses and a softer trading environment. Third, our cost restructuring is delivering.

Total operating expenses declined 15% sequentially to $122.4 million and headcount ended the quarter at approximately 402, down 40% from our Q3 2025 peak. The full benefit of the Q1 restructuring is now flowing through the cost structure. Turning to revenue, net revenue was $43.7 million, up 33% year-over-year. Transaction revenue was $17.8 million, down 15% year-over-year and down 26% sequentially. Within that, there were meaningful moving parts. Exchange revenue was $12.5 million, down 38% year-over-year and down 27% sequentially, reflecting continued softness in crypto trading activity. Total spot trading volume declined to $3.8 billion from $11.3 billion in Q2 of 2025, a 66% decline against a 38% decline in exchange trading revenue. Institutional volume accounted for nearly 90% of the volume decline, while fee economics continued to improve in both retail and institutional trading segments.