Antalpha Platform Holding Company Class A Ordinary Shares 2026 Q2 Earnings Call

Thank you, operator, and welcome everyone to today's call. Joining me today is Paul Liang, Antalpha's Chief Financial Officer. Please note the following. First, all year-over-year comparisons in today's call are for Q2 2026 versus Q2 2025, unless otherwise stated. Second, consolidated financial statements, including Aurelion, began from Q4 2025. As such, Q2 2025 comparative figures reflect Antalpha standalone results. Third, 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 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.

Now I'll turn the call over to Paul Liang, who will provide the Q2 operating and strategic overview, as well as the financial highlights and outlook.

Paul, please go ahead. Thank you, Chris, and good day, everyone.

Thank you for joining us today. The second quarter reflected a more measured financing environment across the digital asset ecosystem versus earlier periods, as many of our customers focus on liquidity management, operational efficiency, and prudent capital allocation. Against this backdrop, we remain selective in deploying capital, optimize our funding structure, and maintain our high underwriting standards. Since inception, our objective has been to build a financing platform that delivers sustainable long-term value for our clients and shareholders, rather than maximizing loan growth in any particular quarter. We believe the strongest evidence of that approach is our record of zero principal loss since inception, achieved across a broad spectrum of market environments while building long-term client relationships.

During the quarter, we strengthened the underlying economics of our financing platform while advancing our broader strategy of building a leader that provides financing, technology, and risk management solutions to the Web3 industry. Further to this point, we made progress across Nina, our Web3 AI business, and Aurelion expanded our capabilities in digital gold, despite the short-term accounting volatilities reflected in this quarter's financials. With that context, let me first provide an update on the operating performance of our key business during the quarter before turning into our financials. Let me begin with Antalpha Prime, which is our flagship financing platform and primary revenue and earnings contributor. During this quarter, we focused on preserving portfolio quality by maintaining prudent underwriting standards and executing with long-term perspective. While financing activity moderated, we were highly selective in deployed capital, prioritizing long-term risk-adjusted return over short-term loan growth.

Most importantly, we maintain our record of zero principal loss since its inception. We believe this track record reflects the effectiveness of our underwriting standards, active collateral management, and comprehensive risk management capabilities across multiple market environments. As institutional participation in digital asset financing continues to evolve, we believe these capabilities, combined with the trust we have earned from our clients and funding partners, will remain important competitive differentiators for Antalpha Prime. As well, we deepen relationships with long-standing clients while selectively originating new loans, reflecting the trust we have built through consistent execution across different market cycles. Although the total value of loans facilitated declined during the quarter, we view that as a reflection of both customer financing behavior and our selective capital deployment, rather than a change of our long-term opportunity. Net fee margin improved year-over-year, while funding costs remained broadly stable.

Turning now to Nina, Antalpha's proprietary agentic initiative. As we discussed last quarter, we firmly believe AI is becoming an increasingly important layer of Web3 infrastructure through this ability to help users more efficiently discover information, analyze opportunities, and interact with decentralized applications. During the quarter, we made encouraging progress in further developing our Web3 AI business. We advanced several key product enhancements and expanded product availability through publicly available iOS and Android applications, making the platform more accessible to a much broader universe of adopters. Nina has now reached several thousand registered users across its website and mobile applications, with the majority of registered users completing at least one core product interaction. While Nina remains in the early stage of commercialization, it is very encouraging to see these initial engagement indicators. Our near-term focuses remain on product development, user engagement, and evaluating Nina's commercial potential.

We look forward to keeping you updated on our progress. With that overview of our operating performance, now let me turn to our financial results for the quarter. Total revenue for the quarter was $12.2 million, ahead of the midpoint of our guidance. The revenue of this quarter down 28% year-over-year, compared with $17 million in the second quarter of last year. As a reminder, our prior year comparison included contributions from the Cango facility, which was almost fully repaid during the first quarter of 2026. Excluding that facility, revenue declined just 15% year-over-year, primarily reflecting lower average loan balance across the remaining portfolio as financing activity moderated during the quarter. Looking at the composition of the revenue, technology financing fees were $7.7 million, down 40% year-over-year, reflecting lower financing activity and average loan balances.

Offsetting this decline, technology platform fees increased 10% year-over-year to $4.5 million, primarily reflecting improved pricing in our margin loan business. We believe the combination of financing and platform revenue provides a solid foundation for the long-term development of our business. Turning to our loan portfolio. Total value of loans facilitated was $1.35 billion as of June 30, compared with $1.61 billion at the end of the first quarter. As discussed earlier, this reflected both more measured financing activity across the market and our disciplined approach to capital deployment. Hash rate financing reached approximately 30.9 exahash, representing approximately 3.1% of the global Bitcoin network hash rate at the quarter end. From a lending economics perspective, we continue improving the efficiency of our business. Funding costs remain broadly stable at 69% of technology financing fee, compared with 67% in the second quarter of last year.

While net fee margin improved by approximately 10 basis points year-over-year, primarily driven by improved pricing within our margin loans portfolio. Turning to operating expenses. In Q2, operating expenses that excluded fair value loss on crypto assets were $15 million, down 14% year-over-year, reflecting tight cost discipline amidst ongoing investments in our strategy initiatives. These expenses include funding costs of $5.3 million and non-cash equity-based compensation of approximately $1.3 million. GAAP operating loss was $25.1 million, compared with operating loss of $0.5 million in the prior year period. Excluding non-cash items, non-GAAP operating loss was $23.8 million. Turning to the bottom line, net loss attributed to Antalpha was $12.5 million, compared with net income of $0.7 million in the second quarter of 2025. As a reminder, Q2 2025 reflects Antalpha's standalone results, as consolidation of Aurelion began in Q4 2025.

Adjusted EBITDA loss was $27.4 million, including approximately $26.2 million in unrealized loss related to XAUT and XAUE holdings. Excluding the XAUT and XAUE related fair value movements, adjusted EBITDA loss was just $1.2 million. To put this consolidated result in context, Antalpha remained profitable on a standalone basis. Let me now discuss the performance of Prime and Aurelion separately. Antalpha Prime generated standalone revenue of $12.2 million during the quarter and operated profitably on a standalone GAAP basis. The business improved its operating economics through funding optimization while maintaining prudent underwriting standards throughout the quarter. Prime standalone adjusted EBITDA loss of $3.3 million includes a $3.9 million fair value loss related to Prime XAUE holdings. Adjusted for the fair value loss, Prime generated $0.6 million of adjusted EBITDA compared to $4 million in the prior year period, representing a 5% and 24% adjusted EBITDA margin respectively.

I will now turn to Aurelion's performance and our perspective on its role with Antalpha's capital strategy and long-term value creation. As I mentioned earlier, Aurelion's reported results this quarter were primarily affected by unrealized fair value adjustment on its XAUT holdings. While these fair value movements significantly affected our reported consolidated earnings this quarter, they do not change our long-term strategic rationale for the business. During the quarter, Aurelion contributed approximately $24.4 million of operating loss, primarily reflecting approximately $22.3 million of fair value loss as XAUT price declined from approximately $4,667 per unit at the beginning of the quarter to approximately $3,996 at the quarter end. Since June 30, XAUT prices have been recovered to above $4,300 as of August 18, reinforcing our long-term confidence in the value of tokenized gold and its potential as an on-chain digital asset. Turning to Aurelion's balance sheet.

As of June 13, 2026, Aurelion's net asset value was approximately $91.9 million, reflecting $134.7 million of digital assets and cash, including 33,318 units of XAUT and XAUE valued at approximately $3,996 per unit, net of $42.8 million of that. During the quarter, Aurelion completed the subscription of XAUE with 8,000 units of XAUT, which were staked into the protocol. Based on our 32% economic interest, Aurelion represents approximately $29 million of attributable net asset value. We continue to believe tokenized gold will play an increasingly important role in the evolving digital asset ecosystem. As institutional adoption continues to broaden, we believe investors will increasingly see assets that combine the stability of traditional safe haven assets with the liquidity, transparency, and programmability of on-chain infrastructure. In that context, tokenized gold can serve simultaneously as a long-term store of value, high-quality collateral, and a yield-generating asset through protocols such as XAUE.