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GEMI
Earnings call · Jun 2026 (Q2 FY26)

Gemini Space Station Q2 FY26 earnings call GEMI

Aug 14, 2026 Source

Executive summary

Gemini Q2 FY26 — Revenue Growth Despite Crypto Headwinds, Cost Restructuring Delivers

Gemini, approaching its first public anniversary, reported Q2 FY26 revenue growth despite significant crypto market headwinds, driven by expanding services and OTC business. The company's strategic shift to a "financial super app" model, with new product launches like commission-free stock trading and a derivatives clearinghouse, is underway. Cost restructuring efforts have yielded sequential operating expense reductions, though profitability remains challenged by crypto market conditions and a one-time credit card fraud provision.

Highlights

5

  • Total revenue grew 37% year-over-year to $45.5 million.

  • Services revenue and interest income reached $26 million, up 117% year-over-year, now representing 59% of net revenue.

  • Total operating expenses declined 15% sequentially to $122.4 million.

  • Operating loss improved 18% sequentially from $94.2 million to $76.9 million.

  • Multiproduct users nearly doubled year-over-year, indicating strong engagement with the expanding platform.

Concerns

5

  • Exchange revenue declined 38% year-over-year to $12.5 million due to continued crypto market volume pressure.

  • Total spot trading volume declined 66% year-over-year to $3.8 billion.

  • Transaction losses increased to $20.1 million, primarily due to higher provision for expected credit losses on the credit card portfolio, linked to a Q1 identity fraud event.

  • Adjusted EBITDA was a loss of $74 million, deteriorating from a loss of $51.9 million in Q2 2025, driven by noncash mark-to-market losses on Bitcoin holdings.

  • Card MTUs were down 7% sequentially, reflecting a deliberate pullback in acquisition marketing and softer crypto market conditions.

Guidance & targets

CategoryTargetConfidence
Cash compensation
decline 15% to 20%
medium materiality
High
Stock-based compensation
$100 million to $115 million
medium materiality
High
Technology and G&A expenses
$155 million to $170 million
medium materiality
High
Marketing spend (without rewards and promotions)
10% to 15% of revenue
medium materiality
High

Product announcements

ProductTypeDetails
Commission-free U.S. stock tradinglaunch
Derivatives Clearinghouse (DCO)launch
Perpetual futures for U.S. customersroadmap
Prediction Markets enhancementsupdate
Advanced mobile trading experienceupdate
Credit card rewards expansionroadmap

Deals & partnerships

Strategic customer Advisory services agreement Started Q3 2025, recognition period ends July 2026

Ongoing advisory services agreement with a strategic customer, associated with a compensatory warrant arrangement.

Distribution partners Partnerships for Derivatives Contract Market (DCM)

Following the DCO license and clearinghouse operation, Gemini is focused on adding distribution partners to its DCM.

Risks & headwinds

Crypto Market Headwinds Q2 FY26

Bitcoin closing Q2 below $60,000 (from $117,000 in Sept 2025); 38% year-over-year decline in exchange revenue; 66% decline in total spot trading volume.

Mitigation:Heads down building to the Gemini of tomorrow; expanding product offerings beyond spot crypto trading; cost discipline.

Credit Card Identity Fraud Event Q2 FY26

Transaction losses increased from $3.6 million in the prior year to $20.1 million; fraud-related delinquency rose from 1% to 6.1%.

Mitigation:Strengthened fraud controls and monitoring; underlying portfolio performing in line with expectations outside of this event.

Noncash Mark-to-Market Losses on Bitcoin Holdings Q2 FY26

Adjusted EBITDA was a loss of $74 million compared to a loss of $51.9 million in Q2 of 2025.

Mitigation:Strategic investment of Bitcoin received in May (cause of holding); broader strategy to diversify revenue away from spot crypto.

Advisory Fee Revenue Conclusion After Q3 FY26

$2.7 million in Q2 FY26

Mitigation:Focus on scaling adoption and growing revenue from expanding platform.

What to watch in Q3 FY26

Perpetual futures approval and launch

This year (2026)
Current DCO amendment and FCM application in flight
Target Approvals received, launch of perpetuals in U.S.

Why it matters

Opens up a significant new revenue stream in a high-demand crypto product category in the U.S.

We are in the process of achieving the approvals we need to offer perpetuals on crypto in the U.S. And what's required is an amendment to our DCO, which is already in flight for marketing and the approval of an FCM, which is already in flight. And once we receive those approvals, we'll be able to launch perpetuals in the U.S.

Q&A highlights

Clarify the nature of the Q2 provision for credit losses, specifically the fraud component, and confidence in preventing future similar events.

The provision was due to a concentrated identity fraud event from a Q1 origination cohort, not broad portfolio deterioration. Delinquency metrics were heavily influenced by this cohort. Fraud controls have been strengthened, but fraud prevention is an ongoing process. Future provisioning is expected to reflect underlying credit performance.

“Based on our investigation to date, we believe that this was a concentrated identity fraud event associated with a specific Q1 origination cohort rather than broad-based deterioration in the portfolio.”

asked by Ryan Todd · answered by Danijela Stojanovic

2 min read 5 chapters

Detailed narrative

Strategic Shift to Financial Super App

Gemini is actively transforming into a broader financial platform, moving beyond its foundational crypto exchange business. This strategic evolution includes the recent launch of commission-free U.S. stock trading and prediction markets, alongside existing crypto services and a credit card. The company aims to build a comprehensive "super app" that offers a wide array of financial products and services, fostering cross-pollination among its offerings, as evidenced by 50% of prediction users also holding a Gemini Credit Card.

Derivatives Infrastructure Expansion

Significant investment has been made in regulated infrastructure, with Gemini launching its derivatives clearinghouse (DCO) and filing an FCM application. This in-house built infrastructure is critical for future product offerings, particularly the planned launch of perpetual futures for U.S. customers. The underlying technology for perpetuals is already operational offshore in Singapore, positioning Gemini to capitalize on this high-demand crypto product once U.S. regulatory approvals are secured, potentially within the current year.

Cost Restructuring and Efficiency Gains

Gemini's cost restructuring initiatives have yielded tangible results, with total operating expenses declining 15% sequentially to $122.4 million. Headcount has been reduced by approximately 40% from its Q3 2025 peak, ending Q2 FY26 at 402 employees. These efforts have contributed to an 18% sequential improvement in operating loss, reaching $76.9 million, demonstrating a more disciplined and efficient operating model despite ongoing investments in product development.

Credit Card Portfolio Performance and Fraud

The credit card business experienced a substantial increase in transaction losses to $20.1 million, primarily due to a higher provision for expected credit losses related to an identified identity fraud event from Q1. While this event significantly impacted overall delinquency metrics, management asserts that the underlying portfolio, excluding the fraud-related cohort, is performing in line with expectations. Strengthened fraud controls and monitoring have been implemented, and future provisioning is anticipated to reflect the portfolio's organic credit performance.

Prediction Markets and Equities Growth

Prediction markets demonstrated sequential growth, with transaction revenue up 18% quarter-over-quarter and event contracts traded increasing 93% sequentially. The focus has been on building order book depth and liquidity rather than immediate fee maximization. The recently launched commission-free U.S. stock trading, while in its early stages and not expected to be a material revenue contributor in 2026, is viewed as a crucial component of the super app strategy, aiming for long-term monetization through deeper customer relationships and cash balances.

AI-generated summary of the company's earnings call. Not investment advice.