Gemini Space Station, Inc.

Operator: Good day. Thank you for standing by. Welcome to the Gemini first quarter 2026 earnings conference call. At this time, all participants are in listen-only mode. Please be advised that today's conference is being recorded. I would like to hand the conference over to Ryan Todd, Head of Investor Relations. Please go ahead. Ryan Todd: Good morning, and thank you for joining Gemini's first quarter 2026 earnings call. Joining me on the call today are Gemini's Co-Founders, Cameron and Tyler Winklevoss, and our Interim CFO, Danijela Stojanovic. Yesterday, we released our first quarter 2026 financial results. During today's call, we may make forward-looking statements which may vary materially from actual results. Information concerning the risks and uncertainties is included in our SEC filings. Our discussion today will also include certain non-GAAP financial measures. We'll start today's call with prepared remarks and then take questions. With that, let me turn the call over to Cameron and Tyler. Cameron Winklevoss: Good morning. Thank you all for joining us. Since announcing Gemini 2.0, we have made meaningful progress towards building Gemini into a markets company. We started as a Bitcoin company, became a crypto company, and are now building the super app for the markets economy. This quarter, we grew revenue 42% and transaction revenue held steady year-over-year, even as trading volume declined more than 50% due to softness in the broader crypto market. We recognize where our share price sits. The price of Bitcoin is down roughly 30% since our IPO, and we are tied to that cycle. However, we do not believe the Gemini of today is 1/6 of the Gemini that IPO’d. We have launched a predictions marketplace and are building a foundation for crypto, predictions, credit card rewards, and soon, stocks. Because we believe the stock is significantly undervalued, we made a strategic investment of $100 million into Gemini via Winklevoss Capital at $14/share, funded in Bitcoin. Tyler Winklevoss: This quarter, Gemini achieved product and regulatory milestones that set us up for success. In April, we received a Derivatives Clearing Organization (DCO) license from the CFTC. This allows us to act as a clearinghouse for derivatives, event-based contracts, and down the road, futures and perpetual contracts. This follows our Designated Contract Market (DCM) license received in late 2025. Together, DCM plus DCO allow us to build an end-to-end marketplace in-house without third-party dependencies. This positions us for perpetual contracts, which we believe will be permitted in the U.S. soon. We also launched the first agentic trading tool on a regulated U.S. exchange, allowing AI agents like Claude and ChatGPT to connect to our API to place trades autonomously. We believe Gemini will one day have more machines as customers than humans. Danijela Stojanovic: Thank you. Revenue grew 42% year-over-year to $50.3 million, driven by the credit card, our OTC business, and our first full quarter from prediction markets. Services revenue and interest income now represents 49% of total revenue, up from 31% in Q1 of 2025. Total revenue was $50.3 million. Exchange revenue was $17.2 million, down 27% year-over-year, as spot trading volume declined 53% to $6.3 billion. OTC revenue was $6.3 million, and prediction markets contributed $0.4 million in their first full quarter. Monthly transacting users were 589,000, up 17% year-over-year. On the expense side, total operating expenses were $144.5 million, up 73% year-over-year. This includes $24.2 million of stock-based compensation and $6.5 million in severance from our 30% workforce reduction. Sales and marketing was $19.1 million. Net loss for the quarter was $109 million, an improvement of 27% year-over-year. Adjusted EBITDA loss was $59.9 million. We ended the quarter with $215.6 million in liquidity, further bolstered by the $100 million founder investment. Ryan Todd: We will now take questions from our research analysts. Our first question comes from Adam Frisch at Evercore regarding the strategic rationale behind the $100 million investment. Cameron Winklevoss: Our belief is that Gemini stock is undervalued. We are disconnected from the underlying business. We have launched an entirely new predictions marketplace and acquired DCM and DCO licenses, which are trading north of $100 million each in the open market. We are being offensive and supporting future products, including equities. Ryan Todd: Next question is from James Yaro at Goldman Sachs on the status of the CLARITY Act. Cameron Winklevoss: It feels like we are getting closer to clarity, and we welcome a federal framework. If it stalls, we are already positioned in a very regulated posture and will continue building. Ryan Todd: Matt Coad at Truist asks about prediction markets cross-sell success. Cameron Winklevoss: We are encouraged that 3.4% of our user base has already placed a trade. Volume grew 78% month-over-month in April. We did approximately $30 million in notional last month and have already crossed $20 million so far this month. Half of that volume is crypto contracts, but we have added commodities like oil, gold, and silver. Ryan Todd: Dan Dolev from Mizuho asks about credit card performance and the higher provision for credit losses. Danijela Stojanovic: The portfolio is performing in line with expectations, with a 3.8% delinquency rate. The $8.6 million provision included a $4.1 million discrete fraud event which we believe is non-recurring. We have since strengthened our fraud controls. Pre-provision net revenue reached a new high of $3.8 million, up 150% year-over-year. Over half of our predictions traders are also Gemini cardholders. Ryan Todd: Michael Cyprys from Morgan Stanley asks about OTC and staking performance. Danijela Stojanovic: OTC performance was driven by a mix of market volatility and onboarding new institutional clients. Staking revenue was down 31% due to lower crypto asset prices and moderated network yields. However, we completed the migration to Staking 2.0, which enables auto-compounding and reduced redemption times from 50 days to eight days. Ryan Todd: John Todaro at Needham asks about prediction market categories. Cameron Winklevoss: Crypto contracts account for about 50%. Real-world commodities like oil and Brent are popular, and we’ve added weather contracts. We are just getting started and continue to ship improvements multiple times a week. Operator: This concludes today’s conference. Thank you for your participation. You may now disconnect.