Cryptocurrency exchange operator Gemini reported its first financial results as a publicly traded company on Monday, revealing a bigger-than-expected quarterly loss, pushing its stock price lower in after-hours trading.
The company posted a net loss of $159.5 million in the third quarter, due to higher IPO-related costs, higher marketing spending and higher stock-based compensation, according to shareholders. letter.
Adjusted loss per share was $1.81, below consensus estimates of a loss of $0.82, according to MarketBeat data.
GEMI stock fell as much as 12% in post-market trading, and the stock price has halved since the drop. September debutGoogle Finance data shows.
Shares rose about 4% to close at $16.84 during regular trading on Monday, but fell about 6% to $15.80 in after-hours. Intraday trading was between $16.11 and $17.23, giving the company a market cap of approximately $1.98 billion.
The decline reflects market concerns that Gemini’s losses continue to exceed revenue, with operating expenses increasing to $171.4 million compared to net revenue of $49.8 million for the quarter.
Although revenue has more than doubled year-over-year, Gemini remains a fraction of the size of its main rival Coinbase, which often generates net revenues of hundreds of millions of dollars to more than $1 billion.
For decryption We asked Gemini for comment on how it expects to achieve adjusted profitability.
Looking from the bright side
Still, net revenue rose 52% sequentially, slightly above the $47.4 million consensus estimate compiled by Yahoo Finance, supported by higher trading activity and stronger contributions from staking, custody and the company’s growing credit card business.
Transaction revenue increased 26% to $26.3 million, and service revenue increased 111% to $19.9 million. Trading volume reached $16.4 billion, the highest level in recent years, primarily due to increased activity by institutional investors.
About half of its quarterly revenue comes from transaction fees, with the rest related to staking, tokenized equity products, and card activity.
Gemini’s credit cards delivered outstanding performance, with more than 100,000 accounts opened and more than $350 million in quarterly spending, more than double the prior period.
“Taken together, these results reflect our strongest user acquisition quarter in the past three years,” the letter said.
Earlier this month, the company applied to launch a prediction markets business, seeking approval to list event contracts related to outcomes such as sports results and political elections.
