Bitgo Holdings, Inc.: Form 10-Q for the period ended Mar 31, 2026

The following discussion and analysis of our results of operations and financial condition should be read in conjunction with our condensed consolidated financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q and our audited consolidated financial statements and the related notes disclosed in our Annual Report on Form 10-K for the year ended December 31, 2025. The following discussion contains forward-looking statements that are based on current plans, expectations and beliefs that involve risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including, but not limited to, those identified below and those discussed in the section titled “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2025 and other sections, including the “Note Regarding Forward-Looking Statements” of this Quarterly Report on Form 10-Q. Our historical results are not necessarily indicative of the results that may be expected for any period in the future.

For purposes of clarity and ease of presentation, numbers presented within this section may not sum precisely to the totals provided. The underlying data used in the calculations, including percentages, is not rounded.

Overview

We aim to be the institutional digital asset infrastructure company of choice, allowing our institutional clients to safely secure, manage, utilize and create digital assets through our holistic technology platform.

Over the last 12 years, we have grown to become a critical partner to digital asset ecosystems, financial institutions, technology platforms, corporations, and governments seeking secure, scalable and compliant access to digital assets. Our mission is to accelerate the transition of the financial system to a digital asset economy.

Our platform combines self-custody wallet, qualified custody, liquidity and prime, and infrastructure-as-a-service solutions, including stablecoin issuance and management. This unified suite of solutions is designed to meet the operational and regulatory demands of our clients. We supported over 1,800 digital assets as of March 31, 2026, and helped pioneer institutional-grade multi-signature (“multi-sig”) security architecture and cold storage solutions. With a client base that includes digital asset ecosystem companies, financial institutions, technology platforms, corporations and government agencies, as well as high net worth individuals (“HNWIs”), our Number of Clients, who were located across over 100 countries, exceeded 5,500 as of March 31, 2026, and we had approximately $63.0 billion in Assets on Platform (“AoP”) for the three months ended March 31, 2026. Our principal markets are the United States and other major financial centers in North America, Europe, and Asia. See “—Key Business Metrics” for a definition of “Number of Clients” and “Assets on Platform.”

We believe we are uniquely positioned at the precipice of growing institutional adoption of digital assets. Today, our team is focused on building out our platform and financial services on top of the foundational technology that our institutional clients depend upon for their business. Our clients range from crypto native companies that use our self-custody wallet technology to traditional financial services firms that leverage our licensed custody, staking and trading capabilities within their own products and services.

We began as a specialized custodian, integrating directly with advanced blockchain technologies, eliminating the need for institutional and retail clients to compromise security for market access. We have continued to innovate in the space having been the first to commercially introduce self-custody wallets. Over time, we have added the BitGo Trust Companies, allowing us to become one of the first custodians purpose-built for digital assets. In 2020, we expanded our platform’s capabilities through the introduction of BitGo Prime which introduced liquidity solutions on top of our custody and wallet layers. Our platform continues to grow. For the three months ended March 31, 2026 we had approximately $63.0 billion in AoP, including $11.8 billion in Assets Staked for the three months ended March 31, 2026. See “—Key Business Metrics” for definitions of “Assets on Platform” and “Assets Staked.”

Financial and Operational Highlights

Certain of our financial and operating results are summarized below:

• The fair value of AoP decreased from $90.5 billion for the three months ended March 31, 2025 to $63.0 billion for the three months ended March 31, 2026.
• Number of Clients increased from 3,900 as of March 31, 2025 to 5,500 as of March 31, 2026.
• The fair value of Assets Staked decreased from $28.4 billion for the three months ended March 31, 2025 to $11.8 billion for the three months ended March 31, 2026.
• Digital asset sales revenue increased from $1,605.5 million for the three months ended March 31, 2025 to $3,659.5 million for the three months ended March 31, 2026.
• Total revenue increased from $1,775 million for the three months ended March 31, 2025 to $3,774 million for the three months ended March 31, 2026.
• Net loss increased from $25.7 million for the three months ended March 31, 2025 to $60.7 million for the three months ended March 31, 2026.
• Adjusted EBITDA decreased from $3.9 million for the three months ended March 31, 2025 to an Adjusted EBITDA loss of $1.7 million for the three months ended March 31, 2026.

See “—Non-GAAP Financial Measures” for a definition of Adjusted EBITDA and related reconciliation to net income, the most directly comparable GAAP (as defined below) measure, and “—Key Business Metrics” for definitions of our key operational metrics.

Key Business Metrics

In addition to the measures presented in our consolidated financial statements, we use the following key business metrics to assess our operations, track performance, identify trends impacting our business and inform our strategic decision-making.

Assets on Platform

We define Assets on Platform (“AoP”) as the median of the daily balances of total assets on our platform over the measured period, where daily balances represent the fair value of both fiat currency and digital assets, whether custodied or non-custodied, held by clients in their accounts on our platform at the end of each day, calculated based on the market price of the applicable assets at the end of such day. We believe that presenting a median of the daily balances of total assets on our platform over a measured period is a more accurate representation than presenting the sum of balances of total assets on our platform at the end of such measured period due, in part, to the volatility of the prices of digital assets, which may change significantly in any given day. AoP demonstrates the scale of balances held across our suite of products and services, as well as the underlying performance of the digital asset economy and corresponding trends in prices of digital assets.

We view AoP as a key measure of the fundamental health, direction and monetization opportunity of our platform. AoP also has a correlation with our total revenues as we earn revenues from the suite of products and services we provide in connection with the balances held by our clients on our platform. We have also found that increasing AoP tends to result in more client services being requested, since our institutional clients often go on to seek out other value added services that we offer, such as trading and staking.

Our AoP has fluctuated over time due, in part, to fluctuations in the digital asset economy and corresponding fluctuations in the prices of digital assets. For the three months ended March 31, 2026, our AoP was $63.0 billion, representing a decrease of 30.4% from the three months ended March 31, 2025, primarily driven by declines in digital asset prices.

AoP is influenced by multiple factors, including certain market-dependent factors, and thus can fluctuate based not only on the quantity of assets held on our platform, but also the price of such assets. For example, over the period from the three months ended March 31, 2025 to the three months ended March 31, 2026, the digital assets market capitalization fell 23% from a high of $3.9 trillion to $3.0 trillion. In comparison, AoP for the three months ended March 31, 2025 and 2026 were $90.5 billion and $63.0 billion, respectively, representing a 30.4% decrease.

(in millions)

29

The value of a majority of our AoP has been, and continues to be, concentrated in a few digital assets held by our clients, including Bitcoin, Ethereum, Sui, XRP, and Solana, which constituted 50.1%, 10.1%, 7.5%, 5.1%, and 3.8%, of our AoP as of March 31, 2026, respectively. In addition to digital assets, our AoP includes a negligible amount of fiat currencies. In line with the historical market cap dominance of Bitcoin, Bitcoin has consistently been the largest single digital asset in our AoP. Our mix of digital assets does, however, fluctuate depending on the price performance of individual digital assets as well as the onboarding and offboarding of client accounts.

Number of Clients

We define Number of Clients as the cumulative number as of the end of the measured period of (i) institutional clients that have (A) an executed service agreement with us that has not been terminated as of the end of such measured period and (B) have been onboarded to at least one of our core solutions, (i.e., custody, wallet platform or trading) and (ii) HNWIs, which we define as any individual with a net worth of $1 million or more, who (A) have an executed service agreement with us that has not been terminated as of the end of such measured period and (B) have been onboarded to at least one of our core solutions (i.e., custody, wallet platform or trading). We frequently observe that our clients, who may initially begin by using one of our products or service offerings, expand into multiple products and/or services across our platform as we deepen our relationship with them. Therefore, we view Number of Clients as a key indicator of our market penetration, client adoption and platform monetization potential, and Number of Clients informs our client acquisition strategy.

While our Number of Clients was less than 100 prior to January 1, 2017, as of March 31, 2026, our Number of Clients exceeded 5,500. Our Number of Clients has grown at a CAGR of 90.0% over the past two years, through March 31, 2026, which has been predominantly driven by organic growth and the resulting increased utilization of our services rather than through acquisitions.

Our Number of Clients is calculated on a cumulative basis commencing in 2013. Therefore, although our Number of Clients metric (i) indicates the number of institutional clients and HNWIs that have demonstrated an interest in our platform or a direct intent to transact with digital assets and (ii) removes institutional clients and HNWIs with terminated contracts as of the end of such measured period, it does not measure the type, frequency or duration of such clients’ or HNWIs interaction with our platform. Further, Number of Clients may also (i) include clients that have not interacted with our platform at all for extended periods of time and (ii) overstate the number of unique institutional clients who have entered into service agreements with us and been onboarded, since one client may enter into multiple service agreements (either for itself or through its affiliates). Nonetheless, we view Number of Clients as an indication of our scale and a representation of a potential revenue opportunity for us given these users have demonstrated an interest in our platform or intent to potentially perform revenue generating activities within our platform by executing service agreements with us.

Our Number of Clients is influenced by several factors, including broader digital asset market conditions, the highly speculative and volatile nature of digital assets, level of market adoption of digital assets, level of our investment in sales and marketing efforts, our ability to effectively compete with other digital asset market participants and the quality of our services and products.

As we continue to expand our platform, we intend to deepen our relationships with our existing clients to increase their adoption of additional products and services across our platform, and to onboard new institutional clients on our platform in line with increased adoption of digital assets and new use cases on top of blockchain. We believe that this strategy, combined with increasing regulatory clarity and institutional demand for secure custody and capital-efficient trading solutions, positions us to capture a growing share of the expanding market. Just like traditional banking services, we have found that clients tend to prefer dealing with an entity registered and regulated in their local domain. To that end, we are constantly exploring ways in which we can responsibly expand our worldwide presence. To support these initiatives, we opened offices in Singapore and Dubai in 2024. We believe that tracking the Number of Clients on our platform assists us in executing effectively on the foregoing growth strategy.

Number of Users

We define Number of Users as the cumulative number as of the end of the measured period of (i) individuals authorized to access the account of any of our institutional clients on such institutional client’s behalf, which institutional client (A) has an executed service agreement with us that has not been terminated as of the end of such measured period and (B) has been onboarded to at least one of our core solutions (i.e., custody, wallet platform or trading), (ii) HNWIs who (A) have an executed service agreement with us that has not been terminated as of the end of such measured period and (B) have been onboarded to at least one of our core solutions (i.e., custody, wallet platform or trading) and (iii) retail users that have registered an account with BitGo, in each case who have conducted at least one of the following activities at any point since onboarding our platform (through the applicable methods described above) and prior to the end of such measured period. We believe the following activities indicate meaningful interactions with our platform.

An API Call, which is a programmatic interaction with our platform using our application program interfaces (“APIs”) (e.g., initiating a transaction, querying wallet balance, or generating an address). Passive or system-generated pings (such as uptime monitoring) are excluded from our definition of “API Call.”

• A UI Session, which is a web-based login session where a user accesses our wallet user interface. A session must include a successful login and at least one interaction (e.g., viewing wallet balances, initiating a transfer, or downloading reports) to be counted.
• An Event in Audit Logs, which includes user-initiated actions that are recorded in our audit logs, such as transaction approvals, policy changes or wallet configuration updates. These events are meaningful indicators of platform usage and exclude purely background or system-automated entries.

We view Number of Users as a key indicator of our scale as it portrays not only the number of institutional clients and HNWIs who have demonstrated an interest in our platform or direct intent to transact with digital assets (which we track through the Number of Clients metric), but also the number of retail users who have conducted at least one meaningful usage of, and meaningful activity with, our platform. Although we generally do not generate incremental revenue solely from an institutional client adding any one additional authorized user, we have observed that the number of users authorized by our institutional clients positively correlates with overall client activity, engagement with our solutions and revenue generated from such client. For example, with respect to institutional clients, there are typically many individuals who are authorized to interact with our platform through a single institutional client account. As of March 31, 2026, the average number of authorized individuals using our platform through a single institutional client was 5.01. By assessing the Number of Users, together with the Number of Clients, we can assess our total platform usage as well as the rate of the general market adoption of digital assets. In addition, because we generate revenue from certain activities by retail users (e.g., when retail users engage in transactional activities on our platform), the “Number of Users” metric provides meaningful insight into the revenue-generating retail activity on our platform.

However, because our Number of Users is calculated on a cumulative basis commencing in 2013, the Number of Users metric could include clients who have only had one meaningful interaction since onboarding onto the platform. Therefore, Number of Users does not measure the frequency or duration of such clients’ interaction with our platform and may also include clients that have not interacted with our platform at all for extended periods of time. In addition, Number of Users may also overstate the number of unique individuals authorized to access accounts of institutional clients who have entered into service agreements with us and been onboarded, since one client may enter into multiple service agreements (either themselves or through their affiliates) and one individual could be authorized to access such multiple accounts. Our Number of Users metric also includes individuals that may have not engaged in any economic activity (for example, where the individual has been authorized by an institutional client to access an account for operational purposes). A substantial majority of our Number of Users is comprised of the individuals who are authorized to access the account of any of our institutional clients on such institutional clients’ behalf and HNWIs, particularly since the number of our retail users is currently relatively low, albeit growing in number. Accordingly, our Number of Users is largely an extension of our Number of Clients. Therefore, while our Number of Users is calculated on a cumulative basis since 2013, the regular interaction of a majority of our institutional clients and HNWIs with our platform as described under “—Number of Clients” can largely be attributed to our Number of Users.

Our Number of Users is influenced by several factors, including broader digital asset market conditions, level of market adoption of digital assets, level of our investment in sales and marketing efforts, our ability to effectively compete with other digital asset market participants and the quality of our services and products.

Assets Staked

We define Assets Staked as the median of the daily balances of total client assets actively delegated to proof-of-stake (“PoS”) and restaking protocols through our staking solutions over the measured period. The daily balances of total client assets represent the fair value of digital assets staked by our clients on our platform at the end of each day, calculated by the market prices of the applicable assets at the end of such day. Assets Staked is a subset of our AoP and, similar to AoP, we believe that presenting a median of the daily balances of total staked assets on our platform over a measured period is a more accurate representation than presenting the sum of balances of total staked assets on our platform at the end of such measured period due, in part, to the volatility of the prices of digital assets, which may change significantly in any given day. We believe Assets Staked serves as a key indicator of our clients’ engagement with our staking solutions and reflects the scale of assets entrusted to our secure and regulated platform. In addition, Assets Staked has a direct impact on our financial results in that we earn staking revenue by participating in proof-of-stake blockchain networks, as well as rewards in the form of the networks’ digital assets by providing validation and block-creation services, and the more Assets Staked, the more staking revenue and rewards we earn.

(in millions)

Similar to AoP, Assets Staked is influenced by multiple factors, including certain market-dependent factors, and thus can fluctuate based not only on the quantity of assets staked on our platform, but also the price of such assets. In addition, similar to AoP, the value of a majority of our Assets Staked has been, and continues to be, concentrated in a few digital assets held by our clients, including namely Sui, Ethereum and Solana, which constituted approximately 37.6%, 35.0%, and 16.5%, of our Assets Staked as of March 31, 2026, respectively.

Non-GAAP Financial Measures

We collect and analyze operating and financial data to evaluate the health of our business, allocate our resources and assess our performance. In addition to total revenue, net income (loss) and net income (loss) margin, we utilize the non–GAAP calculation of Adjusted EBITDA. This non-GAAP measure is presented for supplemental informational purposes only, has limitations as an analytical tool, and should not be considered in isolation or as a substitute for financial information presented in accordance with accounting principles generally accepted in the United States (“GAAP”). In addition, other companies, including companies in our industry, may calculate Adjusted EBITDA differently or may use other measures to evaluate their performance, all of which could reduce the usefulness of our disclosure of such non–GAAP measure as a tool for comparison. Investors are encouraged to review the related GAAP financial measure and the reconciliation of net income (loss), the most directly comparable GAAP measure, to Adjusted EBITDA, and not to rely on any single financial measure to evaluate our business.

Adjusted EBITDA

We define Adjusted EBITDA as net income (loss), excluding (i) provision for income taxes, (ii) depreciation and amortization, (iii) stock-based payment expense, (iv) employer payroll taxes on employee stock transactions, (v) net changes in unrealized appreciation (loss) on digital assets, and (vi) certain non-recurring charges (which are specified in detail below).

The above items are excluded from our Adjusted EBITDA measure because they are non-cash in nature, their amount and timing are volatile and influenced by digital asset prices, they are unpredictable, or they are not driven by the core results of operations. In any case, including such items would reduce the comparability of our financial performance across periods and with industry peers. We believe that Adjusted EBITDA provides useful information to investors and others in understanding and evaluating our results of operations, as well as providing a useful measure for period-to-period comparisons of our business performance in a consistent manner. Moreover, Adjusted EBITDA is a key measure used by our management internally for financial, risk management and operational decision-making.

The following table provides a reconciliation of net loss, the most directly comparable GAAP measure, to Adjusted EBITDA for the periods presented (in thousands):

(1) Fluctuating and volatile digital asset prices primarily drive net change in unrealized appreciation (loss) on digital assets, which we exclude from the definition of Adjusted EBITDA because (i) such net change is not driven by the core results of the Company’s operations; (ii) removing such net change illustrates the way in which the Company’s products and services, instead of fluctuating and volatile digital asset prices, drive the sustainability of the Company’s operations, margins and growth; and (iii) digital assets on our balance sheet are considered long-term holdings and our investing activities in digital assets are not part of our revenue generating activities, which are based on transactions on our platform, staking revenue, subscriptions and services revenue and revenue generated from our Stablecoin-as-a-Service solution. Accordingly, net change in unrealized appreciation/loss on digital assets is materially all related to proprietary digital assets held for investment.

(2) Legal contingencies, settlements, and related costs includes (i) litigation costs of $1.3 million and $0.9 million in the three months ended March 31, 2025 and March 31, 2026, respectively, associated with our ongoing suit against Galaxy alleging that Galaxy breached and wrongfully repudiated the terms of the Merger Agreement, by terminating Galaxy’s proposed $1.2 billion acquisition of the Company, (ii) legal settlement of $0.1 million in three months ended March 31, 2026, (iii) one-time bonus payment of $0.5 million made in three months ended March 31, 2026, in connection with the IPO, (iv) IPO-related expense borne by us of $0.3 million in the three months ended March 31, 2026, (v) legal and professional fees borne by us of $1.2 million in the three months ended March 31, 2026 related to the evaluation of strategic opportunities. See the section titled “Business—Legal Proceedings” in our Annual Report on Form 10-K for the year ended December 31, 2025 and Note 14—Commitments and Contingencies in Part I, Item 1 of this Quarterly Report on Form 10-Q for more information relating to our ongoing litigation with Galaxy.

(3) May not foot due to rounding.

Key Factors Impacting Our Performance

Price and Volatility of Digital Assets

Our core business revolves around providing custody, security, and trading and infrastructure solutions for a range of digital assets. Accordingly, our business correlates to trends in the broader digital assets market, including client sentiment and macroeconomic ongoings.

These factors largely impact price and volatility of digital assets, which underlie the foundation of our business model. Significant price increases or declines in digital assets can substantially influence the value of the assets on our platform, directly impacting our revenue due to our percentage-based fee model. Similarly, high volatility in the digital assets market continues to impact our operations, generating user and investor uncertainty that may potentially lower transaction volumes on our platform and revenue outcomes. In addition, while we support a wide range of digital assets, the digital assets, whether custodied or non-custodied, held by our clients in their accounts on our platform has historically been, and continues to be, concentrated in a small number of distinct digital assets (including Bitcoin, Ethereum, Sui, Solana and XRP). Therefore, declines in demand for such digital assets or in the prices of such digital assets could negatively impact our operating performance and financial condition.

While we have experienced fluctuations in our business related to these pricing and volatility uncertainties, we believe that the fundamentals of our business continue to be strong and resilient over time, which has resulted in trading activity on our platform progressively increasing since our inception.

Adoption of Digital Assets

Our origin story and go-forward mission have closely tracked the development of the digital asset economy. Increased adoption of digital assets and new use cases on top of blockchain in the past decade have translated to higher demand for secure custody, trading infrastructure and other related solutions that we provide.

Our business has expanded rapidly over time, and our conviction in the strength of the digital assets market is unwavering. The digital assets market has grown approximately 500% in size over the last five years to reach a total market capitalization of approximately $3.0 trillion as of March 31, 2026, with use cases continuing to expand. We believe that our unified suite of solutions: self-custody wallet, qualified custody, liquidity and prime, and infrastructure-as-a-service, will enable us to offer a variety of products and services to a growing total addressable market. In addition, we support over 1,800 digital assets as of March 31, 2026 and have helped pioneer institutional-grade multi-sig security architecture and cold storage solutions, which we believe provide a strong foundation for success.

Regulation in United States and International Markets

Our business is subject to various regulations in both the United States and international markets. In addition, the rules and regulations surrounding digital assets continue to evolve and the international regulatory landscape remains fragmented. As a result, we monitor regulatory changes closely and we expect to continue to invest significant resources in our legal, compliance, product and engineering teams to ensure our business practices comply with, and plan and prepare for, current and future regulations.

Client Acquisition, Retention and Expansion

Our business is significantly impacted by our ability to acquire, retain and expand our client base, which presents several risks for us. Expanding our client base and increasing the services used by existing clients, are essential for our revenue growth as our total revenues are driven by the use of our services and products by our clients. Successfully managing user acquisition, retention and expansion strategies is crucial for our sustained growth and market leadership in the digital asset industry.

We have an ambitious goal to onboard a significant percentage of the institutional market, and believe that this is an achievable target even as institutional digital asset stakeholders proliferate with increasing digital asset adoption. Although the customer acquisition cost for institutional clients is generally higher than retail clients, we believe there is significantly more upside potential in deepening our relationship with institutional clients and in turn, offering additional solutions to them once they are within our ecosystem.

Types and Number of Assets that We Provide Services for on Platform

Our business is significantly influenced by the types and number of digital assets we custody, presenting several associated risks. Not only does AoP correlate with our total revenues, but the range of digital assets supported also directly impacts our market appeal and potential client base. If we support fewer digital assets than our competitors, we risk losing clients to platforms that offer broader custody options. Conversely, supporting obscure or illiquid assets could expose us to increased operational and regulatory complexities, without a commensurate increase in revenue.

Adding new digital assets to our custody platform necessitates significant investment in research, development and security protocols. Failure to adequately protect these digital assets could result in breaches and loss of client assets, leading to financial loss and reputational damage. Furthermore, regulatory classifications of different digital assets are not uniform across jurisdictions. Uncertainty surrounding the legal status of certain assets could also limit our ability to custody them in specific regions, impacting our global reach.

Successfully navigating the challenges and unknowns related to the breadth and nature of custodied digital assets is crucial for our long term viability and competitive positioning, and we believe that we have a demonstrated track record of success in this regard. We were one of the first to commercialize the multi-sig wallet, one of the first to introduce a trust structure to keep our clients’ assets safe from theft and loss, and one of the first to introduce prime brokerage services to allow our clients to better access the broader digital asset market. In addition, when the broader digital asset industry undergoes downturns, we are often chosen as the distributor of assets in bankruptcies due to our strong reputation and track record of “getting it right.” We played a key role in the Mt. Gox bankruptcy in 2014 by facilitating the distribution of digital assets during its bankruptcy process, and in 2024, we were selected by FTX Trading Ltd. (“FTX”) and its affiliated debtors to assist in distributing recoveries to retail and institutional clients in supported jurisdictions, per the U.S. bankruptcy court-approved FTX Chapter 11 Plan of Reorganization.

Competitive Landscape

Our success as a business is dependent on our ability to win market share against our competitors and to keep pace in an ever-evolving competitive landscape. The digital assets services industry is increasingly crowded and also seeing increasing competition from new entrants, along with ongoing risk from traditional finance institutions that are increasingly entering the digital assets markets. We believe we must continually invest in research and development to enhance our service offerings, maintain a competitive advantage, and reliably differentiate ourselves in the market. While we are confident in our ability to continue to lead across custody, staking, and our broad range of products and services, our ability to do so is subject to certain limitations and risks.

Critical Accounting Policies and Estimates

Our condensed consolidated financial statements and the related notes thereto included elsewhere in this Quarterly Report on Form 10-Q are prepared in accordance with GAAP. The preparation of condensed consolidated financial statements in accordance with GAAP requires us to make certain estimates, judgments, and assumptions that affect the reported amounts of assets and liabilities and the related disclosures at the date of the financial statements, as well as the reported amounts of revenue and expenses during the period presented. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Actual results could differ significantly from our estimates. To the extent that there are differences between our estimates and actual results, our future financial statement presentation, financial condition, results of operations, and cash flows could be affected.

There have been no material changes to our critical accounting policies and estimates as described in our Annual Report on Form 10-K for the year ended December 31, 2025, filed with the SEC on March 26, 2026, other than as described in Note 2 - Summary of Significant Accounting Policies in our condensed consolidated financial statements in this Quarterly Report on Form 10-Q.

Key Components of Results of Operations

Revenue

Digital Assets Sales Revenue

Digital assets sales revenue consists of (i) the gross sales proceeds from the sales of digital intangible assets on our platform, expressed in U.S. dollar equivalent value, (ii) the net gain or loss, if any, recognized in connection with the purchase and sales of certain stablecoins that are classified as financial assets, and (iii) the net gain or loss recognized on derivative contracts under ASC 815. We present digital assets sales revenue on a gross basis (other than the portion of digital assets sales revenue recognized in connection with sales on our platform of certain stablecoins that are classified as financial assets, which is recognized on a net basis). See the section titled “—Critical Accounting Policies and Estimates” for further information on how we recognize and present digital assets sales revenue, including gross revenue reporting.

Digital assets sales revenue is primarily driven by overall market dynamics, such as digital asset pricing, volatility and macroeconomic trends.

Staking Revenue

Staking revenue consists of the total rewards earned in connection with our staking solutions. Through our staking solutions, our clients may stake their digital intangible assets by delegating such assets to us or a third-party staking validator selected by us. The decision to use a third-party validator is based primarily on providing our clients with the ability to leverage a variety of providers or where we do not yet provide internal support for a newly launched network. We or such third-party staking validator participate in PoS blockchain networks on behalf of our clients, and earn rewards in the form of the networks’ native tokens in exchange for providing validation or block creation services to such networks. We present staking revenue on a gross basis. See the section titled “—Critical Accounting Policies and Estimates” for further information on how we recognize and present staking revenue, including gross revenue reporting.

Subscriptions and Services Revenue

Subscriptions and services revenue consists primarily of providing digital intangible asset wallet solutions to institutional and retail customers in exchange for certain up-front, plus monthly fees for providing access to our platform for multi-sig wallets that provide security and custody for digital assets. Subscriptions and services revenue is recognized monthly based on usage each month, with any onboarding fees recognized ratably over the contract duration, commencing when the service is made available to the customer (generally upon onboarding).

Subscriptions and services revenue also encompass our Crypto-as-a-Service offering, which allows clients to issue and manage the issuance of their own digital assets. Subscriptions and services revenue also consists of interest income from loan receivables and fee income from digital intangible assets loan receivables. Interest income generated from our loan receivables is accrued when interest payments become contractually due. Fee income from digital intangible asset loans includes revenue generated from lending digital intangible assets. In some instances, we may charge a fee for loan origination.

In addition, subscriptions and services revenue also includes fees related to our Wrapped Bitcoin (“WBTC”) solution. Fee income is recognized when the performance obligation of issuing a WBTC, referred to as a mint event, occurs. Fee income is also recognized upon the redemption of the WBTC, referred to as a burn event.

Stablecoin-as-a-Service Revenue

Revenue from our Stablecoin-as-a-Service offering, which we launched in 2025, allows institutional clients to issue U.S. dollar-backed stablecoins using our regulated trust infrastructure. We earn implementation and ongoing service fees for the issuance, reserve management, and transaction processing of white-labeled stablecoins. These fees can be paid based on the interest earned on the reserve management as defined in the fee schedule of the agreement.

Interest Income

Interest income consists primarily of interest earned on the portion of our cash and cash equivalents in our treasury that is held in money market accounts and money market funds.

Expenses

Digital Assets Sales Costs

Digital assets sales costs represents the cost basis of the digital intangible assets transferred corresponding to our digital assets sales revenues.

Staking Fees

Staking fees consist primarily of rewards earned by, and distributed to, customers utilizing our validation infrastructure corresponding to our staking revenues.

Stablecoin sponsor fees

Stablecoin sponsor fees primarily consist of interest income earned on fiat reserves owed to institutional clients that issue U.S. dollar-backed stablecoins through our Stablecoin-as-a-Service solution.

Interest Expense

Interest expense includes charges related to servicing our borrowing obligations to support our lending product.

Compensation and Benefits

Compensation and benefits expenses consist primarily of employees’ salaries, bonuses, travel, amortization of equity awards, and other items, such as benefits.

General and Administrative Expenses

General and administrative expenses consist of professional fees, equipment and technology, occupancy, insurance, marketing, sales-related and other expenses.

Amortization and Depreciation

Amortization and depreciation expenses consist of amortization of intangible assets and equipment and software.

Other Income

Net Change in Unrealized Appreciation on Digital Assets

Net change in unrealized appreciation on digital assets reflects the remeasurement of our owned and controlled digital assets to fair value at each financial reporting date.

Gain on Disposal of Assets

The gain on disposal of assets represents the net proceeds from the sale of digital assets and assets associated with an asset purchase agreement.

Provision for (benefit from) Income Taxes

Provision for (benefit from) income taxes includes the provision for (benefit from) income taxes in the United States and other jurisdictions. As we expand our international business activities, any changes in a jurisdiction’s taxation of such activities may increase our overall provision for income taxes in the future.

Results of Operations

The following table summarizes our results of operations for the periods presented and as a percentage of our total revenue for those periods. The period-to-period comparison of financial results is not necessarily indicative of financial results to be achieved in future periods.

(in thousands)

38

(1) May not foot due to rounding.

Comparison of Three Months Ended March 31, 2026 and March 31, 2025

Total Revenue

(in thousands)

Digital assets sales revenue

Digital asset sales revenue increased by $2,054.0 million, or 127.9%, for the three months ended March 31, 2026 compared to the same period in the prior year.

The increase was primarily attributable to higher digital asset trading activity resulting from the expansion of trading pairs on the platform, increased activity from existing clients, and an expanding client base. We present digital assets sales revenue on a gross basis (other than the portion of digital assets sales revenue recognized in connection with sales and purchases on our platform of certain stablecoins that are classified as financial assets, which is recognized on a net basis) because of our role as principal for accounting purposes in sales of digital assets, as we control the digital assets prior to transfer to the customer, are primarily responsible for fulfilling the transaction, and have discretion in pricing, including the ability to incorporate spreads relative to market prices. As a result, the significant volume of digital asset transactions on our platform results in significant digital assets sales revenue with corresponding digital assets sales costs. For the three months ended March 31, 2026, digital assets sales costs increased by $2,045.7 million, or 127.7%, over the corresponding period in the prior year.

Staking revenue

Staking revenue decreased by $96.6 million, or 66.2%, for the three months ended March 31, 2026 compared to the same period in the prior year, primarily driven by lower staked digital asset volume on our platform and a decline in digital asset prices. We present staking revenue on a gross basis because of our role as principal for accounting purposes in connection with our clients’ staking activities. As a result, the significant volume of staking activities on our platform results in staking revenue with corresponding staking fees. For the three months ended March 31, 2026, staking fees decreased by $86.3 million, or 67.6%, over the corresponding period in the prior year.

Subscriptions and services revenue

Subscriptions and services revenue increased by $2.6 million, or 11.3%, for the three months ended March 31, 2026 compared to the same period in the prior year. The increase was primarily driven by an increase in our Number of Clients, growth in professional services projects, and higher lending activity.

Stablecoin-as-a-Service revenue

Stablecoin-as-a-Service revenue increased by $38.2 million, for the three months ended March 31, 2026 compared to $4,000 in the same period in the prior year. The increase results from the launch of this new service in March 2025. We earn interest on stablecoin reserve assets and recognize that revenue on a gross basis. We recognize stablecoin sponsor fees, which largely offset the interest revenue. For the three months ended March 31, 2026, stablecoin sponsor fees increased by $35.3 million over the corresponding period in the prior year.

Interest income

Interest income increased by $0.7 million, or 258.5%, for the three months ended March 31, 2026 compared to the same period in the prior year. The increase was primarily attributable to an increase in fiat treasury investments.

Expenses

(in thousands)

Digital Assets Sales Costs

Digital assets sales costs increased by $2,045.7 million, or 127.7%, for the three months ended March 31, 2026 compared to the same period in the prior year. The increase was primarily attributable to higher transaction volumes driven by the expansion of trading pairs on the platform, increased activity from existing clients, and growth in the overall client base.

Staking Fees

Staking fees decreased by $86.3 million, or 67.6%, for the three months ended March 31, 2026 compared to the same period in the prior year. The decrease was primarily driven by lower staked digital asset volume on our platform and a decline in digital asset prices.

Stablecoin Sponsor Fees

Stablecoin sponsor fees increased by $35.3 million for the three months ended March 31, 2026 compared to the same period in the prior year, as no such fees were incurred during that period. The increase was driven by the launch of this new service in March 2025.

Interest Expense

Interest expense increased by $4.3 million, or 257.2%, for the three months ended March 31, 2026 compared to the same period in the prior year. The increase in interest expense was primarily attributable to higher borrowings and related interest costs incurred to support the expansion of our lending product.

Compensation and Benefits

Compensation and benefits expenses increased by $16.5 million, or 67.8%, for the three months ended March 31, 2026 compared to the same period in the prior year, primarily driven by increased headcount as a result from our continued investments in research and development initiatives and go-to-market teams, as well as higher stock-based compensation expense, primarily related to the satisfaction of the performance vesting condition on outstanding RSUs upon completion of our IPO.

General and Administrative Expenses

General and administrative expenses increased by $4.8 million, or 30.6%, for the three months ended March 31, 2026 compared to the same period in the prior year. The increase was driven primarily by higher audit and accounting fees, legal fees, conference and event costs, and dues and subscriptions.

Amortization and Depreciation Expenses

Amortization and depreciation expenses increased by $0.9 million, or 99.4%, for the three months ended March 31, 2026 compared to the same period in the prior year. The increase was driven primarily by amortization and depreciation charges related to intangible assets acquired through the Brassica and HeightZero acquisitions, as well as higher capital expenditures and capitalized development costs incurred.

Other Loss

(in thousands)

Net Change in Unrealized Loss on Digital Assets

Net change in unrealized loss on digital assets increased by $19.9 million, or 58.9%, for the three months ended March 31, 2026 compared to the same period in the prior year. The increase in net change in unrealized loss of digital assets was primarily driven by decline in digital asset prices.

Gain (Loss) on Disposal of Digital Assets

Gain on disposal of digital assets increased by $3.5 million, or 229.7%, for the three months ended March 31, 2026 compared to the same period in the prior year. The increase in gain on disposal of digital assets was primarily due to lower transaction volumes, a decline in digital asset prices, and increased proceeds from the sale of our digital asset treasury.

Provision for (Benefit from) Income Taxes

(in thousands)

Tax benefits increased by $3.7 million, or 51.0%, for the three months ended March 31, 2026 compared to the same period in the prior year. The increase was primarily due to our annualized effective income tax rate of 15.5% for the three months ended March 31, 2026, calculated based on first quarter actual results and forecasted results for the remainder of fiscal year 2026, compared to from the effective income tax rate of 22.0% for the three months ended March 31, 2025, primarily due to state and local taxes and limitations on the deductibility of executive compensation, partially offset by the benefit recognized upon the settlement of employee stock-based awards.

Liquidity and Capital Resources

Prior to our IPO, we financed our operations primarily through issuances of preferred stock, cash generated from operations, and holdings in our Bitcoin treasury reserve. As of March 31, 2026, our primary sources of liquidity were our cash and cash equivalents of $186.6 million, excluding cash and cash equivalents segregated for the benefit of stablecoin holders - restricted. As of March 31, 2026 our digital assets included both treasury and borrowed Bitcoin. The Company owned Bitcoin treasury held as of March 31, 2026 was 2,449 BTC with a fair value of $167.1 million based on observable market prices, representing approximately 2.8% of our total assets.

In January 2026, we completed our IPO, in which we sold 11,026,365 shares of Class A common stock, resulting in net proceeds of $174.3 million after deducting underwriting discounts and other offering costs.

Upon the closing of the IPO, all shares of the Company’s then outstanding convertible preferred stock were automatically converted into a total of 60,778,788 shares of Class A common stock. Additionally, we issued 594,862 shares of our Class A common stock upon settlement of the restricted stock units (“RSUs”) for which a liquidity-event performance-based vesting condition was satisfied upon the completion of the IPO and for which the service-based vesting condition had also been satisfied as of that date. Of the shares issued, 270,700 shares were withheld to satisfy employee tax withholding obligations. Based on the IPO price of $18.00 per share, we expect to pay approximately $4.0 million in taxes on net share settlement of these RSUs.

Our material cash requirements from known contractual and other obligations consist of our obligations under operating leases for office space and contractual obligations for hosting services to support our business operations. See Note 14—Commitments and Contingencies” of the notes to our condensed consolidated financial statements in Part I, Item 1 of this Quarterly Report on Form 10-Q for additional discussion of our principal contractual commitments.

We believe our available cash, available borrowings, and cash collected from our revenue will be adequate to meet our future liquidity needs for at least the next twelve months. Our future capital requirements will depend on many factors, including but not limited to price and volatility of digital assets, the adoption of digital assets, our growth rate, client acquisition, retention and expansion, our ability to increase our Bitcoin holdings as part of our Bitcoin treasury strategy, our headcount, our sales and marketing activities, the introduction of new products and offerings, and potential merger and acquisition activity and other strategic initiatives.

We may be required to seek additional equity or debt financing from time to time. In the event that we require additional financing, we may not be able to raise such financing on terms acceptable to us or at all. If we are unable to raise additional capital or generate cash flows necessary to expand our operations and invest in continued innovation, we may not be able to compete successfully, which would harm our business, results of operations and financial condition.

Off-Balance Sheet Arrangements

As of March 31, 2026, we did not have any relationships with unconsolidated organizations or financial partnerships, such as structured finance or special purpose entities that would have been established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes.

Operating Activities

Net cash used from operating activities was $29.5 million for the three months ended March 31, 2026, primarily driven by net loss generated during the period of $60.7 million, partially offset by non-cash adjustments totaling $56.7 million. These adjustments primarily consisted of fair value changes related to digital assets, stock-based compensation, and depreciation and amortization. Additionally, changes in working capital contributed to operating cash flow, including $3.9 million generated from the sale of digital assets, offset by net cash use of $28.9 million from changes in accounts receivable (net), other assets, accounts payable and other liabilities.

Net cash generated from operating activities was $8.2 million for the three months ended March 31, 2025, primarily driven by net loss generated during the period of $25.7 million, partially offset by non-cash adjustments totaling $17.4 million. These adjustments primarily consisted of fair value changes related to digital assets, stock-based compensation, and depreciation and amortization. Additionally, changes in working capital contributed to operating cash flow, including $14.9 million generated from the sale of digital assets, offset by net cash use of $17.2 million from changes in accounts receivable (net), other assets, accounts payable and other liabilities.

Investing Activities

Net cash used in investing activities was $11.3 million for the three months ended March 31, 2026. This cash outflow was primarily driven by $5.8 million in net loan originations and repayments, $14.8 million invested in digital assets, and $2.3 million in equipment and software purchases.

Net cash used in investing activities was $0.9 million for the three months ended March 31, 2025. This cash outflow was primarily driven by $1.7 million in net loan originations and repayments, $0.1 million invested in digital assets, and $2.5 million in equipment and software purchases.

Financing Activities

Net cash generated from financing activities was $1,200.4 million for the three months ended March 31, 2026, primarily driven by net proceeds of $174.3 million from our initial public offering, $1,079.3 million in deposits from stablecoin holders, $20.8 million in proceeds received from borrowings, net of repayment, to support loan originations, $51.2 million related to customer activity pending settlement, and $3.0 million for tax payment related to net settlement of RSUs.

Net cash generated from financing activities was $19.8 million for the three months ended March 31, 2025, primarily driven by $57.0 million in deposits from stablecoin holders, $20.0 million in proceeds received from borrowings, net of repayment, to support loan originations, $27.1 million from fiat currency returned as collateral, $30.2 million of customer activity pending settlement, $0.2 million in proceeds from stock option exercises, and $0.1 million in payment to a joint venture.

Recent Accounting Pronouncements

Refer to Note 2 of the notes to our condensed consolidated financial statements in Part I, Item 1 of this Quarterly Report on Form 10-Q for a full description of recent accounting pronouncements.

Quantitative and Qualitative Disclosures About Market Risk

We are exposed to market risk in the ordinary course of our business. Market risk represents the risk of loss that may impact our financial position due to adverse changes in financial market prices and rates. Our market risk exposure is primarily the result of fluctuations in interest rates and the fluctuation in the market value of digital assets.

Interest Rate Risk

Prevailing short-term interest rates have a significant impact on our profitability, as a portion of our revenue and net income is generated from interest earned on client funds held in segregated accounts, as well as on the Company’s corporate cash and cash equivalents. Higher interest rates typically increase the interest income earned. The Company also generates interest income through its lending products, with the rates charged being influenced by the broader short-term interest rate environment. While rising rates can enhance lending-related income, they may also increase borrowing costs, potentially limiting our access to capital on favorable terms. Conversely, declining interest rates may reduce both interest income and lending fees, which could adversely affect the Company’s profitability. A hypothetical 100 basis points increase or decrease in interest rates during three months ended March 31, 2026 and March 31, 2025 would not have had a material effect on our financial results.

Foreign Currency Exchange Risk

Our reporting currency is the U.S. dollar, which is also the functional currency of our foreign subsidiaries. Substantially all of our revenue is currently denominated in U.S. dollars, with only an insignificant amount generated from international sales in foreign currencies. Accordingly, our revenue is not presently subject to significant foreign currency exchange risk, however, this exposure may increase as our international operations expand. Our operating expenses are denominated in the currencies of the countries in which we operate. As a result, our primary exposure to foreign currency risk arises from transactions denominated in Euros, British Pounds, Korean Won, and Singapore Dollars. As a result, our consolidated results of operations and cash flows are subject to fluctuations resulting from changes in foreign currency exchange rates and may be adversely affected by future changes in such rates. We may use derivative instruments or other financial tools to manage foreign currency exposure, no such instruments were outstanding or entered into during the three months ended March 31, 2026 and March 31, 2025. We do not believe a 10% increase or decrease in the relative value of the U.S. dollar would have a material impact on our operating results.

Market Risk of Digital Assets

A significant portion of our total revenue is generated from transaction fees associated with the purchase, sale and trading of digital assets on our platform. These fees are structured either as a fixed amount or as a percentage of the transaction value and may vary based on payment method and transaction size. In addition to transaction-based revenue, we also derive substantial income from our subscription and services offerings.

Our financial performance is subject to digital asset price risk, with profitability partially dependent on the market value of certain digital assets. Historically, digital asset prices—and by extension, our operating results—have exhibited considerable volatility on a quarterly basis. There is no guarantee that future price movements will mirror historical patterns. Declines in the market value of key digital assets have adversely affected our earnings in the past and could negatively impact future profitability, cash flows, liquidity, and our ability to meet ongoing and future financial obligations.

As part of our treasury strategy, we also hold digital assets, primarily Bitcoin, as long-term investments. These assets are presented at fair value at each reporting date, with changes in fair value recognized in net income. Digital asset prices have been historically volatile. A hypothetical 50.0% increase or decrease in the fair value of our Bitcoin holdings would have resulted in an impact on net income of approximately $83.6 million and $98.3 million for the three months ended March 31, 2026 and March 31, 2025, respectively.

Evaluation of Disclosure Controls and Procedures

Our management, with the participation and supervision of our Chief Executive Officer (our principal executive officer) and our Chief Financial Officer (our principal financial officer), have evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), as of the end of the period covered by this Quarterly Report on Form 10-Q. Based on such evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of such date, our disclosure controls and procedures were not effective to accomplish their objectives at the reasonable assurance due to material weaknesses in internal control over financial reporting as described below.

Material Weaknesses

As previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2025, we have previously identified material weaknesses in our internal control over financial reporting. As of the end of the period covered by this Quarterly Report on Form 10-Q, the material weaknesses identified pertained to the

• lack of effectively designed, implemented, and maintained information technology (“IT”) general controls including:
• logical access to applications and data, software change management,
• review of reports for third-party service organizations associated with IT systems and related complementary user entity controls maintained by management, over applications that support our financial reporting processes,
• insufficient manual review controls over key inputs and/or outputs from our applications that support our financial reporting processes,
• insufficient segregation of duties across financially relevant functions, and
• lack of sufficient number of qualified personnel within our accounting, finance, and operations functions who possessed an appropriate level of expertise to provide reasonable assurance that transactions were being appropriately recorded and disclosed, including evaluating whether new accounting policies are in accordance with GAAP.

We have concluded that these material weaknesses existed because we did not have the necessary business processes, systems, personnel, and related internal controls due, in part, to the rapid growth we have experienced in the past years, which growth placed considerable strains on our IT and accounting systems, processes and personnel.

Notwithstanding such material weaknesses in internal controls over financial reporting, our Chief Executive Officer and Chief Financial Officer have concluded that our unaudited condensed financial statements included in this Quarterly Report on Form 10-Q present fairly, in all material respects, our financial position, results of operations and cash flows for the periods presented in conformity with GAAP. The aforementioned material weaknesses also did not result in a material misstatement in any previously issued consolidated financial statements.

Remediation Effects and Status

As previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2025, management has completed the following remedial actions:

• expanded our resources and personnel with the appropriate level of expertise within our accounting, financial, and operations functions and to implement, monitor, and maintain business processes and IT General Controls (“ITGC”);
• designed, developed and deployed an enhanced ITGC framework, including the implementation of a number of systems, processes, and tools to enable the effectiveness and consistent execution of these controls; and
• hired an outside consultant to help oversee the implementation of and suggest remedial actions.

While management has taken certain remedial actions with respect to the identified material weaknesses, the identified material weaknesses remain un-remediated. Management has developed a plan to remediate the material weaknesses identified, and we expect the implementation of such plan to continue to take place in 2026, and to include the following measures:

• continuing to implement ITGCs to support the evaluation, monitoring, and ongoing effectiveness of key application controls, access controls, program changes and key reports;
• implement a process to review third-party attestation reports on financially significant IT applications;
• continuing to implement processes and controls to better manage and monitor our segregation of duties, including enhancing the usage of technology and tools for segregation of duties within the Company’s systems, applications, and tools;
• continuing to enhance manual review controls, as necessary, over key inputs and/or outputs from our applications that support our financial reporting processes; and
• implement controls to assess whether accounting for new or changed revenue streams are consistent with GAAP.

Changes in Internal Control Over Financial Reporting

Except for the material weakness and remediation efforts described above, there were no changes in our internal control over financial reporting as defined in Rule 13a-15(d) and 15d-15(d) under the Exchange Act that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Inherent Limitations on the Effectiveness of Controls

The effectiveness of any system of internal control over financial reporting, including ours, is subject to inherent limitations, including the exercise of judgment in designing, implementing, operating, and evaluating the controls and procedures, and the inability to eliminate misconduct completely. Accordingly, in designing and evaluating the disclosure controls and procedures, management recognizes that any system of internal control over financial reporting, including ours, no matter how well designed and operated, can only provide reasonable, not absolute assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply its judgment in evaluating the benefits of possible controls and procedures relative to their costs. Moreover, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. We intend to continue to monitor and upgrade our internal controls as necessary or appropriate for our business but cannot assure you that such improvements will be sufficient to provide us with effective internal control over financial reporting.

There have been no material changes to the risk factors set forth in Part 1, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2025. Such disclosures reflect our beliefs and opinions as to factors that could materially affect our business, financial condition or future results. References to past events are provided by way of example only and are not intended to be a complete listing of such events or a representation as to whether or not such factors or similar events have occurred in the past or their likelihood of occurring in the future. The risks described in our Annual Report on Form 10-K for the year ended December 31, 2025 may not be the only risks facing the Company. Additional risks and uncertainties not currently known to the Company or that the Company deems to be immaterial also may materially adversely affect the Company's business, financial condition and/or operating results.