Exodus Movement Inc(EXOD) - 2025 Q1 - Quarterly Report

PART I. FINANCIAL INFORMATION Financial Statements (Unaudited) Unaudited Q1 2025 financial statements report $36.0 million revenues and a $12.9 million net loss, a significant shift from prior year net income Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $59,773 | $37,883 | | Digital assets | $175,207 | $196,359 | | Total Assets | $263,202 | $287,995 | | Total current liabilities | $6,945 | $8,345 | | Total Liabilities | $21,655 | $30,468 | | Total Stockholders' Equity | $241,547 | $257,527 | Condensed Consolidated Statements of Operations Highlights (in thousands, except per share amounts) | Account | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Revenues | $35,996 | $29,060 | | Loss (gain) on digital assets, net | $28,809 | $(56,799) | | (Loss) income before income taxes | $(21,741) | $67,953 | | Net (Loss) Income | $(12,873) | $54,787 | | Basic net (loss) income per share | $(0.45) | $2.09 | | Diluted net (loss) income per share | $(0.45) | $1.75 | Condensed Consolidated Statements of Cash Flows Highlights (in thousands) | Cash Flow Activity | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net cash (used in) provided by operating activities | $(6,166) | $450 | | Net cash provided by investing activities | $33,694 | $9,552 | | Net cash used in financing activities | $(5,638) | $(344) | | Change in cash and cash equivalents | $21,890 | $9,658 | Management's Discussion and Analysis of Financial Condition and Results of Operations Management reports $36.0 million revenue for Q1 2025, a 24% increase, but a net loss due to digital asset fluctuations and rising expenses Key Performance Indicators (KPIs) | Metric | As of March 31, 2025 | As of March 31, 2024 | Change | | :--- | :--- | :--- | :--- | | Monthly Active Users (MAUs) | 1.6 million | 1.7 million | -6% | | Quarterly Funded Users (QFUs) | 1.8 million | 1.6 million | +13% | Results of Operations Comparison (in thousands) | Account | Q1 2025 | Q1 2024 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Revenues | $35,996 | $29,060 | $6,936 | 24% | | Technology, development and user support | $14,893 | $10,704 | $4,189 | 39% | | General and administrative | $14,318 | $8,055 | $6,263 | 78% | | Loss (gain) on digital assets, net | $28,809 | $(56,799) | $85,608 | (151)% | | Net (Loss) Income | $(12,873) | $54,787 | $(67,660) | (123)% | - Revenue growth was primarily driven by a $7.1 million (26%) increase in exchange aggregation revenue, boosted by user growth and business-to-business partner efforts[87] - General and administrative expenses increased by $6.3 million (78%), which included $1.8 million in transaction-related expenses for prospective business acquisitions, a $2.2 million increase in compensation, and a $1.1 million increase in marketing[90] - The company believes its existing cash, digital assets, and cash from operations will be sufficient to fund operations for the next twelve months[93] Quantitative and Qualitative Disclosures About Market Risk The company's primary market risks are digital asset price volatility, interest rate fluctuations, and foreign currency exchange rates - A hypothetical 10% change in digital asset prices would impact fair value by $17.5 million as of March 31, 2025[105] - A hypothetical 100 basis point change in interest rates would result in a $0.6 million change in interest earned on cash and treasury bills[107] - The company's foreign currency exposure is mainly from Swiss Franc transactions, with $0.5 million net foreign currency gains for Q1 2025[108][109] Controls and Procedures Management concluded that disclosure controls and procedures were not effective as of March 31, 2025, due to unremediated material weaknesses - Management concluded that the Company's disclosure controls and procedures were not effective as of March 31, 2025[112] - Material weaknesses related to insufficient personnel and inadequately designed control activities remain unremediated[113] - A remediation plan is underway, but material weaknesses are not yet fully resolved despite some completed activities[114][115] PART II. OTHER INFORMATION Legal Proceedings The company is subject to ordinary course legal claims and proceedings, not expected to have a material adverse effect - The Company is subject to a number of claims and proceedings that generally arise in the ordinary course of business, which are not expected to have a material adverse effect[62][120] Risk Factors No material changes to risk factors from the Annual Report on Form 10-K, except for a mitigated tax information reporting risk - A business-related risk regarding a proposed IRS rule on 'Gross Proceeds Reporting by Brokers' is no longer considered a risk due to new legislation[123] Unregistered Sales of Equity Securities and Use of Proceeds The company reported no unregistered sales of equity securities during the reporting period - None[124] Defaults Upon Senior Securities The company reported no defaults upon senior securities - None[125] Mine Safety Disclosures This item is not applicable to the company - Not applicable[126] Other Information No director or Section 16 officer adopted, modified, or terminated any Rule 10b5-1 trading arrangement during Q1 2025 - No director or Section 16 officer adopted, modified, or terminated any Rule 10b5-1 trading arrangement during the first quarter of 2025[127] Exhibits This section lists the exhibits filed with the Form 10-Q, including CEO and CFO certifications - The report includes certifications from the Principal Executive Officer and Principal Financial Officer as required by the Sarbanes-Oxley Act[129]