Financial Performance - Revenues for the three months ended September 30, 2025, increased by $2.16 million, or 41%, to $7.40 million compared to $5.24 million in the same period of 2024[236]. - Net revenues for the nine months ended September 30, 2025, increased by $7.4 million, or 48%, to $22.7 million compared to $15.3 million in the same period of 2024[257]. - Banking and payment revenues rose by 35% from $5.21 million in Q3 2024 to $7.05 million in Q3 2025, driven by a 39% increase in net revenues from merchant offers[237][238]. - Custody and trading revenues increased from a nominal amount in Q3 2024 to $0.35 million in Q3 2025, with expectations for significant growth in this area[240]. - The company reported a net income of $554,242 for Q3 2025, compared to a net loss in the same period of 2024[236]. - The company reported a net loss of $30.7 million for the nine months ended September 30, 2025, a 47% decrease from a net loss of $30.7 million in 2024[257]. Bitcoin Treasury and Assets - As of September 30, 2025, Fold held approximately 1,575 BTC in its Bitcoin Treasury, valued at $179.7 million based on a market price of approximately $114.1 thousand per bitcoin[196]. - The total Bitcoin Treasury increased from $102.1 million on December 31, 2024, to $179.7 million as of September 30, 2025, reflecting a growth of approximately 76%[197]. - The company held 1,494 bitcoin in its Investment Treasury, valued at $170.4 million, with 800 bitcoin valued at $91.3 million restricted as collateral for convertible notes[287]. - The gain on digital assets - investment treasury was $31.2 million for the nine months ended September 30, 2025, compared to a loss of $0.4 million in 2024, driven by the increase in bitcoin prices[273]. User Growth and Engagement - Fold added more than 7,500 new Accounts, bringing the total to over 625,000, and more than 2,000 new Verified Accounts, totaling nearly 82,000[202]. - The Fold Bitcoin Gift Card was launched in May 2025, allowing customers to purchase USD-denominated gift cards and redeem them for bitcoin, with plans for further rollout[186]. - Fold+ subscription offers users reduced or no fees on eligible products, costing $100/year or $10/month[203]. - The Fold Credit Card, announced in September 2025, is expected to provide premium customers with unlimited 2% bitcoin rewards and drive new user acquisition[188]. Revenue Streams - Fold earns revenue from interchange fees on transactions made with the Fold Debit Card, which are set by Visa and vary based on multiple factors[204]. - Revenue from the Fold Bitcoin Gift Card is recognized as gross revenue and costs of sales, contributing to overall revenue[206]. - Other revenue sources include merchandise sales and sponsorships, though these are currently non-material to the business[207]. - Revenue Rewards are earned through qualifying transactions and are recorded as a reduction in revenue, while Marketing Rewards are treated as marketing expenses[208][209]. Operating Expenses - Operating expenses totaled $13.34 million for Q3 2025, a 42% increase from $9.41 million in Q3 2024, primarily due to increased compensation and benefits[236]. - Compensation and benefits expenses surged by 408% to $3.73 million in Q3 2025, reflecting an increase in employee headcount from 22 to 39[246][247]. - Marketing expenses rose to $0.24 million in Q3 2025 from $0.14 million in Q3 2024, with plans for further investment in growth partnerships[248]. - Professional fees decreased by 59% to $1.29 million in Q3 2025, down from $3.17 million in Q3 2024, due to reduced costs associated with the transition to a public company[249]. Cash Flow and Financing - The company had cash and cash equivalents of $6.7 million and positive working capital of $6.1 million as of September 30, 2025[286]. - Cash used in operating activities for the nine months ended September 30, 2025 was $11.4 million, compared to $3.4 million for the same period in 2024[296]. - Cash flows used in investing activities increased by $2.0 million primarily due to increased purchases of bitcoin for the Investment Treasury[298]. - Cash provided by financing activities for the nine months ended September 30, 2025 was $3.5 million, down from $8.0 million in 2024[299]. - The company entered into a $250 million equity purchase facility, with $3.48 million raised from the issuance of shares of Common Stock through the facility as of September 30, 2025[290]. Market and Economic Factors - The price of bitcoin increased from approximately $63.3 thousand in September 2024 to $114.1 thousand in September 2025, impacting gains and losses on digital assets[250][251]. - The company is exposed to market price changes in bitcoin, with assets and liabilities denominated in bitcoin being remeasured to fair value at the end of each reporting period[315]. - Negative swings in the market price of bitcoin could materially impact the company's earnings and the carrying value of its bitcoin-denominated assets and liabilities[315]. - Macroeconomic factors such as regulatory clarity, institutional adoption, and technological innovation are expected to influence bitcoin's growth and adoption rates[316].
FTAC Emerald Acquisition (EMLD) - 2025 Q3 - Quarterly Report