Financial Performance - Revenues for the three months ended September 30, 2025, increased by $2,157,050, or 41%, to $7,398,939 compared to $5,241,889 in 2024[236]. - Banking and payment revenues rose by 35% from $5,211,630 in 2024 to $7,054,190 in 2025, driven by a 39% increase in net revenues from merchant offers[237][238]. - Custody and trading revenues increased from a nominal amount in 2024 to $346,478 in 2025, with expectations for significant growth in the future[240]. - 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 $6.6 million, or 44%, from $15.3 million in 2024 to $21.9 million in 2025, driven by increased merchant offers[256][260]. - Custody and trading revenues increased significantly from a nominal amount in 2024 to $0.7 million in 2025, indicating growth potential in this segment[262]. - The company reported a net loss of $30.7 million for the nine months ended September 30, 2025, a decrease of 47% compared to the previous year[1]. Operating Expenses - Total operating expenses for the three months ended September 30, 2025, were $13,339,257, an increase of $3,928,209, or 42%, compared to 2024[236]. - Compensation and benefits expenses surged by 408% to $3,728,954 in 2025, influenced by an increase in employee headcount from 22 to 39[246][247]. - Marketing expenses increased by 71% to $237,625 in 2025, reflecting a strategic focus on growth partnerships and product launches[248]. - Professional fees decreased by 59% to $1,294,394 in 2025, primarily due to reduced costs associated with the transition to a public company[249]. - Total operating expenses surged by $22.9 million, or 106%, from $21.5 million in 2024 to $44.4 million in 2025, primarily due to increased compensation and benefits[1]. - Compensation and benefits expenses skyrocketed by 492% to $13.9 million in 2025, largely due to an increase in headcount and share-based compensation[268]. - Marketing expenses increased from $0.2 million in 2024 to $1.3 million in 2025, reflecting the company's strategy to accelerate growth through enhanced marketing efforts[269]. Cash Flow and Financial Position - 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]. - The company reported net operating losses of $5.9 million for the three months ended September 30, 2025 and $21.8 million for the nine months ended September 30, 2025[286]. - For the nine months ended September 30, 2025, cash used in operating activities 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]. - The company raised $3.48 million from the issuance of shares of Common Stock through an equity purchase facility as of September 30, 2025[290]. - The company anticipates that existing cash, accounts receivable, and financing available will be sufficient to fund operations for the next year[291]. Bitcoin Holdings and Treasury Management - 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 company held 1,494 bitcoin in its Investment Treasury, valued at $170.4 million[287]. - The Fold Bitcoin Gift Card was launched in May 2025, allowing customers to purchase USD-denominated gift cards and redeem them for bitcoin[186]. - Fold's Investment Treasury strategy includes holding bitcoin as a long-term strategic investment, with plans to continue accumulating bitcoin over time[184]. - As of September 30, 2025, the Rewards Treasury held $9.3 million and the Investment Treasury held $170.4 million, totaling $179.7 million in bitcoin treasury[197]. Product and Service Development - The Company 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]. - Fold aims to enhance user engagement and attract new customers through the introduction of new products and expansion of existing offerings[190]. - The Fold Credit Card, announced in September 2025, will offer premium customers unlimited 2% bitcoin rewards and is expected to drive new user acquisition[188]. - Fold+ subscription offers users reduced or no fees on eligible products, costing $100/year or $10/month[203]. - The company plans to expand its custody and trading platform, enhancing user experience and geographic reach, which is expected to drive future revenue growth[262]. Revenue Recognition and Sources - 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]. - Transaction fees vary based on membership tier and transaction type, including instant transfer and international transaction fees[211]. - The company recognizes gross revenues and costs for gift card transactions, with revenue typically higher during major shopping periods[211]. Market and Economic Factors - 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 monetary policy significantly influence bitcoin's market dynamics and the company's business[316].
FTAC Emerald Acquisition Corp.(FLDDU) - 2025 Q3 - Quarterly Report