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]. - 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 Fold Bitcoin Gift Card generated $0.20 million in revenues for Q3 2025, with plans for further distribution channel expansion[241]. - 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 for the same period in 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]. - The gain on digital assets - investment treasury showed a significant improvement, with a gain of $31.2 million in 2025 compared to a loss of $0.4 million in 2024[1]. - Adjusted EBITDA for the three months ended September 30, 2025 was $(4,201,998), consistent with $(4,206,774) for the same period in 2024[281]. - Adjusted EBITDA for the nine months ended September 30, 2025 decreased by $6.9 million, or 110%, compared to the nine months ended September 30, 2024[282]. - The company reported a net loss of $554,242 for the three months ended September 30, 2025, compared to a net loss of $(62,310,678) for the same period in 2024[281]. Customer Growth and Engagement - 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 grow its customer base and transaction volume through increased investment in organic and paid marketing channels, leveraging social media and customer referrals[193]. - Fold+ subscription offers users reduced fees and higher rewards for $100/year or $10/month[203]. - Fold launched the Fold Credit Card and Fold Bitcoin Gift Card in 2025, which are expected to drive higher volumes, revenues, and margins while enhancing user engagement[190]. Financial Position and Treasury Management - Fold held approximately 1,575 BTC in its Bitcoin Treasury with a market value of $179.7 million as of September 30, 2025, based on a bitcoin price of approximately $114.1 thousand[196]. - As of September 30, 2025, Fold's Rewards Treasury was valued at $9.3 million and its Investment Treasury at $170.4 million, totaling $179.7 million[197]. - The company has committed significant resources to optimize its business through UX updates and system architecture refinements, achieving product-level profitability for all core product lines[181]. - The company entered into a $250 million equity purchase facility, with $3.48 million raised from the sale of 1.15 million shares as of September 30, 2025[187]. - The company has an accumulated deficit of $136.2 million as of September 30, 2025, with significant portions related to fair value adjustments on SAFE notes and convertible debt instruments[286]. - 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 company had $66.3 million in principal debt outstanding in the form of two convertible notes, with the June 2025 Amended Investor Note due at $20.0 million and the March 2025 Investor Note due at $46.3 million[289]. Operating Expenses - Total operating expenses for Q3 2025 were $13.34 million, a 42% increase from $9.41 million in Q3 2024[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 increased 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]. - Other Selling, General and Administrative expenses increased from $0.34 million in Q3 2024 to $1.21 million in Q3 2025, primarily due to higher insurance premiums and software amortization costs[254]. - 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]. Market and Economic Factors - The company is exposed to market price changes in bitcoin, which affects its assets and liabilities, including the bitcoin Investment Treasury and customer rewards liability[315]. - Macroeconomic factors such as regulation, institutional adoption, and monetary policy significantly impact the growth and adoption of bitcoin[316]. - The political environment in the United States is anticipated to become increasingly favorable for the bitcoin industry, influencing market confidence and liquidity[316].
FTAC EMERALD ACQ(EMLDU) - 2025 Q3 - Quarterly Report