Exodus Movement Inc(US:EXOD)2025-11-10 21:19Financial Performance - Total revenues for the three months ended September 30, 2025, increased to $30,343,000, up 50.8% from $20,117,000 for the same period in 2024[19] - Net income for the nine months ended September 30, 2025, was $41,835,000, compared to $46,024,000 for the same period in 2024, reflecting a decrease of 9.5%[19] - As of September 30, 2025, the company reported a net income of $17,041 thousand, compared to a net income of $46,024 thousand for the same period in 2024, reflecting a decrease of approximately 63.0%[23] - For the nine months ended September 30, 2025, net income was $41,835 thousand, down from $46,024 thousand in 2024, indicating a decline of about 9.5%[25] - The company reported a net loss of $12,873 thousand for the three months ended March 31, 2025, compared to a net income of $37,667 thousand for the same period in 2024, indicating a significant decline in performance[25] - The net income for the three months ended September 30, 2025, was $17,041,000, compared to $843,000 for the same period in 2024, reflecting a significant increase[76] Assets and Equity - Total assets as of September 30, 2025, reached $338,451,000, an increase of 17.5% from $287,995,000 as of December 31, 2024[17] - Total stockholders' equity rose to $296,704,000 as of September 30, 2025, compared to $257,527,000 as of December 31, 2024, marking a growth of 15.2%[17] - The total stockholder equity as of September 30, 2025, was $296,704 thousand, compared to $275,120 thousand as of September 30, 2024, indicating an increase of approximately 7.9%[23] - The company held $263.9 million in digital assets at fair value as of September 30, 2025, which are presented separately from other intangible assets[35] - The fair value of digital assets as of September 30, 2025, was $263,911,000, up from $196,359,000 as of December 31, 2024[49] - The company held treasury bills worth $5.0 million as of September 30, 2025, compared to $31.2 million as of December 31, 2024, indicating a shift in asset allocation[74] Expenses - Technology, development, and user support expenses for the three months ended September 30, 2025, were $16,987,000, a 49.6% increase from $11,333,000 in the same period of 2024[19] - The company reported expenses of $29,218,000 for the nine months ended September 30, 2025, compared to $16,744,000 for the same period in 2024[49] - Marketing expenses increased by $2.7 million and $7.2 million for the three and nine months ended September 30, 2025, respectively, compared to the same periods in 2024[89] - Investment in human capital costs rose by $5.7 million and $8.3 million for the three and nine months ended September 30, 2025, respectively, primarily due to increased salaries and stock-based compensation[88] - The company incurred $1.3 million in expenses related to growth initiatives during the three months ended September 30, 2025, with total expenses for the nine months reaching $4.3 million[91] Cash Flow - Cash flows from operating activities for the nine months ended September 30, 2025, resulted in a net cash used of $16,243 thousand, compared to $6,803 thousand in 2024, representing an increase in cash outflow[25] - The company reported a net cash provided by investing activities of $41,659 thousand for the nine months ended September 30, 2025, compared to $24,741 thousand in 2024, representing an increase of about 68.0%[25] - Net cash used in operating activities increased by $9.4 million to $16.2 million for the nine months ended September 30, 2025, primarily due to a $10.0 million increase in operating activities settled in digital assets and USDC[115] - Net cash provided by investing activities increased by $16.9 million to $41.7 million for the nine months ended September 30, 2025, driven by a $29.2 million net change in treasury bills investments[116] User Metrics - Monthly Active Users (MAUs) were 1.5 million as of September 30, 2025, a slight decrease from 1.6 million in 2024, indicating a focus on expanding the active user base[93] - Quarterly Funded Users (QFUs) increased to 1.8 million as of September 30, 2025, reflecting a growth of 0.3 million, or 20%, compared to 1.5 million in 2024[98] - The company expects MAUs to fluctuate significantly in response to app usage patterns and broader market conditions, while QFUs provide a more stable view of user engagement[99] Gains and Losses - The company recognized a gain on the sale of future token interests amounting to $2,000,000 for the nine months ended September 30, 2025[19] - The company experienced a gain on digital assets of $44,694 thousand for the nine months ended September 30, 2025, compared to a gain of $39,197 thousand in 2024, reflecting an increase of about 14.0%[25] - The Company recognized net realized gains from the exchange of digital assets of $3.6 million and net unrealized gains of $24.6 million during the three months ended September 30, 2025[109] - The Company recognized net realized losses from the exchange of digital assets of $2.8 million and net unrealized gains of $41.9 million for the nine months ended September 30, 2025, compared to net realized gains of $5.1 million and net unrealized gains of $34.1 million for the same period in 2024[110] Taxation - The effective tax rate for the nine months ended September 30, 2025, was 9.1%, down from 16.9% for the same period in 2024, indicating a decrease of 46.7%[67] - The company recorded an income tax expense of $3.3 million on pre-tax income of $20.3 million for the three months ended September 30, 2025, resulting in an effective tax rate of 16.1%[67] - Income tax expense for the three months ended September 30, 2025, was $3.3 million, with an effective tax rate of 16.1%, compared to an expense of $0.1 million and an effective tax rate of 11.4% for the same period in 2024[111] Internal Controls - The Company identified material weaknesses in internal control over financial reporting as of September 30, 2025, impacting the effectiveness of its disclosure controls and procedures[132] - As of September 30, 2025, all key remediation measures for previously reported material weaknesses in internal control over financial reporting have been implemented and are currently operating[135] - The company has hired and trained additional accounting personnel to improve segregation of duties and oversight within the financial reporting process[136] - An external consulting firm with digital asset industry expertise has been engaged to assist with process improvement and control design[136] - Enhanced financial close procedures and workflow controls have been implemented to increase control precision and evidence of performance[136] - The company is performing testing to confirm the operating effectiveness of the enhanced controls[135] - The company continues to monitor and evaluate the enhanced controls to confirm their sustained effectiveness[137] Future Outlook - The company expects stablecoin adoption to increase globally, positioning itself to support a wide variety of stablecoins through its wallet[85] - The Company expects continued growth of the Exodus platform and increased market acceptance of digital assets to support cash generation for operational needs[113]