Financial Data and Key Metrics Changes - The company reported adjusted revenues of USD 32.1 million, adjusted EBITDA of USD 21.6 million, and adjusted net income of USD 17.4 million for Q2 2025 [4][5]. - Average AUM decreased to USD 748 million from USD 780 million in Q1 due to negative cryptocurrency price movements [16]. - Q2 IFRS revenue was USD 13.4 million, leading to a cumulative revenue of USD 57.1 million for the first half of the year, which was below the guidance of USD 62.5 million, resulting in a shortfall of USD 5.5 million or 8.7% [17]. Business Line Data and Key Metrics Changes - Valor, the largest business unit, reported net inflows of USD 77.4 million year-to-date, with AUM ending Q2 at USD 772.8 million and reaching USD 947 million by July 31 [5][6]. - Stoneman Digital generated USD 1.9 million in revenue for Q2, focusing on market making and liquidity for stablecoins [7]. - DeFi Alpha executed a trade in May with returns of USD 17.3 million, maintaining a zero-loss track record since inception [8]. Market Data and Key Metrics Changes - The company experienced strong cash inflows into ETPs, with positive Q2 inflows of USD 27 million [16]. - The effective realized staking income was 3.6% on the average AUM of USD 748 million, with staking revenue declining due to lower on-chain activity and average prices of key assets [19]. - The effective management fee yield during Q2 was 1.1%, down from 1.3% in Q1, primarily due to the performance of Bitcoin and Ethereum [20]. Company Strategy and Development Direction - The company aims to expand its product offerings, targeting 100 listed products by year-end and entering new markets in Africa, Asia, and the Middle East [12][14]. - The strategic focus includes building a comprehensive portfolio of digital asset ETPs and developing hybrid products that combine digital and traditional assets [56][57]. - The company is also exploring opportunities in the DeFi advisory space, leveraging its expertise to assist public companies in managing digital asset treasury strategies [66]. Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the growth potential, stating that the company is still early in its growth story and that the flywheel effect of its subsidiaries is reinforcing each other [5][14]. - The company raised its 2025 annualized operating revenue guidance to USD 218 million, citing a stronger market position and higher expected yields from its asset composition [11][34]. - Management acknowledged the challenges posed by market conditions in Q2 but indicated a positive outlook for the second half of the year, driven by improved asset performance [24][76]. Other Important Information - The company ended Q2 with USD 26.4 million in cash and USD 26 million in digital assets, maintaining a strong balance sheet [11][21]. - The company is in the process of renewing its share buyback program, having repurchased 675,900 shares during Q2 [22]. - An investigation into share discrepancies was initiated at the request of shareholders, with initial reports raising flags about unpaired shares on specific trading days [80][81]. Q&A Session Summary Question: Can you help us bridge the guidance of USD 218 million? - The guidance was adjusted due to a change in portfolio composition, which improved the monetization rate for the rest of the year [34][35]. Question: What is the six-month USD revenue number? - The revenue for the first six months is estimated to be around USD 12-13 million in staking and USD 4.5 million in management fees, with the rest coming from trading activity [36][37]. Question: What are the roadblocks to expanding into Africa, Asia, and the Middle East? - The expansion is more about finalizing regulatory details rather than facing significant roadblocks, with strong demand for products in these regions [48][50]. Question: Can you provide more color on the DeFi Alpha business? - Management is optimistic about executing trades in the pipeline, with a target of completing around 65% of them this year [75][78]. Question: What is the company's stance on the Canadian listing and potential redomiciling to the US? - The company is exploring options regarding its Canadian listing but faces potential tax implications if it were to redomicile to the US [84][88].
DeFi Technologies Inc(DEFT) - 2025 Q2 - Earnings Call Transcript