Exodus Movement, Inc.

okay let's roll hi everyone and welcome to exodus's second quarter 2025 earnings call i'm your host elizabeth shores and with us today are exodus's co-founder and ceo jp richardson and cfo james granetsky now during today's call we may make forward-looking statements the company cautions investors that any forward-looking statement involves risks and uncertainties and is not a guarantee of future performance Actual results may vary materially from those expressed or implied in the forward-looking statements due to a variety of factors. These factors are described in forward-looking statements in our earnings press release and our most recent form, 10-Q, filed with the Securities and Exchange Commission, available on the investor relations portion of our website. We do not undertake any obligation to update forward-looking statements. And you can feel free to visit our social media accounts on X or Reddit to submit any questions you may have about the quarter for our investor relations team after our call. So with that, our CEO will discuss the quarter. Take it away, JP.

Thanks Elizabeth. And thank you everyone for joining us today. Q2 was an energizing quarter. We're building tools people love, expanding our reach and living our mission every day. Exodus posted $26 million of revenue this quarter. That's 16% year-over-year growth, driven by continued use and adoption of our products. We released an update to Exodus Mobile that's getting amazing feedback. And Exodus is working hard to remove crypto's pain points, like seed phrases, crypto addresses, and all of the confusion across blockchains. or even different layers of a single blockchain. Because at the end of the day, consumers don't care if their dollar stablecoin is on Solana or Ethereum. They just want it to work. We've designed XS to feel like the best consumer apps people already trust, but powered by decentralized infrastructure under the hood. It's fast, intuitive, and self-custodial by default. meaning that behind every tap is a direct path to ownership, whether it's dollars, Bitcoin or beyond. That's exactly the kind of experience we think can elevate crypto fully into the mainstream. Similarly, our business partners are picking ExoSwap because it just works. Our exchange aggregator plugs in cleanly to deliver deep liquidity across chains. Two more ExoSwap partnerships became active this quarter, along with a new signing bringing our total active partnerships to nine with 14 signed partnership agreements. And this morning, we announced that we entered into an integration agreement with ConsenSys to bring ExoSwap's bridge functionality into MetaMask. This partnership will bring our swap tech to millions of consumers worldwide. ExoSwap is one of our most scalable growth engines. It monetizes the flow at the protocol level while solving real pain points for partners, such as liquidity fragmentation, UX friction, and speed. Now regarding our on-ramp product, ExoPay, we launched ExoPay in May of this year, serving customers who buy and sell crypto directly within the Exodus mobile wallet. ExoPay makes us the first self-custodial wallet with native on-ramping. You can go from zero to crypto right inside Exodus with no handoffs. ExoPay currently supports popular cryptocurrencies including Bitcoin, Ethereum, USDC, and even Dogecoin. Customers can make purchases using Visa, MasterCard, Apple Pay, or Google Pay all in under 60 seconds. So through ExoPay, Exodus offers a seamless crypto buying experience for customers that maintains all of the benefits we know and love through self custody. I'm extremely proud of how our team combines innovation with a seamless experience. I'd like to now spend some time discussing recent industry trends. First, as I'm sure you've noticed, many crypto prices reached all time highs. While deal activity in our industry continues to gain steam. The price of Bitcoin increased 30% in the quarter, while Ethereum gained 36% and Solana increased 24%. These higher levels continue to contribute to our business momentum. Shifting gears, The regulatory tone in the United States has shown massive improvement. For example, I was at the White House to watch President Trump sign the Genius Act into law, which relates to payment stablecoins and payment stablecoin issuers. That act gives our industry clear definitions in a regulatory environment that respects innovation in digital assets. As a company born in Nebraska with global operations, we have long advocated for regulatory frameworks to protect consumers while allowing innovation to thrive. The Genius Act, which has already passed, along with the Clarity Act, which has yet to pass, reflects a shift in regulatory perspective. Policymakers are finally starting to view digital assets as core infrastructure. The Clarity Act also brings optimism for a more transparent and less cumbersome regulatory framework. I'm very grateful for the administration and Congress who listened and solicited feedback from our industry while crafting this legislation. We're encouraged by the direction in Washington. The current policy tone is finally aligning with how we built the XS platform from day one. As part of our ongoing efforts to be digital asset innovators, we've partnered with Superstate to bring our Exodus common stock token to Solana Next, while also setting the stage for it to exist on Ethereum and other blockchains. This action aligns with a few beliefs we hold. The belief that all stocks will eventually be tokenized. As well as our belief that tokenized stocks will offer on-chain voting and even on-chain dividend payments. Reflects our belief in a multi-chain future. With tokenized assets existing across multiple blockchains. Just like stable coins such as USDC exist across Solana and Ethereum and many other blockchains today. It's going to happen with tokenized stocks and it starts with us. Now for me, one of the highlights of the quarter was Bitcoin 2025 in Las Vegas. It was awesome to connect with so many of you on this call. It's amazing to see and hear from the crypto enthusiasts from all over the world. And taking the stage for the keynote was Electric. I spoke about stablecoins and how they're onboarding millions of people to crypto through something familiar. the US dollar, while they open a path to Bitcoin and digital sovereignty. As of today, over $250 billion of stablecoins have been issued, and that number is forecasted to rise to 1.5 trillion by 2030. Stablecoin issuers already rank in the top 20 of those holding US dollar debt, and issuers are expected to continue as larger purchasers going forward. The adoption of stablecoins is simple but powerful idea. It's all about leading with what the people need today, US dollars, and embed a clear accessible path to Bitcoin for when they're ready. This was the theme of my keynote. The strategy is already working. For many people, particularly those in high inflation or unstable economies, Exodus is that bridge. from local currency to dollars and eventually digital sovereignty. Our role is to make that transition seamless. Again, that means stripping away all of the technical friction. No seed phrases, no blockchain jargon, and no complicated wallet setups. It should be as simple as sending $20 to your family or buying groceries or even saving for your future. Behind the scenes, every dollar in Exodus is one swap away from Bitcoin. That's the long-term vision. And it's one we're already delivering on today. Let's shift and talk about the team for a moment. There's never been more energy inside Exodus as we chase big ideas and solve real problems. Likewise, we're extremely optimistic about future growth on our platform as we diversify our services, expand our partnerships, and carefully select additive acquisitions. Our roadmap is clear and the team is moving fast. To our team, you're building something extraordinary. To our customers, thank you for trusting us with your digital lives. To our investors, Thank you for backing a vision that's bold, needed, and working. We can't wait to keep showing you what's next. Now, I'm going to turn it over to James to review our finances. James?

Thank you, JP. With that, let's jump into the financials. In Q2, revenue was nearly $26 million. This represents a 16% increase year-over-year. This growth was driven by steady engagement across the Exodus wallet ecosystem, along with rising momentum in digital asset markets as macro sentiment started to improve mid-quarter. Total swap volume for the quarter reached $1.38 billion, supported by renewed volatility and broader market activity. Exchange aggregation continued to play a major role, accounting for 91% of total revenue. While ExoSwap, our exchange aggregator product used by our partners, such as MetaMask, referenced earlier by JP, that contributed 15% of quarterly volume and 10% of revenue. Now to talk about some unique items that we had in Q2. Let me just add a little bit of color on those. So first of all, we made some outsized investments in marketing in Q2. We had total marketing and event spending reaching $7.3 million. Now, this was driven by our Bitcoin Las Vegas sponsorship and also increased App Store advertising. I just want to highlight that we do not expect sponsorship or advertising to be at these levels in Q3. We also had $1.2 million in costs associated with our mergers and acquisition efforts. M&A remains an area of opportunity for Exodus, and we continue to see costs associated with our efforts in Q3. Another expense we incurred is related to a proposed settlement of an outstanding legal matter with OFAC. Due to the expense associated with this matter becoming probable, we accrued approximately $2.6 million in expenses. However, while probable, the agreement is still subject to final approval, which we do expect to see in Q3. And finally, we invested a number of years ago in the pre-launch Magic Eden token process. Due to vesting and other restrictions, Exodus is not scheduled to start receiving any of these tokens until the end of 2025. However, we were approached by an investor willing to purchase our rights to these tokens. We elected to sell half of our allocation for $2 million, which more than covers our entire initial investment of $400,000. And we still can capture the potential upside from the remaining half of our tokens as they vest in the future. With respect to users, Q2 brought sequential declines of 6% in monthly active users, which was also unchanged from a year ago. Our longer horizon engagement metric, quarterly funded users, is down sequentially by 6%, at 1.7 million, and up 13% from a year ago. This usage pattern is a reflection of our consumers' trust and commitment, even as economic conditions fluctuated intensely during the quarter. As JP highlighted, one of the most important trends we observed in Q2 was the accelerating global adoption of stablecoins. In many parts of the world where local currencies are unstable or inflation is rampant, access to US dollars is in demand. And in the US, our financial rails are running on 30-50 year old technology. Stablecoins solve a wide variety of problems by offering programmable, borderless, and highly efficient versions of the dollar. Exodus plays a key role in this shift by offering multi-chain support for stablecoins, including across 40 plus blockchains. We've seen this adoption firsthand as we have supported every major stablecoin. Most of them we've supported immediately when they launched or very shortly after they were created. Remember that in order to use stablecoins, you have to have a wallet. Moving along to our balance sheet, It remains in excellent shape. As of June 30th, we held $291 million in digital and liquid assets, maintained a debt-free position, and increased our Bitcoin holdings to 2,058 Bitcoin. Ever since our founding in 2015, Exodus has pursued a Bitcoin treasury strategy that's rooted in long-term conviction and based on generating Bitcoin from our operations. Our balance sheet reflects our belief that Bitcoin is a core part of the future financial system. And finally, I'd like to make a note that we've been providing key metrics on a monthly basis, including volumes and MEUs, giving investors additional transparency into our business. And we plan to continue to do so. And so in summary, in Q2, we advanced our strategy of bridging today's financial needs with tomorrow's sovereignty. We continue to see strong global demand for dollars, especially in the form of stablecoins. Exodus is simplifying access to those dollars while keeping Bitcoin just one step away. This is how we serve the next wave of users beyond today's crypto natives. It's how we serve the global mainstream. As we look ahead, our focus remains on scaling wallet adoption, expanding access to both dollars and Bitcoin, while advancing strategic partnerships and acquisitions. Thank you again for your continued support. And with that, we'll take some questions.