Coincheck Group N.V.

Good afternoon, and welcome to CoinCheck Group's NV Fiscal Year 2026 Third Quarter Earnings Conference Call, covering the period from October 1, 2025 through December 31, 2025. With us today are Gary Simonson, Chief Executive Officer of CoinCheck Group, and Jason Sandberg, Chief Financial Officer of CoinCheck Group. Pascal St. John, Incoming Chief Executive Officer of CoinCheck Group, and Oki Matsumoto, Executive Chairperson. Before we begin our prepared remarks, I'd like to remind everyone that our discussion today will include forward-looking statements. Such forward-looking statements are not guarantees of future performance. Actual results may differ materially from those expressed or implied in the forward-looking statements due to a variety of factors. These factors are discussed in more detail in our filings with the SEC, including our filings related to the third quarter of fiscal 2026. Such factors may be updated from time to time in our periodic filings with the SEC. and we do not undertake any obligation to update forward-looking statements. Additionally, throughout this conference call, we will also present and discuss non-IFRS financial measures, reconciliations of our non-IFRS financial measures to their most directly comparable IFRS financial measures appear in today's earnings press release, which are available on our Investor Relations website and on the SEC website. Our functional currency is the Japanese yen. During today's call, we'll be referring to certain rounded figures and certain figures that we've translated from yen to U.S. dollars solely for the convenience of the reader and to the U.S. dollar. For more details on these figures and the convenient foreign currency translation we have used, please see our earnings release that was issued earlier today and furnished on Form 6-K, as well as our fiscal 2026 third quarter financial statements and MD&A, which we will furnish with the SEC on form K6K. I would now like to turn the conference over to your first speaker for today, Gary Simonson. You may begin.

Good afternoon, and thank you for joining us for our fiscal 2026 third quarter earnings call. I would especially like to welcome Oki Matsumoto, our Executive Chairman, and Pascal St. Jean, Chief Executive Officer of 3IQ, as well as Chief Growth Officer of Coincheck Group, NV, who will both be speaking later on this call. While global financial markets continue to experience outsized volatility and portfolio rebalancing and adjustments, with a further flight to liquidity and de-risking, which has reverberated throughout the crypto industry, we have continued to stay focused and disciplined in our seasoned approach. I would like to reiterate that we do not hold crypto assets on our balance sheet, other than to facilitate customer trading. And we seek to take very limited risk as to the value of any particular crypto asset trading through our platforms. While the financial results for our fiscal 2026 third quarter, including trading volumes, asset under management, and margin, were negatively impacted by declines in crypto asset prices experienced globally in our fiscal 2026 third quarter, as compared to our fiscal 2026 second quarter, our underlying business is stable and continues to show significant progress as we continue to execute building out our global platform. Coincheck Inc. continues to be the number one downloaded crypto app in Japan. Our verified user accounts increased to 2.5 million for our fiscal 2026 third quarter, up from 2.4 million in our fiscal 2026 second quarter. I am pleased to report that we had another solid quarter of core profitability. We had net income of $2.6 million for the fiscal 2026 third quarter, compared to net income of $2.3 million for the fiscal 2026 second quarter. Adjusted EBITDA for the fiscal 2026 third quarter was $9.1 million versus $9.5 million for the fiscal 2026 second quarter. Total revenue for the fiscal 2026 third quarter was $915 million compared to $849 million for the fiscal 2026 second quarter. our efforts to enhance and diversify our revenue channels continue to show promise. Given the recent softening in global crypto market conditions, this promise is underscored by the relatively modest decline in our adjusted EBITDA for the fiscal 2026 third quarter as compared to our fiscal 2026 second quarter, as well as by the increased mix of revenue in our fiscal 2026 third quarter between retail trading staking, successful launch of an IEO, and institutional business generated from the successful closing of the Apollo Prime brokerage acquisition. We continue to be nimble in managing our customer acquisition expense and remain vigilant in maintaining strong expense control. I would like to now turn it over to Jason to dig deeper into the numbers.

Thank you, Gary. Let me take you through our third quarter fiscal 2026 performance. Let's start with some year-over-year comparisons. Total revenue increased 17% to 143.5 billion yen, or 915 million USD, in the third quarter of fiscal 2026, up from 123.1 billion yen, or 785 million USD, in the third quarter of fiscal 2025. This was partially a result of additional gross revenue generated from APLO for the quarter. Gross margin, which means our total revenue less our cost of sales, decreased 20% to 3.8 billion yen, or 24 million USD in the third quarter of fiscal 2026, down from 4.8 billion yen, or 31 million USD in the third quarter of fiscal 2025, mostly as a result of an overall decrease in our marketplace trading volume, partially offset by 2 million USD of revenue from a successful initial exchange offering, or IEO. Our verified accounts increased 13% to 2.5 million accounts as of December 31st, 2025, up from 2.2 million accounts as of December 31st, 2024. However, this was due mostly to the substantial market price decline in crypto assets such as Bitcoin, Ethereum, and XRP during the December 2025 quarter. Even though our digital tokens under custody remained relatively stable, Our customer assets decreased 17% to 948.5 billion yen or 6.04 billion USD as of December 31st, 2025, down from 1,142.2 billion yen or 7.28 billion USD as of December 31st, 2024. Our marketplace trading volume decreased 25% to 87.7 billion yen or 559 million USD for the third quarter of fiscal 2026. down from 117.4 billion yen or 749 million USD compared to the third quarter of fiscal 2025. Please note that fluctuations in marketplace trading volume are usually driven by crypto asset industry market volumes and conditions generally, and the size and level of trading activity at Coincheck Inc. specifically, as well as market price fluctuations in the crypto assets frequently traded. Our net income increased to 405 million yen, or 2.6 million USD in the third quarter of fiscal 2026, compared to a net loss of 15 billion yen, or 98.5 million USD in the third quarter of fiscal 2025. A large component of the net loss results for the third quarter of fiscal 2025 was total transaction costs, including listing expense of 17,518 million yen or 111.7 million USD. These were the costs associated with becoming a public company in December of 2024. Our adjusted EBITDA removed these transaction costs and listing expenses. Turning now to adjusted EBITDA, it decreased by 38% to 1,428 million yen, or 9.1 million USD in the third quarter fiscal 2026, compared to 2,303 million yen, or 14.7 million USD in the third quarter of fiscal 2025, mainly as a result of the reduction in marketplace trading volume year-over-year, partially offset by revenue of 2 million USD from the initial exchange offering we hosted in the fiscal 2026 third quarter. Our staking revenue for the fiscal 2026 third quarter was 777 million yen, or 5 million USD, compared to 794 million yen or 5.1 million USD in the second quarter of fiscal 2026. There is no year-over-year comparison for staking revenue as that service did not really get going until the 2026 fiscal year. Let's now move on to operating expenses. Our total selling general administrative expenses decreased to 3.5 billion yen, or 22.4 million USD in the fiscal 2026 third quarter. compared to 6.4 billion yen, or 41 million USD, in the fiscal 2025 third quarter. This was mainly due, however, to our transaction costs associated with becoming a public company in December of 2024. However, please also note that an increase in our quarterly share-based compensation expense of 2 million USD, as well as transaction costs associated with the acquisitions of APLO, SAS, and 3IQ Corp., were part of the fiscal 2026 third quarter selling general and administrative expenses. while there were no share-based compensation or similar acquisition expenses in the fiscal 2025 third quarter. We ended the fiscal 2026 third quarter with cash and cash equivalents of 10.6 billion yen or 67.9 million USD. In summary, we are pleased with our results in these challenging market conditions, specifically our continued increase in verified accounts and solid marketplace trading volume, which resulted in another quarter of strong adjusted EBITDA. I would now like to hand it back to Gary.