Exodus Movement, Inc.

Hi, everyone. Welcome to Exodus's third quarter 2025 earnings call. I'm your host, Elizabeth Shores, and joining us again are Exodus's co-founder and CEO, JP Richardson, and CFO, James Gernetsky. 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 at our earnings press release and our most recent form 10Q 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. Now you can feel free to visit our social media accounts on X or Reddit to submit any questions you may have about this quarter for our investor relations team after our call. And now our CEO will discuss our developments and our quarter. Take it away, JP.

Thank you, Elizabeth. And thank you, everyone, for joining us this morning. I'm excited about the positive momentum in our business. We had a good quarter. Exodus posted over $30 million in revenue this quarter. That's 51% year-over-year growth. As consumers and industry partners continue to get value from Exodus products. We'll speak more to that value later in this call. Exodus is a company of builders. We've described many of the technologies we have built, such as Passkeys in previous calls. These products have laid the foundation for the next great wave of innovation in money. Exodus is building completely beyond the boundaries of a crypto wallet. We're building toward a future where people use Exodus as an app, not just to invest and save their money, but to make payments and transfer money in the broader financial system. It's a future where with one tap, you can send $20 to your mom across the world. A future where you can easily use crypto wealth to buy groceries, all without any crypto complexity. Many of these experiences will be powered with stablecoins. Payments with stablecoins and purchases with cards using stablecoins. Now I'm excited to share with you our acquisition of Grateful that we announced this morning. The tools that Grateful ship will be helpful to us as we work to produce useful products to consumers and merchants across the payment space. Grateful has built a merchant checkout experience built on stable coins. In addition, we've built a payments app on Passkeys and stable coins to pair with this merchant experience. The Grateful payments app will go live next month in Argentina and Uruguay. Finally, Grateful is a company of builders themselves. The Grateful acquisition is bringing crypto builders and company founders into the fold at Exodus. And that's a positive development that we intend to make into a habit. Now, shifting gears to our traditional crypto business and ExoSwap. We've gotten more traction with recent names signed, including MetaMask. While some of the notable recent signings are still in the integration phase, we are expanding across the industry with 16 signed partnerships, 10 of which are already producing. We've been tracking these producing partners in our monthly treasury updates. In September, we served 37% of exchange provider volume to ExoSwap industry partners, up from 26% in the previous month. Also on this topic, since there were a lot of questions about MetaMask after the last call, this integration is not yet producing revenue. But MetaMask recently posted on X that they are expecting Bitcoin support soon. And as a result, we are optimistic about the prospects for our white label services with continued traction and success since launch. It's gratifying to see Xs extend our services across the industry. Every new partnership validates our technology and drives benefits from scale. Now let's talk about tokenization. Tokenization is another area where Exodus works consistently to be on the leading edge because I strongly believe that tokenization of assets, particular stocks, is the future of financial markets. We announced that we are exploring a Bitcoin dividend. As those plans have progressed, our team has thought through a number of other crypto-like value-added activities that we could power for our shareholders utilizing our XOD token within our Exodus products. But first things first, we are working through the steps for a potential Bitcoin dividend, and James is going to have more on that later. Now, we've partnered with Superstate to extend the Exodus common stock token to the Solana blockchain. So now, Exxon is on two blockchains, Solana and Algorand, with more to come. Enabling Solana is only the first step. All of you who know me well know how excited I am to be moving towards an on-chain stock trading. And it's a priority for Exodus to be in front when U.S. companies start trading. So I'm excited to see the world of Solana and Exodus investment community come together. The time is now. Now let's talk about the industry and market briefly. And while the price of Bitcoin and Ethereum crypto assets supported our overall economic environment for the quarter, we see stable coin and real world asset tokenization adoption as key catalysts in the Exodus world future. I'd like to reiterate once again that Exodus is already a leader in key components of this future. Our multi-chain self-custodial wallet technology, our exchange aggregator that power swaps across blockchains, and our groundbreaking common stock tokens all demonstrate our deep experience across many different rails. So it remains our long-term goal for Exodus to become the last and best app that consumers will ever need for their finances. So I'd like to quickly say thank you to everyone that's joining us on this journey. James, over to you to discuss our finances.

Great. Thanks, JP. Let's jump in. Okay, so Q3 revenue came in at 30.3 million. That's 51% increase from a year ago. And one of the items driving this growth is a higher digital asset prices, which we've seen over the last 12 months as we've had a very favorable backdrop for our industry. Q3 swap volume totaled $1.75 billion. That's an increase of 82% from the prior quarter, from the prior year quarter, excuse me. And as B2B swaps contributed $496 million. That's 28% of our quarterly volume. Key drivers to the overall volume increase here included higher digital asset prices and the emergence of very meaningful volume from our actual swap partnerships. non-exchange related revenue increased to over 10% of our revenue. That's the first time that we've seen that in quite some time. This primarily reflects improvements in staking, specifically in Solana staking. And we've also seen traction from our ExoPay product in the United States. From a user front, our monthly active users ended at 1.5 million. That's similar to the end of last quarter and been down 6% from the previous year. Quarterly funded users ended at 1.8 million and that's up 6% from last quarter and up 20% from a year ago. So, and as a reminder, QFUs counts funded users. Those are users that have put their money on the Exodus platform, and that demonstrates the real stickiness of the XO wallet and the loyalty shown by those users who've trusted us to put their money on our platform. And as we look at the Grateful acquisition, our payment strategy is spearheaded by this acquisition. Grateful is a talented outfit that helps us implement and refine aspects of our software for mass consumption. Additionally, the benefit of Grateful that gives us is a great deal of flexibility with our go-to-market strategy across jurisdictions, including targeted rollouts and feature testing. Excuse me. And onto our balance sheet, it remains a source of strength for us. As of September 30th, digital and liquid assets totaled $315 million. And Exodus maintains a debt-free position while we increased our Bitcoin to 2,123 Bitcoin. With regards to our strategy, the Grateful acquisition provides a beachhead into traditional payment space that can be augmented through development and successive acquisitions as we broaden our capabilities. Meanwhile, the Grateful team's focus on simple, efficient, and multi-chain payment experience for merchants and customers gives us inroads to pursue new regions and new users in conjunction with our existing multi-chain software. On the dividend front, we filed an information statement on Friday. So as previously reported, we are currently exploring the possibility of issuing Bitcoin dividends to our stockholders. We believe that issuing the right to receive a Bitcoin, right to receive a dividend in BTC will allow us to leverage a core asset to reward our public stockholders directly and to promote business objectives such as the adoption of Exodus products and services and promoting the advantages of common stock tokens. As part of this process, we are seeking to amend our charter to allow Exodus to declare and pay dividends to only our publicly listed Class A common stock. And we believe that this charter amendment will allow flexibility in our capital allocation strategy and potentially maximize the value of any potential dividend through targeted distributions to our Class A stockholders, given that our founders, sorry, JP, hold over 96% of our Class B common stock. But any potential dividend remains subject to board approval and the charter amendment is subject to completion. So for additional information on the charter amendment, please refer to the preliminary information statement filed with the SEC on November 7th. And now let's go back to Elizabeth to bring questions and answers from our analysts.

All right. Thank you so much, James. As a reminder, if anyone would like to ask a question, you can just click the raise hand button in the bottom of your screen and we can ask questions. All right. We have Andrew Hart from BTIG. Go ahead, Andrew.

Hi, thanks for the question and congratulations on the Grateful acquisition. I'm hoping maybe you can just unpack a little more. How quickly do you think you can have Grateful integrated into the Exodus wallet and platform and any financial details you can share or expectations around Grateful as well would be really helpful. Thank you.

Thanks, Andrew. So yeah, the Grateful acquisition is super exciting for us. And so to answer your question, we are going to go live with Grateful next month. So we're going to start in Uruguay. And the reason for that is that down in South America, during the summer there now, or will be summer here shortly, down in South America. And so there's a lot of activity that happens down in Uruguay and Argentina. So Grateful is an Argentinian and Uruguayan team. And so we'll launch there next month. and in addition with the Grateful app. So you'll see merchant services, merchant checkout experiences, and the app itself will all be live next month. And James, you probably have more on finances. Yeah, exactly.

So, Andrew, thanks for the question. I would say that we didn't release the amounts, but just so you get an understanding of the size, they are a smaller team down there, and it's not a very large acquisition from a financial perspective. But I think what it really does show is just that as we have been very public about our M&A strategy, as we've talked about, as our team has gone out and looked at acquisition targets, that we have all different types. And the fact that we saw, we really do appreciate and value the technology and that they've built. They just happen to be very rather early on their journey. essentially just gotten to their product launch stage when we started talking to them in earnest about the acquisition. So from a financial perspective, it's not that large, but from a technology perspective, we think it's going to be pretty impactful.

It's really helpful. And then just as my other question, James, you talked about a larger percentage of revenues coming from non-aggregation sources. I think you called out staking and exit pay in particular. As we think about the opportunity for that revenue line item to continue growing in these different sources, can you just break down some of the puts and takes in there and how you see that line item evolving over time? Thanks.

Yeah, so, you know, I think I've generally been, you know, fairly consistent. I think that we'll always see, you know, aggregation, exchange aggregation in particular, be a rather large part of our business. of our revenue stack, if you will, to mix technological and finance terms. I look at the aggregator kind of as the glue because whether you're talking about a stablecoin going from Amazon stablecoin to Walmart stablecoin, that aggregator is kind of the glue that's going to power a lot of the different experiences that we see in the future. But to your point, I mean, the Grateful Acquisition, the stable coins and the technology and dealing with merchants and things like that, that's not necessarily going to be swapped. So I think especially as we acquire other companies, I think you'll see and develop new more stablecoin and more, you know, payment rails type products, I think you could start seeing, you know, there's a lot of other opportunities that aren't necessarily exchange related. But, you know, but I generally believe that that exchange, you know, will be a large part of the revenue. Thank you. Appreciate it.

Thanks for the question, Andrew. And up next, we have Owen Rickert from Northland. Go ahead, Owen.

Hey guys, thank you for taking my question here. What does the monetization model look like for Grateful? Are you guys going to be earning fees on merchant payment volume or stable coin yield spreads? I guess, can you just provide some more color on that?

Yes, absolutely. Short term, we don't care as much about the merchant payment experience in terms of monetizing it. It's more about the utility and getting merchants to realize that if you have a checkout experience with stable coins, you're going to save a lot of money compared to spending fees on credit card exchanges. So while we'll experiment with some, I think, smaller takes anywhere up to 50 bps, In some cases, the aspect for us is not the merchant experience. The monetization piece that really becomes, I think, interesting is for consumers to actually start holding crypto assets, to hold stable coins, to provide assets. yield through stablecoins and to provide other value added services. I mean, if you can imagine that if you have people all over Latin America and the United States using a wallet, they're holding their money, they're holding their stablecoins, that opens up a whole suite of monetization capabilities. You could imagine things like mortgages, you can think any sort of loan capabilities. Things like that are really interesting to us to connect consumers with the money that they have with the utility that they will need. So that's how we think about it. And of course, not to mention that in time in the Grateful app, You know, there's the possibility of even bringing in other crypto experiences like swaps. So if you have stable coins and you see all of a sudden that you want to buy some Bitcoin or Ethereum, that becomes another value added service. But the key, again, is adding making sure that merchants really understand the utility and convenience and cost savings with stable coins. That's that's the really important key here. Great.

Thanks, JP. Super helpful. And secondly, I guess, how big is the opportunity in Latin America and potentially other emerging markets for these stable coin-based payments?

Well, it's huge. It's absolutely huge. I mean, everybody down in Latin America, especially in countries like Argentina, right? We all know the stories of the high inflation of the Argentinian peso and how many consumers around there want to use stablecoins. They want to use the dollar. And so for us, this presents such a huge opportunity. And I've been told that Tether is actually a household name down in places like Argentina. So given that Argentina is a country of over 100 million, Uruguay is a much smaller country of about 5 million, the opportunity is quite big to really present consumers all across Latin America with an easy and convenient way to hold and store and use dollars as a part of their daily lives so i think the opportunity is is ginormous great thanks jp all right and thank you owen and oh hey there um we have kevin deedy from hd rainwright go ahead kevin uh good morning guys uh thanks for having me on uh jp i really appreciated

your color sort of from the 20,000-foot perspective. I was wondering if you wouldn't mind maybe adding a little more to that in your thinking about integrating Grateful with stablecoins and that possibility in the wallet for customers in the Western world where inflation isn't such a big deal or at least is not as bad as Argentina. And then maybe Maybe you could talk a little bit how you'd incentivize your users, number one, to come to your platform, and number two, to actually use it when most people are pretty satisfied with their credit card. I understand the merchant perspective, but just would love to hear your thinking on how users might approach it.

Yeah, Kevin, that's a great question. So when you think about... like Gen Z consumers or, or even younger Gen Alpha consumers. It's like, I have an older son and, and I remember when I had a conversation with him and I said to him, like, yeah, we gotta, we gotta sign you up for the bank account. And, you know, you're going to have to direct deposit and, you know, with your job and, oh, and then you're going to have to, he had to write a check at one point in time. And I remember he asked me, he said, what, what's a check? And I was like, wow, there's such a divide between older generations and younger generations, the Snapchat generation, the I want it now generation. These are the type that want to do all of their banking directly inside of an app, one app. And so that's the opportunity here. And we're not, to be very clear, We're going to integrate with credit cards and debit cards as well because the opportunity is that we want a person to be able to have dollars in their excess wallet and be able to use them anywhere in the world. That's the key important aspect here is to be able to use it anywhere in the world and not have any friction. Because what we found, if we go back to Exodus for a moment, right? Exodus was created to help people manage a portfolio of assets. That's where it started, right? To manage a portfolio of Bitcoin, Ethereum, Dogecoin and just any crypto assets, right? And we saw a future that someday that would involve stocks. And even though at the time stablecoins were early, we knew that someday that would involve stablecoins. But at the end of the day, somebody just be able to buy Dogecoin at a dollar and then turn it around and sell it for four dollars later. Like, while that's cool and it helps make make money for us, people want to be able to bring that additional or get utility from that additional value. Right. Like people buy crypto assets with the intention of being able to get value from them later. Right. So, again, for the consumer, that becomes really powerful where you have one app that has all of your crypto in it. You have one app that has all of your stocks in it. You have one app that has all of your stable coins, and it's presented in such a way that you're not really thinking about, oh, is this stable coin? Is it on Solana? Is it on Ethereum? No. I don't know. I don't care as a consumer. I care about the convenience. I care about being able to use my dollars anywhere. I care about being able to take my Bitcoin and sell it right away so that I can buy a new PlayStation or whatever some Gen Z kid cares about. So that's how we think about it. And again, just be very clear. Exodus and Grateful will integrate

with debit cards so that you can use these assets at the point of sale so i just want to be very very clear on that yeah thanks jp appreciate it uh james quick one for you the uh grateful deal was that cash or stock and did it come with a banking relationship in uruguay and argentina

And is that important? It was a mix of cash and stock. And from the importance of the banking relationship, that was not a driving factor. Obviously, there are relationships on there, but that was not a driving factor. And just to add some color to what JP had mentioned earlier there, Kevin, You know, just as an anecdotal consumer, the other day I went out and I went all day and swiped my card and I got charged 3% every time I did it. So I think that we're seeing a very, you know, rapidly changing, you know, environment, you know, on just payments in general. And so I think that one of the highlights that Grateful does is it allows us to really, you know, broaden our capabilities and address, you know, a numerous different payment rails and methods where we can add some value.

So to your point, James, just lastly, you're swiping your credit card and absorbing the 3% fee that used to be charged to merchants. Exactly.

Yeah.

Okay. Thank you for the color, gentlemen. Appreciate it.

And thank you for the questions. For those who have a question, you can use the raise hand button at the bottom of your screen. Go over and check. And it looks like there are no more questions. So thank you so much again to JP and James and our analysts. If you want, you can visit our social channels on X or Reddit to submit your questions for management for the quarter. And our investor relations team is always standing by. Now, thanks again for joining us today. And we will see you next quarter.