Fold Holdings (FLD) Net Revenue Falls 43.8% to $4.16M in Q3

Q3 Loss Reverses a Year-Ago Profit

Fold Holdings (FLD) reported third-quarter net revenue of $4,161,541, down 43.8% from the year-ago quarter, in its 10-Q filed with the U.S. Securities and Exchange Commission (SEC) on Tuesday. The 10-Q, the quarterly financial report public companies submit to the SEC, covers July 1 through September 30. Net revenue of $4,161,541 compares with $7,398,939 in the same period last year, a decline of $3,237,398. The bottom line reversed with it: net income of $554,242 a year ago became a net loss of $2,649,889 for the quarter. Operating expenses fell 21.5% to $10,474,662, yet the reduction was not large enough to absorb the revenue drop, and the company moved from a modest profit to a seven-figure quarterly loss. For a company whose year-ago quarter showed a profit, that swing is the headline item of the filing for investors. The company names two drivers behind the revenue decline: reduced customer transaction volume and lower sales of merchant benefits products.

The activity behind the revenue softened across the core business. Monthly average trading volume for the quarter came in at $53 million, against $78 million in the prior-year quarter. Merchant benefits revenue, the line tied to customer perk products sold alongside the company's bitcoin services, fell 64% to $2.4 million from $6.6 million. The filing attributes the decline to weaker conditions in the digital asset market and to a deliberate reshaping of the product lineup toward higher-margin benefit products. Trading volume fell by roughly a third year over year, the metric that feeds the company's transaction revenue. One segment grew. Custody and trading revenue rose 269.4%, to $1,279,911 from $346,478, with the filing attributing most of the increase to the gift card program, which generated $1.2 million of third-quarter revenue. That same segment carried costs of $1,301,886, exceeding its own revenue by $21,975.

TikTok Shop Drives the Gift Card Line

TikTok Shop sits at the center of that growth line. The company began selling bitcoin gift cards on TikTok Shop on July 15, and its earnings materials describe the channel as the largest distribution and customer acquisition route for the product. September gift card sales set a monthly record, according to the same disclosure. What the company did not break out is channel-level economics: TikTok Shop's standalone revenue and its customer acquisition cost were not published, so the channel's contribution to the $1.2 million gift card figure cannot be isolated from the filing.

The product mechanics matter for anyone modeling that revenue. Gift cards are sold at fixed dollar denominations. The recipient, not the buyer, verifies identity in the Fold app and receives bitcoin at the exchange rate prevailing at redemption, which means a card sale does not produce a bitcoin purchase at the moment of sale. Account figures are company-wide as well: 1,500 newly verified accounts in the quarter and more than 88,500 cumulative, numbers the company says do not represent TikTok Shop additions alone. Chairman and CEO Will Reeves framed the strategic direction in the earnings release: “Trading pays once, while customer balances generate revenue every month they stay on the platform.” Asked by an analyst on the earnings call about the acquisition cost of TikTok Shop gift card customers, Reeves said each channel carries a different cost structure and that the gift card program was designed to acquire customers at roughly cost-neutral levels. He did not provide a TikTok-specific figure. The company says it observes follow-up purchases from TikTok users but needs a longer observation window to judge customer lifetime value. Fold Reserve, a product built on customer balances, launched in October and therefore falls outside these third-quarter results.

Cost Cuts Could Not Offset the Decline

The filing describes a quarter in which the legacy business contracted faster than the new channel expanded. Transaction volume fell by roughly a third, the merchant benefits line gave back $4.2 million, and the gift card program's $1.2 million arrived inside a segment that ran $21,975 in the red on its own line items. Cost cuts of 21.5% narrowed the loss but could not offset a 43.8% revenue decline. For traders, the market's verdict will show up in the chart before the next filing does, with momentum gauges such as the relative strength index (RSI) registering the repricing. The measurable test comes next quarter, when Fold Reserve's balance-based revenue enters the reported numbers for the first time.