Gemini reported Q3 revenues of $50.6 million, up from $24.5 million year-over-year, but posted a net loss of $159.5 million due to IPO-related costs. Shares slumped to an all-time low of $15.80 after hours, reflecting market pressures in the crypto sector.
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Gemini Q3 revenues doubled to $50.6 million, driven by increased trading activity.
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Net losses widened to $159.5 million, primarily from compensation and advertising expenses tied to the public offering.
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Shares dropped 6.2% after hours to $15.80, amid a 40% decline since the September IPO at $28 per share.
Gemini Q3 results show revenue growth but deep losses from IPO costs, causing shares to slump. Explore the crypto exchange’s super app vision and prediction markets push for future recovery. Stay informed on crypto news at Coinotag.
What Are Gemini’s Q3 Earnings Results?
Gemini Q3 earnings revealed significant revenue growth alongside substantial losses. The crypto exchange, which went public in September, reported $50.6 million in revenues for the third quarter, more than doubling from $24.5 million in the same period last year. However, the company posted a net loss of $159.5 million, up from $90.1 million a year earlier, mainly due to elevated expenses related to compensation and advertising in preparation for its initial public offering.
Shares in Gemini slumped after the company reported losses in its third-quarter results, largely due to the costs associated with going public.
Investors sold off shares of the crypto exchange Gemini on Monday, sending the stock to an all-time low after the bell, as the company’s first quarterly results showed losses due to the expense of going public.
Gemini released its third-quarter results on Monday, its first after going public in September, and reported revenues of $50.6 million, more than doubling from $24.5 million the same time a year ago.
The company, however, posted a net loss of $159.5 million, widening from $90.1 million a year ago, largely due to costs related to compensation and advertising ahead of its initial public offering.
Shares in Gemini (GEMI) ended trading on Monday up 4% to $16.84, but plummeted to a low of $14.75 after the bell. The stock slightly recovered to finish the after-hours trading session down 6.2% to an all-time low of $15.80.
Shares in Gemini sharply dropped on the announcement of its Q3 results after-hours, but later recovered. Source: Google Finance
Gemini’s share price has dropped around 40% since going public at $28 a share on Sept. 12, as the crypto market failed to sustain a rally that hit its peak in early October.
Why Did Gemini Shares Experience a Sharp Decline?
The decline in Gemini shares stems from the reported net losses and broader market dynamics in the cryptocurrency space. Investors reacted negatively to the widened loss figure, which was attributed to one-time costs associated with the IPO process. According to financial data from sources like Google Finance, the stock fell to $14.75 post-announcement before a partial recovery. This movement aligns with ongoing volatility in crypto exchanges, where public listings often face scrutiny over profitability amid regulatory and market challenges. Gemini’s leadership has emphasized long-term strategies to mitigate such pressures.
Frequently Asked Questions
What Caused Gemini’s Q3 Net Loss to Widen Significantly?
Gemini’s Q3 net loss expanded to $159.5 million from $90.1 million last year, primarily due to increased compensation expenses and advertising costs ahead of its September IPO. These one-time expenditures impacted overall profitability despite revenue growth from higher trading volumes in the crypto market.
How Is Gemini Positioning Itself for Future Growth in Crypto?
Gemini is focusing on developing a comprehensive crypto super app that integrates onchain products like tokenized assets and stablecoins. As stated by co-founder Cameron Winklevoss, this approach aims to consolidate multiple services into one platform, capitalizing on the shift toward blockchain-based markets for a seamless user experience.
Gemini Betting on “Super App” Ambition
The share price fall comes as Gemini president and co-founder Cameron Winklevoss signalled to investors on an earnings call that the exchange is betting on building a crypto “super app” to bring together multiple products.
“We’re really excited about building toward the super app,” he said. “It’s an onchain future. We’re an onchain company, and this is our wheelhouse.”
Cameron Winklevoss speaks onstage during a TechCrunch conference in 2015. Source: TechCrunch
“Our view is that markets are all going onchain. Pretty soon, you will be able to hold a tokenized dollar via stablecoin, tokenized equity, and digital commodities, all within one app,” Winklevoss said. “We’re making very good progress there.”
Related: EToro stock jumps on Q3 results, $150M buyback plan
Winklevoss added that the company’s ambition is to create its own products, rather than partnering with or buying other companies.
Prediction Markets Are Like Bitcoin in 2012: Winklevoss
Gemini’s strategic initiatives extend to prediction markets, which Winklevoss compared to Bitcoin’s early stages. He expressed enthusiasm for adding these features, allowing users to engage with events across sports, politics, and more. The company has filed with the Commodity Futures Trading Commission (CFTC) to operate as a designated contract market, a step toward global rollout. This move underscores Gemini’s commitment to innovation in decentralized finance, drawing parallels to Bitcoin’s nascent potential in 2012. Winklevoss noted, “This idea that you can essentially build a market on anything, any kind of event, is fascinating and really a boundless opportunity.” With regulatory approval pending, Gemini anticipates launching these products soon after government operations resume.
In the broader context of cryptocurrency exchanges, Gemini’s approach highlights a focus on in-house development to build robust, integrated platforms. Founded by the Winklevoss twins, the exchange has long emphasized regulatory compliance, earning trust from institutional investors. Data from industry reports indicate that onchain products are gaining traction, with tokenized assets projected to represent a significant portion of future trading volumes. By prioritizing a super app, Gemini aims to capture this growth while diversifying beyond traditional spot trading.
The crypto market’s volatility, evidenced by the failed rally post-October peak, has affected many public crypto firms. Gemini’s revenues benefited from heightened activity during that period, but sustained profitability remains a challenge. Experts from financial analysis firms point out that IPO costs are common hurdles for newly public companies in high-growth sectors like blockchain. Gemini’s Q3 figures, while showing losses, demonstrate underlying business momentum through revenue expansion.
Key Takeaways
- Revenue Growth Amid Losses: Gemini’s Q3 revenues surged to $50.6 million, doubling year-over-year, signaling strong user engagement in crypto trading.
- IPO Impact on Finances: One-time costs from the public offering drove the $159.5 million net loss, a temporary setback in the exchange’s expansion.
- Future Innovations: Focus on a crypto super app and prediction markets positions Gemini for onchain leadership, with CFTC filings underway.
Conclusion
Gemini’s Q3 earnings highlight both the challenges and opportunities in the crypto exchange sector, with revenue growth contrasting IPO-related losses and Gemini shares decline. As the company advances its super app vision and prediction markets initiative, it aims to leverage onchain trends for long-term success. Investors should monitor regulatory developments and market recovery for potential upside in this evolving landscape.
