Fold Q1 2025 Earnings Call Transcript

Quartr
Provided by Quartr
May 15, 2025

Key Takeaways

  • Positive Sentiment: In Q1, Fold recorded 45% year-over-year revenue growth to $7.1 million, active accounts surpassed 600,000, and transaction volume rose ~70% to $85 million monthly.
  • Negative Sentiment: The company reported a net loss of $48.9 million in Q1, driven largely by noncash fair value adjustments and increased operating expenses.
  • Positive Sentiment: Favorable demand for new products includes over 75,000 customers on the Bitcoin rewards credit card waitlist and partnerships enabling the Bitcoin gift card across 150,000+ points of sale.
  • Positive Sentiment: Fold plans to boost its marketing spend nearly tenfold in 2025 to support paid acquisition channels and accelerate customer growth beyond organic referrals.
  • Positive Sentiment: Fold’s corporate treasury now holds nearly 1,500 Bitcoin (≈$150 million), making it a top 20 global holder and reinforcing its strategic asset base.
AI Generated. May Contain Errors.
Earnings Conference Call
Fold Q1 2025
00:00 / 00:00

There are 7 speakers on the call.

Operator

Hello, everyone, and welcome to the Fold Holdings, Inc. First Quarter twenty twenty five Earnings Call. At this time, all participants are in a listen only mode. After the speakers' presentation, there will be a question and answer session. To participate, you will need to press 11 on your telephone.

Operator

You will then hear a message advising your hand is raised. To withdraw your question, please press 11 again. Please note this event is being recorded. Now it's my pleasure to turn the call over to Sameer Jain. The floor is yours.

Speaker 1

Thank you, operator. Good afternoon, and thank you for joining us for Fold Holdings first quarter twenty twenty five earnings call. Joining me on the call today are Chairman and CEO, Will Reeves and CFO, Wolf Repass. Before we begin, let me remind you that during the call, we will make forward looking statements. These statements are based on our current expectations and beliefs and are subject to risks and uncertainties that could cause actual results to differ materially.

Speaker 1

Please refer to our SEC filings for discussion of the risks and uncertainties that may affect our future results. We will discuss certain non GAAP financial measures during this call. These measures should not be considered as a substitute for financial results prepared in accordance with GAAP. Our results are prepared in accordance with GAAP, and the reconciliation to comparable GAAP measures will be provided in our first quarter earnings release and in our SEC filings. With that, I'll pass the call to Will.

Speaker 2

Good afternoon, everyone, and thank you for joining us on Fold's first earnings call as a public company. This is a big milestone for Fold and the many people it took to get us here. As such, I wanna begin by expressing my deepest gratitude to our investors, analysts, partners, and especially our Fold customers. Thank you. From the beginning, you believed in our mission to bring Bitcoin to people through traditional and familiar financial products and continue to be the engine that makes this company run.

Speaker 2

Together, we are redesigning an antiquated financial system and helping everyday people build and retain wealth. Let's begin on slide four of our supplemental investor presentation. When we founded Fold in 2019, our vision was simple, build an easy way for our customers to accumulate, save, and use Bitcoin. Fast forward to today, and that vision has become a reality. Fold now stands as the first publicly traded company focused entirely on delivering Bitcoin native financial products to everyday consumers.

Speaker 2

Listing on the Nasdaq earlier this year represents an extraordinary win indicative of the strength of the team and partners supporting Fold. Since 2019, we've scaled from an idea into a platform with over 600,000 customer accounts, contributing nearly $3,000,000,000 cumulatively since inception. Through our platform, we have distributed more than $70,000,000 in Bitcoin rewards to our customers. And unlike airline miles or traditional rewards points, our Bitcoin based rewards cannot be devalued. They have the potential to appreciate over time, and we believe they have significantly contributed to our customers' financial security and savings.

Speaker 2

As pioneers in the space, we believe that we have a meaningful first mover advantage versus our peers. As more customers join our platform to passively accumulate Bitcoin on the back of their everyday spending and saving, the size of our network expands, creating more value for our partners and facilitating institutions. Likewise, the expanded business drives favorable operating leverage, increasing profitability. Specifically, more customers, more volume, more value. We've spent the last three years proving this model works and are now ready to scale our offerings and enter a phase of compounding and sustainable growth.

Speaker 2

Alongside our core operations, we have strategically accumulated one of the largest Bitcoin treasuries among publicly traded companies. As of March 31, we hold nearly 1,500 Bitcoin in our corporate treasury, making us a top 20 holder globally. Our Bitcoin holdings serve two purposes. First, a steadily increasing reserve of Bitcoin creates another vector of value for our shareholders through exposure to Bitcoin. And second, our Bitcoin reserves act as the strategic backbone for Fold's next generation of Bitcoin powered financial products and services.

Speaker 2

Fold's treasury strategy aligns the interests of our shareholders, customers, and team. We believe the present moment represents a key opportunity for Fold to expand our platform, deepen engagement with our customers, and accelerate the company's growth, building the business around higher margin products and services. I want to spend the majority of time today outlining these opportunities. But first, I will briefly review the quarter's results, which are highlighted on slide six. 2025 is off to a very strong start.

Speaker 2

In Q1, we saw sequential growth in all key metrics. Revenue grew 45% year over year to $7,100,000 Active accounts increased to over 600,000. Total verified accounts exceeded 76,000, and average monthly transaction volume in Q1 twenty twenty five reached nearly $85,000,000 which is approximately a 70% increase over Q1 twenty twenty four. Note, these results do not include any contribution from any of our new product lines. Based on historical seasonality and early momentum, we are optimistic 2025 will be a strong year across the board.

Speaker 2

All product lines continue to be net profitable, highlighting the strength of our unit economics across the business. A major contributor of these results is that our customers are amongst the highest quality in the marketplace with steady incomes and meaningful savings. User growth has been almost entirely organic and achieved with minimal marketing spend, making these results even more impressive. This speaks to the virality of the fold offering and the deep reservoir of unmet demand. I'm confident that we are just beginning to meet this demand and substantial opportunities remain.

Speaker 2

Having said that, we're not satisfied simply absorbing the demand that comes our way. In 2025, we are increasing our paid marketing nearly tenfold compared to 2024 and believe the higher spend will significantly increase the rate of new customers joining the Fold network. Wolf will provide specifics on our financials shortly. But needless to say, we are very pleased with our q one results and are excited for Fold's future growth prospects. Since this is our first earnings call and some of you may be new to our business, let me take a minute to give you a quick overview of our current product offerings as outlined on slide seven.

Speaker 2

Collectively, these offerings provide our customers an integrated suite of Bitcoin financial services designed to make earning, saving, and buying Bitcoin seamless. Our flagship Visa prepaid debit card and FDIC insured cash account offer customers the ability to save and spend while earning industry leading rewards in Bitcoin. Our robust and expansive rewards network connects Fold customers to national and local merchants across numerous products and services. And then in addition to these financial service products, we also offer Bitcoin custody and trading platform that gives Fold customers the ability to purchase and transact in Bitcoin Bitcoin with low to zero fees, instant withdrawals, and automatic purchase features like roundups, recurring buys, and automatic paycheck conversions. Together, these offerings form the foundation of the Fold platform, which is now used by over 600,000 people.

Speaker 2

Our customers are highly engaged, financially sophisticated, and deeply aligned with our long term vision. You can see some specific stats on slide eight, including that the majority of our customers earn over a $100,000 annually and have prime credit ratings. Working with this large base of high quality customers is a significant advantage for Fold and materially derisks new ventures. Our customer demographic is one major reason why we are so excited about our recently announced products and are confident they will be a success. Okay.

Speaker 2

Let's get to those new products, which are listed on slide nine. Starting with Bitcoin custody and trading. In q one twenty twenty five, our Bitcoin transaction volume grew 500% year over year, and we are just getting started. Currently, Fold only captures a sliver of the addressable market as only Fold cardholders can buy Bitcoin with Fold. This represents an obstacle in onboarding new customers and limits the reach of our platform.

Speaker 2

In opening this product to more users, we have removed this barrier and created a new and compelling use case for millions of people. Additionally, we are adding support for larger orders via wire deposits, continuing to expand into new geographical territories via expanded MTL reach, and focusing on making our platform more efficient and scalable via updated system architecture, UX improvements, and more efficient funding options. Our planned program updates will make the onboarding experience seamless and dramatically increase our custody and trading platform's geographic footprint. Next, in early February, we announced the anticipated launch of our Fold Visa Bitcoin rewards credit card. It's not hyperbole to say that the Fold credit card has the potential to be a game changer.

Speaker 2

Our credit card will give our customers more flexibility, higher rewards, higher limits, and it will open up a new customer acquisition funnel for Fold. Moreover, it provides our customers with a better version of a product they already use. Roughly 95% of our debit card customers have a credit card that is both outside our network and isn't tied to Bitcoin. Couple that with the fact that 85% of our customers have expressed a desire to hold a Bitcoin rewards card, and you can clearly see the opportunity. Indications are that demand for our credit card will be incredibly strong.

Speaker 2

As of today, we have over 75,000 customers on the wait list. With the combined impact of word-of-mouth and our increased marketing budget, we expect demand to only increase from here. It's early days in the rollout, so it would be premature for me to comment on the financial impact of the card. However, I can offer some broad guidelines. The credit card will bring higher interchange revenue than our debit card as well as offer new streams such as those related to financing the credit card.

Speaker 2

We also believe that there will be favorable synergies with our current offerings and significant potential to cross sell credit card customers into our other product lines, specifically our Bitcoin trading platform and checking account. Finally, let's talk about our latest announcement, the Bitcoin gift card. Similar to the credit card, we believe this is an incredible opportunity. The full Bitcoin gift card will allow consumers to gain access to Bitcoin nearly everywhere they shop today, both in line and in physical store locations. This creates thousands of points of sale and opens up a new on ramp to Bitcoin that has never existed before and is in a format our customers and the vast majority of American consumers are already familiar with.

Speaker 2

No longer confined to niche corners of the market that cater to those already deeply enmeshed in Bitcoin culture, our gift card brings Bitcoin to the masses. At the same time, the gift card will leverage our existing infrastructure and act as a new distribution channel for our Bitcoin trading platform. It allows Fold to tap into important physical and digital retail networks as well as the largest loyalty and rewards ecosystems. Through our partnership with Totus, we now have access to over a 150,000 points of sale. Our new Bitcoin gift card enables Fold to support major national retailers with a differentiated and in demand product.

Speaker 2

For context, Costco alone has over $200,000,000 in monthly gold sales. Bold's Bitcoin gift card is already resonating with Fortune 100 retailers with thousands of locations nationwide. We have a full pipeline of interested partners. We are optimistic our gift card will result in significant demand for Bitcoin alongside exchanges, and ETFs will become one of the main ways people acquire Bitcoin. Collectively, our new offerings are innovative, dramatically expand Fold's total addressable market, and offer substantial value to deepen existing user engagement.

Speaker 2

They allow us to better serve our existing customer base and capture a higher share of their financial service needs. We see clear upside in cross selling our current customer base into new products like our Bitcoin trading platform, the Fold credit card, and the Bitcoin gift card. Likewise, the addition of the products will allow Fold to operate in a market that is multiple times larger than where we were only months ago. Said differently, our opportunity is exponentially higher. While not a guarantee of success, it gives us an opportunity to scale our business in a way that wasn't previously possible.

Speaker 2

It's something I'm incredibly excited about. Before I move on, let's take stock of where Fold is in terms of achieving our goal of providing customers with a full suite of Bitcoin enabled financial products and services. With the suite of products including a credit card, a Bitcoin gift card that allows users the ability to buy Bitcoin nearly anywhere, and broad based access to Bitcoin trading services, we are fortifying an ecosystem that services our customers' every financial need. This in turn compounds our revenue touch points as everything is happening on one platform, the fold platform. While the use case for any one product is compelling, the collective force of our diversified offerings is both extraordinary and unmatched.

Speaker 2

We believe this will drive significant demand to our platform and further cement our already high customer loyalty. Lastly, let's turn to slide 12 to discuss our Bitcoin treasury. With Bitcoin fundamentals strong, we believe this is a prime moment to increase our Bitcoin holdings. This quarter alone, we've grown that figure by more than 50%. Bold's treasury now stands at nearly 1,500 Bitcoin, which as of May 14 represented roughly a $150,000,000 in value.

Speaker 2

Our strategy is to continue accumulating opportunistically with every move focused on increasing stats per share. Our treasury has already proven to be a compounding asset, lowering our cost of capital and serving as the foundation for future Bitcoin denominated financial products. Further, we have been strategic in our accumulation of Bitcoin and have leveraged various capital market strategies to build out our treasury holdings. We are also open to and currently exploring other capital market strategies. We believe that raising capital to fund the acquisition of Bitcoin is a key and critical part of our overarching strategy.

Speaker 2

As a now public company, many new capital options are available to us, and we have every intention of exploring those options to further our strategy. We believe we are still in the early days of Bitcoin's growth, and adding more to our treasury both increases the value of our equity and further aligns us with our customers. I'll now turn the call over to our CFO, Wolf Repass, who can discuss our financials in greater detail. Over to you, Wolf.

Speaker 3

Thanks, Will, and good afternoon, everyone. I'll now walk through our recent financial performance. Please refer to slide 14 for a few important metrics. Overall, we started the year strong and generally met or exceeded our internal expectations. Our legacy products continued to gain traction with new and existing customers alike, and the positive regulatory developments that our industry has experienced over the past few quarters contributed positively to our q one growth.

Speaker 3

From a financial perspective, our first quarter revenues were 7,100,000.0, which was an approximately 45% increase versus the 4,900,000.0 we recorded in q one twenty twenty four. This increase largely reflects strong performance of our banking and payments business with smaller contributions from custody and trading, which is still being rolled out to a broader customer base. Growth in the quarter was driven by a broad based uptick in our core KPIs with some notable highlights on slide 15. In q one, we added more than 17,000 new accounts, bringing total active accounts to over 600,000. We also added more than 5,000 verified accounts, bring bringing total verified accounts to just over 76,000.

Speaker 3

Importantly, our total transaction volume in the quarter was just over 250,000,000, representing a nearly 70% increase versus q one twenty twenty four. These higher volumes reflected both the increase in new customers as well as deeper penetration into our existing customer base. Notably, average spend per transacting user increased to $3,300 per month, representing an increase of 47% versus a year ago. As we roll out new offerings such as the Fold credit card, the Fold Bitcoin gift card, and our enhanced custody and trading offerings, we expect spend volumes per transacting user to increase further. On the cost side, our operating expenses were $16,600,000, up from 5,800,000.0 in q one twenty twenty four.

Speaker 3

The principal drivers of this increase related to increased professional fees of 1,800,000.0, increased compensation and benefits expense of 5,700,000.0, of which 5,200,000.0 related to noncash share based comp, increased marketing expenses of 400,000.0, and increased insurance expenses of 300,000.0. Our increased professional fees related directly to legal, advisory, and audit services incurred as part of our transition to becoming a public company. Compensation and benefits expenses increased in correlation with increased employee headcount as we brought on key hires to support our public company and new product needs. Marketing expenses increased in accordance with our planned growth strategy, which includes budgeted expenditures for paid marketing channels in 2025. Insurance expenses related to increased coverage premiums as a result of our transition to becoming a public company.

Speaker 3

The good news is that not all of these costs will continue at that magnitude now that we are at the tail end of the merger transaction. We are actively managing our costs across all departments, and we plan to continue to invest in marketing to support new products and to attract new customers to our platform. As Will mentioned, our historical growth as a company has been primarily organic in nature, and we believe we have significant untapped growth potential via paid acquisition channels. Moving down our p and l. Our net loss for q one twenty twenty five was $48,900,000 compared to $1,000,000 in q one twenty twenty four.

Speaker 3

As you'll see in our statement of operations, the majority of this loss relates to noncash fair value adjustments for a variety of balance sheet items that are marked to fair value each period. These fair value adjustments relate to Bitcoin denominated assets and liabilities, including the Bitcoin in our treasury and one of our convertible notes, as well as fair value adjustments related to safe notes. Going forward, Bitcoin denominated assets and liabilities will potentially result in continued large fluctuations in our GAAP earnings. To account for these fluctuations, we are now reporting non GAAP metrics within our MD and A as a supplement to our GAAP financial statements. Key among those is adjusted EBITDA, which excludes various noncash expenses and nonrecurring cash items that we believe are not indicative of our core operating results, including those related to fair value adjustments.

Speaker 3

Our adjusted EBITDA in q one twenty twenty five was a $4,200,000 loss compared to a $900,000 loss in 2024. As noted previously, the majority of this variance was due to increased costs related to becoming a public company. Despite these costs, our unit economics for each product line remain positive, inclusive of the contra revenue impact of rewards. While that has yet to translate to overall profitability, we continue to make progress in that direction. Combined with the growth strategies we have outlined, we're also excited about the additions of higher margin products, like the Fold credit card and Fold Bitcoin gift card.

Speaker 3

The timing and success of these product and future releases will impact our ability to meet financial targets for 2025 and beyond. We ended the quarter with a healthy balance sheet and ample liquidity. As of 03/31/2025, we had cash and cash equivalents of 11,700,000.0 and positive working capital of 13,300,000.0. Unsecured debt balances remain at zero, and we continue to be in a net asset position. Specifically, we currently hold 1,490 Bitcoin in our investment treasury valued at roughly $150,000,000 as of today.

Speaker 3

As of close of business on May 13, the value of our investment treasury represented approximately 80% of our entire market capitalization. As Will mentioned, we'll continue to seek opportunities to add to our Bitcoin holdings and believe in the long term value proposition of a robust Bitcoin treasury strategy. Not only do we believe in the value of Bitcoin and consider the current macro environment to be favorable towards adding additional Bitcoin to our balance sheet, we also believe in being aligned with our customers and having shared incentives. In terms of employing capital raising strategies to further grow our business and our Bitcoin treasury, we are exploring various opportunities. However, it is too early to say exactly when or how we may access these tools.

Speaker 3

Next, I'd like to offer a few thoughts on the year ahead and our longer term financial profile as outlined on slide 16. At the onset of our merger with Eftech Emerald, we put forth a full year 2025 revenue target of 61,600,000.0. That target was based on a twelve month forecast and assumed contributions from both Fold credit card and the Fold Bitcoin gift card. While both of those launches are still rolling out, we are not providing explicit updated forecast for 2025 at this time. We will continue to monitor these products and their impact on our ability to meet 2025 targets as the year progresses.

Speaker 3

Two important things to note regarding our revenues. First, as a consumer payments business, the fourth quarter historically represents our highest volume and revenue quarter as customers engage in seasonal spending behaviors. Second, volumes from the Bitcoin gift card will be recognized on a gross revenue basis as we are the principal in the transaction from an accounting perspective. These volumes will also be included within our custody and trading revenue line. Slide 17 gives an overview of the previously issued revenue forecast for 2025 as well as the expected changing composition of our revenue streams from last year to this year.

Speaker 3

While banking and payments should continue to be our largest business line, we will be more diversified with our upcoming products and platform enhancements. We believe this not only lowers our dependency on any one given business, but it will also give us more vectors for growth. While it'd be premature to give specifics, as I mentioned earlier, our new products are designed to drive harp higher margins than our existing business. With that, I'll now turn the call back to Will for some closing thoughts. Thanks, Wolf.

Speaker 2

It's been an incredible journey conceptualizing, creating, and now taking Fold public. Despite the many milestones we've achieved, I believe our best days are ahead. We hit the ground running in 2025 with the announcements of our proprietary credit card and Bitcoin gift card. These are groundbreaking products that we believe will attract millions of new customers to the full ecosystem. And enhance the value and worth of the customers already here.

Speaker 2

Our substantial treasury holdings of nearly 1,500 Bitcoin are both a stabilizer to volatile markets and an accelerator to our growth. We aim to continue to fortify this position by buying more Bitcoin. As Wolf just mentioned, we are aiming to increase our volumes and revenues this year, which is a testament to the progress we have made as a company in a very short period of time. I'm excited as we continue to expand our offerings and bring many new customers into our ecosystem in the years ahead. We are both a growth company and a leader in an emerging sector where demand far outstrips supply.

Speaker 2

Our goal is to close that gap and in doing so, accrue substantial value for our customers, employees, and shareholders. Thanks again for your support and belief in what we're doing. Let's open the floor for some questions.

Operator

Thank you so much. And as a reminder, to ask a question, simply press 11 on your telephone and wait for your name to be announced. Our first question comes from the line of Michael Donovan with H. C. Wainwright.

Operator

Please proceed.

Speaker 4

Thank you, operator. Congrats, Wolf and Will, on first call as a public company, and congrats on the gift card. I'm on the line for Kevin Dede. I was hoping if you could further discuss the credit card rollout. What could unlock unlock a faster rollout?

Speaker 2

It's great to have you, Michael, and we wish Kevin Dede as as well. Thanks for joining today, and we're very excited about this being the first call. So thank you for for joining here. So our our credit card, as you can see, is is one of the key drivers of our growth for our coming 2025 and and beyond. We believe it is a flagship product for the Fold ecosystem.

Speaker 2

And so our primary goal is to deliver an incredible product to our customers. As we've shown, you know, over 75,000 customers already on the wait list, We have seen significant demand from our existing user base as well as from outside. We truly believe this can be a a game changer in terms of how people on ramp and accumulate Bitcoin in a major way. So for us, our North Star is providing the most competitive, best quality product out there. And so for us, we are making sure to take the time to be able to deliver that.

Speaker 2

However, we know our customers are very eager to get their hands on this, and we are still on track to get this out in 2025. And the team is is very hard at work to make that happen.

Speaker 4

Great. Appreciate that. It's helpful. Now on geographic expansion, which new markets are at the top of your expansion road map, and what drives their priority?

Speaker 2

Well, currently, our Bitcoin custody and trading platform is limited to the MTL licensing footprint that we have access to. And as it stands today, the only markets that we do not have access to are New York and Arkansas. While Arkansas may be a smaller market, still plenty of users there who would like us to join. However, New York remains the largest untapped market for Fold and one that represents a large installed base because many of our cardholders today reside in New York, but they cannot access our Bitcoin custody and trading features. So that is a high priority for us.

Speaker 2

As you may know, the New York Bit license has always provided more friction for companies to provide their services in the state of New York. However, we are optimistic that our partners and us have the ability to move to to change that in the coming year. Now the Bitcoin custody and trading product is new for us. As we said in the update, that product has grown 500 year over year. Bic buying and selling Bitcoin is the tried and true use case in the market, Enfold is relatively new to that, and that's where you can see a lot of that growth.

Speaker 2

And it's only been about six months since we got access to Texas. So we are steadily building out our footprint, steadily optimizing and expanding the access to our Bitcoin exchange, and really a natural next step is is getting into New York, which we we hope to do so soon.

Speaker 4

Okay. Great. One additional question. You highlighted a considerable step up in marketing. Which channels or campaigns do you see absorbing most of that budget?

Speaker 2

So historically, most of our growth has been driven by organic referrals. And as we are looking at the macro climate as well as rising retail interest in Bitcoin, paired with Fold being a publicly traded company representing Bitcoin financial services, we know that their world is a lot larger, and we are not going to be satisfied just waiting for the demand to come to us. And so we have a targeted marketing strategy that will specifically support the growth of our credit card, gift card, and expanding custody and trading platform. We expect a lot of that to be directed at our distribution channels that will get our products in retail stores in front of existing install bases of other companies and organizations, as well as in store. And beyond that, we'll be continuing to tap into the growth channels that we have seen to be very successful, and that is related to financial financial and social content on social media as well as working with the influencers and communities that have driven a lot of a lot of great growth for Fold to date.

Speaker 4

Great. I appreciate you entertaining my questions. I'll hop back in the queue.

Speaker 2

Thank you, Michael.

Operator

Thank you. Our next question comes from Chris Brandler with Rothenblatt Securities. Please proceed.

Speaker 5

Hi, and, good evening. And and I also echo my congratulations on a strong start and being out in your first post trading quarter. So, I wanted to ask a couple of follow ups here on some of Michael's questions. If I could start with marketing, there certain products that will benefit more from marketing? And then did you have any early returns this quarter since there was an increase in marketing spend in the first quarter?

Speaker 2

Yeah. Great to have you, Chris. So our marketing spend that we we mentioned is is specifically earmarked to drive growth to our new products, our our credit card as well as our Bitcoin gift card. Most of the increased spend this year has been specifically related to the initial launch and wait list of our Bitcoin credit card. But so far, we have not because those products are not in market, well, the Bitcoin gift card is now in market as of today, we have yet to really turn up the spend on marketing.

Speaker 2

And so while we've seen an increase, the increase has been fairly modest, and we have a lot more to go. And that's really going to be paired in lockstep with the availability of these products. In terms of which products we think are going to be better suited for marketing, we really believe that today, the Bitcoin gift card is an incredible opportunity here. I think there's a couple things to to understand about this. Number one, the Bitcoin gift card makes buying Bitcoin very simple, perhaps the most simple way that someone can purchase Bitcoin.

Speaker 2

But I think what is most innovative about this product is it packages Bitcoin in a vehicle that can tap into the existing distribution channels of national retailers across the nation. And so what that is gonna allow us to do is reach millions of customers where they shop today because we've packaged it in this very familiar vehicle. And so for us, we believe there is a lot of opportunity to educate Bitcoin curious customers, those that have not fully adopted Bitcoin as a primary savings tool, but those who are interested. And we believe the Bitcoin gift card is able to service and meet those customers where they're at today. And so I suspect a good amount of the marketing will be about supporting that product, its growth, as well as bringing in our retail our our partner retails our retail partners into co marketing so that we can tell this story with other large national merchants and tap into these audiences that Fold today just doesn't have access to.

Speaker 2

And that's for the most part that nobody is selling Bitcoin in those areas.

Speaker 5

That's great. That's great color. I actually had a question on gift card as well, which was, do you envision most of the of the gift card sales coming in physical stores, or is it gonna be more of an online product? How do how do you see that that that product mix breaking out from a from an onboarding perspective?

Speaker 2

Yes. So we we envision the primary distributors of our gift card are going to be online retailers or online loyalty and rewards programs. You can think of credit card rewards, airline mile rewards. You can think of large online retailers as well as in store physical retail locations. Already to date, we have a quite a bit of interest across that spectrum that we're very excited about.

Speaker 2

So as for the mix of, you know, what percent will be online and what percent will be in store, I think that remains to be seen. We do know and have some good examples from the market. I know we mentioned in the call that Costco is selling $200,000,000 worth of gold a month per month. You know, Fold has really created a way for retailers to finally sell Bitcoin to their customers, And this is something that they're already doing. You look at Walmart has already deeply into financial services, Target as well.

Speaker 2

This is something that is very familiar to them, and they see the opportunity that is that will come with being able to give access to Bitcoin to their customers. And so I think we're gonna learn a lot about the in store online mix. What I think we are sure about and and believe will happen is that this is going to meet really a demand that has been really pent up and unmet. There really is no avenues for everyday consumers to, experience Bitcoin in the places that they are already visit and shop every day. Typically, Bitcoin is, in your brokerage account online or in the App Store in an app like Fold.

Speaker 2

Fold is going to bring this and make Bitcoin ubiquitous, and I think that's gonna surprise us and the market in a lot of ways about how big this can actually get. That's great.

Speaker 5

One more on the the gift card, and then I had I wanted to ask one general question on the exchange as well. On the gift card, are there competitors in this space, or is Fold kind of a first mover in the in the Bitcoin gift card space?

Speaker 2

We we consider ourselves a a a first mover. And part of the reason there is there's been there's been various attempts and other ways to create a Bitcoin gift card. But the issue is that they've either lacked actually tapping into the distribution of gift cards so that they don't have the visibility, or they are offering non Bitcoin products. And for us, staying focused on Bitcoin and tapping in to the largest distribution network of gift cards to us makes that makes us a first mover here. And just to give you a sense of that distribution, you know, our partner, Todus, who we're launching the gift Bitcoin gift card with, has direct distribution to a 150,000 points of sale nationwide, and that's our starting point.

Speaker 2

And so if we look at the success that Costco has seen or some of the other larger national retailers, Fold now can activate retailers of that size en masse through a vehicle that's very familiar to those retailers and very familiar to consumers. Gift cards are the number one gift in America. When people think about what to give at a graduation, a Christmas, or a wedding, gift card is often the thing that they give. And Fold is, for the first time, packaged Bitcoin in this very familiar, very easy vehicle.

Speaker 5

That's great. Well, one more one more question, if I may. I appreciate all the time here. Is on the exchange and broadening it up to nonfold customers, is that, you know, just part of the funnel? Like, you're gonna try to attract customers to the fold platform by offering exchange products, or do you expect customers to be exchange only and and benefit from in other ways from having them on the platform, I mean, from a liquidity perspective?

Speaker 2

So Fold is gonna win and is winning because we've created what I believe is the most comprehensive Bitcoin financial services platform out there. And we started with the funnel being, hey. Come in and earn rewards. This gave made us very differentiated. We were a first mover in Bitcoin rewards as well.

Speaker 2

And what we saw was by adding to our our financial service ecosystem with Bitcoin custody and trading, our Bitcoin rewards customers started buying all their Bitcoin through us. And so for us, we understand the power of our platform is the cross sell, is giving our customers access to many different products and services that are valuable to them. But at the same time, we need to recognize that customers are at various stages and coming for different reasons. To date, we've only really been speaking to those wanting to earn Bitcoin as a reward, but there is a large segment of the population that simply is ready to buy Bitcoin today. And for us to open up our exchange beyond our cardholders to everyone allows us to increase the top of the funnel to bring in customers who wanna buy Bitcoin in five minutes after they download the app.

Speaker 2

That's what we're gonna offer to them. But what is better and what gives us a competitive competitive edge is not only is our Bitcoin custody and exchange product going to be superior, but we also now give them access to earning rewards in Bitcoin, converting their paycheck into Bitcoin, earning rewards on their bill pays, or getting access to our merchant network, or giving gifts over the holidays through our Bitcoin gift card. It is the rich network that is going to create the different has created the differentiation for Fold, and our focus to allow customers to immediately download the app and buy Bitcoin is simply to increase our top of funnel and allow people to meet people where they are at today by providing the value proposition they're looking for immediately. And the fact is we've come a long way since starting with rewards, and we are now a fully fledged Bitcoin financial services company. And so we think this is really important to that evolution.

Speaker 5

Yeah. And a great time to be to be in this business. Thanks so much, Will and Wilson. Congrats again.

Speaker 2

Thank you, Chris.

Operator

Thank you. And our last question comes from Mike Grondahl with Northland. Please proceed.

Speaker 6

Hey, Will and Wolf. You know, I'm gonna ask you a question too on the on the Bitcoin gift card. Can you talk about how a consumer will find that and and maybe the mechanics of how it works? Like, will I buy a $25 gift card, a 50, a 100? Kinda from a consumer perspective, how that'll work.

Speaker 6

And then lastly, how is, you know, how is Fold making money or kinda monetizing that service?

Speaker 2

Great questions, Mike, and it's great to have you here. Thanks for joining us on our on our first call. So quickly, how it works? Well, it works just like any other gift card. You can buy a dollar denomination of $25.50 up to $500 that is stored on that gift card, and that gift card can be digital or soon will be physical.

Speaker 2

And from there, you are given a redemption code that you open up the Fold app, enter the redemption code, and your Bitcoin appears in your Fold account. Very simple. Allows us to completely flip the the Bitcoin on ramp on its head. Previously,

Speaker 5

to

Speaker 2

to acquire Bitcoin, you would need to find a platform to do this with. From there, you would need to submit your information, KYC. You would then need to attach a bank account. From there, wait for verification and money settling. From there, you could initiate a trade, and then you would have Bitcoin.

Speaker 2

Now it is you simply buy the Bitcoin gift card and enter the redemption code. It allows us to really make the onboarding into Bitcoin much more seamless and something that I believe for the Bitcoin curious, the masses of people interested in Bitcoin, but those that have not fully adopted it, is the right vehicle for them to make their first step. And so it really is about how can we serve Bitcoin via the most familiar financial instruments for consumers, which is a gift card. And it works about as about as simply as as as most others do. And then go ahead.

Speaker 2

Go ahead, Mike.

Speaker 5

I'll follow-up a question quick.

Speaker 6

If I buy a $100 gift card, am I paying, I don't know, the the retailer and you a couple percent commission, and I'm maybe getting $90.95 dollars of Bitcoin. Can you can you walk through the economics involved a little bit?

Speaker 2

Yes. So Fold Fold the goal with this Bitcoin gift card is to make Bitcoin ubiquitous so that, Mike, when you're walking down into your favorite retail store or grocery store, at the checkout line in the aisles is giant Bitcoin gift cards or the Bitcoin bees staring you in the face. The idea is to bring Bitcoin right to where people are today. And with that is a partnership to do that to make that happen in the background is a partnership between Fold and those retail partners. And so for us, we incentivize retail partners to to carry the card and to bring it to the forefront of their experience by giving them an incentive on the purchase of that card.

Speaker 2

And so Fold and the retail partner will take a margin on that gift card. So the gift card will be sold for a $100, and some percent of that will go to Fold and to the retail partner, for bringing that, very convenient way to buy Bitcoin to the market.

Speaker 6

Perfect. Perfect. And then maybe just one on the gift I'm sorry. On the credit card, is is there one or two things keeping you from launching that, I don't know, imminently, or is it just, hey. This is a big undertaking.

Speaker 6

We're working through it. You know, we'll get it launched as soon as possible.

Speaker 2

Yeah. There's there's really nothing, you know, in our way per se to launching it besides, number one, having a very high bar for the quality and experience of this card. We know that this card needs to handle scale from day one. There are 75,000 people on this wait list ready to go. And so

Speaker 6

for wait list, Will.

Speaker 2

Yes. Well, we will I don't know how far you up there, Mike, but share your referral link more, and you might get it faster.

Speaker 5

Fair enough.

Speaker 2

We we there's really nothing stopping us except continuing to build and working with our partners to find the fastest way and the fastest path to get this to market. But to be really honest, you know, the a a building a credit card is an enormous undertaking. I think many people underestimate that. It takes a a it's really a partnership between multiple entities to bring this thing to fruition. And we have been very lucky that not only have we established a great track record and reputation in the community with our Bitcoin rewards debit card.

Speaker 2

We have the numbers to show the success, the partnership, and that has really helped us identify and get some of the best partners on our side to help us bring this to market. So what I what I can guarantee is that it's coming to market this year, and the only thing that's standing in its way is just us doing a really incredible quality job to make sure this thing is ready for mass market because we believe this product will be one of the top three on ramps to Bitcoin overall, and that is right behind the spot Bitcoin exchange. Right behind the Bitcoin ETF will be the Bitcoin rewards credit card.

Speaker 6

No. They're two really cool products. Thanks, guys.

Speaker 2

Thank you, Mike.

Operator

Thank you. And as I see no further questions in the queue, I will conclude the q and a session and turn it back to Mr. Will Reeves for closing remarks.

Speaker 2

Thank you very much, operator. And I want to thank everyone who showed up today for Fold's first public earnings call. It has been quite the journey, and I want to deeply say thank you to our team and our investors and our customers. You know, the support, trust, and hard work really has made this quarter possible, and I'm very confident that we're going to be able to return quarter after quarter building an even more compelling story and really showing some of the power of these new products that we've mentioned today and the continued growth of our existing business. And this is all powered by the fact that Bitcoin is really what we believe is inevitable for something that the world is increasingly turning to and that 99% of the world has yet to really get involved with.

Speaker 2

And Fold is positioning itself right now to be the most ubiquitous, friendly, easiest cons Bitcoin financial services company to get started. And I think there's no better timing for this. And so thank you all for being on the journey with us. Gonna be a great adventure, and we look forward to to spending time together in another quarter. Thank you all.

Operator

And with that, ladies and gentlemen, we thank you for participating in today's conference. You may now disconnect.

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