Fold Q2 2025 Earnings Call Transcript

Quartr
Provided by Quartr
August 12, 2025

Key Takeaways

  • Positive Sentiment: Fold reported Q2 revenues up 59% to $8.2 million with transaction volumes rising 124% to $265 million, delivering a GAAP net profit of $13.4 million.
  • Positive Sentiment: The launch of Bitcoin Send transforms Fold into a full wallet solution, enabling users to send and receive BTC directly to any address.
  • Positive Sentiment: Fold debuted the Bitcoin gift card via distributors like Blackhawk, giftcards.com, and Tillo, creating a potentially low-to-negative cost customer acquisition channel.
  • Positive Sentiment: A Bitcoin rewards credit card in partnership with Visa and a top issuer is set to roll out this year, supported by a 75,000+ waitlist and dedicated marketing funds.
  • Negative Sentiment: Operating expenses surged to $14.5 million in Q2 from $6.3 million a year ago, contributing to a $4.7 million adjusted EBITDA loss driven by higher legal and payroll costs.
AI Generated. May Contain Errors.
Earnings Conference Call
Fold Q2 2025
00:00 / 00:00

There are 7 speakers on the call.

Operator

Good day, and thank you for standing by. Welcome to the Fold Holdings Second 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. Please be advised that today's conference is being recorded.

Operator

I'd now like to hand the conference over to Sameer Jain, Orange Group Advisors. Please go ahead.

Speaker 1

Thank you, operator. Good afternoon, and thank you for joining us for Fold Holdings second 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, please note that the information reported on this call speaks only as of today, 08/12/2025, and therefore, you are advised that any time sensitive information may no longer be accurate as of the time of any future replay, listing, or transcript reading. A replay of today's call will be available by webcast on the company's website at www.foldapp.com in the Investors section, and more information on how to access this replay feature will be included in the company's earnings release.

Speaker 1

Comments on this call may contain forward looking statements within the meaning of The U. S. Federal securities laws. 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. These statements reflect the current views of FOLD's management and are not guarantees of future performance.

Speaker 1

Please refer to our Form 10 ks and other filings with the SEC filings, which can be found at sec.gov or on the company's Investor Relations website 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 a reconciliation to any comparable GAAP measures will be provided in our second quarter earnings release and in our SEC filings. With that, I'll pass the call to Will.

Speaker 2

Thanks, Sameer, and good afternoon, everyone. Thanks for joining us. I wanna start by thanking our shareholders, partners, and analysts for your continued support, and most importantly, our customers who are building Fold with us every day. And to the Fold team, none of this happens without you. This was a terrific quarter both for Fold and the Bitcoin industry.

Speaker 2

Bitcoin continues to establish itself as an institutional asset class. FOLD's products and customer base are scaling, and the future we've been building toward is continuing to take shape. We posted a strong performance across the board, revenues, profits, customer growth, and platform volumes. The fundamentals of our business are strengthening. That's not just momentum, it's validation, and it's a license to go further, harder, and faster.

Speaker 2

We're in a unique moment for Bitcoin. We've seen major IPOs, institutional inflows, and the rise of the Bitcoin treasury movement. It's exciting, but Fold was built for more than hype cycles. We've built through hype before and outlasted much of the competition that relied on it. We are still here because we build for substance, not cycles.

Speaker 2

We believe we can thrive in both bull and bear markets. We have a true Bitcoin first operating company with diversified and scalable product lines that continue to grow quickly. Further, we're not just selling Bitcoin products, we are continuing to invest in it as a business. In Q2, we delivered more than 10,000 new accounts, transaction volumes of $265,000,000 up 124% year over year for the same quarter. Top line revenues of $8,200,000 up 59% year over year for the same quarter and $13,400,000 in GAAP net profit.

Speaker 2

And here's what's important. These results reflect only our legacy business. Our q two results do not include any meaningful contributions from the Bitcoin credit card or the Bitcoin gift card, both of which are just getting started. These results also include limited additional marketing spend, which we have pushed out to align with future product launches. That means our core business lines, banking, payments, and our Bitcoin exchange are growing organically with strong market demand from high quality customers.

Speaker 2

We've hit a major milestone this quarter with the launch of Bitcoin Send, enabling users to send and receive Bitcoin directly with any wallet address. This transforms Fold from a pure on and off ramp into a full fledged Bitcoin wallet, unlocking the ability to manage finances natively in Bitcoin. It's a breakthrough moment in what is quickly becoming a multibillion dollar industry in The US. In addition to our product growth, during the 2025, we invested deeply into a team that's built some of the best consumer financial products in the world. Soon, you will see their work shine through the Fold experience, driving an enhanced user experience and brand to support continued growth across our business.

Speaker 2

This quarter, we launched a major new product, the Bitcoin gift card. It's currently live on full platforms and is rolling out across the country through major distribution partners like Blackhawk, giftcards.com, and Tillo. For context, Blackhawk is the world's largest gift card distributor, and giftcards.com is one of the world's largest gift card marketplaces. It will soon be available at additional major retailers, putting Bitcoin in front of millions of consumers in places where they already shop. This product brings Bitcoin to the checkout line just like any other gift card.

Speaker 2

We believe this will become the third major on ramp into Bitcoin in The US alongside exchanges and brokerage accounts. Additionally, the Bitcoin gift card represents an alternative to the over 30,000 Bitcoin ATMs across The US. Unlike Bitcoin ATMs, which charge fees of up to 20% and require dedicated hardware, the Bitcoin gift card plugs directly into the existing retail ecosystem, making it more accessible, scalable, and compelling from day one. Each time a Bitcoin gift card is redeemed, Fold acquires a customer at a low to negative cost who is primed to engage with our broader ecosystem. In addition to the Bitcoin gift card, we are proudly looking forward to bringing a best in class Bitcoin rewards credit card to market with Visa and a soon to be announced issuing partner, one of the most respected names in payments.

Speaker 2

We believe that these partnerships will give us instant scale and credibility from industry leaders. With nearly 75,000 people on the wait list, best in class partners in place, we are deep in development of a product we believe will set the standard for Bitcoin rewards credit cards, poised to roll out soon to a built in user base ready to engage from day one. This product marks a major milestone. It's long been my goal to dethrone airline miles and cash back as the default consumer reward in The US, not just to disrupt, but to deliver real lasting value. This card is the final piece.

Speaker 2

It's more than a product. It's a platform with the potential to rival the biggest rewards ecosystems in the country, including airline mile cards. We will continue to lead the market shift from miles and cash back to Bitcoin rewards. We're not just entering the market. We're here to lead it.

Speaker 2

In addition to our current offerings, we're actively developing new products that are expected to naturally extend our consumer financial platform, each designed to serve a real customer need while unlocking new monetization opportunities for Fold. Notably, in other news in the last quarter, Fannie Mae and Freddie Mac began recognizing Bitcoin Holdings for mortgage qualification. A de minimis exemption for everyday Bitcoin spending was proposed, and the current administration is moving to allow Bitcoin to be held in retent retirement accounts. These developments represent a major expansion opportunity for the full platform where customers already come to spend Bitcoin on everyday goods and services and now increasingly plan for long term financial goals in Bitcoin. We're building a seamless financial journey, paychecks into checking, checking into debit and credit cards, cards into rewards, rewards into savings, savings into Bitcoin, and Bitcoin into homeownership and other major financial milestones.

Speaker 2

Every product reinforces the next, compounding value, loyalty, and long term impact. This connectivity is our edge, and it's accelerating. Let's now talk a little bit about our Bitcoin treasury strategy. Bitcoin treasury companies seem to be popping up every week, but Fold has been accumulating Bitcoin in our treasury for years. What sets Fold apart is that our treasury is not separate from our business.

Speaker 2

Our treasury powers our opco and directly aligns with the products we are selling to our customers. It has already enabled us to deliver better products to our customers with better margins for our company. And as we scale, we expect that advantage will compound giving us a structural edge over competitors. Since our listing, we have continued to find ways to grow our Bitcoin treasury using capital market strategies not previously available to us as a private company. And since listing, we have increased the amount of Bitcoin in our treasury by nearly 50%.

Speaker 2

We expect to continue to pursue additional strategies to add Bitcoin to our treasury when it is accretive to our shareholders and makes sense for our business trajectory overall. Our most recent example is the $250,000,000 equity purchase facility we announced in June. The registration statement for which was declared effective by the SEC on August 1 and is ready to be used. Our strategy is simple. Build a great business, accumulate Bitcoin along the way, and create durable long term value for our customers and our shareholders.

Speaker 2

We're building the financial platform for the Bitcoin Century, a company that delivers value today and is built to scale tomorrow. I'll now turn it over to Wolf to walk through our financial results in more detail.

Speaker 3

Thank you, Will, and thank you to everyone for joining today. Similar to Q1, we generally met or exceeded our internal expectations for the quarter. Second quarter revenues were $8,200,000 which was an approximately 60% increase versus Q2 twenty twenty four. Total year to date revenues through June 30 were $15,300,000 which was an approximately 52% increase over the 2024. As Will mentioned, these increases largely reflect continued growth of our legacy businesses and do not include meaningful contributions from any of the new products we've announced.

Speaker 3

Instead, growth in the quarter was driven by a broad based uptick in our core KPIs. In q two, we added more than 10,000 new accounts and more than 3,000 verified accounts. Our total transaction volume in the quarter was 265,000,000, representing a nearly 124% increase versus q two twenty twenty four. These higher volumes reflected both the increase in new customers as well as deeper penetration into our existing customer base. We expect the remainder of 2025 to meet or exceed our current year to date revenue growth pace for our legacy product lines.

Speaker 3

That suggests total 2025 revenue from those product lines of 34 to $42,000,000, which is consistent with our previously issued guidance around legacy product growth. In addition to the legacy product lines, we expect the new product lines to substantially expand our TAM and provide meaningful contributions to our revenues as they continue to roll out. As noted last quarter, as a consumer payments business, the fourth quarter historically represents our highest volume and revenue quarter as customers engage in seasonal spending behaviors. On the cost side, our operating expenses were 14,500,000.0, up from 6,300,000.0 in q two twenty twenty four and down from 16,600,000.0 in 2025. The principal drivers of the year over year increase relate to a combination of higher cost of sales, which correlated directly with our increased volumes and revenues, and increased legal, insurance, and payroll expenses associated with being a public company.

Speaker 3

We are actively managing our costs across all departments, and we believe our fixed operational costs will remain mostly flat going forward with some opportunities for additional cost cutting measures as we mature as a public company. One area where we plan to increase spend is in paid marketing to support new products and to attract new customers to our platform. As mentioned last quarter, 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, we recorded a GAAP net profit of $13,400,000 in q two twenty twenty five compared to a net loss of $2,400,000 in q two twenty twenty four. The primary driver behind the net profit in q two was a $37,000,000 increase in the fair value of our Bitcoin investment treasury.

Speaker 3

Because our Bitcoin denominated assets and liabilities will potentially result in large fluctuations in our GAAP earnings each period, We also check adjusted EBITDA, a non GAAP measure. In q two twenty twenty five, our adjusted EBITDA was a $4,700,000 loss compared to a $1,200,000 loss in q two twenty twenty four. The majority of this variance was due to increased legal costs related to be being a public company and increased payroll expenses related to increased headcount to support our new products and the enhanced compliance requirements of being a public company. We also ended the quarter with a healthy balance sheet and ample liquidity. As of 06/30/2025, we had cash and cash equivalents of $6,600,000 and positive working capital of 7,800,000.0 Unsecured debt balances remain at zero, and we continue to be in a net asset position.

Speaker 3

In addition, as of today, we hold approximately 1,492 Bitcoin in our investment treasury, valued at approximately $160,000,000 as of 06/30/2025. Our Bitcoin treasury remains a core part of our overall business strategy. We've seen many other companies pursue Bitcoin treasuries over the past few months with varying strategies from pure Bitcoin proxies to more sophisticated financial engineering plays, and we expect to continue to see more in the near term. Fold remains one of the few Bitcoin treasury companies with a meaningful operating business and one of the only ones focused purely on Bitcoin financial services. That dual model creates synergies between our treasury and our operating company, and we believe it reduces our execution risk.

Speaker 3

As Will mentioned, we plan to continue to opportunistically pursue strategies to add additional Bitcoin to our balance sheet. With regards to the $250,000,000 equity purchase facility we announced in June, we plan to use this facility when accretive to our shareholders with accretion being measured using Bitcoin per share, which we consider to be the leading KPI for Bitcoin treasury companies. We may also use this facility to accelerate product and operational growth. As of today, we have not used any of the facility, but we expect to do so starting in q three. I'll now turn the call back to Will for some closing thoughts.

Speaker 2

Thank you, Wolf. It's been a defining first six months as a public company, and I'm incredibly proud of the progress we've made and the momentum we're carrying into the second half of the year. We continue to post strong growth in our core operating business, attracting new users and capturing a growing wallet share from existing ones. Our product pipeline is not only deep and differentiated, but increasingly synergistic, designed to expand our value to customers while driving durable revenue to fold. Our newest product offerings are expected to continue to provide momentum for our business in the near to long term.

Speaker 2

With increasing regulatory clarity and institutional adoption, the opportunity to embed Bitcoin into the traditional financial system has never been stronger. Bold is uniquely positioned to be a leader in this next wave, and we are excited for what's ahead. Finally, I want to thank our team, partners and shareholders for your continued trust and belief in FOLD. This is only the beginning. And with that, I'll open the floor for questions.

Operator

Our first question comes from Mike Grondahl with Northland.

Speaker 4

Hey, guys. Thank you. Will, how long has the gift card been online at giftcards.com and a couple of those other online sites.

Speaker 2

Hey, Mike. So I think as we spoke about in the first our first our our previous quarter, it initially rolls out on the fold, fold property virtually in May and June. The activation of the marketplaces including Blackhawk, giftcards.com, Tillo, Flus, and others largely started in July. So you're gonna see it start to pick up, in July and start to contribute quarter. And we have many other marketplace that will be coming online as we move into q three with all in lead up to the physical re in store retail in q four.

Speaker 4

Got it. And and have you has there been much marketing either spent by Fold or some of your partners yet? Has there been much of a push online?

Speaker 2

So there's there's been very little push online to date. Right now, we're securing the distribution so that when Fold activates the mark earmarked over $3,000,000 for marketing for the Bitcoin credit card and Bitcoin gift card. And we wanna make sure there's maximal availability of the Bitcoin gift card before turning that marketing spend on so it's as efficient and productive as possible. So as we have started to partner, you're going to see co marketing with these platforms. So not just full getting these cards turned on, but actual comarketing and with our distribution partners who know who their customers are, whether they're in local markets or they're they're online customers.

Speaker 2

Sometimes these customers are large corporations who give incentives to their employees. Sometimes they are nonprofits. Sometimes they are weddings and other kind of a more celebratory focused platforms. And so for us, it's about developing not only the distribution, also but the follow on co marketing. But up until this moment of that marketing has been activated.

Speaker 4

Got it. And and then on the physical retailer side, do you have a guess as to how many distinct retailers or number of brands the card will physically be in for the holidays and and maybe related to that, the number of locations,

Speaker 2

Ross? So when we when the physical Bitcoin or physical gift card distribution happens in seasons, you have fall, you have spring seasons. And for us, our it's been our focus to focus on quality first with reach versus just purely getting it into as many locations as possible. So what you're gonna see us announcing are some top tier one retailers, and you can go to Blackhawk who is one of our primary distri in Michigan. They have over 400,000 locations across The US.

Speaker 2

So very significant opportunity for us, but we wanna make sure that our first launch of this card is to top tier retailers that have a large footprint. And the reason is that allows us to focus marketing spend on those versus shotgunning across the network. We think this is gonna both lead to more legitimacy around the product and allow us to do a lot more interesting co marketing. And so for us, over, through q three, you're gonna start seeing us move from announcing online partners to physical in store retailers, and we are really truly focusing on really top tier tier one retailers across the country.

Speaker 4

Got it. That'll be great to see. And then may maybe just one more. On the credit card, any any guesstimate at the month you think you can launch that? And then and then also, you know, the wait list, it seems to be, I don't know, still at 75,000.

Speaker 4

Is that by design? Because no need to push it higher than that. Or curious those two related to the credit card.

Speaker 2

Yeah. So for the for the credit card, this is our this is our top priority for the team. And we have a goal that we are all marching towards, which is getting in cards in market this year. And we're gonna start with that wait list. And when we talk about that wait list with 75,000, what that really refers to is we we had a very specific wait list kind of timeline, which we have since closed.

Speaker 2

We can still people can enter the wait list now, but they're not eligible for, you know, climbing up the list and things like that. So when when we talk about the 75, it's really largely the what customers signed up in that initial waitlist period. We still have a ton of users who are on the full platform who are not represented on that waitlist and other customers who have come by to announce their interest in the card who are also not represented in that 75. So it really just is about what was the active wait list period that we have opened up, but we're continuing to get new customers and existing customers interested. So that number is much higher in terms of how many people are are likely to

Speaker 2

for an exact month, Mike, I I wanna be able to give that to you, but I can say that the entire to market this year. And we wanna get cards in hand beginning with the waitlist customers first, and then we'll move out beyond that to a general general access. So can't give you an exact month, but I will tell you this. We have partnered with and we will very shortly announce our issuing partner who is one of the most respected and quality names in financial services and payments that I think will get everyone very excited, and I think we'll relinquish all doubt on our commitment to both getting this fast and ultimately producing the best in class Bitcoin rewards credit card out there.

Speaker 4

Hey. It'll be exciting fall. Thanks, guys.

Speaker 2

Thank you, Mike.

Operator

Our next question comes from Brett Knoblauch with Cantor Fitzgerald.

Speaker 5

Hey, guys. Thanks for taking my question. On the digital asset treasury side, you talked about kind of accessing the equity facility when it's accretive for shareholders. Could you give a framework that you would wanna share? I I know strategy kind of came out this this earnings period and outlined at what levels they would consider using which facilities.

Speaker 5

I'm curious how you guys are thinking about that.

Speaker 2

I think, Brett, it's good to good to hear from you. Glad to get good to get you up on stage. You know, when we think about our, you know, Bitcoin treasury, we we are thinking about this, I think, in a couple different planes that make us a little bit different than the pure play Bitcoin treasuries. And that's that we have a operating company that's growing, has momentum. You could see here 59% year over year revenue growth, 100 plus percent growth in volumes, and that's only our legacy business without any paid marketing really behind it.

Speaker 2

We see both the one of our product offerings that we can invest in. And so when we talk about when it's right to be accretive, we think about it not just how to grow the Bitcoin treasury the fastest, but also what's the opportunity cost to not investing that in the in the operating company that is already proven to be growing at a very fast clip. And I know on the call today, we we did not go as far as I think you were mentioning from strategy on on exactly the parameters for when it is accretive. But I know, Wolf may wanna have lend some lend some of his perspective on here as he's he's really run for us. Wolf, you wanna you wanna get more into into when we think or how we define what's accretive?

Speaker 3

Absolutely. Hey, Brett. So strategy has come out with some very prescriptive strategies around when they plan to hit their ATM versus do preferred share raises, etcetera. A lot of that for them focuses on MNav. MNav is not currently a metric that we're we're reporting on.

Speaker 3

You can get there. It's, you pretty easy to calculate. But one new metric that we are presenting, you'll see this in our deck, is SATs per share. So how much Bitcoin per share do we have? And the math is effectively dependent on two variables.

Speaker 3

One, the price of Bitcoin, and two, the price of FLD at any given time. So in addition to the accretion considerations on the product side, like Will mentioned, the math for us on just a pure pure Bitcoin accumulation strategy is is gonna be focused on really increasing Bitcoin per share when we execute any strategies.

Speaker 5

Perfect. Thanks. Well, that's helpful. And then maybe just on on the credit card, I guess, when this is launched, I feel like with credit cards, you kinda need a lot of capital to go out to, you know, have somebody kinda purchase the receivables on the other end. Are you guys gonna be kind of purchasing the receivables, or is the issuing bank gonna be doing that?

Speaker 5

And, like, how quickly can that scale? Like, if you decide December 1 to turn on the all credit card for the 75,000, probably more waitlist users, Could they all get on, like, at that point and then start spending?

Speaker 2

Yeah. So I think what you're gonna see from us over the next, you know, over the next couple months is we're gonna be announcing not only our issuing partners, but also our credit facility partners. We built this program so that so two things. Number one, we weight of of fold behind this so that we can scale those facilities to accommodate as much of those user base as possible. And this is when we look at things like our treasury.

Speaker 2

We have already been able to open up larger facilities, bring better partners to the table credit worthy. We bring a Bitcoin treasury here that allows us to scale this program far faster than had we not had it. It also we're gonna be announcing our issuing partner that this arrangement allows us to enjoy in the interest share of our program. And so it's gonna be dynamic. It's something that we can really dial up or down depending on, you know, what we think is best use of our capital at any given moment, but we think this is going to be a powerful driver for revenue of the Bitcoin credit card program.

Speaker 2

And so for us, it was really removing to scale, and that means having the best partners on board and credit facilities that can scale up to the size of this program very quickly. And I don't expect that we'll have issues on either fronts there. And I think it will become very clear as we, announce who these partners are, and they are of scale.

Speaker 5

Awesome. That really helpful. Alright, guys. Looking forward to it. Appreciate it.

Speaker 2

Thank you, Brett.

Operator

Our next question comes from Kevin Dede with H. C. Wainwright.

Speaker 6

Hey, Will. And, Wolf, thanks thanks for having me on. What's up, Dede? Great to have you. Yeah.

Speaker 6

Oh, pleasure. Pleasure. You know, well, I was kinda hoping well, I'm not a buff on the whole gift card scene. I was wondering if you could just help us understand, Blackhawk versus versus Tillow versus, I think you mentioned last year or last quarter, Todus. I guess I'd like to understand how you see crossover, whether or not there'll be cannibalization, and how you're balancing distribution among them.

Speaker 2

That's a that's a great question, Kevin. So, really, the the gift card industry in The US is roughly 300 plus billion dollars in prepaid value. The primary distributors of those cards are Blackhawk and Inkall. They are the two major distributors who account for the vast majority of all gift card distribution to the country. From gift card distribution means store on the rack grocery stores, retailers.

Speaker 2

It can mean distribution as employee incentive programs. It can mean payout options for gig economy workers. It is gifts at weddings and birthdays. And downstream from Blackhawk and income are a myriad of other places that are serving some more niche use cases or niche communities that are looking to add gift cards to their marketplace. And so Tillo, for instance, is a great example of being one who primarily serves fintechs.

Speaker 2

So if you go on to, you know, your your preferred fintech and you open up and they have gift cards available, Tillo is one of the primary marketplaces where they're sourcing from. And so what you're gonna see now is the fold is not only partnered with the largest of them with Blackhawk, but we are now going to go out and create as many of the lines into the smaller marketplaces that get us into all corners of the gift card use case. And this is really what's important about this product is, you know, most Bitcoin accumulation channels, like the an exchange or the ETF you can't a single player can't really own them. But this is very different with the Bitcoin gift card as a as a channel because these retailers are actually open to long term contracts, building exclusivity because many of them do not want two Bitcoin gift cards on their platform. It creates confusion, and and also there's tight real estate.

Speaker 2

And so for us, we think this is an incredible opportunity that we go very fast and very wide into as many of these online marketplaces as possible. We secure our spot as the number one Bitcoin channels. And from there, we can work our way down into the smaller and smaller play places. But we are really looking to own the largest distribution channels up top. And you mentioned Totus, and they were our first partner that we went out with and that we are actually issuing the

Speaker 4

card with.

Speaker 2

What's great about them is that they actually operate across all gift card networks. Typically, you will only have one of an issuer work with either a Blackhawk or just an income or one of the smaller marketplaces. Totus is very unique in that it works across every single gift Now for Fold, this positions us to not only get distributed into the maximum channels possible, but also lock them down into being Fold's owned channels, which I think is an incredible opportunity for the company.

Speaker 6

Okay. How about overlap? Well, I mean, it's hard to imagine that, you know, Totus and Blackhawk don't overlap at certain retailers. How how are you sorting through that? And how how are you ensuring that your retailers are gonna take your card exclusively?

Speaker 2

Yeah. That's a great great call. So number one about overlap. Really works, so that there's very, very little overlap. Overlap is is on the rare side if a retailer sources from multiple networks.

Speaker 2

Typically, they source for one. And so if you go to Blackhawk, you can go to Blackhawk's website. You will see the retailers that they are who they bring the gift card marketplace into their platforms, and they're the some of the largest retailers in the country. There's very little overlap there. They'll work with Blackhawk or they'll work with Incom.

Speaker 2

Or if you are a, you know, a wedding registry company, you may work with, Tillo. So there's very little, overlap here. What's most important is that we are getting at we are being we are making the gift card as accessible as possible in all places. So I would say the risk of cannibalization is is very low. And, Kevin, you had one other part of the call question there.

Speaker 2

What was that?

Speaker 6

No. I yeah. No. I I think you tackled it well. I think you tackled it.

Speaker 6

But I'm also curious about how you intend to protect the appearance of the card itself. I I I mean, you and the team obviously did a great job in securing yellow with a white Bitcoin symbol, but how will you protect that?

Speaker 2

Yeah. It's a great it's a great question. So I think when we when we are owning such public channels that that are directly interfacing with millions of customers, it's really important to to protect that that, you know, that While Bitcoin Logo is, you know, essentially an open source logo and that's part of the beauty of it, we are we and we're gonna live with that. What we think is more important is to protect the channel itself. So for us, we are not going to go and trademark the Bitcoin logo.

Speaker 2

We have no intention of that. We think that's against the spirit of Bitcoin. And instead, what we are doing is going to lock down the retailers and the channels themselves. And for them, they do not have interest in carrying multiple Bitcoin gift cards on their racks. There's limited real estate.

Speaker 2

They don't wanna create confusion for customers. Both being a company that has operated in rewards that has built this relationship with them over years, you know, these are not our first conversations with them this year. Both has been working on this relationship with them either selling their gift cards or supporting their rewards programs for years. And so that moat that we have is not only that years of relationship of showing that we can put numbers on the board for them, but the second is that they don't have interest in carrying multiple other options here. And this is why Fold, the Bitcoin gift card, is the only Bitcoin gift card on giftcards.com.

Speaker 2

And so we're gonna carry across all of the other retailers as well. And, ultimately, this is gonna create incredible co marketing opportunities with these retailers and channels that Fold can uniquely own. And so it's less gonna be on the likeness of these cards and more on the actual distribution and ownership of the channels themselves.

Speaker 6

Great insight, Will. Thank you. You also alluded to how your cost to market them could be negative. In other words, you're you'll make money distributing them, obviously, but at zero customer acquisition cost or negative one. And I was hoping you might just or maybe Wolf will help you run through the math on that.

Speaker 6

Yeah. Wolf can get into some of

Speaker 2

the math, but the, you know, the outlines here are typically you know, Fold's primary customer base comes from organic word-of-mouth marketing. Full has a very strong belief that the product rate, and we need to have customers share that product. And that has always led to our historically very low CAC. And so this brings to the question of, well, how is Full gonna even get that CAC even lower? And the the reason is when a customer goes into the store to buy a Bitcoin gift card for friend or family member who is just getting started into Bitcoin or they're doing it as a wedding gift or an employer wants to give all of their employees their first bit of Bitcoin, they buy this gift card.

Speaker 2

And when that gift card is redeemed, there is a fee. There's essentially a spread on that gift card at when it's redeemed. As that new customer is redeeming it, they are not only going through the account creation process, but Fold is making money on that redemption. And so for us, we are actually being paid to acquire this new customer. So that's the that's the overall idea here.

Speaker 2

Wolf, do you have anything to add?

Speaker 3

Not a thing. Nailed it.

Speaker 4

Okay. Got it. Kevin. Got it.

Speaker 6

Yes. Yes. Well, I got the sort of overarching theme, so thanks. I might have to review it again, make sure it sinks in. Last question for me.

Speaker 6

Can I know that you and the team are working really hard in trying to get this credit card out as fast as you can as well as you can with all the secured relationships that you need, and I understand how complicated it is? I'm was wondering if maybe you could give us a little color on how you view the the last hurdles that you need to clear in order to get it to work and where your confidence rating is on that.

Speaker 2

Yeah. So I think one of the I I first off, I'll say, you know, the the initial delay for this card was perhaps the best thing that could have happened to this program, and that's not just from Fold's perspective. This is gonna be from our customer's perspective. What has been transpired over the last few months as we have shifted to bring on new partners here is we are gonna emerge with a fundamentally better program, a program that can scale, that has better margins, that ultimately can provide better value to customers, and that's all because of the new partners that we have that we have brought on to support the launch of this card. As you already mentioned, there's a handful of partners that are very critical to launching a credit card program.

Speaker 2

You have the you have the payments network, which you know we have Visa. We have the issuing partner, which we will be announcing soon. This is, again, the definition of scale, one of the most respected players in the payments space. And on the credit facilities, we have partners here that are gonna essentially gonna that will scale this as fast as possible to as many people around. And, ultimately, this is gonna be a win for Fold customers on this card.

Speaker 2

We it I I believe it was already a best in class card, and I believe now we've secured that position purely based on these new partners that we've brought on board. And I would say these partners are ones that are known for speed of execution and quality of development. So I think as we announce them, it's the picture is going to become abundantly clear. Fold has partnered with some of the best partners in the industry, and we are aligned in getting this out as fast as possible. And so I would risks to bringing a credit card to market are the strength of your partners.

Speaker 2

And what we've done in the last few months is eliminate that risk. And so now it is doing what Fold has done best, which is ship great product alongside partners that are also known to support group for payments and financial services products. So I it it while initially, it was difficult thing to have the delay, this product is going to be far better than it was. And I'm very excited about it, and I know I know our customers are gonna ultimately have a much better experience, and this will be the premier Bitcoin award.

Speaker 6

Yeah. Well, I can't thank you enough for adding that extra color. It,

Speaker 3

you know,

Speaker 6

puts, puts things in in a much different perspective. I appreciate it, and thank you for taking all my questions.

Speaker 2

Of course, Kevin. Great to hear from you.

Operator

That concludes today's question and answer session. I'd like to turn the call back to Will Reeves for closing remarks.

Speaker 2

Alright. Thank you, and and thank you everyone who's listening in. I I hope you can hear it from my voice and and and and Wolf's here. I'm incredibly proud of what the full team has done this quarter. This is, I believe, two solid quarterly earnings in a row, our first two, and I think we'll be delivering some spectacular results, continuing to do that throughout the second half of this year and definitely throughout 2026.

Speaker 2

And, of course, couldn't have done it without the full customer base that not only continues continues to trust us to ship new products in which they use, they give us feedback, and then really light the way for where we go next. We are, again, really focused on on building value for them. So I think that all this real momentum that we've had, net positive net income being we're built this fast. We're holding one of the largest big public Bitcoin treasuries in the world. We have a a $250,000,000 facility to buy more Bitcoin at a think at a time that is, already today extraordinarily accretive to our business.

Speaker 2

And, again, this business today, all of this growth just reflects our legacy business. All of our product lines are profitable on a per product basis, so I couldn't be more excited about about the momentum we have to drop some of these really game changing products with Bitcoin gift card in storefronts, in the checkout people who do not have Bitcoin today will be able to access it. And, of course, the Bitcoin credit card, which I hear loud and clear every day from both customers and the team. Let's get this thing to market, and I'm I'm confident that we're gonna deliver best in class product. So we're gonna keep building.

Speaker 2

And, of course, more than all of these numbers, we are still here about the mission, not the hype. We're building something lasting to help people build and keep wealth in sound money, in the best money created, which is Bitcoin. And I'm grateful for everyone who has believed in this on this journey. We've been doing it for a very long time, and it feels like we are really at the beginning of a new chapter. So appreciate everyone who has come along for the ride.

Operator

This concludes today's conference call. Thank you for participating. You may now disconnect.

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