Bullish Q2 2026 Earnings Call Transcript

Quartr
Provided by Quartr
August 13, 2026

Key Takeaways

  • Bullish said it began trading issuer-sponsored tokenized shares on its regulated venue, with a broader tokenization showcase planned for October 27. Management expects tokenized securities to become a meaningful trading contributor in 2027, although near-term revenue impact is expected to be limited.
  • The proposed $4.2 billion Equiniti acquisition remains on track to close in January 2027, with antitrust clearances secured and other approvals progressing. Bullish expects Equiniti’s relationships with nearly 3,000 issuers and more than 20 million shareholders to support its issuer-sponsored tokenization strategy.
  • Bullish expects potentially earlier access to the U.S. market for crypto derivatives, including perpetuals, dated futures and options, through an overseas regulated platform and approved futures commission merchant. Management views U.S. derivatives as a major long-term opportunity.
  • Second-quarter trading volumes and market share declined as crypto prices and volatility fell, and management described the current crypto trading environment as weak. The company reduced trading incentives and does not provide transaction-revenue guidance.
  • Adjusted revenue was $92.6 million, up 62% year over year, while adjusted EBITDA was $29.5 million at a 32% margin. Bullish narrowed full-year 2026 guidance to $225 million-$245 million for Subscription, Services & Other revenue and $225 million-$230 million for adjusted operating expenses, citing improved visibility and expected cost efficiencies.
AI Generated. May Contain Errors.
Earnings Conference Call
Bullish Q2 2026
00:00 / 00:00

There are 13 speakers on the call.

Operator

Thank you for standing by, and welcome to Bullish second quarter 2026 earnings conference call. Currently, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 1 on your telephone. To remove yourself from the queue, you may press star 1 1 again. I would now like to hand the call over to Michael Fideli, Vice President of Finance. Please go ahead.

Speaker 1

Good morning, and welcome to our second quarter earnings call. I'm Michael Fideli, and I'm joined on today's call by our Chief Executive Officer, Tom Farley, Chief Financial Officer, David Bonanno, and Director of Corporate Development, Liam Foley. This call will contain forward-looking statements, including those relating to our expected performance and business opportunities, our proposed acquisition of Equiniti Group, the anticipated benefits and strategic rationale of the transaction, expected timing and closing conditions, and business opportunities following the transaction. These statements are not assurances of future performance and are subject to risks and uncertainties that could cause actual results to differ materially. Such risks include, among others, the possibility that the Equiniti transaction may not be completed, failure to obtain required regulatory approvals, the possibility that anticipated benefits may not be realized, and the risks related to the integration of Equiniti's business.

Speaker 1

For more details on these and other risks, please refer to today's earnings press release and our SEC filings, including our 20-F dated March 9, 2026. We undertake no obligation to update or revise any forward-looking statements. This call will also include a discussion of non-IFRS financial measures. A reconciliation to the most directly comparable IFRS metrics can be found in our earnings press release and presentation, which also contain additional information regarding non-IFRS financial measures and key performance indicators. I'll now turn the call over to Tom.

Speaker 2

Thanks, Mike. Good morning, everyone. Thanks for joining. I'm Tom Farley, Chairman and CEO of Bullish. A year ago today, Bullish went public on the New York Stock Exchange. Thank you for following us and supporting us as a public company. A year ago today, our old school certificated shares began changing hands. A year later, I'm pleased to share with you that beginning yesterday, Bullish's tokenized shares are trading on our own regulated venue for the first time. This also marks Bullish's first trades of any tokenized security. This is just the beginning. We are building the infrastructure for tokenized securities, and this quarter, we turn that from a blueprint into something real. Our business has remained diversified and resilient against a soft quarter for crypto, with prices and volatility down across the market.

Speaker 2

Our diversified, largely recurring revenue base and mission-critical product offerings have helped carry us through, and our pending acquisition of Equiniti will be another step towards further business model resilience. Regarding Equiniti, we are on track to close in January 2027. We have all the antitrust clearances secured and other regulatory approvals are advancing. Both companies are already building today for the future combined business. What excites me most is the demand from public companies, layer one and layer two blockchains, and other market participants who want to get started in earnest on issuing tokenized securities. The build of this ecosystem will take time, but the interest and demand are already there. I am pleased to share that on October 27th, we will be headed to the New York Stock Exchange for a showcase where we will share a first look at the tokenization platform.

Speaker 2

We will introduce new issuer and layer one partners and demonstrate live tokenized equity issuance and trading. Tokenization of security sits at the heart of our strategy and is the central theme in the modernization of market structure. Tokenization is the process of turning static, traditional financial assets into active, programmable, blockchain-based assets. In May, we announced our agreement to acquire Equiniti, the second largest transfer agent in the world. Tokenized real-world assets on chain have grown more than 20 fold since around 2024 to roughly $37 billion. Tokenized cash in the form of stablecoins is now around $290 billion. Securities are the largest wave still to come. A roughly $270 trillion market that Citi sees reaching about $5.5 trillion tokenized by 2030. I believe this is quite conservative. Not all tokenization is the same, and that distinction is the basis of our strategy.

Speaker 2

We are focused on issuer-sponsored tokenization, where the company itself chooses to tokenize its actual shares, and its transfer agent records the token as the real legal share on the official register. That is very different from a synthetic token, where a third party wraps a claim on a share it holds elsewhere, or maybe doesn't even hold it elsewhere at all, and the issuer sees none of the benefits of this tokenization. When the issuer, on the other hand, creates the token, the token is the actual share. True legal title. The issuer can finally see who owns its stock. Corporate actions and voting can be programmed into the instrument, and a greater share of the economics can flow back to the issuer. Investors gain too.

Speaker 2

They benefit from smoother collateralization of their holdings around the clock trading, instant and atomic settlement fractional access, and access to shareholder rewards and a more direct relationship with public company issuers, a facet that issuers are also very excited about. I would like to spend a few moments telling you a little more about Equiniti, because the standalone business deserves to be better known. Equiniti maintains the share register, the legal record of ownership, for nearly 3,000 corporate issuers, including roughly half of the FTSE 100 and 30% of the S&P 500. It serves more than 20 million shareholders and moves over half a trillion dollars of payments each year. We believe it is one of only two players of real scale in its markets, with high barriers to entry, over 95% client retention rates, and relationships that average well over a decade.

Speaker 2

Equiniti is far more than a register. It runs five connected services, as laid out on page 24 of the slide deck, that are at the center of how public companies and their shareholders interact. Each service is mission-critical, sticky, and recurring, and together they make Equiniti indispensable to how thousands of public companies operate. I will now turn to how the Bullish business performed this quarter, starting with the exchange. On spot, our core market, trading volumes moderated with the broader crypto market, but we kept deepening our institutional footprint. One of the largest global wealth managers in the world selected Bullish as the exclusive crypto trading provider for their Asia business, and we began relationships with many new customers such as SoFi, Berenberg, Bit2Me, BitGo Prime, and others. We keep winning the institutions that value a regulated venue.

Speaker 2

On options and derivatives, in a positive development, we now believe we will gain access to the U.S. market for our perps, dated futures, and options markets in the next several months, nearly a year earlier than we previously anticipated. We believe that the United States is by far the largest global market for derivatives and represents a huge opportunity for Bullish to be amongst the first to offer onshore crypto derivatives. While industry volumes have contracted this year as volatility came down, we still believe that the digital assets derivatives markets will grow more quickly than spot volumes in the years to come. In the second quarter, we reduced trading incentives, prepared our U.S. readiness plan, and started putting in place partnerships with retail broker-dealers, and also went live with other key market participants, such as market access provider Paradigm.

Speaker 2

While our volumes and market share declined in the second quarter, we are excited about our new strategic positioning and the long-term opportunity. Beyond the exchange, our media and events business continues to generate business opportunities throughout the Bullish business. Consensus, our flagship conference, drew more than 16,000 people from over 100 countries to Miami, where we tokenized our own cap table live on stage, a first for an NYSE-listed company. CoinDesk and Consensus power our whole franchise. We are able to gather the industry together in a way that consistently generates new business opportunities. coindesk.com, our media arm, continues to experience strong growth, with page views up by 10 million in Q2 2026, a 38% year-over-year increase. Unique visitors increased 83% against the same period prior year, and our market share continues to consolidate. Our CoinDesk Indices continue to power institutional products.

Speaker 2

In April, Morgan Stanley chose CoinDesk as the benchmark index for their flagship Bitcoin ETP, which has already reached roughly $400 million in assets. We continue to win repeat business with our licensees. For example, Grayscale launched their Grayscale Hyperliquid Staking ETF with our indices in June, and Morgan Stanley launched with Ethereum and Solana ETPs with us in late July. We are putting wins on the board, but index revenue scales with the value of assets in each product, so a softer price environment has held total index revenue back even as we gain share and our mandates add up. Liquidity services deliver sticky, recurring revenue from our delivery of the listing, liquidity, and visibility that every asset needs to come to market and trade well. In Q2, we continued adding great new clients, including the first exchange to list SoFi's new stablecoin, SoFiUSD.

Speaker 2

Finally, on the topic of regulation and legislation, here in the U.S., the CLARITY Act did not advance this session. While clearer market structure legislation would help the entire industry, our strategy does not depend on it. Per reporting by Bloomberg, the SEC is expected to publish a so-called innovation exemption, potentially in the weeks ahead, which would provide some rules of the road for tokenized securities. We have advocated for this innovation exemption and would welcome this as great progress. We, and issuers, are hopeful that this announcement will include provisions that provide control to the issuer of the token issuance process. If indeed the SEC does provide a role for the issuer, we believe this will further cement the importance of the issuer-sponsored token and provide further validation that our acquisition of Equiniti was the right partnership at the right time.

Speaker 2

Practically speaking, this innovation exemption will prompt a dialogue among all of our issuer customers about tokenization on an accelerated timeline. Thank you again for your support over the last year. I will hand it to Dave.

Speaker 3

Thank you, Tom, and good morning, everyone. This morning, we published our second quarter 2026 financial results alongside the 6-K filed with the SEC as well as our earnings press release and investor presentation available on our IR website. As a reminder, reconciliations of our non-IFRS metrics are included in today's earnings presentation in 6-K. Now, turning to our second quarter adjusted financial results and KPIs as shown on page 14 of today's presentation. Total adjusted revenue was $92.6 million, essentially flat with the first quarter and up 62% year-over-year. Subscription, Services & Other revenue reached a record $62.7 million during the second quarter, and adjusted transaction revenue came in at $29.9 million. Adjusted operating expenses for the second quarter were $63.1 million, reflecting our previously provided guidance that 2Q would represent our peak level of quarterly adjusted operating expenses in 2026.

Speaker 3

Our increased operating expenses were driven by Consensus-related costs and approximately $2.5 million in one-time compensation expenses tied to our broader business transformation. This investment in our human capital included signing bonuses for incoming senior talent and retention and relocation bonuses for some of our existing leaders. These one-time compensation expenses will be offset in the second half of the year by efficiencies already realized in Q3 as we continue to optimize our spending across the entire cost base. Second quarter adjusted EBITDA was $29.5 million at an approximately 32% margin, and adjusted net income was $14.3 million after finance expense of $14.5 million. Turning to our balance sheet, as shown on page 17, we ended the quarter with net liquid assets of $2.1 billion.

Speaker 3

Looking forward for the remainder of the year, we have updated Bullish's 2026 full year guidance as shown on page 22, narrowing our previously provided guidance due to increased full year visibility. SSNO revenue is now expected to be between $225 million-$245 million. Based on our current outlook, we expect the second half SSNO revenue implied by our guidance will be split roughly 45% in the third quarter and 55% in the fourth quarter, with new partnerships already signed and coming online this quarter driving that expected sequential growth. Adjusted operating expenses are expected to be between $225 million-$230 million, roughly equally split between the third and fourth quarter. We continue to expect full year finance expenses of $52 million-$60 million. As a reminder, we do not guide on adjusted transaction revenue, and we encourage everyone to review our monthly trading metrics posted on our IR website.

Speaker 3

Finally, we are maintaining our full year 2026 financial outlook for Equiniti, as well as our medium-term combined outlook as previously discussed during our May announcement and first quarter earnings calls, and as covered on pages 26 and 27 of today's presentation. With that, I will turn it back to Tom for closing remarks.

Speaker 2

Thanks, Dave. Now we will open it up for Q&A.

Operator

Thank you. As a reminder, to ask a question, you will need to press star one one on your telephone. To remove yourself from the queue, you may press star one one again. You will be limited to one question and one follow-up to allow everyone the opportunity to participate. Please stand by while we compile the Q&A roster. Our first question comes from the line of Brian Bedell of Deutsche Bank. Your line is open, Brian.

Speaker 4

Great. Thanks. Good morning, guys. Thanks so much for-

Speaker 2

Hey, Brian.

Speaker 4

taking the questions. Hey, good morning. Maybe just to start on the tokenization theme for equities. Tom, maybe if you could just talk about how you see the two ecosystems evolving. When I say that, I mean the synthetic versus the actual. Clearly, your model's based on the actual, but we're seeing early progress certainly on the synthetic side. I guess the question would be, to what extent do you see those two forms of trading tokenized stocks coexisting in the future? Or do you think the share of tokenized versions will move really to the actual, your model?

Speaker 2

Hey, Brian, thanks so much. Great question, and it underscores the nature of the questions we're getting on tokenization. I remember just three months ago when we announced the deal, the questions were of the flavor, will tokenization ever happen? They've kind of moved to, how quickly will tokenization happen? Even, well, when it happens, how much will you win by? Which is great as we de-risk the thesis of the acquisition. To answer your question directly, I have no doubt that both models will survive and maybe even thrive. It's not dissimilar from the traditional equity markets today. Think the actual share versus an ETF, or the actual share versus an ADR, or even an actual share versus, in some cases, a fund structure or a derivative structure or a structured product. So too, in tokenized world, will you see evolve multiple different models.

Speaker 2

For example, the synthetic model may well be sufficient for a small offshore retail customer who does not understand credit risk, does not care to understand credit risk, is flipping in and out of a share at midnight time Turkey. An institutional New York, London, Hong Kong-based firm that manages customer money is certainly not going to hold some IOU or derivative that goes through a credit chain that involves, for example, multiple brokers. I suspect you will see both evolve. The issuers will insist upon it because only the issuer-sponsored token is the actual share, and only the issuer-sponsored token really offers a considerable benefit to the issuer themselves.

Speaker 4

Yep. That is great perspective. Then just my second follow-up question, on the revenue synergies on the trading side that you are seeing evolving, and then combined with the comments that you made about the traction with retail broker-dealers and in advancing derivatives crypto trading, to what extent do you see that enhancing your trading volumes coming into the second half? Of course, you do not guide to the trading volumes, but just trying to get a sense of the organic component of that in the second half and into 2027, potentially.

Speaker 3

Thanks, Brian. We do not expect a major uplift to transaction revenues during 2026 from tokenized equities, but we certainly expect that during 2027, that will be a contributor to our business. As Tom mentioned, we already trade securities today. Bullish stock is trading live on our own platform. We expect the number of stocks and issuers to come on platform with issuer-native tokens to increase throughout the back half of the year. We also believe that the development of additional regulated trading venues throughout the globe that will be trading tokenized stocks will help increase the broader liquidity profile of the asset class. We do expect in 2027 to see some benefits to our trading activities from tokenized stocks.

Speaker 2

Yeah, Brian, just to kind of reflect on this moment that we are in, we were on this call a year ago, or a year ago today was our IPO. If I can kind of frame that moment, Bitcoin was round numbers, $120,000. The market cap of digital assets was round about $4 trillion. Fast-forward to today, the price of Bitcoin is round about $60,000. The market cap of crypto is round numbers, $2 trillion. As you and we both know, in this industry, because it is still relatively nascent, as price goes, so goes volatility, so go trading volumes. We do not want to get on this call in mid-August and cheerlead for trading volumes, not having a clear crystal ball in terms of what will happen to prices and volatility throughout the year.

Speaker 2

What I will tell you is, you saw this in some of the comments in our prepared remarks, but you will continue to see it in the months and quarters ahead, we are doing everything to grow market share. We are doing well, we are winning, across the board, meaning if you look at the portfolio of products that we offer, adding new institutional customers, adding new partners, adding new regulated venues. As Dave just said, as of yesterday, for the very first time, we traded and are now able to trade tokenized securities. We are there ready to capture the growth when it ultimately comes back to digital assets. We do not want to overpromise because we do not know exactly what is going to happen. On the other hand, we do know that tokenized securities trading is going to be a huge wave.

Speaker 2

Again, it is a $270 trillion market, any small slice of that comes on board in the back half of 2026 and certainly 2027, that is an opportunity that ultimately, I am not saying immediately, but ultimately will dwarf the trading opportunity of true crypto assets and that $2 trillion market cap that I referenced at the outset.

Operator

Thank you. Our next question comes from the line of Joseph Vafi of Canaccord Genuity. Please go ahead, Joseph.

Speaker 5

Hey, guys. Good morning. Nice to see all the progress along the evolution here of market structure and the like. I wanted to drill down on potentially being able to open up the U.S. market for options and derivatives potentially a year earlier. If you could double-click on that comment, where that is coming from. Obviously, maybe the regulatory environment is favorable, but just a little more color there would be great.

Speaker 2

Yeah. I appreciate the question, and I'm kind of a closet derivatives regulation nerdler, so I appreciate the nuance here. I spent the formative part of my career managing futures exchanges and clearing houses, and there was kind of a path that was a quite painful path for getting access for certain marketplaces, and it involved the full approval of the full complement of a futures trading platform, a futures clearing house, as well as an FCM in order to access the U.S. market.

Speaker 2

But a new pathway has opened up where if you operate an adult compliant, responsible overseas platform, as we do, and have for many years, as you know, we're regulated by the toughest regulators on planet Earth, including the Germans at BaFin, and the Hong Kongers, and New York with the BitLicense, so on and so forth, that you're able to access the U.S. should you get the necessary approvals with an approved FCM, that's futures parlance for broker-dealer. So if you have an approved FCM, you can leverage that adult regulated overseas trading platform. So perhaps it was a lack of imagination on our part, or my part personally, but that new pathway, we believe, has become available.

Speaker 2

Should we go through the kind of right hoops and steps here over the next couple of months, we believe we'll be able to access, in an unfettered way, the U.S. markets for derivatives.

Speaker 5

That's great. Thanks for that color, and good luck with that, Tom Farley. Then kind of on a, I guess, a related note on the regulatory front, if you've got any additional comments on that, I guess, what was it, an innovation exemption or something like that, relative to tokenized equities and favoring the underlying versus the synthetic and what we might expect there, and market reaction, and issuer reaction to that kind of rule coming out of the SEC, I guess. Thanks.

Speaker 2

Sure. Yes, I will share a few breadcrumbs, but some of our conversations we will keep confidential just out of respect for our regulator in D.C. The CLARITY Act would provide a fair amount of certainty, but at a high level, the certainty that the CLARITY Act was providing was by and large around traditional crypto assets. In other words, you have coins that fall into a little bit of an ambiguous world that is part commodity, part security, and it gets difficult to figure out, in some cases, should I be working under the auspices of the CFTC or the SEC? In addition, imagine somebody holds a portfolio with something that is slightly more commodity and something that is slightly more security. Do the rules exist, and the laws exist where I can hold them in a single portfolio?

Speaker 2

That was the kind of thing that the CLARITY Act was really clearing up, along with some clarity, sorry to use that word, around DeFi, and what was and was not allowed in the DeFi world. What it was doing less of was providing a whole lot of certainty around tokenization. You might view that as a negative. I actually view it as a positive. The reason being, you do not really need a ton of certainty around tokenization. The market we are going after is the tokenization of the global securities market. You hear Dave and I talk about that all the time. That is the $270 trillion market. Well, good news, we have 100 years of legislation and regulation underpinning the global securities market. It is actually abundantly clear. Nonetheless, there are some elements of ambiguity.

Speaker 2

I applaud the SEC for saying, "Hey, look, we want there to be perfect clarity here because we are not going to engage in regulation by enforcement. We are not going to catch you with the rearview mirror when it was not abundantly clear exactly how you would approach this market." The SEC has set out to say, "Hey, we are going to provide this innovation exemption." The intent is to help this market develop with some, I will call it safe harbors. That may not be the right legal term. So that people like us, people like the issuers, broker-dealers, exchanges, would understand exactly how to go about tokenization. So that is kind of the backdrop of that. They are taking their time rolling it out. There were news reports this week that we could see it as soon as this week.

Speaker 2

I do not think we will see it this week. This is the kind of thing I would rather it come out and be good than come out and be quick. Now, to go to this core issue that you are talking about of issuer sponsored versus non-issuer sponsored. I do not know exactly what the text is going to say, so this is not inside information. But I do know there was a great hue and cry from the issuer industry around tokenization as it started to take hold around about four or five months ago. Look no further than our CFO sitting to our left to see a frustrated public market issuer, where all of a sudden your stock is so-called stock. It was not even your stock, but investors think they are holding your stock because they are holding your token on some platform you have never heard of. Meanwhile, it is not your stock.

Speaker 2

It is a derivative or some sort of warehouse receipt that may or may not be backed by your stock. When something goes wrong, all of a sudden you are getting calls from these investors, or their intermediaries, blaming you, even though you had nothing to do with it. It makes no sense. The issuers want control of this process. They want to be able to say, "Hey, if we are going to issue this thing, we want it to be our stock, not some derivative transaction. Or at minimum, you cannot use our name, or you cannot call it our stock. You need to do the appropriate disclosures around it." Just like the existing rules and legislation say. I think, and I am putting that in quotes because, look, I do not know this all with certainty.

Speaker 2

I think the SEC hears that, and I think the SEC wants to celebrate the role of the issuer. In other words, enshrine the role of the issuer. Just as a dollars and cents matter, that is great for us because at Equiniti, we have been having these conversations with issuers. I will just tell you, I would love to get on this call and tell you every issuer wants to tokenize tomorrow. There are some issuers who do not know what tokenization is. Good news. This innovation exemption, talking about the role of the issuer in the tokenization process, guess what that does? It provides a mandate for us to go and talk to every one of our issuer customers about tokenizing their shares, and we think has the possibility of accelerating the timeline for us to provide all sorts of tokenization services to this group of issuer customers.

Speaker 2

I want to say one thing, this is for my lawyers as much as anything. I am saying, "We, we, we, issuers." Please understand when I say that, I am talking about a pro forma world where we have successfully closed the Equiniti deal. As Mike said at the outset, there are of course, risks, and I just wanted to highlight that comment.

Operator

Thank you. Our next question comes from the line of Dan Fannon of Jefferies. Please go ahead, Dan.

Speaker 6

Thanks. Good morning. Tom, you talked about a lot of momentum in terms of new firms signing up for crypto trading, I think both mainly on the spot side. Can you talk about the backdrop of, or I should say, the backlog of firms that you are in conversations with, and how to think about the evolution of both spot trading adoption from an institutional perspective as well as derivative trading?

Speaker 2

Sure. I'll let Dave chime in as well, Dan. Look, because I'm an optimist, I'll start with the positive. Pipeline's as large as it's ever been, and it continues to include more and more institutional names as time passes. The logos that we're adding are among the most credible that we've ever added in our company's history. The benefit of adding a credible logo, perhaps obvious, these are durable companies that don't change their mind about their strategies on a quarterly or semi-annual basis. All of that is great. I feel really good about consolidating market share. Take a step back, Dan. I would argue we are among the very, very top. I won't put a number on it, but among the very, very top exchanges when it comes to credibility. We can walk into the German regulator, and we can get approval.

Speaker 2

We can walk into the New York State regulator, look them across the table and get full papal blessing to operate in their locale. You can just look around and you can see there are very few like that, and that's why we win institutions. We have great liquidity at a low cost. We have a feature-rich platform. We're known for running a reliable platform that's highly compliant and super credible. All of that's great. I'm not going to mince words. Crypto is a lousy environment for trading right now, Dan. I don't think that the CLARITY Act not passing this session is helpful. I'd love to be able to tell you, "Oh, it doesn't matter at all." I think around the trading of pure crypto assets, so think Bitcoin, I'll call that a pure crypto asset, some of these layer one blockchains.

Speaker 2

I was looking forward to the CLARITY Act because I do think there's another wave of institutions that would've rolled in. Some of the obvious guys, some of you on the call work for them, that still don't hold Bitcoin, let's say, for private wealth clients here in the U.S. So, feel really good about the pipeline. We continue to build features and regulatory approvals and build out our jurisdictional footprint all around the world. I'm responding to how you framed the question, and now I'm kind of pivoting to tell you I'm even more excited about the trading of tokenized securities on this mousetrap that we built. It may well turn out to be that that was the giant growth opportunity that none of us saw coming, as opposed to the traditional crypto assets.

Speaker 6

Thank you. That is helpful, and appreciate the clarity there. Then just in the context of SSNO, obviously took the guidance up. The momentum in that side of the business actually seems quite good. Maybe Dave unpack a little bit of what is happening versus what you thought at the beginning of the year when you initially gave the guidance and kind of where things sit today.

Speaker 3

Yeah. Thanks, Dan. To be clear, we have maintained the midpoint of the guide. We have just narrowed it here today. But given the environment we have seen over the last 6, 9, 12 months, where Bitcoin has been down 50%, alts down 50%-75%, interest rates from a year ago down almost 20%, we are extremely pleased with the resiliency of our SSNO line item. Tom touched on it a little bit, and there is a slide in the deck. We continue to use the Consensus event as an acquisition channel and also as a cross-sell vehicle to create stickier and stickier revenue. Over half of our Consensus sponsorship revenue came from customers with multiple different products. We are beginning to see renewed momentum in our pipeline of SSNO, particularly around tokenization. It is not just because of the Equiniti transaction. In general, that is becoming the fastest-growing part of the crypto marketplace.

Speaker 3

It is just a bigger TAM. We are excited about this new position of our business and the new developments in the market, and we think the business we have built is perfectly positioned to ride those tailwinds across all of our different line items, but especially in SS&O and liquidity services.

Operator

Thank you. Our next question comes from the line of Pete Christensen of Citi. Please go ahead, Pete.

Speaker 7

Thank you. Good morning, Tom and Dave. Question on capturing economics, tokenized equities. I guess when you think about the issuer-sponsored model, is the objective here for the shares to trade primarily on Bullish, or do you envision the token, I guess, being interoperable across multiple chains, venues, with Equiniti serving as the authoritative registry? I guess in this open architecture kind of framework, where do you expect Bullish to capture the majority of economics?

Speaker 2

Yeah, great question. There's really kind of two insightful embedded questions in what you're asking, Pete. One is kind of walled garden versus interoperable, and the second is around the economic model. If you don't mind, I'll dissect it in that fashion. Let me just start with walled garden versus interoperable. We are absolutely building our token to be interoperable. In fact, on October 27th, we'll give you some more information, and in the months and quarters ahead. As I said earlier, we'll drop a few breadcrumbs, but not revealing the whole strategy. We're very much engaged with trading venues, regulated trading venues, less regulated trading venues, traditional crypto venues, TradFi firms, about the interoperability of issuer-sponsored tokens with those platforms, number one. Number two, I even see that interoperability working with so-called CSDs, central securities depositories, in the jurisdictions that we operate.

Speaker 2

In the U.S., the most notable is DTCC or NSCC, but same thing abroad. One of the models that works well for those central securities depositories is they'll hold the actual share for safekeeping, and they'll issue a synthetic token on top of that. Sometimes you may have heard that referred to as an entitlement. It wouldn't surprise me at all to see that model really stay in place in various forms, in various locales, and they'll just hold the issuer-sponsored token as opposed to the old school, less beneficial book entry share. In addition, with respect to layer one blockchains, I don't think in the early days you will see a single blockchain gain 90-plus percent market share.

Speaker 2

I think in the early days, there's going to be a thousand flowers that bloom, and then there's going to be a consolidation as the market kind of realizes what is the best blockchain or two to support the issuer-sponsored token. That's how we're looking at that as well. In terms of the economic model, Pete, and I'll let Dave chime in. We offer the following services for tokenization, and apologies for giving you an exhaustive list, but I really just want to give you a sense of the areas that we can provide value, and we can charge for that value because customers will appreciate it. Number one, we can sit down with the customer and discuss exactly what they want their token to look like.

Speaker 2

Number 2, we can actually generate that token using our tokenization factory, the kind of thing we have been doing now for the life of our company, and one of the ways we helped this tokenized cash or stablecoin market come to life. Number 3, we can list it on our own regulated venue. Number 4, we can provide liquidity on our venue or other venues. Those could be regulated venues, they could be DeFi venues. Number 5, we can provide visibility for that token via our CoinDesk portfolio of assets, like think Consensys or the coindesk.com site itself. Number 6, we can be a transfer agent, as we are today. Today, the transfer agent actually earns a quite low fee on a per customer basis. This new service is clearly a value-added service. So quick query what that will look like.

Speaker 2

Finally, number 7, we have a set that I will put in kind of a group of other, but really does not deserve to be in the other bucket. We have a meaningful newswire business, GlobeNewswire, in the combined company. We have investor tools that we provide through Notified and Equiniti. All of these are the sorts of things that a CFO is going to be thirsty for as their stock goes tokenized. They are going to need to understand it. They are going to need to understand who is trading it, why they are trading it, who are the holders, how can they reward those holders. Some of these consumer goods companies are going to want to reward their holders, not just with dividends and greater voting rights, perhaps, for their loyalty, but maybe even discounts or tickets or award points or frequent flyer miles or what have you.

Speaker 2

The number of things that we have in our quiver to provide the tokenization and charge for are many. Therefore, for me to give you kind of an exhaustive answer on the exact economics is a bit difficult.

Speaker 3

Yeah, Pete, I think I would frame it for you this way. Our focus is going to be on the issuer and the success of every issuer customer in delivering great value for money to that customer via tokenizing their stock and other services. We do expect the Bullish exchange to be a beneficiary of our success and our issuer success. We do expect liquidity services to be a core product for us going forward. But the focus is on the issuers first, and we believe the transaction revenue will follow.

Speaker 7

That's really helpful. I do want to ask, though, about some of the carve-outs from the Equiniti deal, particularly like retirement solutions and customer resolutions, those sorts of things. I know those are faster-growing parts of Equiniti's competitor. I'm just curious, does that create a client retention issue by separating those components of the deal?

Speaker 3

No, Pete, those are largely independent businesses from the issuers too, the resolution business and the pension business, and they are not related to tokenization and issuer success. Again, that is what we're focused on, is issuer success. We're happy to part with those assets. We don't believe they're going to fit our growth profile going forward or margin profile, again, distinct from our tokenization and issuer-centric focus, and so we're happy to not be taking those assets with us.

Speaker 2

Just to give you an example, Pete, one of those businesses is a business that sets up temporary call centers during a crisis. So go back to my childhood, Gerber baby food, it comes out, there's glass in the baby food, and all of a sudden they're getting 1 million calls a day. This company shows up and sets up a call center, and deals with that influx of very angry customers. Interesting business, entirely unrelated to what we're building here. So no, the short answer is no. Appreciate the thrust of the question, but I want to say completely unrelated. There may be some tether that I'm forgetting, so I'll hedge and say, almost entirely unrelated at a minimum.

Operator

Thank you. Our next question comes from the line of Ken Worthington of JPMorgan. Your line is open, Ken.

Speaker 8

Hi, good morning, and thanks for taking the question. I know you do not break it out, but maybe you can help us directionally, on what happened to liquidity services revenue in 2Q relative to 1Q. Did it shrink? Did it grow? Was it largely unchanged from last quarter? Are there any puts and takes to call out in this quarter?

Speaker 3

Thanks for the question, Ken. We do not give that level of detail, as you will know. I would say in general, liquidity services in the second quarter was again resilient. There were definitely headwinds versus the first quarter with overall lower prices in the environment. We had new bookings during the quarter, but not as many as we are experiencing today. So ex Consensus, we are happy with the stability of liquidity services and the SS&O revenue excluding Consensus during the second quarter. It was broadly in line with the underlying business previously in the first quarter. A couple of different puts and takes, but steady and we are proud of that resilience that we displayed in the second quarter and what we are going to do in the second half.

Speaker 8

Okay, thank you. Maybe bigger picture, David, you and I have talked about this a bunch, but can you talk to what is happening with dematerialisation in the U.K. and the potential impact on Equiniti's U.K. profit if the business moves away from shareholder accounts to more omnibus structures? How does that impact the number and types of services offered by Equiniti, and how does that impact revenue? Just talk about timeframes here for dematerialisation.

Speaker 3

Yeah, thanks, Ken. Taking a step back, dematerialisation, and this became really clear in the July report from the Dematerialisation Taskforce that was published mid-July of this year. It is simply the process for the removal of paper shares from the U.K. market. Says so on the cover of the report. Furthermore, the report begins and ends with the acknowledgement that tokenization should be developed not just in parallel, but is likely to come before any of these further steps that had previously been contemplated by the Dematerialisation Taskforce, such as the so-called step 3, which is the intermediate model. Even in that world, we believe Equiniti is a beneficiary of this process to remove paper shares from the market. We have a broker-dealer. Some of our competitors do not.

Speaker 3

We believe there will be customers who are going to be up for grabs, and we'll be well-positioned to get those customers in the future. The removal of paper shares is currently scheduled for the end of next year. As we've put, there's a page in the appendices of the deck. Only less than 2% of Equiniti revenue is directly related to paper certificates and mail revenue. It's de minimis to their financial profile, even more de minimis to the combined financial profile, and we believe the convergence of tokenization and dematerialization is a tailwind to Equiniti that will more than offset that less than 2% revenue exposure that we have today.

Speaker 2

I'm glad you asked this question, Ken. As you would imagine, we diligenced their businesses on both sides of the pond because they really have a nexus of business in the U.S., a nexus of business in the U.K. Dematerialization, the big piece of legislation in the U.S. was the CLARITY Act. A big piece of legislation in the U.K. was this kind of dematerialization piece that you brought up. The net of our diligence is that it was kind of puts and takes where the transfer agent would have a tail of customers that it would have to really hold onto. On the flip side, it was pushing hard towards broker-dealer activity, and we're the only guys that have a captive broker-dealer, and a really well-run broker-dealer.

Speaker 2

We kind of looked at it as, okay, there's puts and takes, probably a net neutral to the business or something of that ilk. They have since come out and said, I just want to reiterate what Dave said, "Hey, tokenization kind of obviates this whole conversation, and we really should pivot to exactly how tokenization is going to work." That's where, as you know, we've repositioned our entire business as of early May of this year. Now, undoubtedly, we see this entire thing as a big opportunity for us. Similar to potentially this innovation exemption, accelerating conversations that may have otherwise taken place, let's say, in the back half of 2027 to a much earlier timeframe.

Speaker 2

So too, does this dematerialization/tokenization conversation in the U.K. accelerate those conversations and give us a mandate and an open door to go in and talk to customers, educate them, work with them, be their consigliere as they move to a tokenized world?

Operator

Our next question comes from the line of Owen Lau of Clear Street. Your line is open, Owen.

Speaker 9

Good morning. Thank you for taking my question. I hear that you are going to have a tokenization showcase in October, and you may be limited to what you can say. But could you please give us an update on the pipeline of the issuers wanting to tokenize their shares, profile of these companies? What are they excited about, the tokenization opportunity? And maybe talk about what you expect to get out from this event in October. Thank you.

Speaker 2

Owen, thanks a lot. It is good to hear from you again. If I can just start with some contextual comments. We announced the Equiniti acquisition in May. As you would imagine, we are deep in planning the actual integration post-close. We are actually collaborating with the company on various and sundry solutions, including around tokenization. In fact, we bought this beautiful old antique home up on a hill in Newport at the corner of Main and Main. We knew we would go in, and it would have beautiful millwork and old-growth timber, but it was a fixer-upper. And we knew that going in. We just did not know exactly what we would find when we got in the inside. And what we are finding is that there are a lot of upside. To continue the metaphor, there are a lot of rooms that have been renovated.

Speaker 2

There are great managers and leaders there that I am learning from every day. But perhaps the most exciting part of it is the direct relationship with the issuer, where they pick up the phone, and it is the quality of the issuer list, and relationships that Equiniti have that are even deeper than we expected, and we knew that they had high-quality relationships. So the issuer pipeline, in terms of those sort of conversations in the process there, is filling up. Still early days. We will have more opportunities this quarter than we did in Q2, and we will have more opportunities in Q4. If I reflect on it and kind of have to handicap it feels more like, yes, there is going to be activity here in the latter half of 2026, and then this is a 2027 in earnest growth trajectory, in part because the ecosystem needs to develop.

Speaker 2

For example, the trading solutions for trading of these tokens are nascent. You heard Dave say, and I said in my opening remarks, we just started trading tokenized securities literally yesterday. We feel great about the pipeline, a little bit less certain about the timeline, but you will learn a lot more about that on October 27th. With respect to October 27th, we want you to have a more holistic perspective of this ecosystem. So it is not just about issuers, although they are important. It is about other partners. For example, layer ones, the layer twos, the blockchains are chomping at the bit to be the blockchains that these issuers choose to tokenize their product. As I said in my comments, there is $37 billion of tokenized assets. To be clear, that is a rounding error.

Speaker 2

We have companies that we are talking to about tokenization that would be a multiple of that $37 billion. So you can imagine if you are a layer one. Also broker-dealers who want to make sure they too are part of this solution, and they are offering services to their customers. Then finally, you gave a lot for us to answer there, so apologies if this is long-winded, but I wanted to get to everything you asked in your question. In terms of why the issuers are interested, the answer to that is turning out to be more multivariate than we expected. I will give you an example. When we talk to consumer goods companies, they are very eager to have a direct relationship with their customers. Anything we can provide to them through this tokenization process that gives them more of a direct relationship from their customers.

Speaker 2

They can learn from their customers. They can reward their customers. Like I said in my prepared remarks, the ability to provide, I do not know, frequent flyer miles or hotel points or a discount on a subscription, or even just a thank you for their shareholding. That sort of thing is very appealing. Then depending on the company, being able to provide accelerated dividends for longer-term, more loyal holders or additional voting rights or the 24 by 7 trading. So it is not a one-size-fits-all, but there is a number of things that we are hearing.

Speaker 9

Got it. That is super helpful. Then, my follow-up on a modeling question. Your second quarter adjusted OpEx seems a little bit higher than expected, but you only raised the low end of your full-year OpEx guidance a bit. So the implied second half expense runway was much lower. So on a Bullish standalone basis, it is the second half runway, a good exit way for us to think about going into 2027. Is there any Equiniti-related investment we should be aware of for later this year? Thank you.

Speaker 3

Thanks, Owen. I appreciate the question. I will take that one. As I mentioned in my prepared remarks, the second quarter featured higher expenses than we expect from any other quarter this year. That is in part driven by variable expenses associated with our Consensus Miami event, as well as the $2.5 million of one-time compensation expenses that I detailed related to our broader business transformation.

Speaker 3

Signing bonuses for new hires, retention, and relocation bonuses for certain existing key executives. We maintain a very tight grip on the costs. We have already realized additional synergies and further headcount reductions in the third quarter to keep us in line with that guide. I would not say that the back half of the year is representative of the run rate for 2027, because that would be excluding the variable Consensus-related expenses we have in the first and second quarter. We expect that that baseline in the second half of the year, which excludes the Consensus-related events, is roughly good. We will probably expand over time as we invest in the platform. We intend to hit our guidance there, and we maintain a tight cost control.

Speaker 3

The second quarter, as I mentioned, was definitely a bit anomalous with regard to the wages and compensation expenses with that additional $2.5 million that will not recur, and be offset in the back half of the year by those synergies we have already realized.

Operator

Thank you. Ladies and gentlemen, due to the time, we ask that you limit yourself to one question. Our next question comes from the line of Edward Engel of Compass Point. Your line is open, Ed.

Speaker 10

Hi, thanks for taking my question. As you think about competing with some of these synthetic issuers, is there anything you can do to kind of jumpstart distribution of your issuer-sponsored shares? I saw you mention the onboarding of market makers like Wintermute, so just kind of wondering how you're thinking about solving the cold start problem relative to the synthetic assets, which kind of already achieved pretty strong distribution pretty quickly. Thanks.

Speaker 2

Yeah, no, great question. That's why we did the Equiniti acquisition, is we have 3,000 issuers that we can go to with a product out of the box. At the same time, the issuer is in control. This isn't the kind of thing where all 3,000 will start on the same day. But the difference between us and our more durable model and the synthetic model is once you've created it's there forever, as long as that company is a public company. It's not the kind of thing that can just turn around and disappear the next day, or you put it in the hands of an investor, and they think they're getting IPO proceeds, and they get none, which you probably read about in the press. So we don't think it's a cold start problem. We actually think it'll be an accelerated start.

Speaker 2

But it's not an every single thing happens at once, as some of the other models may be, which I suspect will prove to be far less durable.

Operator

Thank you. Our next question comes from the line of Rayna Kumar of Oppenheimer & Co.. Please go ahead, Raina.

Speaker 11

This is Guru on for Raina, and thanks a lot for taking our question. A lot of the questions have already been asked, but if I can maybe switch to certain other aspects of the business. Most of the conversation pertaining to CoinDesk, right, over the past few quarters has revolved almost exclusively around some of the nice wins on the indices and data side, and of course, on Consensus events. If you can narrow in on the CoinDesk media segment, maybe comment on your outlook for this media portion of your business, excluding events, right? Metrics on slide 14 highlight some strong growth. You called out 38%. Wondering if this will primarily remain focused on supporting broader ecosystem through visibility, cross-selling, or if it could grow into a meaningful standalone piece as well. Thank you.

Speaker 3

Thanks for the question. We are happy with the recent success in our viewer counts at CoinDesk. That is certainly true. Those have improved dramatically, thanks to the new leadership from JRO that we brought into the building late last year. We are currently not monetizing, per se, all those extra eyeballs through banner ads or things of that nature. We want to keep the website premium. It is directed mainly at the benefit of our existing issuers and partners in broadening our reach. We are happy and pleased with that business and the resumed growth it has achieved in views, and we expect it to be a beneficiary of our broader business transformation towards tokenization writ large.

Speaker 2

There are days when the market share of that business is actually a majority of crypto media, a majority. There are lots and lots of competitors. We have carved out this role at the intersection of technology and finance. That is something we are going to be able to grow for years to come. As Dave said, it is very helpful for us, on occasion, to be able to use that asset for, say, for example, advertising purposes for other opportunities that we have under the Bullish umbrella.

Operator

Thank you. Our next question comes from the line of Nathan Frankovitz of Cantor Fitzgerald. Your question, please, Nathan.

Speaker 12

Hey, good morning, guys. Thanks for taking my question. Tom, on your comment that $5 trillion in tokenized equities by 2030 might be a bit conservative, can you just kind of walk through what factors do you think might most influence whether that number plays out above or below that estimate? As a follow-up, do you have any thoughts on how that $5 trillion plus could be distributed between blockchains? Such as any L1s or categories in particular, or newer, more permissioned ones like Canton? Thank you.

Speaker 2

Yeah, really good question. Citi's on this call, so I will start by saying the analysis is excellent. I am just more anecdotal, and I want to say that right up front. I had a conversation on Tuesday with the CEO of a $70 billion company about them tokenizing their stock. I am just looking at it, I am saying, "Okay, it is $37 billion today." I just had a conversation, a real conversation, with a real CEO of a $70 billion company about them tokenizing their stock. It does not take a lot of math to math more than $5 trillion, $6 trillion by the year 2030. I actually see a world where it kind of starts slowly, almost a trickle, and then we have a catalytic event. Either the wave accelerates or there is a one-time event. A big IPO only does a tokenized offering.

Speaker 2

Once you have that, all the institutions are holding the tokenized assets, the broker-dealers are holding the tokenized assets, and you flip the U.S. or the U.K. equity markets onto public blockchains, perhaps alongside traditional shares for a period of time, could be years, could be a decade. But right there, you have just blown through $5 trillion, $6 trillion in terms of tokenized assets. So admittedly, I am coming at it more anecdotally than quantitative. Almost top-down based on these experiences that we are having. But like I said in May, the question was, "Oh, geez, is tokenization going to happen?" If I am honest, we had that question too internally. Look, good teams fight. We spent $4.2 billion for this business. You think we do not look at the glass half full and the glass half empty? We do. We ask that question.

Speaker 2

I can tell you, we have not asked that question in six weeks. The horse is out of the barn. It is just a question of how quickly is it going to happen, and to what extent are we going to be a leader? In terms of the public blockchains who are going to be the ultimate winners out of this, I do not have a clear crystal ball. I think the most decentralized are working on privacy solutions. The least decentralized that have privacy solutions are looking at how can we do a better job of decentralizing. It is going to be whichever of those blockchains meets the moment and meets those customer needs are ultimately going to be the big winners, and we are open to that being many. We are open to that being several, and that is fine with us.

Operator

Thank you. I would now like to turn the conference back to Tom Farley for closing remarks. Sir?

Speaker 3

Hi, everyone. It's Dave. Tom had to jump to a customer call here. Thank you everyone for attending this morning's call. We look forward to staying in touch with all of you on this journey as we build out the future of financial infrastructure. Please reach out to our IR team with any follow-up questions, and we look forward to seeing everyone next quarter.

Operator

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

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