Gemini Space Station (NASDAQ:GEMI) shares rose about 5% on Friday after the company reported first quarter financial results that came in ahead of Wall Street expectations, alongside a new strategic investment that underscored continued expansion beyond core crypto trading.
The company reported a net loss of $0.93 per share for the quarter ended March 31, compared with analyst expectations of a $1.07 per-share loss.
Revenue was up 42% year-ovre-year at $50.3 million, above consensus estimates of $49.48 million.
Revenue growth was driven primarily by expansion in services and interest income, which rose 122% year over year to $24.5 million and accounted for 49% of total revenue. Credit card revenue also increased sharply, rising nearly 300% year over year to $14.7 million as the company reported growth in new cardholders and higher receivables.
Transaction revenue held relatively steady at $24.1 million, while exchange revenue fell 27% year over year amid lower trading volumes.
OTC revenue rose to $6.3 million from $0.1 million a year earlier, reflecting increased institutional activity.
Prediction markets revenue contributed $0.4 million in its first full quarter since launch.
Operating expenses rose 73% year over year to $144.5 million, driven by higher compensation, marketing, and credit card-related costs.
Net loss narrowed to $109.0 million from $149.3 million a year earlier, while adjusted EBITDA improved slightly to a loss of $59.9 million.
Gemini ended the quarter with $215.6 million in cash and cash equivalents and reported 589,000 monthly transacting users, up 17% year over year.
Assets on platform totaled $11.1 billion, down from a year earlier due to lower crypto asset valuations.
Gemini also announced a $100 million strategic investment from Winklevoss Capital Fund, completed at $14 per share of Class A common stock, with proceeds paid in bitcoin.
The company said the investment supports its broader strategy of evolving from a crypto trading platform into a wider “markets company,” following several product launches and regulatory milestones during the year.
“We believe the market has significantly undervalued Gemini, and that this investment will allow us to set up the company for its next phase of growth,” Gemini CEO Tyler Winklevoss said in a statement.
“Gemini has achieved several major product and regulatory milestones that position us well to evolve from a crypto company into a markets company. This investment will help fuel that ambition and set Gemini up for long-term success.”