Exodus Movement (EXOD) Q2 2026 earnings call transcript

Hi everyone, welcome to Exodus second quarter 2026 earnings call. I'm your host Ben Marcos, and with us today are Exodus co-founder and CEO JP Richardson, Motivate CEO Michael Rolf, and CFO James Gronetzky. During today's call, we might make forward-looking statements. The company cautions investors that any forward-looking statement involves risk and internities and is is not a guarantee of future performance. Actual results may vary materially from those expressed or implied due to a variety of factors described in our earnings release, Form 10K, and other SEC filings. We undertake no obligation to update forward-looking statements. As always, we encourage investors to submit questions through X or Reddit following today's call. Today's call is our first opportunity to report on the combined Exodus and Motivate organization.

JP will begin with a strategic transformation underway at Exodus. Michael will explain the payments platform and combined market opportunity, and James will review the quarter's financial performance and the steps we're taking to build a more durable financial model.

With that, let's go to you, JP.

Thanks, Ben, and thank you everyone for joining us. If there's one takeaway from today's call, it's this. Exodus is becoming a payments company, and this quarter, the transformation moved from plan to execution. Over the last few months, Exodus began to execute on the strategy we've presented to you in past calls, Turning our company from one of the industry's leading self-custodial wallets to a diversified financial services platform built to help individuals and businesses manage and move money. Everything we'll discuss today builds on that theme.

During the second quarter, we completed the most strategic acquisition in our company's history throughout the purchase of Montevate and banks. We spent the second quarter focused on integrating the businesses and creating a new combined organization that is optimized around the payments business. This is a strategic transformation. Again, we are becoming a payments company. We are fundamentally expanding our infrastructure and our enterprise capabilities to be a payments provider and full-service fintech solution. Monovate opens the door to a new enterprise payments market with associated revenue streams that are largely independent of the crypto markets.

So Exodus gains capabilities to tap into and potentially monetize many billions of dollars of self-custodial wallets currently held by our users. Finally, the combination of our core wallet and Monovate's payment infrastructure enables us to build novel solutions for new markets, most notably, agentic payments.

Our product roadmap is built around one goal, make Exodus more useful in our customers' financial lives and earn a stronger economic relationship with them over time. As a part of this transformation, we've made some fundamental changes to align with our long-term payment strategy and position Exodus for future profitability.

A few weeks ago, I had to make the difficult decision to reduce the size of our team by approximately 25%. And we expect $10 to $13 million in annualized operating expense savings with a full monthly run rate in place in the fourth quarter of this year. I want to say I'm deeply grateful to everyone affected. They helped build this company and create a product that millions of people use to self-custody their digital assets.

But as I looked ahead, I realized that our team was organized around who we were and not where we are headed. As you're going to hear from Michael in a bit, we are working closely with Monovate to bring our businesses together and create a new company purpose-built for the opportunities ahead.

This quarter, we faced costs associated with business transformation. Revenue was $26 million, the net loss of $19 million. Two key headlines about our financials. First, on revenue. Our revenue has remained relatively consistent over the past six months. This is despite the continued weakness in the crypto market and the incredible amount of time spent acquiring and integrating Monovate into Exodus. I am confident that our platform of direct users and enterprise partners is stable. It is the foundation for growth ahead.

Second, our net loss largely reflects the one-time operational expenses connected with combining the organizations. Looking forward, I believe our revised operating platform can support our growth plans without an associated increase in cost structure. Shortly, James will take you through this in more detail.

Now I want to take a few minutes to orient you on the road ahead for Exodus. Exus. Historically, we have been known as a self-custodial wallet company. We are modeled on wallet metrics viewed as a place to hold and manage digital assets. And that made sense, because it's the company we originally built. Our customers trusted Exus to manage their assets, but our platform was limited. This is changing. Excess Pay is a first example, moving beyond holding assets into everyday money movement.

And the Monovate acquisition gives us the infrastructure to take that much further. These efforts are directed at our core base of 1.4 million active users with the goal of deepening our financial relationship with them. And while we are actively exploring ways to build our customer base, such as partnerships with UOC and DirecTV, our greatest near-term opportunity is with our existing users who already trust our platform.

For Monovate, whose existing business is built around supporting both traditional commercial enterprises and on-chain finance clients, we see a significant opportunity for growth. Before they can be achieved, we are focused on strengthening Monovate's payments infrastructure and restoring capabilities that have been constrained for the past year. Specifically Monovate inability to issue new cards for new clients in Europe This issue was known at the time of our purchase It was a principal reason we were able to make this acquisition at such a favorable price relative to substantially higher valuations seen in other transactions such as RAIN REAP and BRIDGE We always believed we could solve the issue, and the improvements we're making today operationalized the same capabilities we saw as significant untapped value when we acquired the business.

I will let Michael from Montevate provide some additional details, but I'm pleased to say we've made meaningful progress over the past couple months, and we are on track to establish a new issuing arrangement during the fourth quarter. At the same time, we're also transitioning to a new domestic banking partner in the United States, which will accelerate our domestic capabilities to support interest in excess pay and enterprise payment clients.

Excess pay growth is gated on the same issuance fixes, which is why we are holding off from reporting adoption metrics until the product is fully available. Together, these initiatives represent an important milestone in unlocking Monovate's full potential and position the business to contribute much more meaningfully as we move forward. One final point before I hand over to Michael. I've used the term Monovate throughout my remarks. When we say Monovate, we mean the combined teams, businesses, and relationships from both the Monovate and Banks acquisitions. The bank's brand is being retired. Its team and technology are folding into Montevate, and Montevate is our payments business going forward. Michael, over to you.

Thanks, JP. I'm pleased to be joining my first earnings call as part of Exodus. Over the past several months, I've spent considerable time with JP, James, and the broader leadership team. What stands out is the alignment around a clear long-term vision, building infrastructure that bridges traditional financial services to on-chain finance, powering instant, borderless, and programmable movement of value for the world.

Stablecoins are accelerating the modernization of financial services. With near real-time settlement, continuous availability, and borderless interoperability, they are improving how value moves across remittance, global payments, and tokenized assets. Combined with the coming revolution of commerce due to the proliferation of agentic payments use cases, both consumers and enterprises increasingly expect financial products to operate seamlessly across fiat and on-chain environments. That shift is driving demand for regulated infrastructure that enables these experiences to be delivered securely, efficiently, and at scale.

That is precisely where Monovate is positioned. For those left familiar, Monovate provides regulated payments infrastructure that enables enterprises to launch and operate modern payment programs. Our platform includes card issuing, processing, settlement, bin sponsorship, stablecoin settlement, compliance oversight, and multi-jurisdictional operational support, allowing clients to move money safely and efficiently. As JP noted, we experienced a regulatory setback in Europe in late 2025 following a Bank of Lithuania inspection of Manavate UAB. While Monovate UAB was not part of the Exodus transaction, it is important context. The outcome required is to tighten controls, pause new program onboarding in Europe, and offboard a limited number of programs while enhancements were implemented. Importantly, Monovate UAB has continued to service the majority of its existing customers throughout this period as we continue our work on the remediation.

Europe remains a key strategic market, and in July 2026, Exodus assumed W3C's rights and obligations under its existing agreement to acquire TIGSI Pay, subject to regulatory approval by the Bank of Latvia. As a result, Exodus is positioned to acquire TIGSI Pay, which holds the licenses required to help resume scaled business development across Europe, and we view this as an important step in restoring and expanding our regional presence.

As of the end of Q2, Manavate supports approximately 40 active enterprise customers. Since inception, we have issued more than 6 million cards and processed over $8.5 billion in transactions. Year to date, we have processed over $1.8 billion in gross transaction volume across more than 50 countries, supported by approximately 1.4 million active cards. Our customer base spans fintech, payroll, insurance, logistics, and on-chain businesses.

Excluding the impact of one large concentrated client, transaction volumes grew by over 50% in the first half of 2026 compared to the prior year. I will return to that client in a moment.

The strategic rationale for Exodus' acquisition of Monovate is straightforward. We provide the infrastructure layer for moving money. Our customers include CreaCard, MarTrust, ShipMoney, Byplayer, OKEx, Kraken, and Gnosis, to name a few, who span both traditional payment use cases and the digital asset ecosystems. Equally important is what Exodus enables for Monovate. Our enterprise clients now gain access to Exodus' capability in self-custody and digital asset infrastructure, creating meaningful opportunities for cross-sell and the development of integrated end-to-end solutions that bridge fiat and crypto. So, integration is progressing well. Our priorities remain clear, maintaining uninterrupted service for customers, advancing technology integration, and executing on commercial synergies.

Finally, on the large enterprise client referenced earlier, we supported a fintech in scaling what became a successful buy now, pay later platform in the UK. As they matured, they transitioned card processing in-house. They remain a client today, albeit at reduced volume, however, with potential to expand the relationship into new product categories over time. While this impacts concentration, it also demonstrates our ability to incubate and scale high-growth programs.

Importantly, our business today is well diversified and not dependent on any single customer. With that, I'll hand over to James to walk through the financials.

James C. Thanks, Michael. The second quarter represented the first quarter operating as a combined organization following the acquisition of Montevate and Banks. As Sophie and Michael discussed, this transaction fundamentally expands our strategic opportunity. From a financial perspective, however, acquisitions of this scale require a transition period as organizations integrate systems, align operations, I going to turn the call over to management for the Exodus Movement second how we positioning the combined company to generate stronger and more diverse financial performance over the coming years Revenue reported for the quarter totaled $26.2 million, and a net loss of $18.6 million.

Revenue was split approximately $21.2 million from Exodus and $5 million from Montevideo. On a non-GAAP basis, our total revenue for the quarter would be slightly higher, around $29 million. However, our reported results reflect Exodus' ownership of Montevideo only for May and June. The non-GAAP total would be in line with the pro forma Q1 2026 combined revenue we published in July.

For Exodus, both monthly active users and quarterly swap volume held generally constant from Q1 to Q2, at $1.4 million and $1.13 billion, respectively.

Our swap volume is down year over year, but not inconsistent with continued price pressure we are seeing across the broader cryptocurrency market. Our other programs are relatively new and continue to scale. Once fully launched, we look to report adoption usage metrics along the lines of our swap volume. As Michael mentioned, Monovate has processed $1.8 billion in gross transaction volume year to date, with Q2 accounting for approximately $900 million. On a normalized basis, this represents a 60% quarter over quarter increase across Monovate's core client base. Moving down to P&O, we had a net loss of $18.6 million and an EBITDA loss of $21.5 million.

Both numbers reflect activities connected with combining two companies and accounting for acquisition-related expenses, technology integration, and restructuring costs. As such, we view these as transitional rather than structural, so we've also produced an adjusted EBITDA to highlight the strength of the core operating business. For the quarter, our adjusted EBITDA is a loss of $6.7 million, with the primary adjustments coming from transaction expenses and unrealized gains on digital holdings.

Looking at the balance of the year, our operating budget will begin to reflect the organizational changes we announced last month. And with that, I'll turn it back to JP.

Thanks, James. Q2 marked the beginning of our transformation, not as completion. From here, we have three priorities. First, complete the integration of Exodus and Movement while maintaining the service and trust our customers expect.

Second, complete the operational and process improvements that Monovate to reactivate their global capabilities. And third, convert our more diversified revenue base and leaner cost structure into sustainable profitability and positive cash generation. We are not moving away from what made Exodus successful. We are building on it. The trust, technology, and direct customer relationships established through the Exodus wallet are now the foundation for a much broader financial platform.

One that can power financial experiences for customers, businesses, and AI agents. We understand that investors will judge us on execution. Our responsibility is to demonstrate progress consistently in our products, our operating performance, and ultimately in our financial results. With these changes, we also believe we have the potential to fundamentally change how investors think about Exodus.

Historically, we've been largely viewed as a company whose financial performance was closely tied to the crypto markets. While crypto will always remain central to who we are, that's no longer the complete picture. By expanding to payments and broader financial infrastructure, we're building a business with significantly larger addressable market and more diverse revenue streams and opportunities to generate growth that are less dependent on digital asset prices. We're leveraging the technology, regulatory expertise, customer relationships, and distribution we've spent more than a decade building, allowing us to expand into adjacent markets from a position of strength. For investors, the practical change is how you model us. Exodus is now two segments. One is cyclical swap and transaction revenue that moves with crypto markets.

One is durable payments volume for Monovate, which grows with usage rather than asset prices. Exodus is becoming a payments company. We're incredibly excited about the direction we're headed. And although we do not believe the opportunity is fully reflected in how the market values a company, we remain focused on executing our strategy.

Thank you all for your continued support. Okay, operator, now let's open the line for questions.

Yeah, thanks, Garrett. So, I'd say there's about 17 million in pure, you know, transaction-related incentive costs. There's about 5.8 million, you know, related to some professional services, and those are going to be the bulk of the one-time, you know, items there. If you're thinking about, or as we think about the cost structure going forward, I'll just point out that the integration is not fully complete yet. So we had the reduction in force that JP mentioned and that we conducted last month, and we are still actively working towards finding those synergies and efficiencies. as part of a go forward organization, combined organization. And so definitely more to come on that. I think I would just highlight that we're not finished yet with that integration.

So in terms of the ancillary services, I guess it kind of can fall into two buckets, really. The services that make up the core offering of Monovate, which would be things like KYC, Pepsin sanctions checking, chargeback management, and sort of those sort of value-added services that fundamentally through the Monovate One platform, we provide those services through that one integration, which means that as a customer, you don't have to have multiple different partner or supplier integrations as part of your business. The second pack of ancillary services are ones that we're obviously looking to now start to embed as we move forward, which will be the institutional products of Exodus into the Monovate stack so that we can offer those to our existing customer base.

And I think it's fair to say with the way we look at, obviously, the development of the industry overall with the emergence of stablecoins and agentic payments, that we feel that there is a good opportunity for us to go to the existing customer base with that enhanced product offering in time, as well as obviously expand the opportunity that we see in our overall market go-to-market strategy with that combined end-to-end offering. It's worth noting that from my perspective, I think that if you look at that stack end-to-end of what Monobate has and what Exodus brings to the table on the institutional side as well, that there are very few companies out there that actually have that as a fully built service all under one roof.

Yeah, I'm going to add a little bit to what Michael just said there. He's absolutely right about owning the stack end-to-end, so having card issuing, processing, the ability to give these businesses wallets all over the world, the ability for them to hold stablecoins all over the world, take advantage of the efficiencies of stablecoins, and then not to mention if you include swaps on top of that. That just makes the enterprise offering all the more sweet as well.

Yeah, I'll take that one. So effectively, as part of any acquisition of a regulated company, just as the original Exodus transaction of Monovate is subject to a regulatory change of control approval process. That is something that we are currently working on regarding TIGSI Pay. We expect that to be filed imminently, and there is a process around the SLA that the Bank of Latvia works to, which is effectively 60 days, but they have obviously an opportunity within that to pause and ask questions and clarify a submission. So we are hoping that it will be closer to the 60 days, but it could be as much as 90 days from the point of submission.

That's the main step, the long pole in the tent, effectively. There are a couple of things that are happening in amongst that process around a change of business plan for TixiePay, but that is a shorter process and not as meaningful as the actual change control approval that's required from the Bank of Latvia.

Great, thanks for the call.

So yes, right now the focus is to absolutely ensure that we have card issuance 100% restored across where Exodus is served. So that means Europe and the United States as well. On top of that, though, behind the scenes, we are working on these other products, but at the end of the day, because our focus is payments and delivering mainstream utility with cards, it's going to be a little bit of time before we get out the prediction markets and other products like that. So it's mostly the focus is on card and card issuance.

So that is the, you know, the two and a half to the three and a half. So basically just take that amount divided by four, you know, that annual amount. You know, we had a severance. So to the people that were, you know, in the reduction in force. And so that is why we'll see the full cash impact at the end of Q4 because of just the timing of the reduction in force. So we'll get the full benefit of that obviously in 2027, but we'll start to receive the cash benefit of that towards the end of, or actually towards the middle of Q4.