Gemini Posts $107.7 Million Q2 Net Loss; Shares Sink 7% After Hours

Gemini shares fell sharply in after-hours trading after the cryptocurrency exchange posted a steep net loss for the second quarter.

The Block reported on August 13 that Gemini recorded a net loss of $107.7 million in the second quarter. Revenue rose 37% from a year earlier to $45.5 million, but shares slid more than 7% in after-hours trading as profitability fell short of market expectations.

Chief Executive Officer Tyler Winklevoss said in an earnings statement that the company still has more work to do, but the quarter's results reflected ongoing efforts to cut operating costs and diversify revenue.

Results were mixed across business lines. Credit-card revenue surged 231% from a year earlier to $16.2 million, while staking revenue increased 50% to $4 million. Exchange revenue, the company's core business, dropped 38% to $12.5 million as total trading volume fell to $3.8 billion from $11.3 billion a year earlier.

The prediction-markets business posted modest growth. Gemini's prediction-markets platform generated $500,000 in second-quarter revenue, and the number of event contracts traded rose 93% from the previous quarter. The company received approval from the Commodity Futures Trading Commission in April and launched a derivatives clearinghouse earlier this month. It is also considering adding crypto futures, options and perpetual contracts.

President Cameron Winklevoss said changes to the Gemini platform over the past nine months exceeded those made over the previous decade combined. Monthly active users rose 11% from a year earlier, but assets on the platform fell to $8.4 billion from $18.2 billion as prices of major assets including Bitcoin dropped nearly 50%. Shares of Gemini Space Station (GEMI) are now trading below $4, an all-time low.