[10-Q] Exodus Movement, Inc. Quarterly Earnings Report
Exodus Movement (EXOD) reported strong Q3 results. Revenue rose to $30.3 million from $20.1 million a year ago, and net income increased to $17.0 million from $0.8 million. Diluted EPS was $0.53 per Class A and Class B share. For the first nine months, revenue reached $92.2 million versus $71.5 million, with net income of $41.8 million.
Results reflected higher exchange activity and a net gain on digital assets of $21.0 million in the quarter. Cash and cash equivalents were $50.5 million, and digital assets at fair value were $263.9 million, including $242.4 million of Bitcoin. Operating cash flow was $(16.2) million year‑to‑date, reflecting non‑cash items and settlements in digital assets and USDC. Monthly Active Users were 1.5 million; Quarterly Funded Users were 1.8 million.
Exodus recorded a proposed OFAC settlement with a $2.47 million civil penalty and a $0.63 million commitment to sanctions compliance controls. Subsequent events include: the ability for Class A holders to tokenize shares on Solana beginning October 20, 2025; an asset purchase agreement for approximately $3.0 million (half cash, half stock); and a master loan agreement with Galaxy Digital with no borrowings to date.
- None.
- None.
Insights
Q3 revenue and earnings improved, aided by digital asset gains.
Exodus posted Q3 revenue of
Balance sheet liquidity included
Subsequent items expand capabilities: tokenized Class A on Solana effective
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Commission File Number:
(Exact Name of Registrant as Specified in its Charter)
( State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer |
(Address of principal executive offices) |
(Zip Code) |
Registrant’s telephone number, including area code: (
Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
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Trading Symbol(s) |
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Name of each exchange on which registered |
par value $0.000001 per share. |
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NYSE American |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer |
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Accelerated filer |
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Smaller reporting company |
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Emerging growth company |
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No
As of October 31, 2025, the registrant had
(1) We are a remote-first company. Accordingly, we do not maintain a headquarters. For purposes of compliance with applicable requirements of the Securities Act of 1933, as amended, and Securities Exchange Act of 1934, as amended, communications may be directed to the listed address.
Table of Contents
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Page |
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PART I. |
FINANCIAL INFORMATION |
2 |
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Item 1. |
Financial Statements (Unaudited) |
2 |
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Condensed Consolidated Balance Sheets |
2 |
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Condensed Consolidated Statements of Operations and Comprehensive Income |
3 |
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Condensed Consolidated Statements of Changes in Stockholders’ Equity |
4 |
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Condensed Consolidated Statements of Cash Flows |
5 |
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Notes to Unaudited Condensed Consolidated Financial Statements |
6 |
Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
17 |
Item 3. |
Quantitative and Qualitative Disclosures About Market Risk |
24 |
Item 4. |
Controls and Procedures |
25 |
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PART II. |
OTHER INFORMATION |
27 |
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Item 1. |
Legal Proceedings |
27 |
Item 1A. |
Risk Factors |
27 |
Item 2. |
Unregistered Sales of Equity Securities and Use of Proceeds |
27 |
Item 3. |
Defaults Upon Senior Securities |
27 |
Item 4. |
Mine Safety Disclosures |
27 |
Item 5. |
Other Information |
27 |
Item 6. |
Exhibits |
28 |
Signatures |
29 |
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i
Cautionary Note on Forward-Looking Statements
This Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act”). All forward-looking statements are based upon our current expectations and various assumptions and apply only as of the date of this Quarterly Report on Form 10-Q. Our expectations, beliefs, and projections are expressed in good faith, and we believe there is a reasonable basis for them. However, there can be no assurance that our expectations, beliefs and projections will be achieved. Forward-looking statements are generally identified by the words “may,” “will,” “could,” “would,” “should,” “expect,” “intend,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “project,” “potential,” “continue,” “ongoing,” “forecast,” as well as variations of such words or similar expressions. Forward-looking statements include statements concerning:
There are a number of risks, uncertainties and other important factors that could cause our actual results to differ materially from those expressed or implied by our forward-looking statements, including those set forth in the sections titled “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this Quarterly Report on Form 10-Q and “Item 1A. Risk Factors” of our Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”) on March 6, 2025 (the “Form 10-K”). You should evaluate all forward-looking statements made in this Quarterly Report on Form 10-Q in the context of these risks and uncertainties.
We caution you that the risks, uncertainties and other factors referred to above and elsewhere in this Quarterly Report on Form 10-Q may not contain all of the risks, uncertainties and other factors that may affect our future results and operations. Moreover, new risks will emerge from time to time. It is not possible for us to predict all risks. In addition, we cannot assure you that we will realize the results, benefits or developments that we expect or anticipate or, even if substantially realized, that they will result in the consequences or affect us or our business in the way expected and you should not place undue reliance on our forward-looking statements.
All forward-looking statements in this Quarterly Report on Form 10-Q apply only as of the date made, unless an earlier date is specified, and are expressly qualified in their entirety by the cautionary statements included in this Quarterly Report on Form 10-Q. Except as required by law, we disclaim any intent to publicly update or revise any forward-looking statements to reflect subsequent events or circumstances.
In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this Quarterly Report on Form 10-Q, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and you are cautioned not to unduly rely upon these statements.
1
PART I—FINANCIAL INFORMATION
Item 1. Financial Statements.
Exodus Movement, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(Unaudited, in thousands, except share and par value)
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September 30, |
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December 31, |
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2025 |
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2024 |
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ASSETS |
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CURRENT ASSETS |
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Cash and cash equivalents |
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$ |
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$ |
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U.S. dollar coin |
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Treasury bills |
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Accounts receivable |
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Prepaid expenses |
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Income tax receivable |
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Other current assets |
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Total current assets |
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OTHER ASSETS |
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Fixed assets, net |
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Digital assets |
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Software assets, net |
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Other long-term asset |
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Indefinite-lived assets |
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Other investments |
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Deferred tax assets |
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Total other assets |
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TOTAL ASSETS |
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$ |
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$ |
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LIABILITIES AND STOCKHOLDERS' EQUITY |
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CURRENT LIABILITIES |
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Accounts payable |
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$ |
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$ |
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Other current liabilities |
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Total current liabilities |
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LONG-TERM LIABILITIES |
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Other long-term liabilities |
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Deferred tax liability |
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Total long-term liabilities |
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Total liabilities |
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STOCKHOLDERS' EQUITY |
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Preferred stock |
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$ |
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- |
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- |
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Class A Common Stock |
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$ |
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- |
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- |
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- |
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- |
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- |
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- |
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Class B Common Stock |
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$ |
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- |
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- |
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- |
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- |
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- |
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- |
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ADDITIONAL PAID IN CAPITAL |
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ACCUMULATED OTHER COMPREHENSIVE LOSS |
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( |
) |
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( |
) |
RETAINED EARNINGS |
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Total stockholders' equity |
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY |
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$ |
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$ |
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The accompanying notes are an integral part of these condensed consolidated financial statements.
2
Exodus Movement, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations and Comprehensive Income
(Unaudited, in thousands, except per share amounts)
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Three Months Ended |
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Three Months Ended |
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Nine Months Ended |
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Nine Months Ended |
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REVENUES |
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$ |
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$ |
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$ |
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$ |
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EXPENSES (INCOME) |
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Technology, development and user support |
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General and administrative |
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(Gain) loss on digital assets, net |
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( |
) |
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( |
) |
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( |
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Gain on sale of future token interests |
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- |
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( |
) |
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- |
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Impairment on other assets |
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- |
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- |
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- |
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Staking and other income |
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( |
) |
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( |
) |
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( |
) |
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( |
) |
Other loss, net |
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Interest income |
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( |
) |
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( |
) |
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( |
) |
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( |
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Income before income taxes |
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$ |
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$ |
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$ |
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$ |
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INCOME TAX EXPENSE |
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( |
) |
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( |
) |
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( |
) |
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( |
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NET INCOME |
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$ |
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$ |
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$ |
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$ |
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OTHER COMPREHENSIVE (LOSS) INCOME |
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Foreign currency translation adjustment |
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( |
) |
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( |
) |
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( |
) |
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COMPREHENSIVE INCOME |
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$ |
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$ |
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$ |
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$ |
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Net income per share |
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Basic net income per share of common stock - Class A |
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$ |
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$ |
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$ |
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$ |
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Basic net income per share of common stock - Class B |
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$ |
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$ |
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$ |
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$ |
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Diluted net income per share of common stock - Class A |
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$ |
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$ |
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$ |
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$ |
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Diluted net income per share of common stock - Class B |
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$ |
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$ |
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$ |
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$ |
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Weighted average number of shares and share equivalents outstanding |
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Weighted average number of shares used in basic computation - Class A |
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Weighted average number of shares used in basic computation - Class B |
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Weighted average number of shares used in diluted computation - Class A |
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Weighted average number of shares used in diluted computation - Class B |
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The accompanying notes are an integral part of these condensed consolidated financial statements.
3
Exodus Movement, Inc. and Subsidiaries
Condensed Consolidated Statements of Changes in Stockholders’ Equity
(Unaudited, in thousands)
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Accumulated |
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Retained |
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Additional |
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Other |
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Earnings |
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Total |
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Class A |
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Class B |
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Paid In |
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Comprehensive |
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(Accumulated |
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Stockholders' |
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Shares |
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Shares |
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Capital |
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Loss |
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Deficit) |
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Equity |
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||||||
BALANCES as of January 1, 2024 |
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$ |
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$ |
( |
) |
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$ |
( |
) |
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$ |
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||||
Cumulative effect adjustment to the opening balance of retained earnings for ASU 2023-08 adoption, net of tax |
|
- |
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- |
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- |
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- |
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Stock-based compensation |
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- |
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- |
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- |
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- |
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Issuance of Common Stock upon settlement of restricted stock units, net of shares withheld for taxes |
|
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- |
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( |
) |
|
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- |
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- |
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( |
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||
Conversion from Class B to Class A |
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( |
) |
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- |
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- |
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- |
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- |
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Foreign currency translation adjustment |
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- |
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- |
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- |
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- |
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||
Net income |
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- |
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- |
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- |
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- |
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BALANCES as of March 31, 2024 |
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$ |
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$ |
( |
) |
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$ |
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$ |
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Stock-based compensation |
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- |
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- |
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- |
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- |
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||
Issuance of Common Stock upon settlement of restricted stock units, net of shares withheld for taxes |
|
|
|
|
- |
|
|
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( |
) |
|
|
- |
|
|
|
- |
|
|
|
( |
) |
||
Foreign currency translation adjustment |
|
|
- |
|
|
|
- |
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|
|
- |
|
|
|
( |
) |
|
|
- |
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|
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( |
) |
Net loss |
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- |
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- |
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- |
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|
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- |
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( |
) |
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( |
) |
BALANCES as of June 30, 2024 |
|
|
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$ |
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$ |
( |
) |
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$ |
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$ |
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|||||
Stock-based compensation |
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|
- |
|
|
|
- |
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|
|
|
|
|
- |
|
|
|
- |
|
|
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|
||
Issuance of Common Stock upon settlement of restricted stock units, net of shares withheld for taxes |
|
|
|
|
- |
|
|
|
( |
) |
|
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- |
|
|
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- |
|
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( |
) |
||
Exercised options, non-cash |
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- |
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|
|
|
|
- |
|
|
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- |
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|
|
- |
|
|
|
- |
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Conversion from Class B to Class A |
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|
|
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( |
) |
|
|
- |
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|
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- |
|
|
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- |
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|
- |
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Foreign currency translation adjustment |
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|
- |
|
|
|
- |
|
|
|
- |
|
|
|
( |
) |
|
|
- |
|
|
|
( |
) |
Net income |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
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||
BALANCES as of September 30, 2024 |
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$ |
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$ |
( |
) |
|
$ |
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|
$ |
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|||||
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|
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||||||
BALANCES as of January 1, 2025 |
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$ |
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|
$ |
( |
) |
|
$ |
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|
$ |
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|||||
Stock-based compensation |
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|
- |
|
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|
- |
|
|
|
|
|
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- |
|
|
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- |
|
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||
Exercised options, net of options withheld for taxes and exercise price |
|
|
- |
|
|
|
|
|
|
( |
) |
|
|
- |
|
|
|
- |
|
|
|
( |
) |
|
Issuance of Common Stock upon settlement of restricted stock units, net of shares withheld for taxes |
|
|
|
|
- |
|
|
|
( |
) |
|
|
- |
|
|
|
- |
|
|
|
( |
) |
||
Conversion from Class B to Class A |
|
|
|
|
|
( |
) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
Foreign currency translation adjustment |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
( |
) |
|
|
- |
|
|
|
( |
) |
Net loss |
|
|
- |
|
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|
- |
|
|
|
- |
|
|
|
- |
|
|
|
( |
) |
|
|
( |
) |
BALANCES as of March 31, 2025 |
|
|
|
|
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|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
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|||||
Stock-based compensation |
|
|
- |
|
|
|
- |
|
|
|
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|
- |
|
|
|
- |
|
|
|
|
||
Exercised options, net of options withheld for taxes and exercise price |
|
|
- |
|
|
|
|
|
|
( |
) |
|
|
- |
|
|
|
- |
|
|
|
( |
) |
|
Issuance of Common Stock upon settlement of restricted stock units, net of shares withheld for taxes |
|
|
|
|
|
- |
|
|
|
( |
) |
|
|
- |
|
|
|
- |
|
|
|
( |
) |
|
Foreign currency translation adjustment |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
( |
) |
|
|
- |
|
|
|
( |
) |
Net income |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
||
BALANCES as of June 30, 2025 |
|
|
|
|
|
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|||||
Stock-based compensation |
|
|
- |
|
|
|
- |
|
|
|
|
|
|
- |
|
|
|
- |
|
|
|
|
||
Exercised options, net of options withheld for taxes and exercise price |
|
|
- |
|
|
|
|
|
|
( |
) |
|
|
- |
|
|
|
- |
|
|
|
( |
) |
|
Issuance of Common Stock upon settlement of restricted stock units, net of shares withheld for taxes |
|
|
|
|
- |
|
|
|
( |
) |
|
|
- |
|
|
|
- |
|
|
|
( |
) |
||
Conversion from Class B to Class A |
|
|
|
|
|
( |
) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
Foreign currency translation adjustment |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
( |
) |
|
|
- |
|
|
|
( |
) |
Equity warrants |
|
|
|
|
|
|
|
|
|
|
|
- |
|
|
|
- |
|
|
|
|
||||
Net income |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
||
BALANCES as of September 30, 2025 |
|
|
|
|
|
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
4
Exodus Movement, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(Unaudited, in thousands)
|
Nine Months Ended |
|
|
Nine Months Ended |
|
||
CASH FLOWS FROM OPERATING ACTIVITIES |
|
|
|
|
|
||
Net income |
$ |
|
|
$ |
|
||
Adjustments to reconcile net income to net cash used in operating activities |
|
|
|
|
|
||
Depreciation and amortization |
|
|
|
|
|
||
Deferred tax expense |
|
|
|
|
|
||
Impairment of other assets |
|
|
|
|
|
||
Gain on digital assets, net |
|
( |
) |
|
|
( |
) |
Gain on sale of future token interests |
|
( |
) |
|
|
|
|
Staking and other income |
|
( |
) |
|
|
( |
) |
Other loss, net |
|
|
|
|
|
||
Stock based compensation |
|
|
|
|
|
||
Accrued interest income |
|
( |
) |
|
|
( |
) |
Other operating activities settled in digital assets and USDC (1) |
|
( |
) |
|
|
( |
) |
Change in operating assets and liabilities: |
|
|
|
|
|
||
Accounts receivable |
|
|
|
|
( |
) |
|
Prepaid expenses |
|
( |
) |
|
|
( |
) |
Income tax receivable |
|
( |
) |
|
|
( |
) |
Other current assets |
|
( |
) |
|
|
( |
) |
Other long-term asset |
|
|
|
|
( |
) |
|
Accounts payable |
|
|
|
|
|
||
Other current liabilities |
|
|
|
|
( |
) |
|
Other long-term liabilities |
|
|
|
|
|
||
Net cash used in operating activities |
|
( |
) |
|
|
( |
) |
CASH FLOWS FROM INVESTING ACTIVITIES |
|
|
|
|
|
||
Investment in SAFE Note |
|
( |
) |
|
|
|
|
Proceeds from sale of future token interests |
|
|
|
|
|
||
Purchases of fixed assets |
|
( |
) |
|
|
( |
) |
Purchase of treasury bills |
|
( |
) |
|
|
( |
) |
Redemption of treasury bills |
|
|
|
|
|
||
Purchases of digital assets |
|
( |
) |
|
|
( |
) |
Disposal of digital assets held |
|
|
|
|
|
||
Purchase of domain names |
|
|
|
|
( |
) |
|
Net cash provided by investing activities |
|
|
|
|
|
||
CASH FLOWS FROM FINANCING ACTIVITIES |
|
|
|
|
|
||
Repurchase of shares to pay employee withholding taxes |
|
( |
) |
|
|
( |
) |
Net cash used in financing activities |
|
( |
) |
|
|
( |
) |
Change in cash and cash equivalents, and restricted cash and cash equivalents |
|
|
|
|
|
||
Cash and cash equivalents, and restricted cash and cash equivalents |
|
|
|
|
|
||
Beginning of period |
|
|
|
|
|
||
End of period |
|
|
|
|
|
||
|
|
|
|
|
|
||
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES |
|
|
|
|
|
||
Non-cash issuance of stock |
$ |
|
|
$ |
|
||
Fixed assets purchased with digital assets |
|
( |
) |
|
|
|
|
Non-cash capitalized software costs settled in digital assets and stock |
|
( |
) |
|
|
( |
) |
|
|
|
|
|
|
||
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION |
|
|
|
|
|
||
Cash paid for income taxes |
|
( |
) |
|
|
( |
) |
(1)
The accompanying notes are an integral part of these condensed consolidated financial statements.
5
Exodus Movement, Inc. and Subsidiaries
Notes to Unaudited Condensed Consolidated Financial Statements
1. Nature of Business
Exodus Movement, Inc. (“Exodus” or “the Company” or “we”) was incorporated in Delaware in July 2016. The Company operates in the FinTech subsector of the greater blockchain and digital asset industry. The Company has developed an un-hosted self-custodial digital asset wallet on the Exodus Platform and contracts with third parties to provide various services to users that utilize the Company’s wallet through the platform.
2. Summary of Significant Accounting Policies
The accompanying condensed consolidated financial statements of the Company are unaudited. These unaudited condensed consolidated financial statements have been prepared in accordance with United States generally accepted accounting principles (“GAAP”) on the same basis as the audited consolidated financial statements and in management’s opinion, reflect all the adjustments, consisting only of normal, recurring adjustments, that are necessary for the fair statement of the Company’s condensed consolidated financial statements for the periods presented. The unaudited condensed consolidated results of operations for the three and nine months ended September 30, 2025, are not necessarily indicative of the results to be expected for the full year or any other period.
These condensed consolidated financial statements and accompanying notes should be read in conjunction with the audited consolidated financial statements and notes included in the Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”) on March 6, 2025 (the “Form 10-K”).
There were no changes to the significant accounting policies that were disclosed in Note 2 Summary of Significant Accounting Policies to the audited consolidated financial statements included in the Form 10-K.
Concentration of Revenue
Revenue from Application Programming Interface Providers (“API Providers”) exceeding
|
|
Three Months Ended |
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
|
Nine Months Ended |
|
||||
Company A |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Company B |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Company C |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Company D (1) |
|
|
- |
|
|
|
|
|
|
|
|
|
|
|||
Company E (2) |
|
|
|
|
|
- |
|
|
|
|
|
|
- |
|
||
(1)
(2)
Digital Assets
As of September 30, 2025, the Company held $
Digital assets are recorded at fair value based on quoted prices in the principal market for each respective digital asset as of the measurement date, in accordance with ASC 820, Fair Value Measurement. The principal market represents the market with the greatest volume and level of activity for the specific asset that the Company has access to on the measurement date. Fair value determinations are based on observable quoted prices (Level 1 inputs) in those markets. The cost basis of digital assets is calculated on a first-in, first-out basis, and changes in fair value are recognized in current-period earnings.
6
Amounts are recorded at fair value based on the principal market rates. Refer to Note 5, Intangible Assets, and Note 11, Fair Value Measurements.
Fair Value Measurements
Fair value is the price that would be received upon sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The following fair value hierarchy is used in selecting inputs, with the highest priority given to Level 1, as these are the most transparent or reliable:
Prices may fall within Level 1, 2 or 3 depending upon the methodology and inputs used to estimate fair value for each specific security. In general, securities are priced using third-party pricing services. Securities not priced by pricing services are submitted to independent brokers for valuation and, if those are not available, internally developed pricing models are used to value assets using a methodology and inputs that market participants presumably would use to value the assets. Prices obtained from third-party pricing services or brokers are not adjusted.
Recently Issued Accounting Pronouncements Pending Adoption
Targeted Improvements to the Accounting for Internal-Use Software
In September 2025, the Financial Accounting Standards Board (“FASB”) issued ASU 2025-06, “Intangibles — Goodwill and Other — Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software” (herein, the “Update”). The amendments in this Update (i) remove all references to prescriptive software development “project stages,” (ii) refocus the capitalization threshold such that an entity begins capitalizing when (a) management authorizes and commits to funding the project and (b) it is probable that the project will be completed and used for its intended function (subject to evaluation of significant development uncertainty). The amendments in this Update do not (i) amend the accounting for external-use software under Subtopic 985-20, (ii) change the types of internal-use software costs eligible for capitalization (e.g., data conversion, training, maintenance costs generally remain expensed), or (iii) modify when capitalization ceases (i.e., when the software is substantially complete and ready for its intended use). The amendments in this Update are effective for annual periods beginning after December 15, 2027, and for interim periods within those annual periods. Early adoption is permitted, but only as of the beginning of an annual reporting period. Entities may elect a prospective, retrospective, or modified retrospective transition approach. The Company is currently evaluating the impact of adopting the standard on the condensed consolidated financial statements.
Expense Disaggregation Disclosures
In November 2024, the FASB issued ASU 2024-03, "Expense Disaggregation Disclosures" (herein, the "Update"). The Update aims to enhance disclosures regarding a public business entity’s expenses, specifically addressing investor requests for more detailed information on the types of expenses included in commonly presented expense captions such as cost of sales, selling, general and administrative expenses ("SG&A"), and research and development ("R&D"). The amendments in this Update require additional transparency on the breakdown of expenses, including purchases of inventory, employee compensation, depreciation, amortization, and depletion. The amendments in this Update are effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Early adoption is permitted. The amendments may be applied either prospectively to financial statements issued for reporting periods after the effective date, or retrospectively to any or all prior periods presented in the financial statements. The Company is currently evaluating the impact of the Update on its financial reporting and will adopt the standard in accordance with the required effective date. In January 2025, the FASB issued ASU 2025-01 which clarifies the disclosure requirements for public business entities adopting the Update. ASU 2025-01 specifies that all public business entities should initially adopt the disclosure requirements presented in ASU 2024-03 in the first annual reporting period beginning after December 15, 2026, and interim reporting periods within annual reporting periods beginning after December 15, 2027. The Company is currently evaluating the impact of adopting the standard on the condensed consolidated financial statements.
Improvements to Income Tax Disclosures
In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures” (“ASU 2023-09”), which modifies the rules on income tax disclosures to require entities to disclose (1) specific categories in the rate reconciliation, (2) the income or loss from continuing operations before income tax expense or benefit (separated between domestic and foreign) and (3) income tax expense or benefit from continuing operations (separated by federal, state and foreign). ASU 2023-09 also
7
requires entities to disclose their income tax payments to international, federal, state and local jurisdictions, among other changes. The guidance is effective for annual periods beginning after December 15, 2024. Early adoption is permitted for annual financial statements that have not yet been issued or made available for issuance. ASU 2023-09 should be applied on a prospective basis, but retrospective application is permitted. This guidance only impacts footnote disclosures and will not impact our consolidated financial statements. The Company is currently evaluating the impact of adopting the standard on the condensed consolidated financial statements.
3. Revenue Recognition
The following table presents the Company’s revenues disaggregated by geography, based on the addresses of the Company’s customers (in thousands, except percentages):
|
|
Three Months Ended |
|
|
|
Nine Months Ended |
|
|
||||||||||||||||||||||||||||
|
|
2025 |
|
|
|
2024 |
|
|
|
2025 |
|
|
|
2024 |
|
|
||||||||||||||||||||
Republic of the Marshall Islands |
|
$ |
|
|
|
|
% |
|
$ |
|
|
|
|
% |
|
$ |
|
|
|
|
% |
|
$ |
|
|
|
|
% |
||||||||
Hong Kong |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
British Virgin Islands(1) |
|
|
|
|
|
|
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
- |
|
|
|
- |
|
|
||||
Seychelles |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Other(2) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Revenues |
|
$ |
|
|
|
|
% |
|
$ |
|
|
|
|
% |
|
$ |
|
|
|
|
% |
|
$ |
|
|
|
|
% |
||||||||
(1)
(2)
The following table presents the Company's revenue disaggregated by products and services for the three and nine months ended September 30, 2025 and 2024 (in thousands, except percentages):
|
|
Three Months Ended |
|
|
|
Nine Months Ended |
|
|
||||||||||||||||||||||||||||
|
|
2025 |
|
|
|
2024 |
|
|
|
2025 |
|
|
|
2024 |
|
|
||||||||||||||||||||
Exchange aggregation |
|
$ |
|
|
|
|
% |
|
$ |
|
|
|
|
% |
|
$ |
|
|
|
|
% |
|
$ |
|
|
|
|
% |
||||||||
Fiat onboarding |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Staking |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Consulting |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Other (1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Revenues |
|
$ |
|
|
|
|
% |
|
$ |
|
|
|
|
% |
|
$ |
|
|
|
|
% |
|
$ |
|
|
|
|
% |
||||||||
(1)
The following table presents the Company's contract balances as of September 30, 2025 and December 31, 2024 (in thousands):
Balance January 1, 2024 |
|
|
$ |
|
|
Prior period performance obligation satisfied |
|
|
|
( |
) |
Increase in contract liability |
|
|
|
|
|
Current period performance obligation satisfied |
|
|
|
( |
) |
Balance December 31, 2024 |
|
|
|
|
|
Prior period performance obligation satisfied |
|
|
|
( |
) |
Increase in contract liability |
|
|
|
|
|
Current period performance obligation satisfied |
|
|
|
( |
) |
Balance September 30, 2025 |
|
|
$ |
|
8
4. Prepaid Expenses
The Company prepays certain expenses due to the nature of the service provided or to capture certain discounts. The table below shows a breakout of these prepaid expenses for the periods presented (in thousands):
|
|
September 30, 2025 |
|
|
December 31, 2024 |
|
||
Accounting, consulting, and legal services |
|
$ |
|
|
$ |
|
||
Prepaid software |
|
|
|
|
|
|
||
Prepaid cloud services |
|
|
|
|
|
|
||
Prepaid insurance |
|
|
|
|
|
|
||
Prepaid travel |
|
|
|
|
|
|
||
Marketing |
|
|
|
|
|
|
||
Partner fees |
|
|
|
|
|
|
||
Prepaid expenses |
|
$ |
|
|
$ |
|
||
5. Intangible Assets
Indefinite-Lived Asset
Indefinite-lived assets were $
Digital Assets
The table below outlines the fair value of our digital assets based on publicly available rates as of the dates presented as well as the cost (in thousands, except units):
|
|
Units |
|
|
Cost Basis |
|
|
Fair Value |
|
|||
As of September 30, 2025 |
|
|
|
|
|
|
|
|
|
|||
Bitcoin |
|
|
|
|
$ |
|
|
$ |
|
|||
Ethereum |
|
|
|
|
|
|
|
|
|
|||
Solana |
|
|
|
|
|
|
|
|
|
|||
Other |
|
|
|
|
|
|
|
|
|
|||
Digital assets |
|
|
|
|
$ |
|
|
$ |
|
|||
|
|
|
|
|
|
|
|
|
|
|||
As of December 31, 2024 |
|
|
|
|
|
|
|
|
|
|||
Bitcoin |
|
|
|
|
|
|
|
|
|
|||
Ethereum |
|
|
|
|
|
|
|
|
|
|||
Solana |
|
|
|
|
|
|
|
|
|
|||
Other |
|
|
|
|
|
|
|
|
|
|||
Digital assets |
|
|
|
|
$ |
|
|
$ |
|
|||
|
|
|
|
|
|
|
|
|
|
|||
The following table summarizes other operating activities settled in digital assets and USDC (in thousands):
|
|
|
Nine Months Ended |
|
|||||
|
|
|
2025 |
|
|
2024 |
|
||
Revenues |
|
|
$ |
( |
) |
|
$ |
( |
) |
Expenses |
|
|
|
|
|
|
|
||
Conversion of digital assets and USDC to cash, net |
|
|
|
|
|
|
|
||
Accounts receivable and other current assets |
|
|
|
|
|
|
|
||
Payroll liabilities |
|
|
|
|
|
|
|
||
Currency translation related to digital assets |
|
|
|
( |
) |
|
|
|
|
Other operating activities settled in digital assets and USDC |
|
|
$ |
( |
) |
|
$ |
( |
) |
9
Gain on Sale of Future Token Interests
In June 2025, the Company sold its right to receive
6. Fixed Assets, Net
Fixed assets, net, consisted of the following (in thousands):
|
|
September 30, 2025 |
|
|
December 31, 2024 |
|
||
Computer equipment |
|
$ |
|
|
$ |
|
||
Vehicles |
|
|
|
|
|
|
||
Furniture and fixtures |
|
|
|
|
|
|
||
Fixed assets, gross |
|
|
|
|
|
|
||
Less: accumulated depreciation |
|
|
( |
) |
|
|
( |
) |
Fixed assets, net |
|
$ |
|
|
$ |
|
||
Depreciation expense was less than $
7. Software Assets, Net
Costs incurred are used to develop internal software applications and consist of mainly compensation and benefits. We capitalize software development costs upon the establishment of technological feasibility. During the three and nine months ended September 30, 2025, we capitalized $
Software assets, net, consisted of the following (in thousands):
|
|
September 30, 2025 |
|
|
December 31, 2024 |
|
||
Software in development |
|
$ |
|
|
$ |
|
||
Software assets in use |
|
|
|
|
|
|
||
Less: accumulated amortization |
|
|
( |
) |
|
|
( |
) |
Software assets in use, net |
|
|
|
|
|
|
||
Software assets, net |
|
$ |
|
|
$ |
|
||
The following summarizes the future amortization expense as of September 30, 2025 (in thousands):
|
|
|
|
|
|
|
Three months ending December 31, 2025 |
|
|
|
$ |
|
|
2026 |
|
|
|
|
|
|
2027 |
|
|
|
|
|
|
2028 |
|
|
|
|
|
|
|
|
|
|
$ |
|
|
Amortization expense was $
8. Stockholders’ Equity
The rights of the holders of Class A common stock and Class B common stock are identical, except with respect to voting and conversion rights. Each share of Class A common stock is entitled to
In December 2024, our Class A Common Stock was listed for quotation on the NYSE American under the symbol “EXOD”.
10
In April 2024, our Class A Common Stock was listed for quotation on the OTCQX under the symbol “EXOD”. OTC Markets approval was received in April 2024.
In January 2024, our Class A Common Stock was listed for quotation on the OTCQB under the symbol “EXOD”. OTC Markets approval was received in January 2024 and in January the initial qualifying deposit was made and initial trades have occurred.
Stock-Based Compensation
Options and Equity Grants Issued
The 2019 Equity Incentive Plan adopted in September 2019 (the “2019 Plan”) permitted the Company to grant non-statutory stock options, incentive stock options, and other equity awards to Exodus team members, directors, and consultants.
In August 2021, the Company also adopted the 2021 Equity Incentive Plan (the “2021 Plan”). The 2021 Plan permits the Company to grant non-statutory stock options, incentive stock options and other equity awards, such as restricted stock awards, to Exodus team members, directors, and consultants.
Upon the approval of the 2021 Plan, the Company can no longer grant non-statutory stock options, incentive stock options, or other equity awards to Exodus team members, directors, or consultants under the 2019 Plan.
Terms of our share-based compensation are governed by the plan in which awards were issued.
The following table summarizes stock option activities for the nine months ended September 30, 2025 and 2024:
|
|
|
|
|
Weighted |
|
||
|
|
|
|
|
Average |
|
||
|
|
|
|
|
Exercise Price |
|
||
|
|
Options |
|
|
Price |
|
||
Outstanding as of January 1, 2024 |
|
|
|
|
$ |
|
||
Exercised |
|
|
( |
) |
|
|
|
|
Forfeited |
|
|
( |
) |
|
|
|
|
Outstanding as of September 30, 2024 |
|
|
|
|
$ |
|
||
|
|
|
|
|
|
|
||
Outstanding as of January 1, 2025 |
|
|
|
|
|
|
||
Exercised |
|
|
( |
) |
|
|
|
|
Outstanding as of September 30, 2025 |
|
|
|
|
$ |
|
||
Vested and exercisable as of September 30, 2025 |
|
|
|
|
$ |
|
||
11
The following table summarizes RSU activities for the nine months ended September 30, 2025 and 2024:
|
|
|
|
|
|
|
||
|
|
|
|
|
Weighted Average |
|
||
|
|
|
|
|
Grant Date |
|
||
|
|
Restricted Stock Units |
|
|
Fair Value |
|
||
Outstanding as of January 1, 2024 |
|
|
|
|
$ |
|
||
Granted |
|
|
|
|
|
|
||
Settled |
|
|
( |
) |
|
|
|
|
Forfeited |
|
|
( |
) |
|
|
|
|
Outstanding as of September 30, 2024 |
|
|
|
|
$ |
|
||
|
|
|
|
|
|
|
||
Outstanding as of January 1, 2025 |
|
|
|
|
|
|
||
Granted |
|
|
|
|
|
|
||
Settled |
|
|
( |
) |
|
|
|
|
Forfeited |
|
|
( |
) |
|
|
|
|
Outstanding as of September 30, 2025 |
|
|
|
|
$ |
|
||
We recognized stock-based compensation related to options and restricted stock units of $
Stock-based compensation is recorded on the Company’s condensed consolidated statements of operations and comprehensive income as follows (in thousands):
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
||||||||||
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
Technology, development, and user support |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
General and administrative |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Stock-based compensation |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
As of September 30, 2025, total unrecognized stock-based compensation expense was $
Warrants
During the three months ended September 30, 2025, the Company issued warrants to purchase
|
|
September 30, 2025 |
|
|
Exercise price |
|
$ |
|
|
Risk-free interest rate |
|
|
% |
|
Expected dividend yield |
|
|
% |
|
Expected volatility |
|
|
% |
|
Expected life (years) |
|
|
|
|
All warrants outstanding will expire in August of 2032.
9. Income Taxes
At the end of each interim period, the Company records income taxes by applying an estimated annualized effective tax rate to the current period income or loss before income taxes. The Company’s annualized effective tax rate is based on pre-tax earnings, enacted U.S. statutory tax rates, non-deductible expenses, tax credits, certain tax rate differences between U.S. and foreign jurisdictions, and
12
specific events that are discretely recognized entirely within the interim period in which they occur. Exodus’ foreign subsidiary Proper Trust AG files an income tax return in Switzerland.
For the three months ended September 30, 2025 and 2024, the Company recorded an income tax expense of $
Our effective tax rate for the nine months ended September 30, 2025 was primarily impacted by federal research tax credits and the change in permanent differences, including the tax benefit from the foreign derived intangible income, non-deductible expenses and discrete items, including stock-based compensation and tax effect of realized and unrealized digital asset gains and losses during the period. For purposes of recording the discrete tax expense related to digital assets, for the nine months ended September 30, 2025 realized gains or losses are recorded to the Company’s current taxes payable and unrealized gains and losses are recorded to the deferred tax liability based on current period activity. The effective tax rate for the nine months ended September 30, 2024 was primarily impacted by the change in permanent differences and discrete items, including the tax benefit from the foreign derived intangible income and the effect of digital asset gains and losses, specifically recognized in the period.
On July 4, 2025, the “One Big Beautiful Bill Act” (P.L. 119‑21) was enacted into law. The legislation reinstates and extends several provisions of the 2017 Tax Cuts and Jobs Act, including permanent 100% bonus depreciation, enhanced Section 179 expensing, full R&D expense deduction for domestic expenditures and modification to the international tax framework. We are currently assessing its impact on our consolidated financial statements. The primary impact of the legislation is the acceleration of deductions related to research and development costs incurred in the US which did not have a material impact on the Company’s effective tax rate in the quarter ended September 30, 2025. We are continuing to assess its impact on our consolidated financial statements.
10. Commitments and Contingencies
Legal Proceedings
The Company is subject to a number of claims and proceedings that generally arise in the ordinary course of business, the outcome of which cannot be predicted with certainty. The Company does not believe that the liabilities from such ordinary course claims and proceedings will have a material adverse effect on the Company’s consolidated financial position, results of operations or cash flows. If the Company believes the losses are probable and can be reasonably estimated, reserves will be established. For matters where a reserve has not been established, the ultimate outcome or resolution cannot be predicted at this time or the amount of ultimate loss, if any, cannot be reasonably estimated. Litigation is subject to many uncertainties and there can be no assurance as to the outcome of the individual litigated matters. It is possible that certain of the actions, claims, inquiries or proceedings could be decided unfavorably to the Company or any of its subsidiaries involved. Accordingly, it is possible that an adverse outcome from such a proceeding could exceed the amount accrued in an amount that could be material to the Company’s consolidated financial condition, results of operations or cash flows in any particular reporting period.
OFAC Matter
As previously disclosed, in December 2018, we received an administrative subpoena issued by the U.S. Department of the Treasury’s Office of Foreign Assets Control (“OFAC”) seeking information regarding potential transactions with individuals in Iran. In response, we conducted a comprehensive review that covered all countries and territories subject to U.S. trade embargoes administered by OFAC. We submitted a voluntary self-disclosure and subpoena response regarding potential violations to OFAC, and took remedial action designed to prevent similar activity from occurring in the future. Additionally, in March 2021, we received a second administrative subpoena issued by OFAC seeking information regarding potential transactions with certain North Korean cyber actors, to which we have responded. The administrative subpoena responses and voluntary self-disclosure have been under review by OFAC.
During the three months ended September 30, 2025 we reached a proposed settlement agreement with OFAC to fully resolve the matter. Under the terms of the proposed agreement, we agreed to pay a civil monetary penalty of $
13
11. Fair Value Measurements
The Company’s financial assets are summarized below as of September 30, 2025 and December 31, 2024, with fair values shown according to the fair value hierarchy (in thousands):
|
|
Carrying |
|
|
Quoted |
|
|
Significant |
|
|
Significant |
|
||||
September 30, 2025 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Bitcoin |
|
$ |
|
|
$ |
|
|
$ |
- |
|
|
$ |
- |
|
||
Treasury bills |
|
|
|
|
|
|
|
|
- |
|
|
|
- |
|
||
Money market funds |
|
|
|
|
|
|
|
|
- |
|
|
|
- |
|
||
Ethereum |
|
|
|
|
|
|
|
|
- |
|
|
|
- |
|
||
Solana |
|
|
|
|
|
|
|
|
- |
|
|
|
- |
|
||
Other digital assets |
|
|
|
|
|
|
|
|
- |
|
|
|
- |
|
||
Other investments |
|
|
|
|
(1) |
|
|
|
- |
|
|
|
- |
|
||
|
|
$ |
|
|
|
|
|
|
|
|
|
|
||||
December 31, 2024 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Bitcoin |
|
$ |
|
|
$ |
|
|
$ |
- |
|
|
$ |
- |
|
||
Treasury bills |
|
|
|
|
|
|
|
|
- |
|
|
|
- |
|
||
Money market funds |
|
|
|
|
|
|
|
|
- |
|
|
|
- |
|
||
Ethereum |
|
|
|
|
|
|
|
|
- |
|
|
|
- |
|
||
Solana |
|
|
|
|
|
|
|
|
- |
|
|
|
- |
|
||
Other digital assets |
|
|
|
|
|
|
|
|
- |
|
|
|
- |
|
||
Other investment |
|
|
|
|
(1) |
|
|
|
- |
|
|
|
- |
|
||
|
|
$ |
|
|
|
|
|
|
|
|
|
|
||||
(1)
The Company invests in held to maturity treasury bills. As of September 30, 2025, the discount rate was
Assets and Liabilities Not Measured and Recorded at Fair Value
The Company’s financial instruments, including USDC, are carried at cost, which approximates their fair value. If these financial instruments were recorded at fair value, they would be based on Level 1 inputs.
14
12. Earnings Per Share
The following table sets forth the computation of basic and diluted net income per share of common stock (in thousands, except per share amounts):
|
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
||||||||||
|
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
Basic net income per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Numerator |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net income, basic and diluted |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Denominator |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Weighted-average number of shares used in per share |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Weighted-average number of shares used in per share |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic net income per share - Class A |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Basic net income per share - Class B |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Diluted net income per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Denominator |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Weighted-average number of shares used in diluted |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Weighted-average number of shares used in diluted |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Diluted net income per share - Class A |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Diluted net income per share - Class B |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
13. Segment Reporting
The Company has
14. Subsequent Events
Tokenization of Class A Common Stock
Beginning October 20, 2025, holders of our Class A Common Stock have the ability to tokenize their shares on the Solana blockchain through our co-transfer agent, Superstate. The tokenized common stock is recorded and maintained by the co-transfer agent and represents the same ownership interests as the corresponding shares of Class A Common Stock reflected in the company’s official share register.
Gratitud Interna, Ltd. Asset Purchase Agreement
On November 10, 2025, the Company entered into an asset purchase agreement with Gratitud Interna, Ltd., to purchase certain assets, including technology, applications, software, APIs, databases and web or cloud-based inferences relating to and used in connection with its payment platform. The purchase price is approximately $
15
Master Digital Currency Loan Agreement with Galaxy Digital LLC
On November 5, 2025, the Company entered into a Master Digital Currency Loan Agreement with Galaxy Digital LLC (“Galaxy”), under which the Company may borrow digital assets and/or U.S. dollars from Galaxy pursuant to individual loan term sheets (each, a “Loan”). The Agreement establishes the general terms governing such loans, including procedures for loan requests, collateral requirements, borrow fees, callable and term loan structures, margin call and refund provisions, and rehypothecation rights, subject to mutual consent.
16
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
The following discussion and analysis of Exodus’ financial condition and results of operations should be read in conjunction with the unaudited, condensed consolidated financial statements and related notes included in this Quarterly Report on Form 10-Q. The following discussion contains forward-looking statements based upon current plans, expectations and beliefs that involve risks and uncertainties. Actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under “Item 1A. Risk Factors” in the Form 10-K and “Cautionary Note on Forward Looking Statements” and in other parts of this Quarterly Report on Form 10-Q.
Overview of Our Business
We are engaged principally in the business of creating and distributing self-custodial wallets for digital assets. Due to a majority of our revenue being derived from services provided by application programming interface (“API”) providers (“API Providers”) to persons located outside the United States pursuant to a transaction-based structure, our profitability is dependent on a number of factors including the pricing of digital assets, the volume of transactions and the quality of our third-party relationships.
Our revenues are primarily derived from digital asset-related transactions and consist of fees from third-party API agreements. These API agreements typically consist of transaction-based contracts and tiered subscription contracts where fees are generated based on transaction volume which is primarily driven by users interacting with the API providers.
Our expenses primarily consist of:
Based on the services offered and transactions conducted by API Providers, the following table shows the digital assets that are most material to our business by revenue.
Digital Asset |
API Provider Service(s) |
Blockchain(s) |
BTC |
|
|
Store of value and payment cryptocurrency |
Exchange Aggregation; Fiat Onboarding |
Bitcoin |
Tether |
|
|
Stablecoin |
Exchange Aggregation; Fiat Onboarding |
Ethereum, Algorand, Avalanche, Binance Smart Chain, Arbitrum, Polygon, Optimism, Solana, Tron, Fantom, Polygon, Solana |
Ether |
|
|
Blockchain economy or blockchain platform |
Exchange Aggregation; Fiat Onboarding; Staking |
Ethereum |
U.S. Dollar Coin ("USDC") |
|
|
Stablecoin |
Exchange Aggregation; Fiat Onboarding |
Ethereum, Algorand, Avalanche, Binance Smart Chain, Arbitrum, Fantom, Polygon, Optimism, Solana, Tron |
Other |
|
|
All other digital assets |
Exchange Aggregation; Fiat Onboarding; Staking |
Multiple Blockchains |
Known Trends and Uncertainties
Stablecoins - We expect stablecoin adoption will increase globally as cryptocurrencies become more widely used in the future. User adoption of cryptocurrency networks for payments, or lack thereof, as well as worldwide government regulation, both friendly and adversarial, have and will continue to influence global stablecoin usage. Stablecoins will not function without a digital asset wallet. The Company’s wallet supports a wide variety of stablecoins, including the largest coins such as Tether’s USDT and Circle’s USDC. Additionally, by supporting over 40 different networks, including large networks like Ethereum, Solana, and Tron, we believe Exodus is positioned to natively support stablecoins wherever current and future use cases emerge. Furthermore, Exodus’ XO Swap product already provides the Company’s partners a solution for swapping between stablecoins and between blockchains.
17
Cloud based infrastructure expense – Cloud infrastructure expenses increased $0.7 million and $0.3 million for the three and nine months ended September 30, 2025 compared to the three and nine months ended September 30, 2024, respectively. We anticipate increased cloud infrastructure expenses as the platform continues to grow due to increased database capacity and new users.
Investment in human capital – Costs related to investment in human capital increased $5.7 million and $8.3 million for the three and nine months ended September 30, 2025 compared to three and nine months ended September 30, 2024, respectively, primarily due to an increase in salaries, payroll taxes and stock based compensation. As the Exodus platform continues to expand, we anticipate the need to add more team members to accommodate the growth in our business, which is expected to materially increase expenses as a result of the impact on the human capital costs described above. Human capital costs are also expected to increase due to the need to add additional team members to address compliance with the evolving regulatory environment, including as a publicly traded company.
Marketing expenses – Marketing-related costs increased $2.7 million and $7.2 million for the three and nine months ended September 30, 2025 compared to three and nine months ended September 30, 2024, respectively. The increase was primarily due to increased spending on website advertisements targeted at the digital asset focused spaces and on online platforms, such as the App Store, and marketing agency expenses. To date, we have primarily focused our marketing strategy toward user growth. We continue to evaluate our marketing strategy and in the future may decide to refocus the current organic growth-based strategy in growing our user base to a more competitive approach, which would be expected to further increase marketing-related expenses.
Changes in tax laws –We operate in various jurisdictions and are subject to changes in applicable tax laws, treaties or regulations in those jurisdictions. A material change in the tax laws, treaties or regulations, or their interpretation, of any jurisdiction with which we do business, or in which we have significant operations, could adversely affect us. For example, the new Pillar 2 approach, which came into effect in 2023 in certain jurisdictions, will establish a global minimum tax rate of 15%, such that multinational enterprises with an effective tax rate in a jurisdiction below this minimum rate will need to pay additional tax. While many aspects of the application of Pillar 2 remain to be clarified, including how the jurisdictions in which we operate, and those in which we and our subsidiaries are based, choose to implement the Organization for Economic Cooperation and Development’s approach in their tax treaties and domestic tax laws, we do not expect Pillar 2 to apply in 2025. On July 4, 2025, the “One Big Beautiful Bill Act” (P.L. 119‑21) was enacted into law. The legislation reinstates and extends several provisions of the 2017 Tax Cuts and Jobs Act, including permanent 100% bonus depreciation, enhanced Section 179 expensing, full R&D expense deduction for domestic expenditures and modification to the international tax framework. The primary impact of the legislation is the acceleration of deductions related to research and development costs incurred in the US which did not have a material impact on the Company’s effective tax rate in the quarter ended September 30, 2025. We are continuing to assess its impact on our consolidated financial statements.
Growth Initiative and Transaction-Related Expenses
During the three and nine months ended September 30, 2025, the Company incurred $1.3 million and $4.3 million, respectively, in expenses associated with the evaluation, negotiation, and travel due to prospective business acquisitions. The Company expects these expenses to continue throughout 2025 as it continues to evaluate potential acquisition targets. These expenses primarily include legal and advisory costs and are recorded within general and administrative expenses in the accompanying condensed consolidated statements of operations. There were no growth initiative expenses in the three and nine months ended September 30, 2024.
In addition, the Company incurred $5.0 million and $11.7 million in revenue sharing expenses related to its business-to-business partnerships for the three and nine months ended September 30, 2025, respectively and $0.5 million and $1.3 million in revenue sharing expenses related to its business-to-business partnerships for the three and nine months ended September 30, 2024. While the Company does not control the operations or growth of its partners, their success can directly impact our own performance. As these partners grow or as new partnerships are formed, our associated revenue sharing expenses are expected to increase. These expenses represent costs of revenue and are included within technology, development, and user support expenses in the condensed consolidated statements of operations.
Monthly Active Users
Monthly Active Users ("MAUs") were 1.5 million and 1.6 million as of September 30, 2025 and 2024, respectively. Our strategic focus remains on expanding our active user base, improving app features, and expanding our business-to-business partnerships. We believe that over the long term, interest in digital assets and digital asset markets will continue to increase. However, during any given period, we cannot be certain that our MAU growth efforts will be effective or that interest in digital assets will remain or continue to increase.
MAUs are defined as any user with activity history in any month. A user has “activity history” if, in the last calendar month, the user performed any activity within the application such as opening their application to check digital asset prices, reading news, or accessing the services of our API Providers. MAUs provide a measurement of user engagement, allowing management to compare engagement over time. MAUs consist of both funded wallets and unfunded wallets. Because Exodus users do not have accounts, users do not close an account. Therefore, users may be inactive one month and active the next as they re-engage with the platform. Management views
18
increasing interest in the Exodus Platform over time as a key indicator of increasing revenue, especially for MAUs outside of the United States as the likelihood of revenue generating transactions increases as user interest increases.
Quarterly Funded Users
In addition to MAUs, we utilize Quarterly Funded Users ("QFUs") to assess user trends and market sentiment. QFUs are defined as unique users with an Exodus wallet that was funded at any point prior to or during the fiscal quarter and during which the user remained active, i.e. opening the app during the period. A wallet is considered “funded” if it holds a non-zero balance of any supported digital asset, QFUs offer a longer-term view of engagement by capturing users who have already funded their wallets.
QFUs totaled 1.8 million and 1.5 million as of September 30, 2025 and 2024, respectively, reflecting an increase of 0.3 million, or 20%. This growth reflects user engagement in addition to active user count. We expect MAUs to fluctuate more significantly in response to app usage patterns and broader market conditions. In contrast, QFUs provide a longer-term view of engagement, representing a more stable cohort—users with funded wallets actively participating in the Exodus platform.
We consider both MAUs and QFUs to be Key Performance Indicators ("KPIs") that provide insight into user activity and platform engagement. While MAUs may fluctuate more significantly due to changes in app usage patterns and broader market conditions, QFUs offer a longer-term view of engagement by capturing users with actively funded wallets who are transacting on the platform. Management uses these metrics to monitor platform health, inform product and marketing strategies, and assess user trends over time.
Results of Operations
Results of operations for the three and nine months ended September 30, 2025 and 2024 (in thousands):
|
Three Months Ended |
|
Three Months Ended |
|
$ Change |
|
% Change |
|
Nine Months Ended |
|
Nine Months Ended |
|
$ Change |
|
% Change |
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
REVENUES |
$ |
30,343 |
|
$ |
20,117 |
|
$ |
10,226 |
|
|
51 |
|
$ |
92,166 |
|
$ |
71,485 |
|
$ |
20,681 |
|
|
29 |
|
EXPENSES (INCOME) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Technology, development and user support |
|
16,987 |
|
|
11,333 |
|
|
5,654 |
|
|
50 |
|
|
46,610 |
|
|
32,804 |
|
|
13,806 |
|
|
42 |
|
General and administrative |
|
14,884 |
|
|
8,466 |
|
|
6,418 |
|
|
76 |
|
|
48,019 |
|
|
25,575 |
|
|
22,444 |
|
|
88 |
|
(Gain) loss on digital assets, net |
|
(21,003 |
) |
|
370 |
|
|
(21,373 |
) |
* |
|
|
(44,694 |
) |
|
(39,197 |
) |
|
(5,497 |
) |
|
14 |
|
|
Gain on sale of future token interests |
|
- |
|
|
- |
|
|
- |
|
* |
|
|
(2,000 |
) |
|
- |
|
|
(2,000 |
) |
* |
|
||
Impairment on other assets |
|
- |
|
|
- |
|
|
- |
|
* |
|
|
137 |
|
|
- |
|
|
137 |
|
* |
|
||
Staking and other income |
|
(264 |
) |
|
(146 |
) |
|
(118 |
) |
|
81 |
|
|
(241 |
) |
|
(701 |
) |
|
460 |
|
|
(66 |
) |
Other loss, net |
|
32 |
|
|
169 |
|
|
(137 |
) |
|
(81 |
) |
|
494 |
|
|
255 |
|
|
239 |
|
|
94 |
|
Interest income |
|
(599 |
) |
|
(1,026 |
) |
|
427 |
|
|
(42 |
) |
|
(2,188 |
) |
|
(2,668 |
) |
|
480 |
|
|
(18 |
) |
Income before income taxes |
|
20,306 |
|
|
951 |
|
|
19,355 |
|
|
2,035 |
|
|
46,029 |
|
|
55,417 |
|
|
(9,388 |
) |
|
(17 |
) |
INCOME TAX EXPENSE |
|
(3,265 |
) |
|
(108 |
) |
|
(3,157 |
) |
|
2,923 |
|
|
(4,194 |
) |
|
(9,393 |
) |
|
5,199 |
|
|
(55 |
) |
NET INCOME |
|
17,041 |
|
|
843 |
|
|
16,198 |
|
|
1,921 |
|
|
41,835 |
|
|
46,024 |
|
|
(4,189 |
) |
|
(9 |
) |
OTHER COMPREHENSIVE (LOSS) INCOME |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Foreign currency translation adjustment |
|
(5 |
) |
|
(637 |
) |
|
632 |
|
|
(99 |
) |
|
(1,318 |
) |
|
31 |
|
|
(1,349 |
) |
|
(4,352 |
) |
COMPREHENSIVE INCOME |
|
17,036 |
|
|
206 |
|
|
16,830 |
|
|
8,170 |
|
|
40,517 |
|
|
46,055 |
|
|
(5,538 |
) |
|
(12 |
) |
* Percentage variances not considered meaningful.
Revenue increased $10.2 million, or 51%, for the three months ended September 30, 2025, compared to the three months ended September 30, 2024. The increase was primarily driven by exchange aggregation revenue, which increased $8.8 million, or 48%, for the three months ended September 30, 2025, compared to the three months ended September 30, 2024, which was primarily attributable to volume exchange growth related to our business-to-business partner efforts. Non-exchange aggregation (i.e., fiat onboarding, staking, consulting, and other) revenue increased $1.5 million, or 73%, for the three months ended September 30, 2025, compared to the three months ended September 30, 2024. The non-exchange revenue increase was driven by higher staking revenue with an increase of $1.3 million or 272%, reflecting growth in total staked assets and reward mechanisms, while also having an increase in fiat-onboarding, reflecting growth of 55%, or $0.5 million.
19
Revenue increased $20.7 million, or 29%, for the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024. The increase was primarily driven by exchange aggregation revenue, which increased $19.3 million, or 30%, for the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024, which was primarily attributable to volume exchange growth related to our business-to-business partner efforts. Non-exchange aggregation (i.e., fiat onboarding, staking, consulting, and other) revenue increased $1.4 million, or 21%, for the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024. The non-exchange revenue increase was driven by higher staking revenue with an increase of $1.9 million or 112% as a result in growth in total staked assets and new reward mechanisms. Fiat revenue grew by 22%, or $0.6 million for the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024.
For the three months ended September 30, 2025, four API Providers accounted for more than 10% each of total revenue and collectively generated exchange aggregation revenue of $18.4 million. For the nine months ended September 30, 2025, five API Providers accounted for more than 10% each of total revenue and collectively generated exchange aggregation revenue of $64.3 million. For the three and nine months ended September 30, 2024, four API Providers accounted for more than 10% each of total revenue and collectively generated exchange aggregation revenue of $13.8 million and $50.6 million, respectively.
The following table summarizes the revenue by users of the platform and the business-to-business partnerships for the three and nine months ended September 30, 2025 and 2024:
|
|
Three Months Ended |
|
|
|
Nine Months Ended |
|
|
||||||||||||||||||||||||||||
|
|
2025 |
|
|
|
2024 |
|
|
|
2025 |
|
|
|
2024 |
|
|
||||||||||||||||||||
Exchange aggregation - users |
|
$ |
21,894 |
|
|
|
72.1 |
|
% |
|
$ |
17,520 |
|
|
|
87.1 |
|
% |
|
$ |
70,580 |
|
|
|
76.7 |
|
% |
|
$ |
62,673 |
|
|
|
87.7 |
|
% |
Exchange aggregation - partnerships |
|
|
5,000 |
|
|
|
16.5 |
|
|
|
|
604 |
|
|
|
3.0 |
|
|
|
|
13,538 |
|
|
|
14.7 |
|
|
|
|
2,143 |
|
|
|
3.0 |
|
|
Fiat onboarding - users |
|
|
1,321 |
|
|
|
4.4 |
|
|
|
|
851 |
|
|
|
4.2 |
|
|
|
|
3,436 |
|
|
|
3.7 |
|
|
|
|
2,808 |
|
|
|
3.9 |
|
|
Fiat onboarding - partnerships |
|
|
- |
|
|
|
- |
|
|
|
|
1 |
|
|
|
- |
|
|
|
|
13 |
|
|
|
- |
|
|
|
|
8 |
|
|
|
- |
|
|
Staking |
|
|
1,817 |
|
|
|
6.0 |
|
|
|
|
488 |
|
|
|
2.4 |
|
|
|
|
3,515 |
|
|
|
3.8 |
|
|
|
|
1,655 |
|
|
|
2.3 |
|
|
Consulting - users |
|
|
78 |
|
|
|
0.3 |
|
|
|
|
(6 |
) |
|
|
- |
|
|
|
|
115 |
|
|
|
0.1 |
|
|
|
|
(6 |
) |
|
|
- |
|
|
Consulting - partnerships |
|
|
6 |
|
|
|
- |
|
|
|
|
313 |
|
|
|
1.6 |
|
|
|
|
584 |
|
|
|
0.6 |
|
|
|
|
859 |
|
|
|
1.2 |
|
|
Other - users |
|
|
214 |
|
|
|
0.7 |
|
|
|
|
49 |
|
|
|
0.2 |
|
|
|
|
372 |
|
|
|
0.4 |
|
|
|
|
142 |
|
|
|
0.2 |
|
|
Other - partnerships |
|
|
13 |
|
|
|
- |
|
|
|
|
297 |
|
|
|
1.5 |
|
|
|
|
13 |
|
|
|
- |
|
|
|
|
1,203 |
|
|
|
1.7 |
|
|
Revenues |
|
$ |
30,343 |
|
|
|
100.0 |
|
% |
|
$ |
20,117 |
|
|
|
100.0 |
|
% |
|
$ |
92,166 |
|
|
|
100.0 |
|
% |
|
$ |
71,485 |
|
|
|
100.0 |
|
% |
Technology, development and user support increased $5.7 million, or 50%, for the three months ended September 30, 2025, compared to the three months ended September 30, 2024. The increase was primarily due to a $4.5 million increase in partner fee expense as a result of a correlated increase in revenue from business-to-business partnerships, a $2.1 million increase in team member compensation and benefit expense as a result of increased team member compensation and a $0.7 million increase in cloud services expenses, partially offset by a $0.6 million decrease in subscription expenses primarily driven by higher costs associated with key infrastructure vendors for development tools, application development, performance optimization and security protections and a $0.5 million decrease in depreciation and amortization expenses.
Technology, development and user support increased $13.8 million, or 42%, for the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024. The increase was primarily due to a $10.4 million increase in partner fee expense as a result of a correlated increase in revenue from business-to-business partnerships, a $2.8 million increase in team member compensation and benefit expense as a result of increased team member compensation, payroll taxes and stock based compensation, partially offset by a $1.4 million increase in capitalized labor as a result of impairment of software projects, a $0.9 million decrease in depreciation and amortization expenses, a $0.2 million decrease in subscription expenses primarily driven by higher costs associated with key infrastructure vendors for development tools, application development, performance optimization and security protections, a $0.1 million decrease in technology equipment expense.
General and administrative expenses increased $6.4 million, or 76%, for the three months ended September 30, 2025, compared to the three months ended September 30, 2024. Expenses driving the increase include a $3.6 million increase in team member compensation and benefit expenses, $2.7 million increase in marketing expenses, a $0.7 million increase in foreign currency expense, a $0.5 million increase in legal and consulting expenses, a $0.4 million increase in expense associated with the issuance of warrants, a $0.2 million
20
increase in subscription expense and a $0.2 million increase in miscellaneous expenses partially offset by a $0.3 million decrease in meeting and travel expenses and a $0.1 million decrease in political contributions.
General and administrative expenses increased $22.4 million, or 88%, for the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024. Expenses driving the increase include a $7.2 million increase in marketing expenses, a $5.4 million increase in team member compensation and benefit expenses as a result of increased team member compensation, a $4.2 million increase in meeting and travel expenses, a $3.8 million increase in legal and consulting expenses, a $2.5 million increase in regulatory expenses, a $1.3 million increase in political contributions, a $0.7 million increase in miscellaneous expenses, a $0.6 million increase in subscription expense and a $0.4 million increase in expense associated with the issuance of warrants, partially offset by a decrease of $2.1 million in foreign currency expenses.
The Company experienced a favorable fluctuation in the market price of digital assets held during the three months ended September 30, 2025, primarily driven by institutional inflows and ETF adoption, regulatory clarity and stablecoin legislation, and macro and geopolitical tailwinds. During the three months ended September 30, 2025, the Company recognized net realized gains from exchange of digital assets of $3.6 million and net unrealized gains from remeasurement of digital assets of $24.6 million. During the three months ended September 30, 2024, the Company recognized net realized losses from exchange of digital assets of $0.7 million and net unrealized gains from remeasurement of digital assets of $0.4 million.
The Company experienced a favorable fluctuation in the market price of digital assets held during the nine months ended September 30, 2025, primarily driven by institutional inflows and ETF adoption, regulatory clarity and stablecoin legislation, and macro and geopolitical tailwinds. During the nine months ended September 30, 2025, the Company recognized net realized losses from exchange of digital assets of $2.8 million and net unrealized gains from remeasurement of digital assets of $41.9 million. During the nine months ended September 30, 2024, the Company recognized net realized gains from exchange of digital assets of $5.1 million and net unrealized gains from remeasurement of digital assets of $34.1 million.
Income tax expense was $3.3 million for the three months ended September 30, 2025, compared to an expense of $0.1 million for the three months ended September 30, 2024. The effective tax rate during the three months ended September 30, 2025 was 16.1%, compared to 11.4% during the three months ended September 30, 2024. Income tax expense was $4.2 million for the nine months ended September 30, 2025, compared to an expense of $9.4 million for the nine months ended September 30, 2024. The effective tax rate during the nine months ended September 30, 2025 was 9.1%, compared to 16.9% during the nine months ended September 30, 2024. For the nine months ended September 30, 2025, the change from the effective rate was primarily impacted by federal research tax credits and the change in permanent differences, including the tax benefit from the foreign derived intangible income, non-deductible expenses, and discrete items, including stock-based compensation and tax effect of realized and unrealized digital asset gains and losses during the period. For the nine months ended September 30, 2024, the change from the effective rate was primarily impacted by the change in permanent differences and discrete items, including the tax benefit from foreign derived intangible income and the effect of digital asset gains and losses, specifically recognized in the period.
Liquidity and Capital Resources
Overview
Our primary source of funding is from API fee revenues. We fund our operational costs from these revenues. Our primary use of funds is payment of our operating costs, which consist mostly of compensation and benefit expenses and security costs. As of the date of this filing, based on current operating plans, we believe that our existing cash and cash equivalents, treasury bills, USDC and digital assets, together with cash generated from our operations, will be sufficient to fund our operations and anticipated growth for the next twelve months and thereafter for the foreseeable future. We may seek to opportunistically raise additional capital through private or public equity securities offerings in the future.
We expect that increased market acceptance of digital assets and blockchain technology, combined with our expected continued growth of the Exodus platform, market acceptance of our services and ability to attract and retain users on our platform, should support our ability to generate sufficient cash to meet our requirements and plans for cash.
21
Cash Flows
The following table summarizes our cash flows for the periods indicated (in thousands):
|
|
Nine Months Ended |
|
|
|
|
||||||
|
|
2025 |
|
|
2024 |
|
|
$ Change |
|
|||
Net cash used in operating activities |
|
$ |
(16,243 |
) |
|
$ |
(6,803 |
) |
|
$ |
(9,440 |
) |
Net cash provided by investing activities |
|
$ |
41,659 |
|
|
$ |
24,741 |
|
|
$ |
16,918 |
|
Net cash used in financing activities |
|
$ |
(12,751 |
) |
|
$ |
(2,684 |
) |
|
$ |
(10,067 |
) |
Net Cash Used In Operating Activities
Net cash used in operating activities increased by $9.4 million for the nine months ended September 30, 2025 as compared to September 30, 2024. The primary drivers of the change were an increase of $10.0 million in operating activities settled in digital assets and USDC, an increase in stock based compensation of $5.7 million, a net increase in gains on digital assets of $5.5 million, a decrease in net income of $4.2 million, offset by a decrease of $6.3 million in working capital and a decrease in deferred tax expense of $0.9 million. The primary drivers of the increase in operating activities settled in digital assets and USDC included an increase to revenue of $21.1 million related to increased transaction volume, $12.5 million of increased expenses, $1.5 million of conversion of digital assets and USDC to cash, net for use in operational expense and $1.1 million in accounts receivable, partially offset by decreased payroll liabilities of $2.6 million and decreased currency conversion of $1.3 million.
Net Cash Provided By Investing Activities
Net cash provided by investing activities increased by $16.9 million for the nine months ended September 30, 2025 as compared to September 30, 2024. The increases were related to $29.2 million of net change in treasury bills investments and redemptions, proceeds for the sale of future token interests of $2.0 million, partially offset by a decrease of $14.5 million of digital assets sold for cash and a decrease in purchases of $0.1 million of digital assets.
Net Cash Used In Financing Activities
Net cash used in financing activities increased by $10.1 million for the nine months ended September 30, 2025 as compared to September 30, 2024. This was primarily driven by cash used for the repurchase of shares of our common stock to pay employee withholding taxes as a part of our 2019 and 2021 Plan.
Total Digital Assets and Liquid Assets
The following tables show the Company’s holdings of digital assets and cash and cash equivalents (including treasury bills with a maturity date of less than three months), USDC, and treasury bills with a maturity date of greater than three months.
The digital asset holdings as of September 30, 2025 and December 31, 2024 were (in thousands, except units):
|
|
Units |
|
|
Cost basis |
|
|
Fair Value |
|
|||
As of September 30, 2025 |
|
|
|
|
|
|
|
|
|
|||
Bitcoin |
|
|
2,123 |
|
|
$ |
96,482 |
|
|
$ |
242,387 |
|
Ethereum |
|
|
2,770 |
|
|
|
5,321 |
|
|
|
11,490 |
|
Solana |
|
|
47,502 |
|
|
|
6,328 |
|
|
|
9,936 |
|
Other |
|
|
172,185,790 |
|
|
|
100 |
|
|
|
98 |
|
Digital assets |
|
|
|
|
$ |
108,231 |
|
|
$ |
263,911 |
|
|
|
|
|
|
|
|
|
|
|
|
|||
As of December 31, 2024 |
|
|
|
|
|
|
|
|
|
|||
Bitcoin |
|
|
1,941 |
|
|
$ |
69,707 |
|
|
$ |
181,238 |
|
Ethereum |
|
|
2,655 |
|
|
|
4,967 |
|
|
|
8,847 |
|
Solana |
|
|
24,472 |
|
|
|
2,241 |
|
|
|
4,628 |
|
Other |
|
|
10,011,770 |
|
|
|
5,641 |
|
|
|
1,646 |
|
Digital assets |
|
|
|
|
$ |
82,556 |
|
|
$ |
196,359 |
|
|
22
The liquid asset holdings as of September 30, 2025 and December 31, 2024 were (in thousands):
|
|
|
|
Carrying Value |
|
|
Quoted |
|
|
Significant |
|
|
Unobservable |
|
||||
As of September 30, 2025 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cash and cash equivalents |
|
|
|
$ |
50,548 |
|
|
$ |
50,548 |
|
|
$ |
- |
|
|
$ |
- |
|
USDC |
|
|
|
|
257 |
|
|
|
257 |
|
|
|
- |
|
|
|
- |
|
Total liquid assets |
|
|
|
$ |
50,805 |
|
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
As of December 31, 2024 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cash and cash equivalents |
|
|
|
$ |
37,883 |
|
|
$ |
37,883 |
|
|
$ |
- |
|
|
$ |
- |
|
USDC |
|
|
|
|
12 |
|
|
|
12 |
|
|
|
- |
|
|
|
- |
|
Treasury bills |
|
|
|
|
30,490 |
|
|
|
30,490 |
|
|
|
- |
|
|
|
- |
|
Total liquid assets |
|
|
|
$ |
68,385 |
|
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Material Capital Commitments
Exodus currently has no material commitments for capital expenditures.
Critical Accounting Estimates
See the section titled “Critical Accounting Estimates” set forth under “Item 7. Management’s Discussion and Analysis of the Financial Condition and Results of Operations” in the Form 10-K. There have been no material changes from those disclosed in the Form 10-K.
23
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
Market price risk of digital assets
A large portion of our revenue generated from API providers is received in Bitcoin. A decline in the market price of digital assets had (and could in the future, have) an adverse effect on the Company's operations, the value of our digital assets, and our future operations and cash flows.
The market price of Bitcoin is impacted by a variety of factors and is determined primarily using data from various exchanges, over-the-counter markets and derivative platforms. The digital asset industry has previously been negatively impacted by market price volatility. Pricing may be the result of, and may continue to result in, speculation regarding future appreciation in the value of Bitcoin. There can be no assurance that we will be able to exchange our digital assets for U.S. dollars on a timely basis, if at all, or for a fair price. If the value of our digital assets declines, or if we experience difficulties converting our digital assets to U.S. dollars, we may not have sufficient liquidity to satisfy our liabilities, expenses and costs as they become due, which may negatively affect our business operations and financial condition. A hypothetical 10% increase or decrease in the digital assets held would have resulted in a change to the fair value of $26.3 million and $19.6 million as of September 30, 2025 and December 31, 2024, respectively.
Interest rate risk
Our exposure to changes in interest rates primarily relates to interest earned on our cash and cash equivalents and U.S. Treasury Bills with maturities of six months or less. We had no outstanding debt subject to interest rate risk as of September 30, 2025 and consequently, we do not currently expect to be exposed to fluctuations in interest rates for the foreseeable future.
Our investment policy and strategy related to our cash, cash equivalents, and treasury bills is to preserve capital and meet liquidity requirements without increasing risk. Our cash and cash equivalents consist of money market funds denominated in U.S. dollars, cash deposits, and treasury bills acquired with less than three months to maturity. Treasury bills outside of cash and cash equivalents include amounts acquired with three months to twelve months to maturity. Therefore the fair value of our cash, cash equivalents, and treasury bills would not be significantly affected by either an increase or a decrease in interest rates. A hypothetical 100 basis points increase or decrease in average interest rates applied to our daily balances held as of September 30, 2025 and 2024, would have resulted in a $0.5 million and a $0.7 million increase or decrease respectively, in interest earned on cash, cash equivalents, and treasury bills. The Federal Reserve has increased the Federal Funds Rate over 525 basis points since March 31, 2021 to control current levels of inflation and as of September 30, 2025, the Federal Funds Rate was 4.09%. A decrease in interest rates is possible. A hypothetical 500 basis points increase or decrease in average interest rates applied to our daily balances held as of September 30, 2025 and 2024, which hypothetical basis point increase corresponds closely to the increase of the Federal Funds Rate since early 2021, would have resulted in a $2.5 million and $3.5 million increase or decrease, respectively, in interest earned on cash, cash equivalents, and treasury bills.
Foreign currency risk
Foreign currency transaction risk
Revenues, expenses, and financial results of our foreign subsidiaries are recorded in the functional currency of these subsidiaries. Our foreign currency exposure is primarily related to transactions denominated in Swiss Francs attributable to cash and cash equivalents, and other intercompany transactions where the transaction currency is different from a subsidiary’s functional currency. Changes in foreign exchange rates, and in particular a weakening of foreign currencies relative to the U.S. dollar may negatively affect our results of operations as expressed in U.S. dollars. We have experienced and will continue to experience fluctuations in our results of operations as a result of gains or losses on the settlement and the remeasurement of monetary assets and liabilities denominated in foreign currencies that are not the functional currency.
We recognized net foreign currency gains of $1.9 million and net foreign currency losses of $0.2 million for the nine months ended September 30, 2025 and 2024, respectively, in general and administrative expense, net in the condensed consolidated statements of operations and comprehensive income. If an adverse 10% foreign currency exchange rate change was applied to total monetary assets, liabilities, and commitments denominated in currencies other than the functional currencies at the balance sheet date, it would not have a material impact on our financial results.
We have not, but may in the future enter into derivatives or other financial instruments in an attempt to hedge our exposure to foreign currency exchange risk. It is difficult to predict the impact hedging activities would have on our results of operations. Additionally, the volatility of exchange rates depends on many factors that we cannot forecast with reliable accuracy. Our international operations increase our exposure to exchange rate fluctuations and, as a result, such fluctuations could have a material impact on our future results of operations and cash flows.
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Foreign currency translation risk
Fluctuations in functional currencies from our net investment in international subsidiaries expose us to foreign currency translation risk, where changes in foreign currency exchange rates may adversely affect our results of operations upon translation into U.S. dollars. We recognized losses on translation adjustments, net of tax, of $1.3 million for the nine months ended September 30, 2025, compared to losses on translation adjustments, net of tax, of less than $0.1 million for the nine months ended September 30, 2024, in the condensed consolidated statements of operations and comprehensive income. As of September 30, 2025 and 2024, a 10% increase or decrease on foreign currency exchange rates for translation purposes would not have a material impact on our financial results.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Our management, with the participation of, and under the supervision of, our Chief Executive Officer (Principal Executive Officer) and Chief Financial Officer (Principal Financial Officer), evaluated the effectiveness of the Company’s disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, as of September 30, 2025. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of September 30, 2025, the Company’s disclosure controls and procedures were not effective due to the material weaknesses in internal control over financial reporting, as described below.
Previously Reported Material Weaknesses
We identified errors in our previously reported financial information as of and for the year ended December 31, 2021. As a result of the errors that were identified, we identified a material weakness in the Company’s control environment whereby the Company did not design and maintain effective internal control over financial reporting with respect to the expertise and quantity of its resources. Specifically, we did not effectively execute a strategy to hire, train, and retain a sufficient quantity of personnel with an appropriate level of training, expertise, and experience in certain areas important to financial reporting. In addition, we also identified a material weakness whereby we did not design and implement effective control activities based on the criteria in the Internal Control -- Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO Framework”). Specifically, the control activities did not adequately (i) address relevant risks, (ii) provide evidence of performance, (iii) provide appropriate segregation of duties, or (iv) operate at a level of precision to identify all potentially material errors. While the Company is progressing in its efforts to remediate the existing material weaknesses in full, certain control activities attributing to those material weaknesses continue to exist as of September 30, 2025.
Remediation Plan Update of Previously Reported Material Weaknesses
Management has continued to execute its remediation plan through the period ended September 30, 2025, to address the previously reported material weaknesses in internal control over financial reporting. Throughout the current fiscal year 2025, the Company has added experienced accounting leadership, enhanced control design and documentation, and implemented review and approval processes to further strengthen oversight of our financial reporting processes. Key remediation actions completed as of September 30, 2025, include:
As of September 30, 2025, all key remediation measures have been implemented and are in the process of operating. The Company is now performing testing to confirm the operating effectiveness of these enhanced controls.
While management has made significant progress and believes remediation efforts are substantially complete, the material weaknesses will not be considered fully remediated until controls have operated for a sufficient period of time and have been successfully tested for
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effectiveness. Management, with assistance from external consultants, will continue to monitor and evaluate the enhanced controls to confirm their sustained effectiveness and make additional refinements as necessary.
Changes in Internal Control over Financial Reporting
Except as described above with respect to our remediation plan, there have been no changes in our internal control over financial reporting that occurred during the three months ended September 30, 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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PART II—OTHER INFORMATION
Item 1. Legal Proceedings
The information required with respect to this item can be found in Note 10, “Commitments and Contingencies—Legal Proceedings” to our consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.
Item 1A. Risk Factors
There have been no material changes in our risk factors from those previously disclosed in Item 1A of Part I of our Annual Report on Form 10-K for the year ended December 31, 2024 and Item 1A of Part II of our Quarterly Report on Form 10-Q for the quarterly periods ended March 31, 2025.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
None.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
Not applicable.
Item 5. Other Information
(c) Trading Plans
On
Master Digital Currency Loan Agreement with Galaxy Digital LLC
The information included in this “Part II-Item 5. Other Information” of this Form 10-Q is provided in lieu of filing such information on a Current Report on Form 8-K under “Item 1.01 Entry into a Material Definitive Agreement” and “Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.”
On November 5, 2025, Exodus Movement, Inc. (the “Company”) entered into a Master Digital Currency Loan Agreement (the “Loan Agreement”) with Galaxy Digital LLC (the “Lender”). The Loan Agreement establishes the terms and conditions under which the Company may from time to time borrow U.S. Dollars and/or specified digital currencies (each, a “Loan”), including Bitcoin (BTC), Ether (ETH), Bitcoin Cash (BCH), Litecoin (LTC), and other mutually agreed digital assets (the “Loan Facility”). Loans may be structured as open or term loans, with the specific type, amount, collateral, fees, maturity, the interest rate applicable to each Loan, and other terms for each Loan set forth in a written Loan Term Sheet executed by the Company and Lender at the time of such Loan. As of the date of this filing, the Company has not made any borrowings under the Loan Agreement.
Each Loan is secured by cash or digital currency collateral, and the Company has granted the Lender a first-priority security interest in such collateral to secure its obligations under the Loan Agreement. The Loan Agreement includes customary provisions regarding margin calls, events of default, and termination rights, as well as terms addressing hard forks, airdrops, and other digital-asset-specific events. Events of default include, among others, failure to pay borrowed amounts or fees when due, failure to return collateral, breach of covenants or representations, failure to meet margin requirements, certain merger or insolvency events, and cross-default events under other agreements for borrowed money. Upon an event of default, the non-defaulting party may declare all outstanding obligations immediately due and payable and exercise remedies available under the agreement and applicable law.
The Loan Agreement has an initial term of one year and automatically renews for successive one-year periods unless terminated in accordance with its terms. Termination events include specified regulatory or governmental actions, significant declines in the Company’s total equity, failure to deliver required reports, and key-person events. The Loan Agreement is governed by the laws of the State of New York and provides for binding arbitration in New York County.
The foregoing description of the Loan Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Master Digital Currency Loan Agreement, which is attached hereto as Exhibit 10.1 and incorporated herein by reference.
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Item 6. Exhibits
Exhibit Number |
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Description |
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10.1* |
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Master Digital Currency Loan Agreement, dated November 5, 2025, by and among Exodus Movement, Inc. and Galaxy Digital LLC (Portions of this exhibit indicated by [***] have been omitted from this public filing as they are not material and would be competitively harmful if disclosed). |
Filed herewith.
|
31.1 |
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Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
Filed herewith.
|
32.2 |
|
Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
Filed herewith.
|
32.1 |
|
Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
Filed herewith.
|
32.2 |
|
Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
Filed herewith.
|
101.INS |
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Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document. |
|
101.SCH |
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Inline XBRL Taxonomy Extension Schema With Embedded Linkbase Documents |
|
104 |
|
Cover Page Interactive Data File (embedded within the Inline XBRL document) |
|
|
|
|
|
* Portions of this exhibit indicated by [***] have been omitted from this public filing as they are not material and would be competitively harmful if disclosed.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
|
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EXODUS MOVEMENT, INC. |
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Date: November 10, 2025 |
|
By: |
/s/ James Gernetzke |
|
|
|
James Gernetzke |
|
|
|
Chief Financial Officer |
|
|
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FAQ
How did EXOD perform in Q3 2025?
What drove Exodus Movement’s revenue mix (EXOD) in Q3 2025?
What are EXOD’s digital asset holdings?
What was EXOD’s cash position and operating cash flow?
Did EXOD disclose any regulatory matters?
What subsequent events did EXOD announce?
What were EXOD’s user metrics?
