Gemini Space Station (NASDAQ:GEMI) reported second-quarter revenue growth despite weaker crypto trading activity, as expanding services revenue, over-the-counter trading and new product offerings offset a decline in exchange revenue. The company also highlighted lower operating costs following restructuring actions, while a fraud-related credit-card provision weighed on results.
Total revenue rose 37% year over year to $45.5 million, while net revenue increased 33% to $43.7 million, Interim CFO Danijela Stojanovic said. Services revenue and interest income reached $26 million, up 117% from a year earlier and representing 59% of net revenue, compared with 50% in the first quarter.
Trading Revenue Falls as Services Grow
Transaction revenue totaled $17.8 million, down 15% year over year and 26% sequentially. Exchange revenue fell 38% from a year earlier to $12.5 million as crypto trading activity remained weak. Total spot trading volume declined 66% to $3.8 billion from $11.3 billion in the prior-year quarter, with institutional activity accounting for nearly 90% of the volume decrease, Stojanovic said.
Over-the-counter revenue, however, climbed 671% year over year to $4.7 million. The company attributed the increase partly to episodic institutional demand during periods of heightened crypto-market volatility, while noting that OTC results could remain variable because of the nature of large institutional trades.
Prediction markets contributed $500,000 in transaction revenue, up 18% from the first quarter. Event contracts traded increased 93% sequentially. Gemini said it prioritized order-book depth and liquidity over near-term fee capture, with rebates under new maker and taker incentive programs accounting for roughly 20% of gross prediction-market fees.
“We continue to see predictions as the largest near-term growth opportunity on the platform,” Co-Founder and President Cameron Winklevoss said, particularly heading into the second-half sports season.
The company tripled its number of contracted prediction-market makers since the first quarter, introduced three maker and taker incentive programs, enhanced its predictions API and added AI-powered personalized insights. Gemini also began operating its derivatives clearinghouse and settling its own prediction-market contracts after receiving a derivatives clearing organization license from the Commodity Futures Trading Commission in April.
Card Revenue Rises, but Fraud Provision Increases
Credit-card revenue increased 231% year over year to $16.2 million and rose 10% sequentially. Card monthly transacting users totaled 106,000 at quarter-end, up 165% from a year earlier but down 7% from the first quarter as Gemini shifted customer acquisition toward lower-spending, higher-return channels.
Card receivables were roughly unchanged from the prior quarter at $219.6 million, while pre-provision net revenue from the card business improved 44% sequentially to $5.5 million. New card sign-ups were approximately 5,000 during the quarter.
Transaction losses rose to $20.1 million from $3.6 million a year earlier, primarily because of a higher provision for expected credit losses tied to an identity fraud incident involving a specific first-quarter account cohort. Gemini had previously established an initial $4.1 million reserve, but expanded its estimate during the second quarter after identifying additional affected accounts and fraud patterns.
Stojanovic said the company believes the issue was concentrated rather than indicative of wider deterioration in card credit performance. Total delinquency rose to 9.4% from 3.8%, but fraud-related delinquency increased to 6.1% from 1%, while non-fraud delinquency rose modestly to 3.3% from 2.8%.
Gemini has strengthened fraud controls, onboarding and monitoring processes, though Stojanovic said the company would not publicly detail those measures because they are part of its fraud-prevention framework.
Cost Reduction and Platform Expansion
Total operating expenses declined 15% sequentially to $122.4 million, reflecting the full-quarter impact of restructuring actions. Salaries and compensation fell 26% sequentially to $48.2 million, including $20.3 million of stock-based compensation. Headcount ended the quarter at about 402, down from 442 in the first quarter and approximately 40% below the company’s third-quarter 2025 peak.
Sales and marketing expense declined 54% sequentially to $8.8 million. Broad-based acquisition marketing was largely paused, with brand and performance marketing spending of approximately $100,000 during the quarter. Gemini said it expects to increase brand and performance marketing in the second half while remaining within its full-year guidance.
The company launched commission-free U.S. equities and exchange-traded fund trading in July. Gemini said eligible U.S. customers can now access more than 5,000 tradable markets across equities, crypto and event contracts, compared with fewer than 100 a year earlier. Multi-product users nearly doubled year over year, according to management.
Tyler Winklevoss, Gemini’s co-founder and CEO, said the company is pursuing a “financial super app” strategy rather than operating solely as a predictions or crypto-trading platform. He said 50% of Gemini customers who have placed predictions also hold a Gemini credit card.
Perpetual Futures and Second-Half Outlook
Gemini said it has filed an application to operate as a futures commission merchant and is seeking an amendment to its derivatives clearinghouse approval for margining. Tyler Winklevoss said the company could launch U.S. crypto perpetual futures after receiving those approvals, which management believes could arrive this year. Gemini already offers perpetual contracts in Singapore, he said.
The company is not providing revenue guidance, citing the early monetization stage of several new products and uncertainty in the broader crypto environment. It expects cash compensation to decline 15% to 20% from 2025 levels, stock-based compensation of $100 million to $115 million for the year, and technology and general-and-administrative expenses of $155 million to $170 million.
Gemini expects marketing spending, excluding rewards and promotions, to equal 10% to 15% of revenue for the full year. Management said it is now focused on distribution, customer acquisition and cross-selling across its expanding product platform while maintaining cost discipline.
About Gemini Space Station (NASDAQ:GEMI)
Our mission is to unlock the next era of financial, creative, and personal freedom. Gemini envisions a future where crypto will redesign the global financial system, the internet, and money in a way that provides greater choice, independence, and opportunity for all. As a trusted bridge between the traditional financial system and the emerging cryptoeconomy, we are providing access for individuals and institutions to a decentralized future that is more open, fair, and secure. Gemini was founded in 2014 to be the most trusted, secure, and easy way to buy, sell, and store crypto assets.
