Antalpha Platform - Q4 2025

Transcript

Herman Yu (Head of Strategy)

Good day, and thank you for standing by. Welcome to Antalpha's Fourth Quarter and Full Year 2025 Earnings Conference Call. Today's call is being recorded. All participants are now in a listen-only mode. After management prepared remarks, there will be a question and answer session. I would now like to turn the call over to Mr. Chris Mammone, Managing Director of The Blueshirt Group and representative for Antalpha's Investor Relations team. Mr. Mammone, please go ahead.

Chris Mammone (Managing Director)

Thank you, operator. Please note that our remarks today will include forward-looking statements based on current expectations. These statements involve risks and uncertainties that could cause actual results to differ materially. For a discussion of these risks, please refer to Antalpha's filings with the SEC. We do not undertake any obligation to update forward-looking statements except as required by law. This call also contains references to unaudited non-GAAP financial measures. Reconciliation to the most comparable GAAP measures can be found in our press release and SEC filings. I'll now turn the call over to Herman Yu, Head of Strategy at Antalpha. Herman will provide key operational highlights, followed by Paul Liang, who will provide financial highlights. On the call today, both Herman and Paul will discuss our results on a year-over-year basis unless they mention otherwise. Herman, please go ahead.

Herman Yu (Head of Strategy)

Welcome, everyone. Thank you for joining our call today. Antalpha delivered a strong fourth quarter to wrap up a milestone year, reflecting the continued execution across our long-term roadmap. Revenue growth accelerated every quarter throughout 2025, with fourth quarter revenue reaching $28 million, up 110% year-over-year. Despite Bitcoin prices declining 23% in the fourth quarter, Antalpha revenue remained resilient. For the year, Antalpha revenue was $80 million, up 68% year-over-year. Total loan book grew at a consistent steady pace with prudent risk management. Total value loan on Antalpha Prime reached $2.8 billion at the end of 2025, up 59% year-over-year. Bitcoin pledge on the total loan book was $3.7 billion.

Loan-to-value or LTV on supply chain loans was 57%, representing our disciplined approach to underwriting and collateral management. Loan balance per client grew 43%, and new client adds increased 12% year-over-year. At the end of December, our clients generated 81.3 EH/s, approximately 7.3% of global hash rate. For the fourth quarter, adjusted EBITDA was $18.4 million, up 802% year-over-year. adjusted EBITDA margin reached 66%, up 51 points from the prior year. For 2025, adjusted EBITDA was $33.2 million, up 460% year-over-year. adjusted EBITDA margin reached 42%, up 30 points for the year. As a crypto-native financing platform with tokenized gold upside, Antalpha revenue and profitability reached a historical high in the fourth quarter.

Our mining financing business is aligned with the economics of compute, energy, and collateral-based lending. Our clients are more long-term focused. They rely on Antalpha's risk management capabilities to better equip them in navigating macro volatility. In addition, by embracing Tether Gold and acquiring XAUt as part of our long-term roadmap, such risk management strategy not only improves our balance sheet resilience and funding source, but also provides our shareholder with the upside to gold appreciation. In an industry susceptible to volatility and large market swings, it is important for us to solidify our current strength while seizing new opportunities in adjacent industries. When we look at large global financial institutions, we often find market leaders that have solid balance sheets to weather market turbulence and be ready for market opportunities as they arise.

To us, this means having an active risk management strategy to weather the market volatility and leveraging our marketing position and competitive mode to build on new market opportunities. Let me talk about our risk management and product innovation. Let's start with risk management. Antalpha's operating philosophy of risk management first has been prevalent since our inception. We require overcollateralization on day one instead of relying on clients' credit rating for loan origination. We require our clients to store their machines at a data center where we know the operator, and all the BTCs our clients mine are deposited in our wallet during the term of the loan, which allows our clients' collateral pool to accumulate. With Bitcoin down approximately 50% from its peak last October, we have been in conversation with our clients to review the current market situation.

There have been four other periods in BTC's 17-year history with a drawdown of 50% or more. The market rallied back each time. From a risk management perspective, it's important to be in conversations with our clients to discuss potential scenarios and options with them. Helping our clients navigate market volatility and maintaining a stable financial position is crucial to our clients' long-term participation in the Bitcoin mining industry. This not only brings tremendous value to our clients, it also strengthens our own business overall. Let me turn to product innovation and seizing new market opportunities. Our competitive mode comes from our ability to serve clients. We work closely with our clients to understand their needs and offer new financing solutions in anticipation of new market opportunities.

For example, it has always almost been a year since we foresaw the importance of tokenized gold in serving the mining community and the crypto industry at large. Initially, we acquired $20 million in Tether Gold. Last October, we acquired Nasdaq-listed Aurelion, anchoring its $100 million pipe and purchasing $134 million in Tether Gold, which further strengthened our balance sheet while building for gold appreciation upside. As of year-end, total accumulated unrealized gain on Tether Gold was $16.6 million. $9.5 million of that is attributed to Antalpha. Year to date, gold prices have gone up another 22% as of last Friday. Aside from Treasury gains, our involvement with Tether Gold in launching Antalpha RWA Hub have also allowed our customers to diversify into Tether tokenized gold and improve the resilience of their crypto holdings.

Starting in Q4, a client can purchase XAUt from us and redeem London Good Delivery in both Singapore and Hong Kong. As our long-term roadmap, it's important to incorporate tokenized gold into our risk management strategy. Gold has low correlation with Bitcoin and low volatility. Tokenized gold is well-suited for the use as a collateral and as a store of value. We are looking into offering XAUt collateralized loans to our clients for resilience and diversification. With a strong supply of HPC coming to market, the backdrop suggests that AI agents are expected to drive demand for inference compute. With the advent of AI engines, we see financing opportunities that in the past were not possible due to the high administrative costs, are now opportunities for us, such as agent-led financing solutions.

2026 will be an exciting year for us as we align Antalpha with new AI capabilities and market opportunities, as well as adjusting the way we operate to become an AI-driven company. We will brief you more on how we approach AI when we are ready to share more details. With that, let me turn the call over to Paul to walk through our financial highlights.

Paul Guanning Liang (CFO and Director)

Thank you, Herman. I will walk you through Antalpha's financial performance for the fourth quarter of 2025, focusing on the underlying drivers of our results. We closed the acquisition of Aurelion and their $100 million PIPE, raising on October 10th last year, with 73% of Aurelion's share voting rights. We started consolidating Aurelion's operating results subsequent to the deal closing. We released the Q4 earnings release earlier today. As you can see, our Q4 earnings release saw Antalpha's operating results at three levels. The first, Antalpha combined and consolidated. Second, Antalpha Prime, which is the Antalpha business prior to the acquisition of Aurelion. The third, Aurelion. Herman summarized Antalpha's consolidated results. Let me now give you more color on Antalpha Prime and Aurelion. Let me talk about Antalpha Prime first.

Fourth quarter revenue on our Prime business was $28 million, which reached the high end of our guidance, growing 110% year-over-year. All revenue derived in Q4 was organic. There was no contribution from Aurelion. Tech financing fees on supply chain loans was $18.5 million, up 79% year-over-year, driven by continuous strengthen in hash rate loans. Tech platform fees on margin loan was $6 million, up 98% year-over-year. Other revenue was $3.5 million. This was mainly related to pirate loans, which did not have such revenues in prior years. Turning to net fee margin or NFM. Total NFM increased 25 basis point year-over-year, driven by margin loan improvements. Margin loan NFM increased 30 bits year-over-year to 1.49.

For supply chain loans, funding costs increased slightly faster than revenue growth due to the redeployment of $40 million as part of our investment in the Aurelion PIPE. Turning to non-GAAP operating expense, excluding funding costs. Antalpha Prime non-operating OpEx, excluding funding costs, was $8.5 million, up 45% year-over-year, which grew slower than the 110% year-over-year revenue growth, reflecting continued operating leverage from Antalpha Prime technology platform. With Prime operating expense on a non-GAAP basis, tech and development fee increased 32% and G&A expenses increased 35% year-over-year, which reflect operating efficiency. Sales and marketing increased 121% year-over-year, or $1.6 million, mostly due to increase in industrial event sponsor and to a lesser extent due to the increase in personal related expense. Prime adjusted EBITDA was $9 million, compared to $2 million last year.

Prime adjusted margin was 32% compared to 15% last year. Q4 Prime adjusted EBITDA includes $3 million unrealized gain on Tether Gold. Turning to Aurelion. Aurelion did not have any revenue in Q4. Adjusted EBITDA of Aurelion for the Q4 was $9.4 million, which includes $10.4 million in unrealized gain on Tether Gold. Let me dis-decompose our current valuation. Aurelion's net asset value at 31st December was $106.8 million, not counting the gold appreciation since. Antalpha's economic interest of 32% in Aurelion would be worth approximately $34 million. When you add back, take this out from Antalpha's market cap of $208 million using last Friday's closing price.

Antalpha is being valued at roughly 2.2x of 2025 revenue and 9.3x of 2025 net income attributed to Antalpha. We have built a very sizable crypto native lending platform with strong risk management, which positions us in a very unique position to take advantage of new blockchain lending scenarios, including insurance, compute, and AI agent lending opportunities. Turning to Q1 guidance. We expect revenue for the first quarter of 2026 to range between $20 million and $23 million, representing an increase between 47%-69% year-over-year. This assumes that market conditions remain consistent with what we see today for the remaining period of the quarter. With that, I will turn over to Herman for closing.

Herman Yu (Head of Strategy)

We exited 2025 with strong execution across our strategic priorities, growing consistently across Bitcoin up cycles and down cycles. We have scaled Antalpha Prime lending. At year-end, our loan book stood at $2.6 billion, and our client provided $3.7 billion in Bitcoin collateral, which is an amazing feat for a three-year-old company like us. Looking ahead in 2026, our priorities are of threefold. First, we will remain focused on active risk management and continue to work closely with our clients to manage market volatility. Having a sound balance sheet positions our clients to expand mining activities in the future. Second, as a crypto native lending platform with established trust and brand in the industry, we are well positioned in the mining industry and leveraging Antalpha Prime to branch into new areas.

We are super excited about using our platform to tap into AI and the tremendous opportunities that AI agents will bring to the industry. Lastly, we'll continue to innovate in the area of Tether Gold, including Antalpha RWA Hub and other opportunities to release the value of tokenized gold. Real-world assets will be an important category in the crypto industry. Tether announced in January that they have acquired $23 billion in gold, which tees them up to make tokenized gold a very big business. With that, let's go into Q&A. Operator, please go ahead.

Operator (participant)

Thank you, management. At this time, if you'd like to ask question, please press star one one and wait for your name to be announced. If you'd like to cancel your request, you can also press star one one again. One moment for the first question. Our first questions comes from the line of Edward Engel from Compass Point. Please ask your question.

Edward Engel (Senior Research Analyst)

Hi. Thank you for taking my question. Do you mind just talking about the performance of the loan book, whether or not there was any write-offs or provisions in the fourth quarter? I guess just quarter to date, how that's been holding up?

Herman Yu (Head of Strategy)

Paul, you wanna talk about loan provisions?

Paul Guanning Liang (CFO and Director)

Hello? Oh, sorry, I was on mute just now. For the fourth quarter, we don't have any write-off on the loans. We do calculate provision based on the CECL, which is a normal practice for assessing the provision of our. Can you hear me?

Herman Yu (Head of Strategy)

Yeah, we can hear you.

Edward Engel (Senior Research Analyst)

Yes.

Paul Guanning Liang (CFO and Director)

Yeah. Okay. Yeah. Basically it's, well, calculated based on the loan book. Yeah.

Herman Yu (Head of Strategy)

Okay. Yeah.

Edward Engel (Senior Research Analyst)

Yeah, I guess-

Herman Yu (Head of Strategy)

You can see from Sorry. LTV, it's at 57%, which is pretty healthy.

Edward Engel (Senior Research Analyst)

I guess just in the first quarter, would you expect continued no write-offs either?

Herman Yu (Head of Strategy)

Well, we're managing our loan book now, as I mentioned in the prepared remarks, that we're talking to clients and, you know, monitoring them and working with them. I think at this point, we are managing our thing, and we are obviously, you know. As we mentioned, the way we work our business is we want a client to have sound balance sheet, right? That with new versions of machine that come out, they can participate in the next upgrade. They can continue to have hash rate financing and so forth. We're working with them right now, and that's what we pride with, you know, our risk management.

We're managing this and, so far, we haven't seen any, you know, major issues with these, you know, bad debt write-offs and so forth. We're gonna have to manage the situation because the situation is fluid, as you know, with so many events that's happened just in the last few weeks.

Edward Engel (Senior Research Analyst)

Great. No, that's helpful. You talked about the $3.5 million of revenue, from pirate loans. Those were also repaid by the end of the year. Do you mind just kind of explaining to me what those pirate loans were? Would you expect to have those again in 2026?

Herman Yu (Head of Strategy)

You know, we've been having experiments with different type of loan scenarios, in the last few quarters. In Q4 specifically, the majority of the loan came from, you know, a loan, a bridge loan that we gave for that. Because the loan term expired by the end of the quarter, we don't expect to have that kind of a loan, in Q1.

Edward Engel (Senior Research Analyst)

Great. Thanks for the color and, great to hear everything's going up. Okay, thanks.

Herman Yu (Head of Strategy)

Thank you.

Operator (participant)

Thank you for the question. Our next questions comes from Darren Aftahi from Roth. Please go ahead.

Darren Aftahi (Managing Director and Senior Research Analyst)

Hi, guys. Good morning, good evening. Just three, if I may. Just, you know, in light of power and globally, people may be reallocating power from Bitcoin mining to AI, can you maybe talk about what you're seeing in the market in terms of opportunity? Obviously, in crypto winters, sometimes people lean into things, and then there's other times where, you know, cost of mine becomes a little bit prohibitive. Just maybe the macro environment there. Two, your AI lending and financing platform, like, what sort of KPIs do you need to see in order for that to become kinda a real product/revenue line? Is there any thought from the management or board level about share buybacks or redeploying capital for shareholders? Thank you.

Herman Yu (Head of Strategy)

Okay, great. That's a lot of questions. Let me try. Energy, I think, couple things. You know, we're seeing a lot of public companies, you know, shifting their data centers for AI use. I think in that sense, it is probably positive for our business because then that will level the playing field for everyone. As you know, there's limited amount of Bitcoins out there, so if everyone's at the same energy efficiency then it's easier, you know, for our clients and so forth. I think from that perspective, in terms of the energy cost, there's many, there are many factors going to that. It's hard to generalize.

Um, so when you look at our customers, it's, you know, across different regions of, uh, the US, um, and, uh, the cost of, uh, energy, there's factors like, for example, you know, different cities, they would have, uh, you know, probably different price for mining versus the, you know, the, the typical commercial and res-residential. So if you have too many people doing mining and it's sucking away from commercial and residential, you probably get taxed. Um, so that is more of a function of how many machines, how dense those machines are in that particular city. And obviously, uh, across different cities they have different, uh, you know, way to charge a rate

What we normally see is, you know, because of the fluctuation in Bitcoin prices, because of, you know, people coming in with new machines and so forth, those things are usually more direct impact to this energy. Okay. I would say, you know, the cost of mining a Bitcoin today probably just is higher than, for example, a year ago, right? You saw some of the, you know, public companies reporting the cost of getting one Bitcoin. Okay. AI lending. I think AI lending is really two ways. One is we talked about, you know, inference chip compute. What we're talking about today, I think, opportunity that we're also looking at is using AI agents.

You know, in the past, as you know, this whole lending business, there's a lot of administrative things you have to do. You know, number one is, all the KYC, all the checks and stuff. Secondly, I think it's very unique. I think in the going forward that, you know, today, for example, if I go into my account, you know, I want to buy certain type of bond, buy certain type of, you know, products and so forth, I have to manually shift it. There's a lot of things that you select. If you have different, you know, different, you know, platforms and so forth, you got to go through each one of these and read the details, right? What we envision is with, you know, these agents, in the future, you just set the criteria.

It basically just continues to go out and it just searches for these. Between, you know, agents and so forth, you can consummate these type of transactions versus manually have to, you know, seek them out. I think with the advent of AI, I think people who are in the blockchain who can do risk management, who has the whole platform set up, gives us an opportunity to actually leverage the blockchain technology, which, you know, agents can be able to basically talk to another agent. You could basically go out and scout out, here's the criteria that we want and so forth. And then, if it meets my criteria, then I'm willing to transact. It brings a really interesting dimension.

We're looking at that, and we're also looking at how our company is structured and how do we adjust that so that we're, you know, seizing and taking, you know, putting ourselves set up to take advantage of such opportunity. In terms of share buyback, you know, our stock price has been going, you know, volatile and we're watching the market. We announced a share buyback a while back, and we are watching the market and we're looking at it opportunistically.

Obviously, with, stock prices going up and down because of recent news and so forth, you probably wanted to, settle down or you wanted to see if there are, you know, opportunistic way for us to do this so that it adds value to our shareholders.

Operator (participant)

Okay. One moment for the next question. Our next question's from Hal Goetsch from B. Riley Securities. Please go ahead.

Hal Goetsch (Senior Managing Director and Head of Fintech & Financials)

Peter, you know, in Q4, there was quite a drawdown in Bitcoin prices. The results were, you know, pretty good, solid results for the quarter, $28 million revenue. another drawdown in the quarter, Q1. The guidance is for $20 million-$23 million revenue, down from $28 million in Q4. I wonder, are you give us some a bridge to how you think about that quarter shaping up versus Q4? Just kinda, you know, what are some of the drivers of how you're thinking about that guidance and how it steps down from $28 million to the $20 million-$23 million range? Thank you.

Herman Yu (Head of Strategy)

Okay. I think number one is, as we mentioned earlier, we had, you know, other revenue that we test pilot in Q4, that $3.5, that's gonna go away in Q1, right? That brings us in the $24 range. Our guidance right now, you know, the $20-$23 versus the $24, that gap is the anticipation of maybe some of the loans, there could be early retirement. Because as I mentioned earlier, we talked to, you know, these, our clients and so forth, and some of them, there are those that wanna continue mining, thinking that there could be, you know, Bitcoin going up.

There are those that as we talk to, they feel like closing it out, would make sense. You're seeing that, those kind of discussions reflected in our guidance.

Hal Goetsch (Senior Managing Director and Head of Fintech & Financials)

Is, you know, I think in our prior discussions over the last, you know, year or so, Herman, talk about how if there's drawdowns in Bitcoin prices, you know, miners get more active and maybe you don't have the loan balances and margin loans, but, you know, the Bitcoin mining gets more active. Are you seeing that behavior now? People are kinda leaning into more mining machines to buy Bitcoin when it's in a drawdown? Or how is that, how is that progressing?

Herman Yu (Head of Strategy)

I think at this point, because, you know, Bitcoin prices has gone down pretty significantly in a very short amount of time and because there's a lot of uncertainty in the market, you probably want that to settle a little bit before people going in. I think, we need to stabilize a little bit and then. From our perspective, if prices are coming down or going up, any type of these big changes, you know, we want to have a more stable price and a more stable environment before we're willing to lend it out, right? Because we're based on LTV.

If it's, you know, going down in a certain speed, and then all of a sudden you lend it out with this LTV, that error margin could be eaten up very quickly. I think that there's a demand there. From a risk management perspective, as I stressed in the prepared remarks, at this environment it's very important for us to make every loan origination, make sure that, you know, it doesn't blow up in us a couple of quarters down the line. We're gonna be looking at the current, you know, macro situation. As things get more stable and so forth, then what you said, there's more opportunity for us to do that.

Hal Goetsch (Senior Managing Director and Head of Fintech & Financials)

Okay. Thank you.

Herman Yu (Head of Strategy)

Thank you.

Operator (participant)

Thank you for the questions. One moment for the next question. Our next question comes from Devin Ryan from Citizens Bank. Please go ahead.

Neo Eloff (Analyst)

Hey, guys. This is Neo Eloff on for Devin. Just kind of a quick question on policy and how you guys are thinking about it. Obviously the CLARITY Act is kind of a big topic here in the U.S., but you could talk about various legislation around the world. I guess, what do you see as the opportunities as some of this legislation kinda comes through for your various businesses? What are some challenges you expect as some of the incumbents, you know, potentially are more willing to get into this lending game, as it becomes more institutionalized?

Herman Yu (Head of Strategy)

I think first of all, I think when you think about, you know, crypto with these new legislation and so forth, you're seeing a lot of the existing financial institutions going into it, right? And you're seeing a lot of the, for example, asset management going into, you know, RWAs and so forth. What that means, I think, is, number one, access is gonna open up. I don't think in a market that even today is $2 trillion you're concerned with competition because, you know, the size of $2 trillion is a huge market, right?

If you look at just our client right now, you know, you have, you have a, you have a crypto on their hands over $3 billion some, there's a lot of things you could do for them to actually diversifying their investment. I think the opportunity is there. I think number two is, as I mentioned earlier, when you think about first, you know, the mining business and outside of the mining, you gotta have a platform, you gotta have a brand, you gotta have all this, you know, situation worked out for risk management, being able to deal with stablecoin, being able to deal with, for example, like tokenized gold. Because any type of these exchanges, you need a place of safety, right?

If some of these investments have high volatility and so forth. I think from that infrastructure stack, I think we're well set up, you know, over the last three years. As these market opportunities arise because of our brand, because our customers currently have a lot of the assets in their hand, that gives us kind of that foundation to go into these new businesses. I think whether it's CLARITY Act or any other things that gives it more clarity, it just means that there's more partners that we could work with. Because of our platform and the clients that we have, the current assets that we have, we could do a lot with these kind of opportunities.

Neo Eloff (Analyst)

Awesome. Thanks.

Operator (participant)

Thank you for the question. That concludes the question and answer period. Thank you again for joining our call today. You may now disconnect.