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EM

Exodus Movement, Inc. (EXOD)·Q1 2024 Earnings Summary

Executive Summary

  • Record quarter: revenue $29.1M (+118% y/y; +57% q/q), Adjusted EBITDA $13.2M (45% margin), and net income $54.8M, driven by strong swap activity and early Wallet‑as‑a‑Service (WaaS) traction; operating margin printed 231% due to new digital-asset mark‑to‑market accounting (ASU 2023‑08) .
  • KPIs inflected: exchange volume $1.35B (+102% y/y), Monthly Active Users 1.69M (+33% y/y), Monthly Funded Users 1.08M (+31% y/y), and downloads 801K (+21% y/y) .
  • Strategic catalysts: Magic Eden wallet partnership gaining adoption; NYSE American uplisting scheduled for May 9, 2024; XO Pay fiat onboarding slated for limited‑jurisdiction launch in Q2 .
  • Guidance stance: no formal numeric guidance; management targets continued positive Adjusted EBITDA and notes Q2 volumes started ahead of Q1’s start, while Bitcoin prices have trended lower in recent weeks—implying continued crypto beta and P&L volatility from mark‑to‑market accounting .

What Went Well and What Went Wrong

  • What Went Well
    • Record revenue and profitability with meaningful operating leverage; Adj. EBITDA reached $13.2M (45% margin) on $29.1M revenue; operating margin 231% under new accounting .
    • WaaS momentum: “tremendous traction” with Magic Eden; management frames WaaS wallets as distribution partners that feed Exodus’ swap/fiat infrastructure .
    • KPIs broadly strengthened: swap volume $1.35B (+102% y/y); MAUs 1.69M (+33% y/y); MFUs 1.08M (+31% y/y) .
  • What Went Wrong
    • P&L volatility: ASU 2023‑08 mark‑to‑market on corporate digital assets produced a large non‑operational net income gain (> $50M), a dynamic management expects to normalize but remain volatile given treasury size .
    • Cost inflation aligned with activity: cost of revenues rose to $10.7M (+56% y/y) on higher infrastructure and headcount; G&A up 35% y/y (audit, legal, headcount) .
    • Continued sensitivity to crypto macro: management cites Bitcoin price drift lower early in Q2 and emphasizes ongoing volume/earnings exposure to crypto cycles .

Financial Results

Headline metrics vs prior quarters

MetricQ3 2023Q4 2023Q1 2024
Revenue ($M)$12.0 $18.5 $29.1
Adjusted EBITDA ($M)$2.0 $8.1 $13.2
Adjusted EBITDA Margin (%)N/AN/A45%
Operating Margin (%)N/AN/A231%
Net Income ($M)N/AN/A$54.8

Notes: Management stated Q1 revenue increased 57% q/q (+118% y/y) .

Revenue by category (mix and growth)

CategoryQ1 2023 ($M)Q1 2024 ($M)YoY %Q1 2023 MixQ1 2024 Mix
Exchange aggregation12.6 26.8 111.8% 94.7% 92.1%
Staking0.2 0.6 308.2% 1.2% 2.2%
Fiat on/off-boarding0.5 1.0 91.8% 3.9% 3.5%
Other0.0 0.7 2080.0% 0.2% 2.2%
Total Operating Revenues13.3 29.1 117.8% 100.0% 100.0%

KPIs

KPIQ1 2023Q1 2024YoY %
Exchange volume ($M)$646 $1,348 +102%
Exchange transactions431,350 704,397 +63%
$ per transaction$1,497 $1,914 +28%
Downloads660,143 800,569 +21%
Monthly Funded Users821,566 1,077,472 +31%
Monthly Active Users1,276,075 1,693,702 +33%

Cost structure (Q1)

Cost of Revenues ($M)Q1 2023Q1 2024As % of revenue
Software development2.2 4.4
Customer support1.6 2.0
Security & wallet ops2.1 3.1
D&A1.0 1.2
Total cost of revenues6.9 10.7 51.4% (Q1’23) / 36.8% (Q1’24)
G&A ($M)Q1 2023Q1 2024As % of revenue
G&A5.5 7.6
Advertising & Marketing0.4 0.4
Depreciation0.1 –
Total G&A6.0 8.0 44.8% (Q1’23) / 27.7% (Q1’24)

Non‑GAAP reconciliation and accounting change

  • Adjusted EBITDA: Q1’24 $13.2M; reconciliation adjusts for taxes ($13.2M), interest income, D&A, and removes a large gain from digital asset remeasurement under ASU 2023‑08 (shown as “Gain on impairment of digital assets, net” of $(56.9)M) .
  • ASU 2023‑08: adoption on Jan 1, 2024 recognized mark‑to‑market gains on digital assets in net income; no retroactive 2023 adjustment .

Balance sheet/treasury snapshot (3/31/24)

  • Cash and digital assets ~$206.9M, including ~$136.9M in BTC/ETH and ~$65.4M in cash, cash equivalents, USDC, and T‑bills; over 1,750 BTC in treasury; no debt .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
RevenueFY/Q2 2024No formal numeric guidance historicallyNo formal numeric guidance; Q2 volumes started ahead of Q1’s start; BTC prices lower in recent weeks Maintained qualitative only
Adjusted EBITDAFY 2024Maintain positive Adjusted EBITDA posture (from prior commentary) Expect to maintain positive Adjusted EBITDA while investing in people, marketing, and products Maintained
Expense growthFY 2024Invest in 2024 but not at 2021 pace Continue strategic investment with operational discipline Maintained
Capital markets2024Evaluating national exchange listing (Q4’23) Uplisting to NYSE American on May 9, 2024 Raised (milestone reached)

No explicit numeric guidance provided for revenue, margins, OpEx, OI&E, or tax rate .

Earnings Call Themes & Trends

TopicQ3 2023 (Q-2)Q4 2023 (Q-1)Q1 2024 (Current)Trend
Wallet‑as‑a‑Service / Magic EdenFirst WaaS deal announced with Magic Eden “First iteration” live; generating revenue for both firms “Tremendous traction”; wallets as distribution to Exodus infrastructure; 200K+ extension installs (public page) Strengthening
Fiat onboarding (XO Pay)Teased as strategic on‑ramp Finishing touches; plan launch in limited jurisdictions in Q2 Expect to launch in limited jurisdictions in Q2 Progressing to launch
Regulatory (UK FCA)Placed on FCA warning list; UK App Store pullback noted —“Available in the app stores in the UK” after removal from list; compliance emphasized Improving
Macro/CryptoPrices/activity dipped; ETF speculation rising Bullish turn into 2024; ETF approvals in Jan ETF approvals; BTC ~$40k→$70k in Q1; halving enthusiasm Positive with volatility
Guidance/ToneEBITDA‑positive each 2023 quarter 2024 invest, but disciplined vs 2021 No numeric guidance; maintain positive Adj. EBITDA; Q2 start strong but BTC lower recently Disciplined growth
Capital marketsOTC path; eventual NYSE/Nasdaq contemplated Form 10 effective path; evaluating exchange NYSE American uplisting May 9 Milestone reached

Management Commentary

  • CEO strategic message: “We are making significant strides in our next phase of growth by building out our Wallet‑as‑a‑Service… partnership with Magic Eden… tremendous traction out of the gate… we expect to launch [XO Pay] in limited jurisdictions in the second quarter.”
  • CEO on the quarter: “Record revenue of $29.1 million, up 118% year‑over‑year… uplisted on the NYSE American on May 9th” .
  • CFO on profitability and drivers: “Revenue increased to $29.1 million… up 118% y/y and 57% from the prior quarter… Adjusted EBITDA… $13.2 million, or 45% of total revenue” .
  • CFO on accounting change: “New accounting guidance adoption has led to a mark to market… coupled with the appreciation of Bitcoin, we did have a gain of over $50 million… expected to be more normalized… crypto market related volatility to continue to impact our financials” .

Q&A Highlights

  • Magic Eden wallet performance: WaaS wallets are “distribution partners,” not competitors; Magic Eden browser extension shows 200,000+ installs publicly; mobile wallet not yet released at the time—management expects strong adoption .
  • Regulatory/privacy: Exodus never offered mixing features; firm operationally treats most tokens as if they were securities to better navigate regulatory uncertainty; CFO underscores personal support for financial privacy balanced with enforcement against bad actors .
  • Real‑world assets (RWA): Team actively evaluates RWA; Exodus tokenized its own Reg A shares on‑chain in 2021; future integrations will depend on customer demand and compliance readiness .

Estimates Context

  • S&P Global consensus estimates for Q1 2024 were not available for comparison at the time of this analysis; as a result, we do not present beat/miss statistics versus Street expectations here. Values retrieved from S&P Global could not be accessed at this time.*

Key Takeaways for Investors

  • Exodus delivered a crypto‑beta‑levered revenue ramp (Q3→Q4→Q1) with operating leverage, underscoring upside in bull markets and discipline on costs; watch for sustainability if volatility returns .
  • ASU 2023‑08 will introduce optical P&L swings tied to treasury mark‑to‑market; focus on Adjusted EBITDA and cash generation to gauge core performance .
  • WaaS (e.g., Magic Eden) is a scalable distribution vector to Exodus’ swap/fiat rails; traction here is a central medium‑term growth driver .
  • XO Pay launch (limited jurisdictions in Q2) can expand onboarding funnel and lift non‑swap revenues; track conversion and take rates .
  • Regulatory execution improving (UK FCA matter resolved for app stores), lowering friction to user growth in key markets .
  • Balance sheet strength (no debt; ~$207M cash/digital assets; ~1,750 BTC) provides strategic flexibility for investment and marketing through cycles .
  • Near‑term trading setup: NYSE American uplisting (May 9) and WaaS/XO Pay milestones are catalysts; crypto price/volume trends remain the principal swing factor .

Footnote: *Values retrieved from S&P Global.