Fold Holdings - Earnings Call - Q2 2025

Executive Summary

• Q2 2025 revenue was $8.18M, up 59% YoY, with GAAP net income of $13.43M and diluted EPS of $0.28; Adjusted EBITDA was a loss of $4.69M as operating costs rose with public-company build-out and headcount.
• Results modestly beat Wall Street consensus: revenue $8.07M vs. actual $8.18M, and Primary EPS -$0.19 vs. actual -$0.14; note the company-reported diluted EPS of $0.28 diverges from S&P’s Primary EPS framework due to fair-value items and methodology differences* (Values retrieved from S&P Global).
• Core KPIs continued to expand: transaction volume reached $265M, active accounts exceeded 615K, verified accounts topped 80K; Bitcoin treasury holdings were 1,492 BTC ($160M value as of 6/30/25), with an additional $250M equity purchase facility to opportunistically add BTC.
• Near-term catalysts: rollout of the Bitcoin Gift Card with major distributors (e.g., Blackhawk/giftcards.com) and the planned late-2025 launch of the Bitcoin rewards credit card (75K waitlist), plus expected paid marketing activation tied to product availability.

What Went Well and What Went Wrong

What Went Well

• Strong headline growth: revenue +59% YoY to $8.18M and GAAP net income $13.43M driven by fair-value gains on the BTC investment treasury; “We posted a strong performance across the board…revenues, profits, customer growth, and platform volumes”.
• KPIs expansion with limited marketing: +10K new accounts, +3K verified in Q2; transaction volumes +124% YoY to $265M, with new product momentum (Bitcoin Sends, Gift Card distribution, credit card development).
• Strategic financing and treasury scale: established $250M equity purchase facility; 1,492 BTC held, $160M value as of 6/30/25; management frames accretion in “SATs per share” and intends opportunistic use.

What Went Wrong

• Core operating loss and higher opex: operating loss of $(6.33)M in Q2; Adjusted EBITDA loss widened YoY to $(4.69)M on legal, insurance, payroll, and public-company costs.
• Earnings quality volatility: GAAP profitability largely driven by fair-value remeasurement of BTC assets/liabilities, creating large swings in net income and margins period-to-period.
• Product timing still pending: credit card launch guided “this year” without a month; marketing spend ($3M budgeted) largely deferred until broader product availability, leaving growth more reliant on organic traction near term.

Transcript

Operator (participant)

Good day, and thank you for standing by. Welcome to the Fold Holdings second quarter 2025 earnings call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you'll need to press star one one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one one again. Please be advised that today's conference is being recorded. I'd now like to hand the conference over to Samir Jain, Orange Group Advisors. Please go ahead.

Samir Jain (Head of Investor Relations)

Thank you, Operator. Good afternoon, and thank you for joining us for Fold Holdings second quarter 2025 earnings call. Joining me on the call today are Chairman and CEO Will Reeves and CFO Wolf Repass. Before we begin, please note that the information reported on this call speaks only as of today, August 12th, 2025, and therefore you are advised that any time-sensitive information may no longer be accurate as of the time of any future replay, listing, or transcript reading. A replay of today's call will be available by webcast on the company's website at www.foldapp.com in the investor section, and more information on how to access this replay feature will be included in the company's earnings release. Comments on this call may contain forward-looking statements within the meaning of the U.S. federal securities laws.

These statements are based on our current expectations and beliefs and are subject to risks and uncertainties that could cause actual results to differ materially. These statements reflect the current views of Fold's management and are not guarantees of future performance. Please refer to our Form 10-K and other filings with the SEC, which can be found at sec.gov or on the company's investor relations website for discussion of the risks and uncertainties that may affect our future results. We will discuss certain non-GAAP financial measures during this call. These measures should not be considered as a substitute for financial results prepared in accordance with GAAP. Our results are prepared in accordance with GAAP, and a reconciliation to any comparable GAAP measures will be provided in our second quarter earnings release and in our SEC filings. With that, I'll pass the call to Will.

Will Reeves (Chairman and CEO)

Thanks, Samir, and good afternoon, everyone. Thanks for joining us. I want to start by thanking our shareholders, partners, and analysts for your continued support, and most importantly, our customers who are building Fold with us every day, and to the Fold team, none of this happens without you. This was a terrific quarter both for Fold and the Bitcoin industry. Bitcoin continues to establish itself as an institutional asset class. Fold's products and customer base are scaling, and the future we've been building toward is continuing to take shape. We posted a strong performance across the board: revenues, profits, customer growth, and platform volumes. The fundamentals of our business are strengthening. That's not just momentum. It's validation, and it's a license to go further, harder, and faster. We're in a unique moment for Bitcoin. We've seen major IPOs, institutional inflows, and the rise of the Bitcoin treasury movement.

It's exciting, but Fold was built for more than hype cycles. We've built through hype before and outlasted much of the competition that relied on it. We are still here because we build for substance, not cycles. We believe we can thrive in both bull and bear markets. We have a true Bitcoin-first operating company with diversified and scalable product lines that continue to grow quickly. Further, we're not just selling Bitcoin products; we are continuing to invest in it as a business. In Q2, we delivered more than 10,000 new accounts, transaction volumes of $265 million, up 124% year-over-year for the same quarter, top-line revenues of $8.2 million, up 59% year-over- year for the same quarter, and $13.4 million in GAAP net profit. And here's what's important: these results reflect only our legacy business.

Our Q2 results do not include any meaningful contributions from the Bitcoin credit card or the Bitcoin gift card, both of which are just getting started. These results also include limited additional marketing spend, which we have pushed out to align with future product launches. That means our core business lines, banking, payments, and our Bitcoin exchange are growing organically, with strong market demand from high-quality customers. We've hit a major milestone this quarter with the launch of Bitcoin Sends, enabling users to send and receive Bitcoin directly with any wallet address. This transforms Fold from a pure on-and-off ramp into a full-fledged Bitcoin wallet, unlocking the ability to manage finances natively in Bitcoin. It's a breakthrough moment in what is quickly becoming a multi-billion-dollar industry in the U.S.

In addition to our product growth during the first half of 2025, we invested deeply into a team that's built some of the best consumer financial products in the world. Soon, you will see their work shine through the Fold experience, driving an enhanced user experience and brand to support continued growth across our business. This quarter, we launched a major new product, the Bitcoin gift card. It's currently live on Fold platforms and is rolling out across the country through major distribution partners like Blackhawk, Giftcards.com, and Tillo. For context, Blackhawk is the world's largest gift card distributor, and Giftcards.com is one of the world's largest gift card marketplaces. It will soon be available at additional major retailers, putting Bitcoin in front of millions of consumers and places where they already shop. This product brings Bitcoin to the checkout line, just like any other gift card.

We believe this will become the third major on-ramp into Bitcoin in the U.S., alongside exchanges and brokerage accounts. Additionally, the Bitcoin gift card represents an alternative to the over 30,000 Bitcoin ATMs across the U.S. Unlike Bitcoin ATMs, which charge fees of up to 20% and require dedicated hardware, the Bitcoin gift card plugs directly into the existing retail ecosystem, making it more accessible, scalable, and compelling from day one. Each time a Bitcoin gift card is redeemed, Fold acquires a customer at a low to negative cost who is primed to engage with our broader ecosystem. In addition to the Bitcoin gift card, we are proudly looking forward to bringing a best-in-class Bitcoin Rewards credit card to market with Visa and a soon-to-be-announced issuing partner, one of the most respected names in payments. We believe that these partnerships will give us instant scale and credibility from industry leaders.

With nearly 75,000 people on the waitlist, best-in-class partners in place, we are deep in development of a product we believe will set the standard for Bitcoin Rewards credit cards, poised to roll out soon to a built-in user base ready to engage from day one. This product marks a major milestone. It's long been my goal to dethrone airline miles and cashback as the default consumer reward in the U.S., not just to disrupt, but to deliver real, lasting value. This card is the final piece. It's more than a product. It's a platform with the potential to rival the biggest rewards ecosystems in the country, including airline mile cards. We will continue to lead the market shift from miles and cashback to Bitcoin rewards. We're not just entering the market. We're here to lead it.

In addition to our current offerings, we're actively developing new products that are expected to naturally extend our consumer financial platform, each designed to serve a real customer need while unlocking new monetization opportunities for Fold. Notably, in other news in the last quarter, Fannie Mae and Freddie Mac began recognizing Bitcoin holdings for mortgage qualification. A de minimis exemption for everyday Bitcoin spending was proposed, and the current administration is moving to allow Bitcoin to be held in retirement accounts. These developments represent a major expansion opportunity for the Fold platform, where customers already come to spend Bitcoin on everyday goods and services and now increasingly plan for long-term financial goals in Bitcoin. We're building a seamless financial journey: paychecks into checking, checking into debit and credit cards, cards into rewards, rewards into savings, savings into Bitcoin, and Bitcoin into homeownership and other major financial milestones.

Every product reinforces the next: compounding value, loyalty, and long-term impact. This connectivity is our edge, and it's accelerating. Let's now talk a little bit about our Bitcoin treasury. MicroStrategy. Bitcoin treasury companies seem to be popping up every week, but Fold has been accumulating Bitcoin in our treasury for years. What sets Fold apart is that our treasury is not separate from our business. Our treasury powers our OpCo and directly aligns with the products we are selling to our customers. It has already enabled us to deliver better products to our customers with better margins for our company. And as we scale, we expect that advantage will compound, giving us a structural edge over competitors. Since our listing, we have continued to find ways to grow our Bitcoin treasury using capital market strategies not previously available to us as a private company.

And since listing, we have increased the amount of Bitcoin in our treasury by nearly 50%. We expect to continue to pursue additional strategies to add Bitcoin to our treasury when it is accretive to our shareholders and makes sense for our business trajectory overall. Our most recent example is the $250 million equity purchase facility we announced in June, the registration statement for which was declared effective by the SEC on August 1st and is ready to be used. Our strategy is simple: build a great business, accumulate Bitcoin along the way, and create durable, long-term value for our customers and our shareholders. We're building the financial platform for the Bitcoin Century, a company that delivers value today and is built to scale tomorrow. I'll now turn it over to Wolf to walk through our financial results in more detail.

Wolf Repass (CFO)

Thank you, Will, and thank you to everyone for joining today. Similar to Q1, we generally met or exceeded our internal expectations for the quarter. Second quarter revenues were $8.2 million, which was an approximately 60% increase versus Q2 2024. Total year-to-date revenues through June 30th were $15.3 million, which was an approximately 52% increase over the first half of 2024. As Will mentioned, these increases largely reflect continued growth of our legacy businesses and do not include meaningful contributions from any of the new products we've announced. Instead, growth in the quarter was driven by a broad-based uptick in our core KPIs. In Q2, we added more than 10,000 new accounts and more than 3,000 verified accounts. Our total transaction volume in the quarter was $265 million, representing a nearly 124% increase versus Q2 2024.

These higher volumes reflected both the increase in new customers as well as deeper penetration into our existing customer base. We expect the remainder of 2025 to meet or exceed our current year-to-date revenue growth pace for our legacy product lines. That suggests total 2025 revenue from those product lines of $34 million-$42 million, which is consistent with our previously issued guidance around legacy product growth. In addition to the legacy product lines, we expect the new product lines to substantially expand our TAM and provide meaningful contributions to our revenues as they continue to roll out. As noted last quarter, as a consumer payments business, the fourth quarter historically represents our highest volume and revenue quarter as customers engage in seasonal spending behaviors.

On the cost side, our operating expenses were $14.5 million, up from $6.3 million in Q2 2024 and down from $16.6 million in Q1 of 2025. The principal drivers of the year-over-year increase relate to a combination of higher costs of sales, which correlated directly with our increased volumes and revenues, and increased legal, insurance, and payroll expenses associated with being a public company. We are actively managing our costs across all departments, and we believe our fixed operational costs will remain mostly flat going forward, with some opportunities for additional cost-cutting measures as we mature as a public company. One area where we plan to increase spend is in paid marketing to support new products and to attract new customers to our platform.

As mentioned last quarter, our historical growth as a company has been primarily organic in nature, and we believe we have significant untapped growth potential via paid acquisition channels. Moving down our P&L, we recorded a GAAP net profit of $13.4 million in Q2 2025, compared to a net loss of $2.4 million in Q2 2024. The primary driver behind the net profit in Q2 was a $37 million increase in the fair value of our Bitcoin investment treasury. Because our Bitcoin-denominated assets and liabilities will potentially result in large fluctuations in our GAAP earnings each period, we also track Adjusted EBITDA, a non-GAAP measure. In Q2 2025, our Adjusted EBITDA was a $4.7 million loss compared to a $1.2 million loss in Q2 2024.

The majority of this variance was due to increased legal costs related to being a public company and increased payroll expenses related to increased headcount to support our new products and the enhanced compliance requirements of being a public company. We also ended the quarter with a healthy balance sheet and ample liquidity. As of June 30th, 2025, we had cash and cash equivalents of $6.6 million and positive working capital of $7.8 million. Unsecured debt balances remain at zero, and we continue to be in a net asset position. In addition, as of today, we hold approximately 1,492 Bitcoin in our investment treasury, valued at approximately $160 million as of June 30th, 2025. Our Bitcoin treasury remains a core part of our overall business strategy.

We have seen many other companies pursue Bitcoin treasuries over the past few months with varying strategies, from pure Bitcoin proxies to more sophisticated financial engineering plays, and we expect to continue to see more in the near term. Fold remains one of the few Bitcoin treasury companies with a meaningful operating business and one of the only ones focused purely on Bitcoin financial services. That dual model creates synergies between our treasury and our operating company, and we believe it reduces our execution risk. As Will mentioned, we plan to continue to opportunistically pursue strategies to add additional Bitcoin to our balance sheet.

With regards to the $250 million equity purchase facility we announced in June, we plan to use this facility when accretive to our shareholders, with accretion being measured using Bitcoin per share, which we consider to be the leading KPI for Bitcoin treasury companies. We may also use this facility to accelerate product and operational growth. As of today, we have not used any of the facility, but we expect to do so starting in Q3. I'll now turn the call back to Will for some closing thoughts.

Will Reeves (Chairman and CEO)

Thank you, Wolf. It's been a defining first six months as a public company, and I'm incredibly proud of the progress we've made and the momentum we're carrying into the second half of the year. We continue to post strong growth in our core operating business, attracting new users and capturing a growing wallet share from existing ones. Our product pipeline is not only deep and differentiated but increasingly synergistic, designed to expand our value to customers while driving durable revenue to Fold. Our newest product offerings are expected to continue to provide momentum for our business in the near to long term.

With increasing regulatory clarity and institutional adoption, the opportunity to embed Bitcoin into the traditional financial system has never been stronger. Fold is uniquely positioned to be a leader in this next wave, and we are excited for what's ahead. Finally, I want to thank our team, partners, and shareholders for your continued trust and belief in Fold. This is only the beginning, and with that, I'll open the floor for questions.

Operator (participant)

As a reminder, if you'd like to ask a question at this time, please press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. Please stand by while we compile the Q&A roster. Our first question comes from Mike Grondahl with Northland.

Mike Grondahl (Senior Research Analyst, Head of Equity Sales, Trading and Research)

Hey, guys, thank you. Will, how long has the gift card been online at Giftcards.com and a couple of those other online sites?

Will Reeves (Chairman and CEO)

Hey, Mike. So I think as we spoke about in our previous quarter, it initially rolls out on the Fold property, which largely in May and June. The activation of the marketplaces, including Blackhawk, Giftcards.com, Tillo, Fluz, and others, largely started in July. So you're going to see it start to pick up in July and start to contribute throughout the quarter. And we have many other marketplaces that will be coming online as we move into Q3, all in lead-up to the physical in-store retail in Q4.

Mike Grondahl (Senior Research Analyst, Head of Equity Sales, Trading and Research)

Got it. And has there been much marketing either spent by Fold or some of your partners yet? Has there been much of a push online?

Will Reeves (Chairman and CEO)

There's been very little push online to date. Right now, we're securing the distribution so that when Fold activates their market, we're marked over $3 million for marketing for the Bitcoin credit card and Bitcoin gift card. We want to make sure there's maximal availability of the Bitcoin gift card before turning that marketing spend on, so it's as efficient and productive as possible. As we have started to partner, you're going to see co-marketing with these platforms. Not just Fold getting these cards turned on, but actual co-marketing with our distribution partners who know who their customers are, whether they're in local markets or they're online customers.

Sometimes these customers are large corporations who give incentives to their employees. Sometimes they are nonprofits. Sometimes they are weddings and other kind of more celebratory-focused platforms. And so for us, it's about developing not only the distribution but also the follow-on co-marketing. But up until this moment today, that marketing has been activated.

Mike Grondahl (Senior Research Analyst, Head of Equity Sales, Trading and Research)

Got it. And then on the physical retailer side, do you have a guess as to how many distinct retailers or number of brands the cards will physically be in for the holidays and maybe related to that, the number of locations?

Will Reeves (Chairman and CEO)

Yes. When the physical Bitcoin or physical gift card distribution happens in seasons, you have fall, you have spring seasons. And for us, it's been our focus to focus on quality first with reach versus just purely getting it into as many locations as possible. And so what you're going to see us announcing are some top tier-one retailers. And you can go to Blackhawk, who is one of our primary distributors. They have over 400,000 locations across the U.S. So very significant opportunity for us. But we want to make sure that our first launch of this card is to top-tier retailers that have a large footprint. And the reason is that allows us to focus marketing spend on those versus shotgunning across the network.

We think this is going to both lead to more legitimacy around the product and allow us to do a lot more interesting co-marketing. And so for us, through Q3, you're going to start seeing us move from announcing online partners to physical in-store retailers. And we are really, truly focusing on really top-tier, tier-one retailers across the country.

Mike Grondahl (Senior Research Analyst, Head of Equity Sales, Trading and Research)

Got it. That'll be great to see, and then maybe just one more. On the credit card, any guesstimate at the month you think you can launch that? And then also the waitlist, it seems to be, I don't know, still at 75,000. Is that by design? Because no need to push it higher than that? Or, curious, those two related to the credit card.

Will Reeves (Chairman and CEO)

Yeah. So for the credit card, this is our top priority for the team. And we have a goal that we are all marching towards, which is getting our cards in market this year. And we're going to start with that waitlist. And when we talk about that waitlist with 75,000, what that really refers to is we had a very specific waitlist kind of timeline, which we have since closed. Still, people can enter the waitlist now, but they're not eligible for climbing up the list and things like that. So when we talk about the 75,000, it's really largely what customers signed up in that initial waitlist period.

We still have a ton of users who are on the Fold platform who are not represented on that waitlist and other customers who have come by to announce their interest in the card who are also not represented in that 75, so it really just is about what was the active waitlist period that we have opened up, but we're continuing to get new customers and existing customers interested, so that number is much higher in terms of how many people are likely to be using the card.

Mike Grondahl (Senior Research Analyst, Head of Equity Sales, Trading and Research)

Sure. That's good.

Will Reeves (Chairman and CEO)

For an exact month, Mike, I want to be able to give that to you, but I can say that the entire team is back on the market this year, and we want to get cards in hand, beginning with the waitlist customers first, and then we'll move out beyond that to a general access, so can't give you an exact month, but I will tell you this. We have partnered with Amazon, and we will very shortly announce our issuing partner, who is one of the most respected and quality names in financial services and payments that I think will get everyone very excited and I think will relinquish all doubt on our commitment to both getting this fast and ultimately producing the best-in-class Bitcoin rewards credit card out there.

Mike Grondahl (Senior Research Analyst, Head of Equity Sales, Trading and Research)

Hey, it'll be exciting fall. Thanks, guys.

Will Reeves (Chairman and CEO)

Thank you, Mike.

Operator (participant)

Our next question comes from Brett Knoblauch with Cantor Fitzgerald.

Brett Knoblauch (Managing Director)

Hey, guys. Thanks for taking my question. On the digital asset treasury side, you talked about kind of accessing the equity facility when it's accretive for shareholders. Do you have a framework that you would want to share? I know Strategy kind of came out this earnings period and outlined at what levels they would consider using which facilities. I'm curious how you guys are thinking about that.

Will Reeves (Chairman and CEO)

I think, Brett, it's good to hear from you. Glad to get you up on stage. When we think about our Bitcoin treasury, we are thinking about this, I think, on a couple of different planes that make us a little bit different than the pure-play Bitcoin treasuries. And we have an operating company that's growing, has momentum. You can see here, 59% year-over-year revenue growth, 100+% growth in volumes. And that's only our legacy business without any paid marketing really behind it. We see both the treasury as one of our product offerings that we can invest in.

And so when we talk about when it's right to be accretive, we think about it not just how to grow the Bitcoin treasury the fastest, but also what's the opportunity cost to not investing that in the operating company that is already proven to be growing at a very fast clip. And I know on the call today, we did not go as far as I think you were mentioning from MicroStrategy on exactly the parameters for when it is accretive. But I know Wolf may want to lend some of his perspective on here as he's really running the stock. Wolf, you want to get more into when we think or how we define what's accretive?

Wolf Repass (CFO)

Absolutely. Hey, Brett. So MicroStrategy has come out with some very prescriptive strategies around when they plan to hit their ATM versus do preferred share raises, etc. A lot of that for them focuses on NAV. NAV is not currently a metric that we're reporting on. You can get there. It's pretty easy to calculate. But one new metric that we are presenting, you'll see this in our deck, is sats per share. So how much Bitcoin per share do we have? And the math is effectively dependent on two variables. One, the price of Bitcoin, and two, the price of FLD at any given time. So in addition to the accretion considerations on the product side, like Will mentioned, the math for us on just a pure Bitcoin accumulation strategy is going to be focused on increasing Bitcoin per share when we execute any of these strategies.

Will Reeves (Chairman and CEO)

Perfect. Thanks, Wolf. That's helpful. And then maybe just on the credit card, I guess when this is launched, I feel like with credit cards, you kind of need a lot of capital to go out to have somebody kind of purchase the receivables on the other end. Are you guys going to be kind of purchasing the receivables, or is the issuing bank going to be doing that? And how quickly can that scale? Who decides December 1st to turn on all credit card for the 75,000, probably more waitlist users? Could they all get on at that point and then start spending? Yeah. So I think what you're going to see from us over the next couple of months is we're going to be announcing not only our issuing partners, but also our credit facility partners. We built this program so that two things.

Number one, we've put a weight of Fold behind this so that we can scale those facilities to accommodate as much of those user bases as possible. And this is when we look at things like our treasury. We have already been able to open up larger facilities, bring better partners to the table because we have it worthy. We bring a Bitcoin treasury here that allows us to scale this program far faster than had we not had it. Also, we're going to be announcing our issuing partner that this arrangement allows us to enjoy in the interest share of our program. And so it's going to be dynamic. It's something that we can really dial up or down depending on what we think is best use of our capital at any given moment.

But we think this is going to be a powerful driver for revenue of the Bitcoin credit card program. And so for us, it was really room to scale. And that means having the best partners on board and credit facilities that can scale up to the size of this program very quickly. And I don't expect that we'll have issues on either front there. And I think it will become very clear as we announce who these partners are. And they are of scale.

Brett Knoblauch (Managing Director)

Awesome. That was really helpful. All right, guys. Looking forward to it. Appreciate it.

Will Reeves (Chairman and CEO)

Thank you, Brett.

Operator (participant)

As a reminder, if you'd like to ask a question at this time, please press star one one on your touch-tone phone. Our next question comes from Kevin Dede with H.C. Wainwright.

Kevin Dede (Managing Director and Senior Technology Analyst)

Hey, Will and Wolf, thanks for having me on.

Will Reeves (Chairman and CEO)

What's up, Dede? Great to have you.

Kevin Dede (Managing Director and Senior Technology Analyst)

Yeah. Pleasure. Pleasure. I was kind of hoping I'm not up on the whole gift card scene. I was wondering if you could just help us understand Blackhawk versus Tillo versus, I think you mentioned last year or last quarter, Totus. I guess I'd like to understand how you see crossover, whether or not there'll be cannibalization, and how you're balancing distribution among them.

Will Reeves (Chairman and CEO)

That's a great question, Kevin. So really, the gift card industry in the U.S. is roughly $300+ billion in prepaid value. The primary distributors of those cards are Blackhawk and InComm. They are the two major distributors who account for the vast majority of all gift card distribution through the country. Gift card distribution means getting a store on the rack, so entry stores, retailers. It can mean distribution as employee incentive programs. It can mean payout options for gig economy workers. It is gifts at weddings and birthdays. And downstream from Blackhawk and InComm are a myriad of other places that are serving some more niche use cases or niche communities that are looking to add gift cards to their marketplace. And so Tillo, for instance, is a great example of being one who primarily serves fintechs.

So if you go on to your preferred fintech and you open up and they have gift cards available, Tillo is one of the primary marketplaces where they're sourcing from. And so what you're going to see now is Fold has not only partnered with the largest of them, which is Blackhawk, but we are now going to go out and create as many of the distribution lines into the smaller marketplaces that get us into all corners of the gift card use case. And this is really what's important about this product is most Bitcoin accumulation channels, like an exchange or the ETF, a single player can't really own them. But this is very different with the Bitcoin gift card as a channel because these retailers are actually open to long-term contracts, building exclusivity, because many of them do not want two Bitcoin gift cards on their platform.

It creates confusion, and also there's tight real estate, and so for us, we think this is an incredible opportunity that we go very fast and very wide into as many of these online marketplaces as possible. We secure our spot as the number one Bitcoin gift card channels, and from there, we can work our way down into the smaller and smaller places, but we are really looking to own the largest distribution channels up top, and you mentioned Tillo, and they were our first partner that we went out with and that we are actually issuing the card. What's great about them is that they actually operate across all gift card networks. Typically, you will only have an issuer work with either a Blackhawk or just an InComm or one of the smaller marketplaces. Tillo is very unique in that it works across every single gift card.

So for Fold, this positions us to not only get distributed into the maximum channels possible, but also lock them down into being Fold's owned channels, which I think is an incredible opportunity for the company.

Kevin Dede (Managing Director and Senior Technology Analyst)

Okay. How about overlap, Will? I mean, it's hard to imagine that Totus and Blackhawk don't overlap at certain retailers. How are you sorting through that, and how are you ensuring that your retailers are going to take your card exclusively?

Will Reeves (Chairman and CEO)

Yeah. That's a great call. So number one about overlap, Tillo really works so that there's very, very little overlap. Overlap is on the rare side if a retailer sources from multiple networks. Typically, they source for one. And so if you go to Blackhawk, you can go to Blackhawk's website. You will see the retailers that they are who they bring the gift card marketplace into their platforms. And they're some of the largest retailers in the country.

There's very little overlap there. They'll work with Blackhawk or they'll work with InComm. Or if you are a wedding registry company, you may work with Tillo. So there's very little overlap here. What's most important is that we are making the gift card as accessible as possible in all places. So I would say the risk of cannibalization is very low. Kevin, you had one other part of the question there. What was that?

Kevin Dede (Managing Director and Senior Technology Analyst)

Yeah. No, I think you tackled it well. I think you tackled it. But I'm also curious about how you intend to protect the appearance of the card itself. I mean, you and the team obviously did a great job in securing yellow with a white Bitcoin symbol. But how will you protect that?

Will Reeves (Chairman and CEO)

Yeah. It's a great question. So I think when we are owning such public channels that are directly interfacing with millions of customers, it's really important to protect that likeness. While Bitcoin logo is essentially an open-source logo, and that's part of the beauty of it, and we're going to live with that, what we think is more important is to protect the channel itself. So for us, we are not going to go and trademark the Bitcoin logo. We have no intention of that. We think that's against the spirit of Bitcoin. And instead, what we are doing is going to lock down the retailers and the channels themselves. And for them, they do not have interest in carrying multiple Bitcoin gift cards on their racks. There's limited real estate. They don't want to create confusion for customers.

Being a company that has operated in rewards, that has built this relationship with them over years, these are not our first conversations with them this year. Fold has been working on this relationship with them, either selling their gift cards or supporting their rewards programs for years. The moat that we have is not only that years of relationship of showing that we can put numbers on the board for them, but the second is that they don't have interest in carrying multiple other options here. This is why Fold, the Bitcoin gift card, is the only Bitcoin gift card on Giftcards.com.

We're going to carry that across all of the other retailers as well. Ultimately, this is going to create incredible co-marketing opportunities with these retailers and channels that Fold can uniquely own. It's less going to be on the likeness of these cards and more on the actual distribution and ownership of the channels themselves.

Kevin Dede (Managing Director and Senior Technology Analyst)

Great insight, Will. Thank you. You also alluded to how your cost to market them could be negative. In other words, you'll make money distributing them, obviously, but at zero customer acquisition cost or negative one. And I was hoping you might just, or maybe Wolf will help you run through the math on that.

Will Reeves (Chairman and CEO)

Yeah. Wolf can get into some of the math, but the outlines here are typically Fold's primary customer base comes from organic word-of-mouth marketing. Fold has a very strong belief that the product needs rate, and we need to have customers share that product. And that has always led to our historically very low CAC. And so this brings the question of, well, how is Fold going to even get that CAC even lower? And the reason is when a customer goes into the store to buy a Bitcoin gift card for a friend or family member who is just getting started into Bitcoin, or they're doing it as a wedding gift, or an employer wants to give all of their employees their first bit of Bitcoin, they buy this gift card. And when that gift card is redeemed, there is a fee.

There's essentially a spread on that gift card when it's redeemed. As that new customer is redeeming it, they are not only going through the account creation process, but Fold is making money on that redemption. And so for us, we are actually being paid to acquire this new customer. So that's the overall idea here. Wolf, do you have anything to add?

Wolf Repass (CFO)

Not a thing. Nailed it.

Kevin Dede (Managing Director and Senior Technology Analyst)

Okay.

Will Reeves (Chairman and CEO)

Got it. Kevin, got it.

Kevin Dede (Managing Director and Senior Technology Analyst)

Yes. Yes. Well, I got the sort of overarching theme, so thanks. I might have to review it again, make sure it sinks in. Last question for me. I know that you and the team have worked really hard in trying to get this credit card out as fast as you can, as well as you can, with all the secured relationships that you need. And I understand how complicated it is. I was wondering if maybe you could give us a little color on how you view the last hurdles that you need to clear in order to get it to work and where your confidence rating is on that?

Will Reeves (Chairman and CEO)

Yeah. So I think one of the first off, I'll say the initial delay for this card was perhaps the best thing that could have happened to this program. And that's not just from Fold's perspective. This is going to be from our customer's perspective. What has transpired over the last few months as we have shifted to bring on new partners here is we are going to emerge with a fundamentally better program, a program that can scale, that has better margins, that ultimately can provide better value to customers. And that's all because of the new partners that we have brought on to support the launch of this card. As you already mentioned, there's a handful of partners that are very critical to launching a credit card program. You have the payment network, which you know we have Visa.

We have the issuing partner, which we will be announcing soon. This is, again, the definition of scale, one of the most respected players in the payments space. And on the credit facilities, we have partners here that are essentially going to scale this as fast as possible to as many people around. And ultimately, this is going to be a win for Fold customers on this card. I believe it was already a best-in-class card, and I believe now we've secured that position purely based on these new partners that we've brought on board. And I would say these partners are ones that are known for speed of execution and quality of development. And so I think as we announce them, the picture is going to become abundantly clear.

Fold has partnered with some of the best partners in the industry, and we are aligned in getting this out as fast as possible. And so I would say number one risks to bringing a credit card to market are the strength of your partners. And what we've done in the last few months is eliminate that risk. And so now it is doing what Fold has done best, which is ship great product alongside partners that are also known to support great product for payments and financial services products. So while initially it was a difficult thing to have the delay, this product is going to be far better than it was. And I'm very excited about it. And I know our customers are going to ultimately have a much better experience. And this will be the premier Bitcoin rewards.

Kevin Dede (Managing Director and Senior Technology Analyst)

Yeah. Well, I can't thank you enough for adding that extra color. It puts things in a much different perspective. I appreciate it. And thank you for taking all my questions.

Will Reeves (Chairman and CEO)

Of course, Kevin. Great to hear from you.

Operator (participant)

That concludes today's question and answer session. I'd like to turn the call back to Will Reeves for closing remarks.

Will Reeves (Chairman and CEO)

All right. Thank you and thank you, everyone who's listening in. I hope you can hear it from my voice and Wolf's here. I'm incredibly proud of what the Fold team has done this quarter. This is, I believe, two solid quarterly earnings in a row, our first two, and I think we'll be delivering some spectacular results, continuing to do that throughout the second half of this year and definitely throughout 2026 and of course, couldn't have done it without the Fold customer base that not only continues to trust us to ship new products in which they use, they give us feedback, and then really light the way for where we go next. We are, again, really focused on building value for them, so I think all this real momentum that we've had, net positive net income being growing positive is fast.

We're holding one of the largest public Bitcoin treasuries in the world. We have a $250 million facility to buy more Bitcoin at a time that is already today extraordinarily accretive to our business. And again, this business today, all of this growth just reflects our legacy business. All of our product lines are profitable on a per-product basis. So I couldn't be more excited about the momentum we have to drop some of these really game-changing products with Bitcoin gift card in storefronts, in the checkout lines. People who do not have Bitcoin today will be able to access it. And of course, the Bitcoin credit card, which I hear loud and clear every day from both customers and the team, let's get this thing to market. And I'm confident that we're going to deliver a best-in-class product. So we're going to keep building.

And of course, more than all of these numbers, we are still here about the mission, not the hype. We're building something lasting to help people build and keep wealth in sound money, in the best money created, which is Bitcoin. And I'm grateful for everyone who has believed in this on this journey. We've been doing it for a very long time. And it feels like we are really at the beginning of a new chapter. So appreciate everyone who has come along for the ride.

Operator (participant)

This concludes today's conference call. Thank you for participating. You may now disconnect.