Gemini Crypto Exchange Reports 52% Q3 Revenue Surge – But $159.5M Loss Shocks Investors

Introduction

Gemini, the crypto exchange founded by the Winklevoss twins, reported a strong Q3 performance with net revenue rising 52% to roughly $49.8 million, driven by higher transaction fees and fast-growing services such as its crypto credit card, staking, and custody offerings. Trading volume climbed, and services revenue surged, reflecting Gemini’s push into diversified crypto products and international expansion. This marks Gemini’s first earnings update since its Nasdaq IPO under the ticker GEMI. (CryptoNews)

Despite topline growth, Gemini posted a $159.5 million net loss for Q3 as operating expenses more than doubled year-over-year, largely due to marketing, staffing, and IPO-related stock-based compensation. The company’s loss per share came in at $6.67, missing analyst expectations, and adjusted EBITDA remained negative. Investors reacted to the widening losses, sending GEMI shares lower in after-hours trading even as revenue momentum continued. Coverage from other outlets echoed the mixed picture of strong revenue growth versus rising costs and losses. (Yahoo Finance, BeInCrypto, The Block)

Looking ahead, the key question for Gemini is whether it can translate its growing services mix—credit card, staking, custody—and increased transaction activity into sustainable profitability while managing expense growth post-IPO. With GEMI stock under pressure, investors will monitor cost discipline, services revenue scale, and any strategic updates that improve operating leverage. The Q3 snapshot underscores a classic crypto exchange challenge: balancing market-share growth and product expansion with the path to positive earnings amid volatile crypto markets.

Background

Gemini, the cryptocurrency exchange founded by Cameron and Tyler Winklevoss, has published its first quarterly results as a public company—and the numbers are a study in contrasts. Net revenue soared 52 % quarter-over-quarter to about $49.8 million, yet the firm booked a $159.5 million net loss, sending GEMI shares lower in after-hours trading. Below is an easy-to-follow breakdown of what drove the revenue surge, why losses widened, and how Gemini’s performance stacks up against rivals such as Coinbase.

Quick Facts at a Glance

• Net revenue: $49.8 million (↑ 52 %)

• Net loss: $159.5 million

• Loss per share: $6.67 vs. analyst estimate of $3.24

• Adjusted EBITDA: –$52.4 million

• Ticker: GEMI (Nasdaq)

Where the 52 % Revenue Growth Came From

Transaction fees remain the backbone. Trading activity generated $26.3 million, up 26 % from the prior quarter as spot-crypto volumes rebounded. For context, Gemini processed roughly $16.4 billion in trading volume—still tiny compared with Coinbase’s $154 billion but a notable 45 % sequential jump (BeInCrypto).

Services revenue is accelerating. At $19.9 million—up 111 % quarter-over-quarter—Gemini’s non-trading lines now represent almost 40 % of total revenue. Key drivers include:

• Gemini Credit Card. More than 100,000 open accounts logged over $350 million in spend.

• Staking services. Balances climbed to $741 million, allowing users to earn staking rewards without managing private keys.

• Custody offering. Institutional clients continue to store digital assets with Gemini Trust Company, boosting recurring fees.

Why it matters: The mix shift toward services helps smooth revenue in volatile markets and creates stickier customer relationships—an advantage repeatedly cited by Coinbase in its own earnings calls (Coinbase Shareholder Letter).

Why the Net Loss Swelled to $159 Million

IPO-related costs. Gemini went public in September; stock-based compensation tied to that debut drove personnel expenses to $82.5 million, up sharply year-over-year.

Aggressive marketing. Sales and marketing outlays rose to $32.9 million as Gemini pushed brand visibility and customer acquisition ahead of the Bitcoin halving cycle.

Platform expansion. Launches of a self-custody wallet, tokenized U.S. equities, and new regional offices in Australia and the EU (via a MiCA license) added to operating expenses. These initiatives are core to Gemini’s “regulatory-first” strategy but weigh on short-term margins.

Glossary Check

• Operating expenses: Day-to-day costs required to run the business (salaries, tech infrastructure, marketing).

• Adjusted EBITDA: Earnings before interest, taxes, depreciation, and amortization; a cash-flow proxy that excludes many non-cash or one-off items like IPO compensation.

• Staking: The act of locking crypto assets to support network security and earn yield—similar to earning interest on a savings account, but riskier because rewards depend on blockchain performance.

Investor Reaction and Peer Comparison

GEMI closed at $16.84 on results day but slid more than 6 % after hours, hitting a fresh all-time low below $15 (The Block). By contrast, Coinbase (COIN) rallied after posting a surprise $433 million profit for the same period, helped by higher trading spreads and cost cuts.

Key takeaway: Markets are rewarding profitability and disciplined spending even in a growth sector like crypto exchanges. Gemini’s challenge is to convert its expanding services revenue into positive cash flow while containing expense growth.

 Outlook: What to Watch Next

1. Cost discipline. Management signaled that IPO-related compensation is front-loaded; investors will look for a plateau in operating spend.

2. Services scale. Continued growth in credit-card spend, staking balances, and custody AUM would diversify revenue and improve gross margins.

3. Regulatory expansion. Gemini’s MiCA approval positions it well in the EU, but licensing costs must translate into meaningful volume.

4. Market cycle. Crypto price rebounds typically lift trading volumes; a Bitcoin spot-ETF approval in the U.S. could be a catalyst for both Gemini and competitors.

Bottom Line

Gemini’s first post-IPO quarter delivered eye-catching top-line growth but also exposed the high cost of scaling a global crypto platform. With GEMI stock under pressure, the Winklevoss-led exchange must prove it can tighten expenses and leverage its fast-growing services business to achieve sustainable profitability. For crypto-curious investors, the report underscores a broader industry truth: revenue alone is not enough—operational efficiency and prudent risk management increasingly set the winners apart.