Gemini's Post-IPO Growth Can't Outpace Soaring Costs, Shares Dive 12%

Gemini Shares Drop in After-Hours Trading as First Earnings Since IPO Reveal Rising Costs

Gemini Space Station Inc. (GEMI) shares fell sharply in after-hours trading following the crypto exchange's first quarterly earnings report since its September IPO, as widening losses and surging expenses overshadowed strong revenue growth. The stock dropped nearly 12% post-market, trading below $15, after reporting a $159.5 million net loss for the third quarter-more than double the $90.2 million loss in the same period a year earlierGemini Shares Slip After First Earnings Report Since Nasdaq Debut. The loss per share of $6.67 exceeded analyst estimates of $3.24, further dampening investor sentimentWinklevoss’s Gemini Crypto Exchange Falls as Losses Disappoint.

Despite the losses, revenue climbed to $50.6 million, a 52% increase from the previous quarter and 106% year-over-year, driven by a 45% rise in total trading volume to $16.4 billionGemini Space Station posts Q3 revenue beat as crypto trading volume surges. Services revenue, including credit card and staking products, nearly doubled to $19.9 million, accounting for nearly 40% of total revenue. The Gemini Credit Card, now with over 100,000 accounts, generated $8.5 million in quarterly revenue, more than doubling from the prior quarterGemini reports first quarter as public company, shares drop 9.5%. However, operating expenses ballooned to $171.4 million, fueled by $82.5 million in salary and compensation costs and $32.9 million in marketing expenses as the company ramped up promotional effortsGemini Stock Slides as Q3 Loss Overshadows Revenue ....

The financial results contrasted sharply with those of rival Coinbase Global Inc., which reported a $433 million profit for Q3Gemini Shares Slip After First Earnings Report Since Nasdaq Debut. Gemini's adjusted EBITDA of -$52.4 million highlighted the challenge of balancing growth investments with profitability. "The increase in operating expenses reflects higher marketing and stock-based compensation costs associated with our transition to a public company," the firm stated in its shareholder letterGemini Stock Slides as Q3 Loss Overshadows Revenue ....

Gemini's expansion into new markets, including tokenized U.S. stocks and prediction markets, and regulatory licenses in Europe and Australia, underscore its long-term strategyWinklevoss brothers’ Gemini logs $159.5 million loss in Q3 as spending surges, stock crashes. However, analysts at Goldman Sachs warned that the credit card business "introduces credit and interest rate risk in an economic downturn," raising concerns about financial stabilityWinklevoss’s Gemini Crypto Exchange Falls as Losses Disappoint. The company also faces political scrutiny after the Winklevoss twins donated $21 million to a pro-Trump PAC and attended White House events, sparking debates about regulatory favoritismWinklevoss brothers’ Gemini logs $159.5 million loss in Q3 as spending surges, stock crashes.

For 2025, Gemini projected $60–$70 million in services and interest revenue but expects technology and general administrative expenses to reach $140–$155 million and marketing costs to hit $45–$60 millionGemini Space Station, Inc. GAAP EPS of -$6.67, revenue of $50.62M beats by $3.25M. The firm emphasized its focus on diversifying revenue streams through staking, custody, and cross-product engagement but acknowledged the need for disciplined expense management.