Prepared remarks
Ladies and gentlemen, thank you for standing by. Welcome to Fold's second quarter 2026 earnings call. Please be advised that today's conference is being recorded. I would like now to turn the conference over to Samir Jain, Investor Relations. Please go ahead.
Thank you, operator. Good afternoon and thank you for joining us for Fold Holdings' second quarter 2026 earnings call. Joining me on the call today are Chairman and CEO Will Reeves and CFO Wolfe Repass. Before we begin, please note that the information reported on this call speaks only as of today, August 11, 2026, and therefore 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 https://investor.foldapp.com 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, products, activities, or timeframes to differ materially.
For example, statements suggesting or implying the company's ability or positioning for growth, as well as any statements which indicate future dates or timeframes, are forward-looking statements and inherently uncertain. In some cases, you may identify forward-looking statements by terms such as believe, expect, potential, should, plan, or similar terminology. But any statement that is not a statement of a historical fact may be a forward-looking statement. These statements reflect the current views of Fold's management and are not guarantees of future performance. Please refer to Fold's Form 10-K and other filings with the SEC for discussion of risks and uncertainties that may affect our upcoming results, future plans, and product rollouts, among other things. We will discuss certain non-GAAP financial measures during this call. These measures should not be considered a substitute for GAAP results. A reconciliation of comparable GAAP measures is included in our earnings release and SEC filings. With that, I'll pass the call to Fold CEO, Will Reeves.
Good afternoon, everyone, and thank you for joining us. Fold is entering an important new chapter. Over the past year, we've invested across consumer credit, banking infrastructure, merchant distribution, rewards, and new revenue engines. Today much of that foundation is in place, and over the next few months investors will begin to see those investments come together. Our credit card is performing well in early access. We've eliminated our secured debt and increased our financial flexibility. We've established the banking infrastructure to participate in the economics of customer deposits, and we're preparing to bring a much broader Fold platform to market. Everything we've built has been in service of one objective: build the most rewarding financial platform in America. That progress is especially important given the environment we've been operating through. The second quarter remained challenging across the broader bitcoin industry.
Lower bitcoin prices continue to pressure transaction activity, trading volume, and consumer engagement, and those conditions are reflected in our financial results. But we believe the more important story is how different Fold is becoming as a business. Historically, our economics have been heavily dependent on transaction activity. Going forward, we're building a broader financial platform designed around deeper, longer-term customer relationships and more durable sources of revenue. We believe the next generation of financial platforms won't be defined by the best individual products, they'll be defined by the strength of the customer relationship. That's the platform we're building, one that rewards customers not just for how they spend, but for how they save, build wealth, and manage their financial lives over time. At its core, Fold is expanding from solely a transaction business into a broader financial services company.
Historically, Fold generated most of its revenue from payment transactions. Card products, merchant offers, and exchange volumes have driven nearly all of our historical economics. Going forward, we are expanding beyond payments into additional traditional financial services, primarily those that encourage users to deposit and hold assets on the Fold platform. This strategy allows us to participate in the economics of those assets and is intended to grow our investable cash, earn yield on that cash, and to use that yield to provide richer rewards to our customers. We believe that focusing on deepening the customer relationship can fundamentally change the economics of Fold. They create more predictable recurring cash flows, stronger customer relationships, greater customer lifetime value, and ultimately a business that's less dependent on transaction activity alone. We believe that's the economic foundation that allows us to sustainably deliver better products, stronger rewards, improved cash flows, and long-term growth.
Delivering that strategy required infrastructure we simply didn't have a few years ago. Our recently announced partnership with Lead Bank provides the foundation that enables us to bring expanded banking capabilities to more customers, participate in deposit economics, and support the next generation of the Fold platform. Additionally, over the past year, we have been building a proprietary bank-grade core ledger, purpose-built for a multi-asset world. We believe this infrastructure is one of the most important long-term competitive advantages we have. The second major update is who Fold will be serving. Historically, Fold primarily served bitcoin-native customers. Going forward, we're building a platform for anyone who wants to be rewarded for managing their financial life. We believe expanding our addressable market to a broader audience will increase the value of the distribution, partnerships, and infrastructure we've already built and lead to better growth opportunities for our business.
Our conviction in bitcoin hasn't changed, and we continue to believe it's a strategic long-term asset and will continue to grow in importance within financial services. Our strategy is simple: build the best financial platform first, provide optionality to customers, and create more opportunities for customers to discover the long-term benefits of bitcoin over time. Of course, strategy only matters if you can execute. Our credit card has been the proving ground for the broader platform. Today, over 2,000 customers are participating in early access. The objective was to validate underwriting, fraud systems, servicing, financing, and the customer experience before scaling and the results have reinforced our confidence. Interchange and lending economics continued to meet or exceed our expectations and our per-swipe economics are profitable as it currently stands. We've improved underwriting, expanded approvals for qualified customers, and built the operational confidence to support our broader rollout.
During the quarter, we also de-risked our balance sheet in order to support these launches and our overall business. Specifically, we eliminated all of our secured debt to reduce treasury volatility and increase financial flexibility and kicked off initiatives to lower operational costs. Together, these milestones give us confidence that Fold is entering its next chapter from a position of strength, with the platform, capital structure, and operational foundation needed to pursue the opportunities ahead. The next few months don't consist merely of additional product launches. It's the period where investors will begin to see the foundation we've been building come together. We look forward to sharing more as those products come to market and discussing our progress with you on our next earnings call. With that, I'll turn it over to Wolfe to review our financial results.
Thanks, Will. As anyone that follows our space already knows, the second quarter continued to be a challenging environment for the broader bitcoin ecosystem. Lower bitcoin prices have continued to weigh on retail engagement, and that has been reflected in our numbers through the first half of the year. During the second quarter, we generated revenue of $6.1 million, a decrease of 26% year-over-year. Our GAAP operating expenses during the period were down 4% to $13.9 million compared to $14.5 million in the second quarter of 2025. Net loss in the quarter was $9.7 million compared to a net income of $13.4 million in the prior year period. Consistent with prior quarters, we look to adjusted EBITDA as a key barometer of core business operations. In Q2, adjusted EBITDA was negative $5.5 million compared to negative $4.7 million in the prior year period. The principal drivers of the increased loss related to increased payroll and contractor expenses as our headcount expanded year-over-year.
Our numbers for the first half of 2026 reflect both the challenges posed by current headwinds in the bitcoin space, as well as the increased investment we have made over the past two years to improve our infrastructure, our team, and to support the rollouts of major new product lines like the credit card. Looking ahead, we expect our financial profile to evolve as we expand into yield on assets held, which we believe will result in higher and more recurring revenues, better margins, and less dependence on transactional volume. We believe our broader strategy will also improve both the quality and predictability of our earnings over time. We are also focused on reducing operational expenses, including the elimination of certain vendors and contractors that were used to support our investments over the past year. During the quarter, we also eliminated $20 million in bitcoin-backed debt under our facility with Two Prime, thereby reducing our monthly interest expense by nearly $145,000 going forward.
We retained an additional $25 million of unrestricted capital for use in the business. This move was made primarily to improve financial flexibility and reduce the volatility associated with our treasury. As it currently stands, Fold is self-financing all of the receivables on our credit card product. This is by design, as we do not currently require a third-party financing vehicle. However, as receivables grow, we expect to expand financing capacity through strategic financing partners. Despite the challenging quarter, we believe the product foundations we have in place are well positioned to scale to larger audiences. Our priorities now are to scale the credit card responsibly, execute on our newest product initiatives, continue managing costs carefully, and to continue to look for areas to acquire new users and expand margins. With that I'll turn it back to Will.
Thanks, Wolfe. Before we open the line for questions, I'd leave you with one final thought. The investments we've made over the past two years weren't about improving one quarter. They were about building a fundamentally different company, one that's evolving from a transaction business into a full-featured financial services business, one serving a much larger market, and one with the foundation to become what we believe can be the most rewarding financial platform in America. We're looking forward to sharing more as our strategy unfolds over the next few months. So with that, operator, we'd be happy to take your questions.
Questions and answers
The first question will come from Dave Storms with Stonegate. Your line is now open.
Hello, good afternoon. This is Maximus. I'll be asking questions for Dave today. Just wanted to start off with, beyond account growth, are you seeing any other early signs that customer activity is accelerating, especially in the current challenging bitcoin price environment?
Hey, Maximus, thanks for jumping on here. Most of the traditional metrics that we're looking at—transaction volume and trading volume—are down. I think we're seeing that across the broader industry, but really what this is about is looking at where the company is going next and how we're positioned for a reversal here in the market. When I look at positive signs, we've seen the credit card program drive meaningful engagement. Transactions per user increase 4x as a customer establishes themselves in the program over a few months, now that we have several months of data. All of this suggests that the card is performing exactly as we hoped, becoming the primary transaction card for our customers. So while we are seeing trading in bitcoin definitely depressed in this period, we are seeing bright spots in some of the early new growth products that we are teeing up. A lot of it is Fold has been building towards a more robust platform, not so tied to bitcoin sentiment or volatility.
That will always be a boon for us in strong bitcoin markets, but really Fold is here to serve the entire customer. We are seeing increases in transactions on the credit card. Spend per user is outpacing even what our projections were. We're very excited to continue the rollout of the credit card to the wider MTU base, to the waitlist, and to the new growth segment customers where we're looking to target with our upcoming launches in a few weeks.
I appreciate that, great color. And then I wanted to move forward with the bitcoin gift card. You guys have lowered the customer fee. Are you seeing that drive higher customer activity and overall retailer interest? Also, I want to touch on the expanded distribution through TikTok Shop and what the early results are there, and if you're seeing a meaningfully different customer than your existing distribution.
What we've been noticing with this card program is the strategy of the bitcoin gift card is to lay distribution lines, both physical and digital, into some of the largest networks and marketplaces in the U.S. We believe these distribution lines we're laying today are going to make us top of mind and very accessible for when bitcoin's price reversal occurs. Fold will be everywhere. One of the things we've learned is as we gain distribution to new partners, they bring different types of customers. Our first flagship customer was Kroger, and being sold in a grocery context that is a lot of gifting where people are looking at it primarily as a gift. What we are very excited to see is the TikTok Shop that just opened up—primarily a digital environment with a very different customer base than Kroger—and we are seeing incredible results. This is one of the strongest momentum channels we've seen of any distribution channel, and that's all happening in a very depressed bitcoin market.
What's even more interesting is as it appeared on TikTok, creators started making content around this, and these videos are posting 20,000, 50,000, 60,000 views per video. These are driving customers not just to the gift card, but to Fold in general. We believe these lines are only going to get more valuable as market sentiment returns, but they are also helping us identify the most valuable distribution channels to focus on. TikTok is an example of what more of the names that we're going to be adding to this distribution line will look like. We love the engagement post-redemption and the profile of the customer. As we mentioned in the earnings call, our upcoming launches will allow us to speak to a much broader customer that is not necessarily just here to earn bitcoin. We're going to be speaking to customers that look a lot like TikTok creators and those who consume not just bitcoin content, but regular personal finance.
We think this upcoming summer launch will make these distribution channels even more valuable, allowing us to capture more bitcoin demand and capture the 80% of Americans who are searching for the best rewards program out there. Fold will be top of mind because of these distribution lines.
Good luck in the second half of the year.
The next question comes from Mike Grondahl with Northland Capital Markets.
Hey guys, this is Kiyan Phelps on for Mike Grondahl. Just one or two from us on credit cards. I think last quarter you stated the credit card pipeline was roughly 80,000 people. Any updates on the size of that going into the back half of the year?
When we look at the pipeline for our product, there's really three buckets that we're looking at. Fold today has tens of thousands of customers on the platform every month, but only a segment of those have actually gotten access. We have the waitlist, which stands over 80,000. That has both continued to grow and customers are coming direct to the platform now to get in line for the card. We have our distribution channels that we mentioned—like TikTok—but it's not just the channel, it's our TAM of people interested in bitcoin and people interested in the best rewards platform out there. All three of those are going to be tailwinds as we move into the scaling chapter of the credit card program. The early access program was specifically not for scale. It was to harden our operations and make sure our KPIs are in the right direction and the economics are correct, and that's exactly what we've seen. Almost every single metric we look at that is important to this credit card meets or exceeds our expectations and projections. As we move to widen the credit card release, that will coincide with our upcoming product launches later this summer. That will grow into the waitlist, our existing MTUs, and importantly, speak to customers who are not necessarily just here for bitcoin, but who truly want the most rewarding platform out there. We'll deliver that to a wider audience shortly.
Great color there. Last one, the Bitcoin Bonus Program—how is that looking at the top end of the funnel as we go into the back half of the year as well?
We're seeing great feedback from the Bitcoin Bonus Program. This is really the first of its kind at this scale. We have anchor partners like Steak 'n Shake and crypto companies who are on it—Simple Mining, among others—using it for retention and recruitment. A lot of our focus today is to make sure those customers have a great experience and that the product is dialed in so we can easily onboard more businesses at scale. We also want to get proof points that we are directly impacting these companies' ability to recruit and retain talent. Those case studies and data will allow us to expand from our initial relationships and start integrating the Bitcoin Bonus Program at large into major paycheck and benefits portals. Much of it will be driven by proof points from these early customers.
Best of luck on the back half of the year.
The next question will come from Nathan Frankovitz with Cantor Fitzgerald.
Hey guys, thanks for taking my question. Just another one on the credit card scaling. Can you provide an update on the expected pace of cardholder growth over the next few quarters? And last quarter you mentioned the gating factor being financing capacity. Is that the gating factor today or has anything changed there? Thank you.
Yes, so today we are running the credit card fully off of our own balance sheet. As we've moved through early access and hardened the operations of the program, the next step is expanding out into that pool of customers. We have the waitlist, our existing MTUs, and expansion into other customer segments. The gating factor to satisfying all that demand is continuing to find new financing partners to help us expand our ability to service beyond our own balance sheet. What you'll see in tandem with the summer launches and wider release of the credit card is bringing on new partners that will provide financing to expand. In early access we honed our underwriting. At the very early onset of the program, our underwriting was extremely strict to ensure we scaled responsibly on our own balance sheet and collected good data. That meant some good customers weren't getting through. We spent a lot of early access defining how to maximize great customers and ensure they're not blocked by underwriting while also keeping risks under control.
Now we've dialed that in and can bring the product to a much wider audience without denying good customers. That's the opposite of what we wanted to do earlier, and one of the reasons we didn't go out of the gate too fast: you can create an unfortunate experience for some great people. Now we can expand faster and capture as much of that demand as possible. Right now, the only limiting factor in continuing to scale is bringing more financing partners on board, and that's going to be true for the life of this program. We'll have strategic financing partners that allow us to expand the credit score box or go deeper within a given cohort. We'll start with some financing announcements in tandem with our summer launch. One of the largest points we've made in this earnings call is that Fold historically has only monetized the transactions of our customers. Our customers live rich lives; they get paid and do many things with their money.
Up until today, Fold has only monetized their transactions, and transactions are deeply dependent on market sentiment, which can be volatile. A lot of the reason for that is we haven't monetized the other side of our customer base—the assets they hold, where they park their money and get paid. With Fold's partnership with Lead Bank and our upcoming product launches, we'll be able to talk more freely about these strategies. We're going to monetize more of our customer base, which will look like a much better customer experience for them. For the credit card, we still intend to target upper-end customers who will also bring assets to the platform. This means that even if we sacrifice some volume of customers, we'll onboard more valuable customers that Fold can optimize beyond transactions and optimize their entire financial life. That's the story we'll be talking about in Q3: how Fold has transformed from a transaction business to monetizing the whole customer relationship on assets they bring.
Fold has always attracted a customer base that is high income, with liquid assets they want to optimize, and Fold aims to be the most rewarding financial platform in America. That will become clearer in the coming weeks and in Q3.
That's helpful color. If I may, I think that's a good segue. I noticed that you commented you'll be providing support for customers beyond bitcoin. Do other crypto assets have a role in that story?
Fold has made dollars and bitcoin seamless, where you can hold bitcoin and you can hold dollars, and they're connected to the traditional financial tools Americans rely on every day. The reality is Americans want more dollars and increasingly want more bitcoin. There are groups of consumers who want other crypto assets because they trade or want to speculate, but Fold is about personal finance. From what we've seen from our customer base and interviews beyond market research, dollars and bitcoin reign supreme, and that's where we will continue to focus. Fold has established its foothold as the premier provider of bitcoin rewards. We are now going to use the same platform, with major improvements coming, to become the premier provider of rewards in general. That means meeting customers where they are today: 80% of consumers today are primarily interested in cash back. We're not going to shy away from that. We believe those are great customers for Fold that we can ultimately transition to earning bitcoin. One of the things we've always done well is meet people where they are today. We'll meet the largest segment of the market shortly and bring them into our platform—not just because they want bitcoin, but because they want the most rewarding financial platform out there.
I am showing no further questions at this time. I will now turn the call back over to Will for closing remarks.
Thank you very much, Michelle. It was obviously a challenging Q2, but I think the signal here is that the team has focused and made our investments into a new vision for Fold, one we spoke about a year ago. There have been challenges getting here, but the reality is we're here. The bulk of the investments are done. The infrastructure is set. We have incredible IP that we have developed, and incredible new product expansions that allow us to speak to customer segments that are orders of magnitude larger than those we've been speaking to over the last few years. We think overall this is going to drive a tremendous amount of value to our existing customers, our new customers, and most importantly to the equity of Fold. I want to thank all the investors, team members, advisors, and board members who were brave enough to invest in this large vision through a bitcoin bear market. We're about to see the fruits of our labor.
It is one of those amazing moments: both the best of times and the worst of times. It was a difficult quarter across the crypto industry, but what we did during that time is going to define us in the future. It's going to define our ability to grow, to build a great business, and accelerate toward cash flows. I'm really excited to return in Q3 and discuss that with all of you. I think we'll have something we're really proud of to show you all. So thank you all for joining today.
This concludes today's conference call. Thank you for participating and you may now disconnect.