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Gemini posts strong Q3 revenue growth but stock reacts negatively
Gemini, the crypto exchange led by the Winklevoss twins, reported a 52% quarterly increase in net revenue for Q3 2025, driven by higher trading volumes and rapid adoption of new financial products. Despite that top-line improvement, the company disclosed a sizeable net loss for the period, and GEMI shares dropped in after-hours trading — signaling investor concern about profitability and near-term outlook.
Key financial highlights (Q3 2025)
The exchange recorded net revenue of approximately $49.8 million in Q3, up 52% from the previous quarter and 104.4% year-over-year. Transaction revenue — driven by retail and institutional trading activity — represented the bulk of that growth, rising 26% as volumes climbed. Services revenue, which includes custody, staking and the new Gemini credit card, contributed nearly $20 million and surged 111% quarter-over-quarter.
Credit card adoption accelerated sharply: credit card revenue rose by $3.7 million to $8.5 million in the quarter, supported by 64,000 card registrations compared to 17,000 in Q2 and just 8,000 in 2024. Credit card balances swelled to about $150.6 million, up 61% from the prior quarter. Staking revenue also expanded, increasing by $3.2 million to $5.9 million, with Solana staking noted as a meaningful component of growth.
But a growing net loss undermines investor confidence
Despite the revenue gains, Gemini revealed a Q3 net loss of $159.5 million — a 76.9% increase year-over-year. That widening loss profile appears to have overshadowed the strong revenue narrative and is the primary reason many investors reacted negatively to the earnings release. After an initial intraday bump, GEMI shares slid by about 6.18% in after-hours trading, with the stock trading near $15.80 following the report.
Gemini’s stock price fell despite the rise in revenue
Why revenue growth didn’t translate into a higher stock price
Several factors help explain the disconnect between top-line momentum and the share price reaction:
- Net loss and margins: The headline loss raises questions about operating efficiency, product economics and how quickly new revenue streams can turn profitable. Investors prioritize sustainable earnings improvements, not just revenue expansion.
- Market sentiment and volatility: Crypto-linked equities remain sensitive to broader market swings, regulatory uncertainty, and sentiment shifts. Bad news or perceived risks can amplify stock moves even when revenue is growing.
- Short-term technical pressure: Trading indicators and short-term momentum can push a stock lower while investors wait for clearer signs of margin recovery or consistent quarterly profitability.
- Peer performance and risk-off flows: Several other crypto-related firms have seen share weakness recently, and risk-off flows across the sector can weigh on individual names like GEMI.
Comparisons with industry peers
Gemini’s share reaction is not unique; many crypto infrastructure and mining stocks experienced declines in the same window. However, some peers such as Robinhood and Coinbase posted gains, demonstrating that market responses remain idiosyncratic and can depend on each company’s balance sheet, regulatory positioning, and revenue mix.
Outlook: catalysts that could stabilize or lift GEMI shares
While the near-term picture is cautious, there are clear catalysts that could improve sentiment if realized:
- Continued product adoption: Further growth in credit card users, custody clients, and staking customers could expand recurring revenue and improve unit economics.
- Higher trading volumes: A sustained rebound in retail or institutional trading activity would lift transaction revenue and margins.
- Regulatory clarity: Positive regulatory developments or constructive engagement with regulators can reduce perceived legal and compliance risks that depress valuations.
- Institutional partnerships: New institutional flows or custody deals would signal confidence from large counterparties and help diversify revenue.
What investors should watch next
Investors tracking GEMI should focus on sequential metrics and proof points: month-to-month trading volume trends, customer acquisition and retention for the crypto card, growth and monetization of custody and staking services, and any commentary from management on cost dynamics and path to profitability. Technical market indicators and broader crypto market conditions will also continue to play an outsized role in short-term price action.
Bottom line
Gemini’s Q3 performance highlights a common theme across the crypto industry: strong product-led revenue growth can coexist with significant operating losses. For GEMI to regain investor confidence, management will need to demonstrate that new revenue streams scale into sustainable profits or that path-to-profit targets are achievable. Until then, the stock may remain sensitive to both company-level execution and broader sentiment across cryptocurrency markets.
Źródło: crypto
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