Gemini's Diversification Strategy Tested by Q2 Loss

Gemini's second-quarter loss of $107.7 million has put its strategy of revenue diversification to the test. The company reported a net loss despite total revenue growing by 37% year over year to $45.5 million. This growth was driven mainly by services revenue, which rose 149% to $23.5 million.

Exchange revenue, on the other hand, fell by 38% to $12.5 million in Q2. Credit card revenue surged by 231% to $16.2 million, with managed credit card receivables expanding to $219.6 million from $93.5 million a year earlier.

The company's operating expenses rose by 24% to $122.4 million, including $48.2 million for salaries and compensation. The new lines of business brought new risks, with transaction losses climbing to $20.1 million, mainly driven by a $16.1 million credit loss provision tied to an identified identity-fraud cohort in the credit card portfolio.

The adjusted view also failed to provide relief, with adjusted EBITDA worsening to a $74.0 million loss, primarily due to market-driven realized and unrealized losses on Bitcoin tied to a May 2026 private placement.