CoinShares PLC Ordinary Shares 2026 Q2 Earnings Call

Thank you. Good morning, everyone, and thank you for joining us.

Before we begin, CoinShares would like to remind everyone that statements made on today's call and webcast will include forward-looking statements, including statements about plans, goals, expectations, and aspirations for the company. Such forward-looking statements are based on current expectations and assumptions and are not guarantees of future performance or success. The statements are subject to risks and uncertainties, and actual results may and often do materially differ from those expressed or implied in the forward-looking statements. For a discussion of these risks and uncertainties, please refer to the CoinShares annual report on Form 20-F for the fiscal year ended December 31st, 2025, and other filings with the SEC. CoinShares undertakes no obligation to update any forward-looking statements except as may be required by law. In addition, during this call, CoinShares will refer to certain non-GAAP financial measures.

The non-GAAP measures may not be comparable to similar measures disclosed by other companies because not all companies and analysts calculate these measures in the same manner. Management believes these measures provide useful supplemental information, but they should not be considered substitutes for financial measures prepared in accordance with the U.S. GAAP. Reconciliations of these non-GAAP measures to the most directly comparable GAAP measures are included in our earnings press release and investor presentation, which has been filed with the SEC and are available on our investor relations website. Today's earnings call will be delivered by Jean-Marie Mognetti, Chief Executive Officer, and Richard Nash, Interim Chief Financial Officer.

Jean-Marie, over to you. Thank you, Jeri, for this legal disclaimer.

This is a particularly significant release for CoinShares. It is our first result presentation since completing our U.S. listing, and it marks the beginning of our ongoing communication with the market as we settle into our life as a U.S. Nasdaq-listed company. I'm going to start with the headline story of the first half, and then Richard will take you through the numbers in more detail. The first half of 2026 was, in many ways, a stress test for our business model. Digital asset markets experienced one of their sharpest contractions in recent years. Bitcoin, indeed, the period down approximately 32% since the beginning of the year. Ethereum was down approximately 48%, and our asset under management declined by approximately 25%.

But what matters to me is how the business performs through that environment, and I think there are six proof points worth double-clicking on. First point, our clients stayed with us, and we generated positive net flows. Despite a significant decline in asset values, CoinShares recorded approximately $28 million of net inflows during the period. That distinction matters. Our AUM declined because market declined, not because clients were leaving the platform. Second point, our flows materially outperformed the market. While the broader industry experienced meaningful redemptions, CoinShares generated positive organic growth. Within that, our physical platform in Europe, our growth engine, attracted approximately $156 million of net inflows, demonstrating the continued migration and strength of our core European franchise. Third point, the economics of our asset management business remain resilient. We generated $14 million of management fees during the half.

Revenue declined primarily because lower digital asset price reduced average AUM. We also continue to see the product mix of our European business shift from our legacy XBT products toward our newly physical platform and BLOCK Index, continuing our product diversification. In other words, the principal pressure on asset management revenues came from the market environment and associated change in product mix, not from a deterioration of the franchise. Fourth point, capital market remains strong through an exceptionally difficult environment. Capital markets generated approximately $15 million of segment revenue and gains during the half. That result reflects the way we manage this business. We reduced lending activity and maintained a conservative approach to balance sheet deployment as market conditions deteriorated. Fifth point, the underlying operating businesses remained profitable despite the severity of the market correction. We generated $21.6 million of segment EBITDA during the first half.

This figure also includes several one-off costs not taken through equity in association with the listing and U.S. GAAP conversion totaling a circa $4.9 million. Segment EBITDA adjusted for this amount would be closer to $26.5 million. The difference between that underlying segment performance and our reported GAAP loss is important. The reported result includes the unrealized loss on the group XBT Pricing Differential, costs associated with completing our Nasdaq listing and transition to U.S. GAAP, the settlement of our historic share option plan, and below operating income, the mark-to-market impact of our digital asset treasury position. And sixth point, we entered the second half with both the balance sheet and the platform position to benefit from a recovery. On June 30th, we had approximately $453 million of net asset, no long-term debt, having repaid our loan to Intesa Sanpaolo, and approximately $414 million of available capital.

Since then, digital asset market has begun to recover. Bitcoin increased approximately 34% between June 30th and August 31st, and our AUM had recovered to approximately $6.9 billion by the end of August, moving back toward December 2025 levels. So when I step back from the individual numbers, the message from the first half is relatively simple. The market contracted sharply, and we weathered the storm well, as we have done many times in the past. Clients continue to allocate to us. Our core asset management segment remained profitable. Our capital market segment remained profitable. We preserved capital when condition warranted it, and we finished the period with a very strong balance sheet. That is what we mean when we talk to our investors during the pre-IPO roadshow about our resilience, not avoiding market cycle, but having a business model built to navigate through them.

Importantly, we are not standing still. We are continuing to build beyond passive listed product across active strategies, staking on-chain infrastructure, and new investment exposures with one objective, to make the frontier investable. It is again that backdrop and with that balance sheet strength that our board has put forward a proposal for a multi-year share repurchase program of up to 25% of shares outstanding. We will ask shareholder to approve this at our upcoming AGM tomorrow. With that, I will hand it over to Richard to take you through the financial performance in more detail. Richard, over to you. Thank you very much, JM.

Now let me take you through the key financial results for the first half of the year, and importantly, how the market environment interacted with our business model during this time. As JM mentioned, the first half saw a significant contraction in digital asset prices. Against that backdrop, our assets under management ended the period at $5.5 billion, down from $7.4 billion at December and $8 billion as of June last year. The important point is the composition of that decline. During the first half of 2026, approximately $1.9 billion of the reduction in AUM was attributable to market movements, while the group generated approximately $28 million of positive net flows across our various platforms. As previously mentioned, the decline in AUM was overwhelmingly market driven rather than the result of client redemptions.

Looking at the income statement, our total GAAP revenue for the period was $51.4 million, compared with $80 million in the prior year period. Within asset management, the contribution to that top-line figure was $40 million, down 33%, principally reflecting lower average AUM in the period. The remaining revenue is attributable to our capital markets lending and staking activities, with further trading gains generated by the operating segment of $3.5 million, bringing the top line to $14.9 million of segment revenue and gains, compared to $26.5 million in the prior year period. As previously mentioned, we deliberately maintained a conservative approach to capital deployment during the period, including reducing lending activity as market conditions deteriorated. Segment EBITDA for the period was $21.6 million, compared with $59 million for the first half of 2025. The decline reflects the operating leverage inherent in our model.

Management fees respond relatively quickly to changes in AUM, while a significant proportion of our operating cost base is fixed in the short term. Reported expenses were also elevated by costs that we do not expect to recur at the level incurred in the first half of the year, principally costs attributable to the completion of the Nasdaq listing and transition to U.S. GAAP. The quantum of the non-recurring fees impacting our segment EBITDA in H1 totaled circa $4.9 million. As an illustration, had we not incurred such fees, our segment EBITDA would have been $26.5 million for the period. While profitability contracted materially, the underlying operating business remained profitable through a very difficult market environment.