Key Takeaways:
DeFi Technologies' second-quarter revenue fell 30 percent to CAD 7.8 million as weaker crypto prices cut assets under management to CAD 397.2 million, even as the ETP issuer drew CAD 22.8 million in net inflows.
"The underlying business continues to move in the right direction. Our core business is becoming more scalable and efficient," Chief Executive Johan said on the earnings call.
Average AUM reached CAD 471.5 million in the quarter, but quarter-end AUM dropped to CAD 397.2 million as Bitcoin and altcoin prices weakened. Management attributed the decline to market prices rather than redemptions, pointing to CAD 22.8 million in net inflows. Effective management fee yield held near 1 percent, while staking yield eased to 2.4 percent. Stillman Digital, the trading arm, generated about CAD 5.4 million in first-half revenue, up 30.2 percent from a year earlier, and accounted for roughly 30 percent of platform revenue.
The company ended the quarter with CAD 119.8 million in total liquidity, including CAD 60.3 million in cash. Management said it needs about CAD 550 million in AUM at a 4.25 percent monetization rate to reach breakeven, and expects the Smart Crypto Fund to launch within three weeks, followed by eight additional ETPs in the third quarter.
The stock fell 7.32 percent to $0.45, near the low end of its 52-week range of $0.39 to $2.80. The decline came as investors weighed the weaker revenue trend and a CAD 16.3 million mark-to-market loss on the venture portfolio, mostly tied to the 5 percent stake in AMINA Bank.
Chief Commercial Officer Andrew said more than 40 percent of Q2 inflows came from institutional events and outreach, including deals that began at a company event in Abu Dhabi in December 2025. The company's AUM is 46 percent Bitcoin and Ethereum and 69.8 percent Bitcoin, Ethereum and Solana, leaving revenue sensitive to the three largest tokens.
Operating expenses fell to CAD 8 million in Q2 from CAD 9.6 million in Q1, putting the annualized cash operating run rate at about CAD 32 million, below the CAD 36 million to CAD 39 million target. The company said it will apply for another 180-day Nasdaq extension on Sept. 1 and remains optimistic about approval.
The product pipeline is central to the growth story. Management said the Smart Crypto Fund faces no remaining obstacles and should launch within days to three weeks, with a hedge fund to follow. The company also expects eight additional ETP or structured product launches in the third quarter, and is pursuing a UCITS structure after Sweden's financial regulator rejected its initial application, with a Luxembourg path under review.
The results show the sensitivity of crypto-linked asset managers to token prices: when Bitcoin and major altcoins weaken, AUM and monetization rates fall even if product demand stays healthy. Management said it is budgeting for a 4.25 percent yield in the fall, above the 3.3 percent to 3.6 percent levels seen in the first half of 2026, as it expects the crypto cycle to turn later this year.
This article is for informational purposes only and does not constitute investment advice.
