Earnings Call Transcript - FLD Q1 2026

Operator, Operator

Good day, and thank you for standing by. Welcome to the Fold First Quarter 2026 Earnings Call. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Samir Jain of Investor Relations. Please go ahead.

Samir Jain, Investor Relations

Thank you, operator. Good afternoon, and thank you for joining us for Fold Holdings First 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, May 12, 2026, and therefore, any time-sensitive information may no longer be accurate as of the time of any future replay, listening, or transcript reading. A replay of today's call will be available by webcast on the company's website at 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 time frames to differ materially. For example, statements suggesting or implying the company's ability or positioning for growth as well as any statements which include future dates or time frames 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 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 to comparable GAAP measures is included in our earnings release and SEC filings. With that, I'll pass the call to Fold's CEO, Will Reeves.

William Reeves, Chairman and CEO

Thanks, Samir, and good afternoon, everyone, and thanks for joining us. Q1 was a challenging quarter across the broader Bitcoin industry. Lower Bitcoin prices pressured transaction volumes, trading activity, and consumer engagement, and Fold saw that pressure in our results. But as with past drawdown cycles, we believe the fundamental value proposition, technological value, and network effects of Bitcoin remain very strong. We are focused on what we control, and we continue to put our energy and focus into building our products and serving our customers. Over the last several quarters, we have laid the foundation for Fold's next phase. We launched the Fold Credit Card, expanded Bitcoin access across retail platforms, advanced our infrastructure, simplified our capital structure, and strengthened the acquisition and rewards engine we believe can scale Fold significantly from here. That foundation is now in market. In that vein, let's talk about some of the important developments this quarter. The Fold Credit Card is a foundational product for us. If Fold is going to become the primary financial platform for Bitcoin-minded consumers, we need to be present across savings, rewards, exchange, and everyday spending. The credit card completes what we believe is already one of the strongest consumer Bitcoin platforms in the market and materially expands both our growth opportunity and our relationship with customers over time. As of today, the Fold Credit Card is live with more than 1,000 cardholders. A reminder that this product officially launched into early access in March and that we are intentionally throttling access through a phased rollout. This allows us to validate systems, economics, underwriting, servicing, and risk assumptions as we scale. We remain on target with the rollout expectations and plan to continue expanding access through the quarters ahead as we work through our existing wait list of more than 8,000 potential users and our existing user base. We are extremely pleased with both the early demand and customer response. What is especially encouraging is the cohort behavior. Cardholders are already engaging with the multiple products in our ecosystem, validating our belief that the card can become both a powerful acquisition engine and a major driver of ecosystem engagement over time. Importantly, this cohort includes both entirely new customers and existing Fold users, deepening their engagement with the platform. We are also seeing strong signals that this is becoming a true primary card for users, exactly as we intended. Customers are using the card across everyday purchases as well as larger spend categories like travel and major transactions, reinforcing our belief that the card can compete as a mainstream financial product, not simply as a niche Bitcoin card. And importantly, this rollout only represents the early foundations of the experience we intend to bring to market. The current release does not yet include the full reward structure, merchant experiences, benefits, and broader platform integrations that we anticipate in the future. Given the timing of the launch, the credit card did not materially contribute to Q1 results. But as access expands, we expect the card to become an increasingly important contributor to the transaction volume, customer acquisition, engagement, and revenue growth. In parallel, we have also been working diligently on securing additional capital facilities to support larger scale growth of the credit card program. While we cannot discuss specifics today, we expect to share additional updates in the near future. The Bitcoin Gift Card also remains an important part of our growth strategy and continues to perform strongly. Through this product, we have onboarded thousands of new customers and reengaged existing users through a familiar retail experience. And many of these users are now engaging across the broader Fold ecosystem exactly as we expected. These are high-quality customers that we believe can create significant long-term value for Fold. And our flagship relationship with Kroger has been a success. We believe this model can scale nationally across additional retailers, and we intend to move aggressively to capture that opportunity. To support that growth, we are restructuring our gift card economics with distribution partners to materially reduce customer friction and improve retail placement opportunities. From a financial perspective, you should increasingly think about the gift card business as cost neutral on the front end, with the value compounding over time as users move into credit, exchange, rewards, debit, and additional Fold products, just as we've seen from the existing program. Another important milestone this quarter was the launch of Fold's Bitcoin bonus program with Steak 'n Shake and others. And we are already seeing meaningful interest from additional businesses exploring similar programs. Through the program, employees earn Bitcoin bonuses alongside their normal wages, turning everyday work into long-term savings and ownership. This is not a payroll replacement or a speculative trading product. It is a retention and savings tool built around long-term alignment. We believe what begins with Steak 'n Shake has the potential to expand from here, and we believe the Bitcoin bonus program has the ability to become the beachhead into a much larger business platform opportunity for Fold. In many ways, this is Fold extending the value already proven on the consumer side of the platform into businesses and employers at scale. The same infrastructure behind this product can naturally expand into payroll, employee benefits, corporate treasury, corporate rewards, and corporate spending tools over time. The credit card, our retail distribution, the business offerings launched this year are becoming the foundation of Fold's core platform going forward, and what we believe can drive meaningful scale over time. We are already well into the next phase of product development and expect to provide additional guidance on upcoming launches soon. As these products come to market, we believe Fold is increasingly positioned to emerge not only as one of the best places to acquire Bitcoin, but also one of the strongest platforms for consumers to be rewarded for their financial activity overall, not just within Bitcoin, but across the broader rewards industry. Because of the timing of the credit card rollout, many of our upcoming launches will now occur in closer succession rather than across a longer staggered timeline, making for what we expect will be a very active and exciting period ahead for Fold with multiple launches, platform expansions, and additional developments still to come. With that, I'll turn it over to Wolfe.

Wolfe Repass, Chief Financial Officer

Thanks, Will, and thank you to everyone for joining today. As Will mentioned, Q1 was a challenging quarter for the entire industry. In February, the price of Bitcoin was down nearly 50% from its all-time high in October, representing a significant drop in a short period of time. These pullbacks caused many consumers to risk adjust their spending and investment behaviors, and neither Fold nor many of our competitors were immune to that behavioral shift. We saw that impact both our transactional volumes, which were down 31% year-over-year for the same period, and in our revenues, which were down 21% year-over-year for the same period. February 2026 marked the bottom across most of our core KPIs over the last year, and we are already seeing signs of a rebound as the price of Bitcoin shows signs of recovery. Overall, our Q1 operating expenses were $13.4 million compared to $16.6 million in the first quarter of 2025, a decrease of approximately 19%. The primary drivers of this decrease were lower direct costs associated with revenue, which were also down 21% year-over-year for the same period, lower share-based compensation expense, and lower professional services fees. Net loss in the quarter was $29.2 million compared to a net loss of $48.9 million same period. A reminder that our net loss is impacted by non-operating items, including the change in fair value of our Bitcoin investment treasury and various entries related to financing structures like SAFE notes and convertible debt. Therefore, consistent with prior quarters, we look to adjusted EBITDA as a better barometer of our core business operations. In Q1, adjusted EBITDA was negative $5.8 million compared to negative $4.2 million in the prior year period. The principal drivers of the increased loss relate to increased payroll expenses of $1 million as our headcount expanded year-over-year and increased expenses related to product development and marketing, including net new branding efforts that are currently underway. On the balance sheet, we ended the quarter with $11.5 million in cash and cash equivalents compared to $7.7 million at year-end. Net cash used in operating activities was $6.6 million compared to $5 million in the prior year period. As previously announced, in Q1, we extinguished both of our previously existing convertible notes, eliminating those obligations, simplifying our capital structure, and improving optionality with our financing options. As of March 31, we held 826 Bitcoin in our investment treasury, which today is valued at nearly $67 million, of which 430 Bitcoin is currently held as collateral under our Two Prime credit facility. Despite the challenging quarter, we believe the product foundations we have in place are now well positioned to allow us to scale to larger audiences. As a reminder, all of our products currently generate positive contribution margins for the company. So our priorities now are to scale the credit card responsibly, continue managing fixed costs carefully, and continue to look for areas to acquire new users and expand margins. With that, I'll turn it back to Will.

William Reeves, Chairman and CEO

Thank you, Wolfe. Despite a challenging market backdrop, we believe Fold made significant progress in the first quarter and more importantly, laid the foundation for what comes next. What is becoming increasingly clear to us is that Fold's opportunity is far larger than simply Bitcoin rewards. We believe Fold has the opportunity to evolve from a niche Bitcoin platform into a leading financial rewards platform for the Bitcoin era, competing directly against entrenched incumbents across rewards, payments, savings, credit, and broader financial services. Many of those incumbents are built on aging systems, poor alignment with customers, high fees, weak experiences, and reward structures that increasingly fail to deliver meaningful value. We believe Fold can win by offering something fundamentally better: better Bitcoin access, better rewards, better value, better products, and better alignment with customers. The integrated platform we are building combines Bitcoin access, rewards, spending, saving, credit, and business services into a single ecosystem where every product strengthens the broader platform. And importantly, we believe we can compete head-on on fees, rewards, and experience while we simultaneously build a powerful margin, revenue, and cash flow engine for Fold over time. We believe the foundation is now in place, and we believe upcoming releases will begin making that vision unmistakably clear. We are incredibly excited for what lies ahead. Thank you to our team, our partners, our customers, and our shareholders for your continued support. Operator, let's open the line for questions.

Operator, Operator

Our first question will come from the line of Dave Storms with Stonegate.

David Storms, Analyst (Stonegate Capital)

Just want to start with the rollout. I know you mentioned that things seem to be going well. Just curious as to if you're seeing anything that would make you want to or be able to go faster or cause you to slow down in that rollout.

William Reeves, Chairman and CEO

Hello, Dave, thanks for jumping up and asking the question here. We're actually very excited about the pace of the rollout. I think last time we spoke, we discussed the rollout happening in phases of a few hundred, then a few thousand and eventually tens of thousands. We're already at well over 1,000 now. That's a reflection of both the team's ability to adapt and our assumptions proving out correctly: our ability to manage fraud, underwrite, and service properly. What we're really doing now is taking that cohort through a whole billing cycle so we will have a 360-degree view of the entire program, allowing us to confidently scale into the tens of thousands and hundreds of thousands, which I think this program ultimately leads to. So I'm very excited about the 1,000 cardholders we're at today. We are accelerating that rollout. Any card program is ultimately throttled by your ability to manage fraud, and I think the team has an incredible handle on that; we're seeing very encouraging results. As we expand into new capital partners, I think we'll be coming to the market with some updates on that front. Ultimately, that's going to help us build on the foundation we have and really start to scale this to a much larger cohort. But right now, the most important thing is: do we have a product that people love and are using in ways that confirm our hypotheses? Are people using multiple products? Are they using it as their primary card? All of those things are being confirmed in real time now, not only with existing customers but with new ones. For us, the ability to continue to control fraud across the full billing cycle with this level of cardholders and then bringing more credit facilities to the table is a recipe for scaling this much faster than we thought. I think we are already ahead of schedule.

David Storms, Analyst (Stonegate Capital)

I wanted to turn to maybe some of the institutional interest on the Bitcoin bonus program. What are you seeing towards the top of that funnel? And I guess as you start to bring more corporations on board, how are you seeing that sales cycle evolve? Is that shortening? Are there things you're learning? Maybe just any more color here would be great.

William Reeves, Chairman and CEO

I think we're early. To be very honest, this is a program we launched about a little less than a month ago, but all feedback from not only employees participating, but the employers — Steak 'n Shake and some of the other businesses — has been really positive. We have seen an incredible response from businesses who want to add this to their benefits package. It really runs the gamut from small businesses all the way up to businesses that look more like Steak 'n Shake: publicly traded, thousands of employees. We found something interesting selling this product: typically, selling a business on adding corporate treasury Bitcoin or earning Bitcoin rewards in their spending requires a commitment and belief in Bitcoin at the leadership level. But when packaged as a bonus benefit, these operators look to one primary thing: can this program recruit better employees, and will those employees stay longer than they otherwise would have? This program is starting to unlock a whole new set of businesses for which Bitcoin is relevant. What that ultimately does is open up the top of the funnel pretty tremendously. We are working through the various business sizes we've seen come through the sales funnel, and we're excited to be continuing to announce more participants. We built this program to scale to large businesses, and I think that's where a big impact is going to be — not only for what shareholders care about in terms of adding more monthly transacting users to our ecosystem, but also as larger contracts with these businesses. Over the next few quarters, you'll start to see this program grow, and you'll see an interesting mix that shows the diversity in demand for this program.

Operator, Operator

Our next question will be coming from the line of Mike Grondahl of Northland.

Mike Grondahl, Analyst (Northland)

First, on the Bitcoin Gift Card, can you kind of explain the economic change to promote distribution partners? Did the fees go from like A to B? If you could just walk us through that to start.

William Reeves, Chairman and CEO

Yes, Mike, it's good to hear from you. Let me take a step back. Right now, Fold is in a reality where all of our product lines are contributing positive contribution margins; every customer is accretive to the business. The Fold Credit Card is now live and in market and will begin to rapidly scale over the coming months. All Fold needs is increased scale. That leads to a company generating cash flows and consistent growth, especially if the market returns and Bitcoin starts to perform. We wanted to gear our business for maximum scale. What we learned from the Bitcoin Gift Card pilot at Kroger was that it brings in thousands of customers. One of my favorite customer examples is a top-five spender at Fold who came in via a gift card. We are seeing it become an incredible area of growth for referrals. Looking forward, we want to remove any impediment to growing this program, for new customers and for new retailers carrying it. The number-one area of friction we heard was the fee, which is a function of the costs associated with getting physical cards in-store, and that varies by retailer. As we ran the numbers and looked at what these customers do once they're in, we quickly concluded that removing the fees will generate more customers, attract more retailers, and scale the user base much faster. So when we talk about where the fees are going, the customer is going to see significantly reduced fees upfront; that's been done by working with our retailers to reduce their fees. Reducing the built-in cost and seeing the payback period on these customer cohorts makes this change compelling. It still depends on the retailer, but for the customer side, making it maximally available and reducing friction means those fees are going to go to zero.

Mike Grondahl, Analyst (Northland)

So you might still have to pay Kroger a small commission. But if I'm buying $50 of Bitcoin off a Bitcoin Gift Card, I'm not paying a commission to you anymore. Is that fair?

William Reeves, Chairman and CEO

Yes, correct. A lot of the fee previously was just passed on to the customer. Ultimately, it made a great gift, but it wasn't necessarily a great way to continue to buy. We see that by simply making this change, a whole different set of customers will come to the product and use it more often. For us, the big questions were: who are these users, will they become good long-term users, and will they mature into users who use multiple products? What we've seen is many of them will. Some are still holding the gift card balances, but when we look at their profiles, we believe they will grow into great credit card holders, debit card holders, and Bitcoin buyers. We recently had a customer write in saying they came to Fold via a gift card, earned rewards, and have now become a Bitcoin investor — something that likely wouldn't have happened without these on-ramp products. We view the Bitcoin Gift Card as turning a wider segment of the population into future Bitcoin investors through Fold.

Mike Grondahl, Analyst (Northland)

Do you have any goals for the credit card business, number of cards, September 30, year-end 2026? How should we think about that going forward?

William Reeves, Chairman and CEO

For me, the objective is as fast as possible to as many people as possible. We have 1,000 cardholders right now running on credit lines that extend upwards of $20,000. We are seeing very strong spend. Now we need to see the billing cycle go through: charge-offs, how many are revolving, average spend rate. That data will inform not only how much we can scale within our existing credit facility but also what additional facilities we need to bring to scale later. All this data is already making a very attractive value proposition for more credit facilities to participate. This next month is critical to see the full life cycle. I believe we can scale through the wait list and our full customer base within the year, if not more. I'll leave it to Wolfe to talk about constraints and how he's thinking about balancing customer behavior with the credit facility backing required.

Wolfe Repass, Chief Financial Officer

And Mike, yes, like Will mentioned, we do have internal targets. We have not put anything out publicly, but we need to make sure the systems are working first. A big piece of scaling a credit card program is securing a capital facility to scale. This is not a dilutive equity-style facility; it's a revolving warehouse that we can pull down on to float customer receivables. We've been working very diligently on that process for quite some time now, and hopefully we'll be able to give more updates in the near future. As soon as we get that locked in and our processes are up and running and we feel good about them, I think we'll scale this as big as we can with the appropriate risk lens in mind.

Operator, Operator

And I would now like to turn the conference back to Will Reeves for closing remarks.

William Reeves, Chairman and CEO

Thank you all. I want to thank specifically the team at Fold who's been able to persevere through a bear market. These bear markets come and go. We've been building in Bitcoin for a while; this is not new to us. Fold's team has demonstrated that we're shipping some of the most important products that will have the biggest impact, and we're shipping at a higher velocity and higher quality than ever before. First and foremost, thank you to the team, investors, partners, and analysts for joining and following the Fold story. I think we've waited a little longer than we wanted to get the credit card to market, but now that it's here, there are many products and launches that were placed secondary while we achieved this milestone. Now that we're through it, I think this summer will mark the beginning of Fold emerging as a clear leader, not just in Bitcoin but in financial rewards overall. That will be due to some of the major product launches, announcements, and partnerships we're releasing this summer. I'm incredibly excited for what's ahead. We truly believe that Fold has been making the right investments even when Bitcoin is down, which shows our belief and confidence in where we're going. I think we'll see returns not only as the Bitcoin market returns, but as Fold moves beyond being a company specifically tied to Bitcoin to becoming a broader financial rewards platform — a potential paradigm shift. Again, thank you all for participating in the journey. And finally, happy birthday to my dad today. Thanks, everyone, and have a great rest of the day.

Operator, Operator

This concludes today's program. Thank you for participating. You may now disconnect.