Securitize Corp. (SECZ) Q2 2026 Earnings Call Transcript

Hello, everyone. Thank you for joining us and welcome to Securitize Second Quarter 2026 Earnings Call. After today's prepared remarks, we will host a question and answer session. If you would like to ask a question, please press star 1 to raise your hand. To withdraw your question, press star 1 again. I will now hand the conference over to Sam Ross, Head of Investor Relations. Sam, please go ahead.

Thank you, Chase. Good morning, and thank you all for joining Securitize's second quarter 2026 earnings call. For our prepared remarks today, I am joined by our Chairman and Chief Executive Officer, Carlos Domingo, our Chief Financial Officer, Francisco Flores, and our President, Rhett Redfern, who will be joining us for the Q&A portion of the call i'd like to remind you that today's presentation which is available for download on our investor relations website investors.securitize.io may contain forward looking statements which are based on management's current expectations and are subject to risks uncertainties and changes in circumstances actual results may differ materially from these statements due to a variety of factors including those described in our earnings materials as well as in our SEC filings. And with that, I'll turn the call over to Carlos.

Good morning, everyone. And thank you for joining us on our first earnings call as a public company. Plus to nine years ago, when I started the company with my co-founders, this moment was a very distant dream. Today, it has become a reality and I'm incredibly excited to be here. Before I discuss the quarter, I want to thank the Securitize team, our customers and partners and investors who believe in Securitize the opportunity from the start. Now let me tell you why this moment matters for more than just at Securitize. For years the debate about tokenization was whether it was real. Will financial assets move on to blockchains? Will this remain a crypto experiment at the edge or of the financial system? That debate is largely over. The question is no longer whether capital markets move on chain. It's how fast and which companies will build a regulated infrastructure that enables that transition. We believe this represents one of the largest shifts in financial market infrastructure in a generation and we intend to be the company that leads that shift in an emerging industry like ours and particularly as a newly public company numbers alone do not tell the full story what mother is what those numbers tell us about our progress towards a much larger goal the adoption of tokenization across global capital markets with that in mind I want to begin somewhere different than where most earning calls typically begin first I want to walk you through who we are and what we do then And I'll discuss the size of the opportunity ahead of us and our strategy to win. From there, we'll move into our second quarter business highlights. Given how large and diversified this industry is, we will break those highlights across the key areas of the market where we're focusing our efforts. Finally, I'll provide an update on the regulatory environment before handling the presentation over to our CFO to walk through the financials. So let's start with our stated mission, tokenize the world. capital markets today still run on outdated ledger technology a single transaction can require updates across multiple silo ledgers all of which need to be reconciled and coordinated through a web of intermediaries before that transaction can successfully settle our thesis is very simple the underlying plumbing of global finance comes from the 70s archaic ledgers manual settlement cycles and the constant need to reconcile silo systems was built for a world of couriers and physical document transmission that world has disappeared but the infrastructure remains it persists not because it's efficient but because it's deeply entrenched and because many institutions have been incentivized to equate that entrenchment with quality for years skeptics argue that blockchain was a technology looking for a problem they insisted that major incumbents will never adopt it and the regulation will stifle the industry from growing these claims were made with absolute certainty but the market has already changed dramatically and they're no longer true. Our technology and regulatory stack is modernizing how capital is raised, managed and traded. That means broader access, always on markets, significant operational efficiencies, lower structural costs, fewer intermediaries and more transparent ownership. Securitize provides the most comprehensive regulatory stack for assets issuers looking to move their securities on chain. It begins with our regulatory transfer agent a first in the industry register back in july 2019 way before transfer agents were sexy and crypto companies were purchasing them or register new ones we complement this with the largest digital fund administration business in the industry we have further expanded our stack through our investment advisor which became a fully registered investment advisor in early q3 that gave us the ability to manage or co-manage tokenized assets alongside our customers Together, these capabilities allow us to provide an end-to-end service to asset managers and issuers for their tokenized assets. But issuing assets on a blockchain is only one side of the story. Tokenized assets also need to reach investors. This is why Securitized has operated a broker-dealer and alternative trading system since late 2020. These capabilities support both primary distribution and secondary market trading of our customers' tokenized assets, giving investors the ability to access them with a strong regulatory framework and the protections they expect from traditional markets. But tokenizing an asset and putting on a blockchain is only the beginning. To become truly useful for investors, tokenized assets need to be integrated throughout the on-chain financial ecosystem. Over the years, Securitize has built the most comprehensive ecosystem of integrations in the tokenization industry. We've integrated with 23 different blockchains, including all the major ecosystems. We've worked with many of the largest qualified custodians, as well as the leading Oracle's providers that bring asset pricing on-chain. We've also built integrations across major DeFi protocols and stablecoins with support from leading prime brokers and market makers. And all of that is surrounded by an interoperability security and compliance layer designed for Web3 markets. And this is how we win. Since 2018, we have been building the largest and most comprehensive technology platform in the tokenization industry, a platform that is supported by the broadest and most compliant regulatory stack. That combination has helped us attract the largest institutions in the world. Companies like Apollo, BNY, BlackRock, or Hamilton Lane have chosen to issue their assets with our technology and put their trust with us. That creates a flywheel. Having high-quality assets drives investor adoption of our platform. Radar investor adoption creates additional demand from issuers that in turn brings more assets onto the platform. We're very proud of our work today, but the real opportunity lies ahead of us. Let's now focus on how we're tackling this accelerated market. Tokenization is growing faster than any other part of the digital asset ecosystem, but the industry is still at its infancy. Today there are roughly 38 billion dollars of asset tokenized on public blockchains, excluding XTABO coins. However, most analysts predict that that figure will grow into a multi-trillion dollar market over the next five years, with that growth distributed across multiple asset classes. So let's talk about that and where we see that growth happening. As we stated, our long-term ambition is to tokenize the world, which means every single financial asset. But not every asset class is equally ready today to benefit from tokenization. Some categories like treasuries are already growing at a meaningful scale. We have established a leadership position there that I will expand on shortly. Other categories like equities, bonds, and credit are early in the adoption curve but are ready to scale. Some others like alternative assets or real estate we believe will take longer. The rate of adoption, the size of the addressable market, and the opportunity we see over the next five years informs our strategy and focus today much of the tokenization economy revolves around the two trillion dollar crypto market think about the participants in that market these are retail and institutional users who are already familiar with managing wallets signing transactions using stable coins and other crypto native tools that makes it easier for them to benefit from tokenized assets today but as we mentioned the much larger opportunity is shift to traditional financial institutions and investors. That expands the addressable market to 100x from two trillion dollars to 400 trillion dollars. So while we continue to scale our business with crypto native markets, we're also preparing for much broader adoption of tokenized assets by traditional financial participants. From a monetization perspective, our strategy is also evolving. Today we primarily monetize the creation and servicing of assets through our transfer agent and for administration business over time we see an opportunity to move upstream and capture more value from the growing transaction activity these assets generate that includes trading and on and off ramping as examples we have started to do a bit of that but there is a larger opportunity ahead we also see a large opportunity to become a more active participant on the on-chain economy where tokenized assets can be lent traded and used as collateral as we mentioned tokenization creates new opportunities depending on each asset class in the next section we'll walk you through the three areas we're most focused today treasuries yield bearing assets and public equities and i'll explain why we believe each category matters how we're approaching it and the progress we've made in each area before we dive in each area i want to quickly highlight how productive the second quarter and overall this year has been so far for securitize we expanded major institutional partnerships, continue building the utility of our assets across DeFi and on-chain markets, and other important regulatory and marketing infrastructure capabilities. These are all important building blocks for the business, and we'll walk through each of them in more detail over the next several slides. First, I want to emphasize that Securitize continues to be the largest tokenization platform in the industry. We were the only platform with more than 4 billion assets at the end of Q2, and in early Q3 we surpassed 5 billion, becoming the first tokenization platform to reach that milestone as well. Currently, no other platform has surpassed the $4 billion AUM market except us. We've mentioned the diversity of the products we strive to provide. Well, we're also the only platform with more than seven individual assets that exceeded $100 billion in AUM products that expand multiple asset classes. We are the leader in permission tokenized treasuries. We have the largest tokenized equity in the industry. SEC, our own New York Stock Exchange listed stock. More on that later. We have the largest tokenized institutional fund, BCAP, at close to 1 billion of AUM. We also have one of the largest tokenized credit platforms with more than 450 million in AUM. We're not only the largest platform, we're also winning in many categories. As you can see in this chart from the gray line, crypto market cap ticked in late Q3 2025 and has since then continued declining each quarter to to be now at around 50% of the size that it was back then. Well, we saw some outflows during Q4 and Q1 as a result of the market downturn. Our AUM has recovered successfully, and in Q2, we're back at $4.2 billion. And as I mentioned, in Q3, we already exceeded 5 billion, which is our all-time high in tokenized asset. So we have now basically decoupled from the crypto market direction, and we're now growing while crypto is declining. We're also closely tracking transaction volume close our platform because it's important for two reasons first it is an indicator of the health and utility of our products second we believe it represents an important future monetization opportunity that we have started to explore there was an unusually large increase in q4 last year when one of our customers generated significantly peer-to-peer transaction activity across its holdings followed by a decline in q1 outside of that event transaction volume across the platform has been growing steadily and in q2 we had 5.3 billion dollars in volume and a healthy 170 growth from last quarter our fund services business was also initially impacted by the decline in crypto prices and activity that followed the october 2025 crash that was driven by lower digital asset prices which reduced the value of the assets in the funds and therefore the assets under administration also few funds have to close as a result of deteriorated market conditions however since then our assets under administration has remained relatively steady at around 24 billion dollars for the past three quarters it's very important to note that our asset administration stay consistent even as the larger crypto market continue to decline that you can see here on the gray line on this chart we believe that speaks of the quality and resilience of the fund managers that use securitized services business since we recently went public we had to overhaul our board of directors. As you can see we have assembled a very strong board with a combination of both TradFi and crypto as well as company veterans and Frisplot that we think will strongly help us on this new stage as a publicly traded company. Let's now look at the business to the lens of each major asset category. I started with yield varying assets and treasuries. Yield varying assets are in high demand among crypto market participants. They can be used as a reserve asset or a treasury management tool for protocols. It can also be used as collateral for trading and lending across centralized and decentralized markets. This is why we focus on building a broad spectrum of products in this category. At one end are the highly liquid lower risk products such as treasuries. We'll go in more detail on our work with BlackRock and Van Echter shortly. At the other end of the spectrum are higher yielding products with greater risk or duration, including private credit strategies from firms like Apollo and Hamilton Lane. Early this year, we began filling the gap between those categories with the launch of a AAA CLO product with BNY and more recently in Q2 with a USAFI product with Atlas. For the rest of the year, we will continue to expand that spectrum with products across areas like corporate bonds, asset-backed securities, and other high-yield strategies. Tokenized ratios have been one of the fastest-growing categories in the entire digital asset and tokenization ecosystem. The major catalyst for this growth came in March 2024 when BlackRock chose Securitize to launch Beedle. The chart speaks for itself. When Beedle launched, the total AUM in tokenized treasures had not even reached $1 billion. Today, the market has grown to over $16 billion across a total of 87 products. That represents market growth of 20 times, or a carrier of 250%. As that market has grown, Securitize has solidified its leadership. Today, tokenized treasuries by Securitize represent around 20% of the entire market. And while the growth of that market has been impressive, we believe there is still significant room to grow. If you look at the stable coins today, they represent around a $300 billion market. In traditional finance, the treasury market is considerably larger than the amount of dollars in circulation. so we expect tokenized treasures to continue growing with that pattern in mind as mentioned we have established a leadership position through our work with blackrock and now we're expanding our product portfolio from private treasury funds into register funds through the launch of blackrock second tokenized fund the daily reinvestment stablecoin reserve vehicle or be reserved this is the second blackrock fund tokenized by securitize and it's a register fund designed to be used as a stablecoin reserve asset to address the opportunity created by the genius act Service in Registered Funds is a significantly more complex and demanding task for a transfer agent, so we're very pleased that we managed to meet BlackRock requirements to manage this newly created Registered Fund. One detail that is particularly interesting is BlackRock's decision to include the word daily reinvestment in the name of the product. That capability illustrates one of the advantages of putting the assets on chain. Using our infrastructure, interest can be efficiently reinvested on a daily basis with a simple blockchain transaction. That process requires significantly less manual intervention and reduces the potential for reconciliation errors. Biddle and Nobile Reserve are differentiated within BlackRock's treasury-based product portfolio, which typically allows for monthly reinvestment, only with our two funds being the only ones that do daily reinvestments. Our ability to support daily reinvestments allows interest to compound more frequently and can enhance the resulting return for investors, making the product more attractive. We also announced our partnership with Atlas Capital, founded by renowned economist and longtime crypto skeptic Nouriel Rubini. Atlas has developed a product called USFI under a novel concept of a technodollar, a diversified strategy combining treasuries, gold, real assets, and strategic commodities that is designed to be resilient across different macroeconomic environments because it's not just backed by dollars and t-bills. The plan USFI token will provide a digital representation data strategy under the novel Dubai's VARA framework. For Securitize, this is significant for two reasons. First, it brings another differentiated yield-bearing asset on chain with a structured design, as we mentioned, to be resilient across different microeconomic environments. Second, this marks our first collaboration under VARA in Dubai and gives us a foothold to expand our insurance business in one of the world's leading digital asset jurisdictions. It's another example of how can we expand both the types of assets we tokenize and the markets in which we operate. As I mentioned earlier, one of the reasons we are investing heavily in yield-bearing assets is that we believe they can become a superior form of collateral. That applies to both centralized derivatives, changes across crypto and traditional finance, and to DeFi protocols. In some cases, the advantages come from bringing high-quality assets like Treasuries on chain. In other cases, it comes from enhanced collateral mobility. Tokenized assets can be posted, transferred, and redeemed on chain 24-7 and near instantly. The centralized trading opportunity is very large, potentially reaching $2 trillion by 2028, with potentially $600 billion of that coming from treasuries and tokenized money market funds. On the decentralized finance side, Standard Charter projects that the market could reach $2.7 trillion by 2030. Tokenized assets to date represent a very small percentage of collateral used across lending protocols, but that percentage is growing. If tokenized assets make up 10% of that market, that will be a 270 billion dollar market cap. We believe this creates significant opportunity as DeFi protocols are already building mechanisms to integrate tokenized assets into permissionless environments, and we're actively supporting this effort with our regulatory expertise. This shift is already happening, as you can see from this chart. While stablecoin reserves on crypto-derivative exchanges have been stagnant, or even declining, the use of treasuries is increasing. Securitize has already secured integrations for BlackRose-Beatle across major crypto-derivative exchanges, including Crypto.com, Deribit, Binance, and more recently in this quarter, OKEx, using Standard Chartered Custody Solution. These integrations increase the utility of Biddle and have life further adoption. The next step is to extend that model to traditional finance derivative exchanges, like CME, following CFTC's recognition of tokenized tracers and acceptable form of collateral. We also continue making progress on the DeFi side. For some time, we have been working to integrate tokenized assets compliantly with all the major DeFi lending protocols, including Aave and Morpho. This quarter, we unveiled two on-chain liquidity facilities through our partnership with FINA and Grove, which is part of the SKY ecosystem. We also make progress to integrations with Loopscape and Zarta to enable recursive lending. This allows yield-bearing assets to be leveraged multiple times in an efficient manner while maintaining controls around the collateral and its liquidation. This is a process that is extremely difficult to achieve in traditional finance markets, where lending and issuance processes remain much more manual. On the previous site, I mentioned our ability to integrate with permission-led DeFi ecosystem in a compliant way. A key part of that capability is the technology called Vault Registrar, which we released publicly during this quarter. Vault Registrar allows investors to create vaults that function as a smart scroll for But we believe this opportunity goes much faster as two super trends, tokenization and AI, converts together. We see this technology as part of the foundation for a compliance layer supporting agent-based tokenized finance. We believe AI power agents will increasingly become a standard way that trading occurs on the internet. And that will be particularly relevant for tokenized assets because those assets are natively digital and programmable. And we intend to help lead the industry development toward that future. Finally, let's move to tokenized equities. This is one of the largest opportunities in the market given that US equities and ETF markets alone exceeds $100 trillion. Think about that. If only 2% of that market moves on chain, it will double the size of the crypto market today. But tokenized equities currently represent around 2 billion dollars. This is still a rounding error relative to the size of the underlying market. And many of the activities currently synthetic exposure that is offered outside of the United States regulatory framework. The SEC recently outlined a taxonomy that divides tokenized equities into three broad categories. First is issuer-sponsored tokenized equities. In this model the issuer chooses to tokenize his shares through his registered transfer agent. The token represents the share itself preserving the applicable shareholder rights without introducing counterparty risk. This is the model Securitas demonstrated with our equity which I will discuss in a moment. The second category is the custodial fair party model. Here the token does not represent the underlying share. Instead it represents a claim on an asset held by a regulated intermediary. This is also regulated model available in the United States that is the approach that the DTCC is pursuing. We welcome the involvement of a major incumbent like DTCC in the space. Their entrance into tokenization expands awareness of the opportunity and encourages traditional financial institutions to think seriously about tokens and wallets. At the same time, we believe this model remains more closely tied to the existing intermediary architecture of traditional finance. Long term, we continue to believe that there is significant benefits to bring assets directly onto public blockchains and enable permissionless innovation around them. The third category is the synthetic exposure we've seen through offshore wrappers. These structures are generally not available in the United States given that they are not compliant with U.S. regulations. They introduce additional intermediaries and counterparty risk while potentially creating multiple derivatives representations of the share underlying asset fragmenting liquidity. We do not believe regulatory arbitrage is the most durable long-term model for tokenized securities, and it is not the approach we're pursuing. So what is Securitize doing to position itself to win in this large but still emerging market? We have assembled what we believe is the most comprehensive and consequential set of partnerships in the tokenized equities industry, and we are only at the beginning of connecting tokenized equities and ETFs with existing capital market infrastructure. First, Securitize has been selected as the tokenization partner for the first and the third largest transfer agency in the industry. ComputerShare is the largest global transfer agent and serves closely to 60% of the Standard & Poor's 500, as well as more than 2,500 US publicly traded companies. Continental Stock Transfer is the third largest transfer agent and has the particular strength among small and mid-cap companies, IPOs and SPACs. Together, these relationships give us access to very different segments of the public company market. Second, we have partnered with the New York Stock exchange, the world's largest equity exchange, as it develops a digital ATS designed to support 24-7 trading and instant settlement of tokenized equities and ETFs alongside its traditional business. Securitize has been selected as the design partner for the ATS as well as an initial transfer agent and tokenization partner. Our broker-dealer is also expected to connect to their ATS and provide investor flow. Third, we have partnered with Jam Trading, the largest crypto market maker and one of the largest proprietary trading firms in the world. Jamf is acting as a market maker for tokenized equities, beginning with our own stock. And finally, we want tokenization to extend beyond secondary trading into capital formation. We want investors with digital wallets to be able to participate in IPOs and secondary offerings in tokenized form. This is why we've partnered with Counterfeit Settle, one of the leading investment banks in SPACs and digital assets, to explore enabling these offerings through our infrastructure and recently expanded regulatory capabilities. And I want to emphasize that the partnership we've announced so far are only the beginning. We continue to have conversations with many of the largest participants in the industry that are highly interested in tokenization, and we look forward to building a broader ecosystem for bringing capital markets on chain through tokenization. But we also believe in walking the talk. So when Securitize became a public company, we did something that had never been done before. We made our own equity available on chain on the same day our shares began trading on the New York Stock Exchange, the same share and the same write, but in token format, issue on a public blockchain. We do not believe on-chain markets yet have the same depth of liquidity isolation on markets, but we do believe that two markets can be complementary and can coexist. So we put our own stock on-chain through a regulated structure, using Continental as our transfer agent and securitized tokenization infrastructure. Tokenizing SECC was available on listing day, including to eligible investors in the United States. It immediately became the largest tokenized equity in the industry. More importantly, we demonstrated that it's possible to tokenize U.S. public equity within the existing regulatory framework. There is a tendency in crypto to assume that offshore synthetic structures are necessary because compliant tokenization cannot be done in the United States. We have always said this is not the case, and we have now demonstrated otherwise. We issued tokenized SEC on both Avalanche and Solana, two of our long-standing existing partners. Doing so also demonstrated our ability to support multiple blockchain ecosystems simultaneously through our multi-chain infrastructure. But we did more than simply issue the shares on-chain. We enabled tokenized SEC to trade through atomic swaps, again, USB-C, from self-custody wallets with jump trading acting as a market maker, using a very familiar process and UI for any person that has traded crypto on chain before. We did that while operating within the regulatory requirement governing public securities in the United States. So again, it's possible. The next step is to continue increasing the utility of tokenized SEC and to bring additional equities on chain. For anyone listening this call who wants to experience this directly, I encourage you to visit stocks.securitize.io. You can create a securitized IDE, complete a simple KYC process, connect your wallet, and use USDC to begin trading. For anyone that has traded crypto before, the experience should feel very familiar. And if you haven't, we encourage new users to introduce themselves to the platform and technology we're so proud of. When you purchase tokenized SDZ, you receive the shares directly in your wallet at pricing tied to the traditional markets. The key difference is that settlement happens immediately into your wallet allowing you to hold user transfer the asset directly rather than rely entirely on a third-party broker dealer to custody for you. Let me now close with a brief update on the regulatory environment. Under Chairman Paul Atkins, the SEC has taken a much more constructive approach towards tokenized securities. Over the past year we've seen greater clarity around the use of public blockchains by transfer agents, broker dealer custody, and the different models for tokenized securities. We have also continued expanding our own regulatory capabilities securitized market now has the ability to custody and facilitate training of tokenized securities supporting atomic settlement against stable coins and participate in initial and secondary tokenized offerings there are additional regulatory developments under discussion in washington that could make it easier for tokenized markets to grow including an innovation exemption and more practically custody frameworks that the sc has announced that some of these things are actually coming as soon as friday this week we will certainly welcome those developments but importantly our business does not depend on them although it will benefit from them security that has spent years building within the existing US regulatory framework we are already issuing servicing trading and setting tokenized securities today so additional regulatory clarity can accelerate the market and expand our opportunity but we don't need to wait for Washington to build the business we're already operating okay let me close where I started with our mission to tokenize the world. When we founded Securitize nearly nine years ago, that ambition sounded incredibly bold. Today, some of the largest institutions in global finance increasingly share that vision. As BlackRock's chairman and CEO Larry Fink has said, every stock, every bond, every fund, every asset can be tokenized. We agree with our partners at BlackRock and if that is where financial markets are going, the opportunity in front of Securitize is enormous we've spent nearly a decade building the technology regulatory infrastructure products and institutional partnerships required to make that future possible we're still early but the direction is becoming clearer every day and we believe we've never a better position to do it with that i will turn over to our cfo francisco flores to work you through our financial results thank you thank you carlos good morning i'll just briefly echo carlos's comments that it is great to be with you all for our first earnings call as a public company and I look forward to engaging

with all of our investors and analysts going forward. For my prepared remarks today, all reference growth rates are on a year-over-year basis unless I indicate otherwise. Now onto the second quarter results. Total revenue was $14.4 million in the quarter, down 5% versus the prior year period, driven by lower tokenization revenue, partially offset by continued growth in asset servicing revenue. Despite the quarterly decline, total revenue for the first half of 2026 was $33.9 million, an increase of approximately 16% versus the prior year period, and a record half for the company. Tokenization revenue was $7.9 million, a decrease of 12% versus the prior year period, primarily due to fewer new on-chain integrations, as the prior year period had benefited from a number of new protocol launches. As you might recall, tokenization revenue tends to be a bit more volatile on a quarter-to-quarter basis, reflecting the project-based nature of on-chain integrations, which carry between periods based on the number, timing, and mix of completed projects. Asset servicing revenue was $6.6 million, an increase of 3% versus the prior year period, driven by growth in the underlying business. Turning to expenses, total operating costs and expenses were $24.1 million, an increase of $8.7 million or 56% driven by higher compensation and benefits, higher SG&A, including professional services fees as we prepare to become a public company, and higher cost of revenue. Compensation and benefits were $10.5 million, an increase of $2.5 million versus the prior year period. The increase reflects continued headcount growth, including several senior hires added in connection with our transition to being a publicly traded company. SG&A expenses were $8.2 million, an increase of $4.7 million versus the prior year period. The increase was largely attributable to the underlying growth of our businesses, increased conference and marketing expenses heading into our public listing, as well as approximately 1.9 million dollars of one-time cost associated with our public listing including professional and consulting fees. Cost of revenue in the second quarter was four million dollars an increase of approximately zero point five million dollars or 13% predominantly driven by revenue generating headcount expansion. As a reminder cost of revenue consists largely of direct labor in our blockchain engineering and integration division, fund accounting, and client-facing personnel, and capitalized software amortization. On a sequential quarter basis, cost of revenue decreased $0.5 million or 11%, consistent with the lower asset servicing revenue in the second quarter. Provision for credit losses increased by $1.2 million versus the prior year period, primarily related to a terminated contract with a single protocol which was not able to meet its financial obligations. As a result, we do not anticipate any additional financial impact related to this contract going forward. Turning to non-operating expenses in the second quarter. Interest expense was $1.1 million, a decrease of $0.3 million versus the prior year period. Recall, on July 1, 2026, at the close of our business combination, all outstanding convertible notes, approximately $80 million dollars in total converted into equity. As a result, we do not expect any material interest expense in the third quarter of 2026. Adjustments to the fair value of complex financial instruments led to a combined expense of $11.7 million. This includes a $4.3 million loss associated with SAFE agreements and a $29.3 million charge for auction liabilities, largely upset by a $21.9 million dollar unrealized gain from derivative liabilities. While there are some moving pieces in each of these line items in the aggregate, the total expense for complex financial instruments was driven by a combination of actual shares exercised and issued as part of Securitize going public versus prior estimates, as well as the impact from the final price per share for these shares versus the previously model price per share. Importantly, I'll point out that these line items do not have a cash impact. Obviously, even that these expenses were all related to us finalizing the business combination, we do not anticipate any material impact in these line items going forward. Looking at adjusted debida, adjusted debida was negative 5.5 million dollars compared to positive 1.8 million dollars in the prior year period, a decrease of 7.3 million dollars. The decrease was primarily driven by higher compensation and benefits as we continue to scale the business, higher SG&A expenses, including professional and consulting costs associated with becoming a public company, and the modest decline in total revenue. For the second quarter of 2026, Securitize reported a gap net loss of $21.7 million, compared to a net loss of $6.1 million in the prior year period, an increase of $15.5 million. The higher year-over-year net loss was primarily driven by higher expenses, including headcount growth to support the expansion of our business and prepare for being a publicly traded company, along with non-recurring costs associated with the company's public filing process. The higher net loss also reflected higher non-cash fair value losses resulting from the periodic remeasurement of our financing instruments, as well as lower revenue versus the prior year period. Net loss per diluted share in the second quarter was $2.37, compared with a loss per share of 72 cents in the prior year period. From a capital and balance sheet perspective let me remind you that when we closed our business combination on July 1st it resulted in approximately 350 million dollars in net cash and liquid securities on our pro forma balance sheet with zero debt or roughly two dollars per share in net cash. Now before I discuss our updated financial outlook for 2026, I thought it would be helpful to ground everyone on where the industry is now versus where it was when we last provided our outlook back in November 2025. There were several macro assumptions that were embedded into our outlook which so far are playing out well short of our initial expectations. For instance, in the fall of 2025, the overall crypto market was nearing all-time high of four trillion dollars. We had assumed at the time that the overall crypto market would continue to grow to roughly $5 trillion by the end of 2026. However, the market has clearly taken a step back with the overall crypto market below $2.2 trillion. Similarly, we had assumed that the overall stablecoin market would grow from approximately $300 billion at the time to around $450 billion by the end of 2026. So this market has been largely stagnant, currently sitting at roughly $300 billion. dollars. Lastly, we assumed that the overall RWA market would grow to roughly 77 billion dollars by year-end 2026. And this market has also experienced more modest growth than we had hoped, now sitting at approximately 38 billion dollars. All of these factors have impacted our AUM growth expectations, which we were initially targeting 9 billion dollars by year-end 2026. And while we have seen a good rebound off the bottom earlier this year. We sit here today in August with AUM of roughly five billion dollars. However, despite this industry headwinds, we continue to see very healthy levels of engagement with asset issuers and a strong demand for products, both from tokenized funds and equities. You see this momentum with the announcements Carlos mentioned, such as the NYSE partnership, the computer share agreement and continental announcement, as well as several other initiatives we have in the pipeline that we believe will accelerate our growth trajectory. And so while we are managing our business through this volatility on the crypto side of the industry, momentum on the TradFi and tokenized equity side of things provides some solid tailwinds to support the business. As you may recall, when we provided our initial 2026 revenue outlook, we indicated that we had expected $85 million in revenue that was either contracted or based on AUM at the time. And while we continue to expect to recognize the vast majority of this revenue, given the lower AUM trends and the other industry headwinds I just mentioned, we now expect total revenue to be in a range of $70 to $80 million for the full year 2026. And note that at the midpoint of this range, it still implies a growth rate of more than 20%, percent, which is quite strong against the current macro backdrop. In conclusion, the pipeline remains very strong across our businesses, and we see healthy organic growth ahead despite the industry headwinds I just outlined. When we look at the industry-leading firms we're already working with, the key partnerships we have entered into so far this year, and the strength of our balance sheet, we believe that Securitize is well-positioned to capitalize on the secular tailwinds towards tokenization, which we believe is still in its infancy. And with that, we'll be happy to take your questions. Operator, please go ahead and open the line for Q&A.

We will now begin the question and answer session. Please limit yourself to one question and one follow-up. If you would like to ask a question, please press star 1 to raise your hand. To withdraw your question, press star 1 again. We ask that you pick up your handset when asking a question to allow for optimum sound quality. If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question comes from the line of Devin Ryan with Citizens Bank. Your line is open. Please go ahead. Devin, your line is open. Please go ahead.

I'm sorry, I was muted there. Good morning, Carlos, Francisco, and Brett. Congratulations on getting to the public markets here and on your first call. I want to start with a big picture question on the opportunity. You've made obviously tremendous progress getting to $5 billion of tokenized AUM, and you mentioned seven assets above $100 million. At the same time, that's very small relative to your current customer base, which has tens of trillions in AUM, and many of them are vocal about wanting a lot of their assets to move on chain over time. So when you talk with your existing asset management partners today, what is driving the decision to think about launching that second or third tokenized product? What are the decision points? What are the gating factors? And then if you can also just weave in how you think about the incremental economics as additional funds launch relative to that kind of initial launch with those partners? Good.

Thank you. So this is Carlos Domingo. I think most of our partners wants to launch one first and then see it move successfully and get familiar with the entire process. And also, one thing you need to think about is when we launch a product, the product doesn't just stay there. So if you think about BlackRock Beedle, even though it launched in March 2024, until we announced the second one recently, the beer reserve, we've actually have been making a lot of progress in increasing the features of the fund. So it initially launched on Ethereum only. It was monthly dividend. Over time, we moved it to multiple different chains. We also moved it from monthly to daily dividend, which is not a big reserve, as we mentioned in the call. It's also daily dividend reinvestment. We added on-chain data, integrating with Oracle, et cetera. So there's been a lot of progress in the product itself, improving it to integrate more features before they take the decision to launch the same one. so with the rest of the of the partners that we have it's kind of like the same journey they want to launch something first you know see out there how it's being consumed how the features can be improved over time before they move into the second one but obviously we think that most of these uh you know products because of being successful in the market will lead to other launches in the future with the same partners yeah carlos if i could add and um hi this is Francisco.

Hi, Devon. Thank you for your question. In terms of incremental economics, it's important to understand that our platform exhibits high operating leverage. We have already made most of the investments needed to support the infrastructure. So as we continue to scale in terms of AUMs and transactions, we will see improved margins flowing down to the bottom line. Also, as Carlos mentioned, As our business becomes more mature, onboarding new asset managers becomes more efficient because we require less resources, as well as whenever we try to launch new products with existing clients or the second type of an existing product category, we become more efficient. So, as we continue to launch products, we will improve our economics considerably.

Got it. Thank you both. It's easier for us to launch another product with an existing asset manager that we already have a contractual relationship than onboard a new one because the process of onboarding to become a service provider for a large asset manager is very lengthy. Most people don't realize that it's very demanding. There is a lot of due diligence involved, a lot of legal red tape to negotiate contracts, terms, et cetera. So this is why we're looking at not launching with hundreds of different asset managers, but launching with a few selected ones and then try to scale Thank you so much.

And then just my follow-up question, I want to dig in a little bit on tokenization revenue and some of the components that go within that, because I think, obviously, there's a lot of drivers within that line item. And so if we're just looking at kind of a yield on assets, it's kind of a brute force modeling. But based on the disclosure, I think that's the way some investors are looking at it. And so you had the first quarter yield over 140 basis points on AUM and then drop down to a little bit over 70 basis points in the second quarter. It would seem to get to your full year guidance on revenues that there's probably a step up from the second quarter. So if you can just I appreciate that they're volatile, but just how we should be thinking about the components of tokenization revenue and how much to get to the 70 to 80 million is based on kind of a spread on AUM growth versus transactional that, you know, is going to fluctuate. Because again, like I think the second quarter is probably a little bit lower yield, but also there's a lot of components that go into it.

This is a great question. Thank you, Devon. Let me start by saying that currently our AUM-based revenue is not material. It's still growing, and it has grown in line with AUM growth, but the majority of the revenue from the tokenization part is still related to the expansion of our ecosystem by integrating new protocols. regarding transactional based revenue this is an opportunity for the medium to long term so currently very little of that volume is being monetized in regards to the guidance I think it's important to understand our revenue model that separates between organization and asset servicing. Asset servicing provides a stable recurring source of revenue which is growing modestly quarter by quarter. So that is a portion of the updated guidance. And then the remaining is currently basically driven by the protocol integrations.

It's a small portion of AUM-based revenue that is is going to become more meaningful in the medium term excellent if i could just squeeze one more into this related just as we hopefully move to a world where tokenized equities are scaling materially how will the economics on that look relative to uh the economics on the funds uh so so like just if you could just walk through briefly for everyone the the revenue opportunities in a tokenized equity world to the extent we see material scaling there over the next couple of years?

I can take that one. So on the tokenized equity side, we think that because equity is a very liquid asset, there will be a lot more trading than some of the assets that we hold that, I mean, they don't move a lot because they're like more, you know, reserve assets like, you know, treasuries or credit or other things like that. So we think that transaction monetization is going to be more meaningful compared to the pure just tokenization and issuance and asset servicing portion of it. So as we announced in the past in the New York Stock Exchange project, we're not just the tokenization and the transfer agent, but we're also a broker-dealer that can bring retail flow that obviously will monetize the transactions. So we think on equities, transaction monetization will become a much bigger component of our revenue, as opposed to other assets, where it's more like the issuance and the asset servicing.

Excellent. Okay. I will leave it there, but thanks so much for taking the questions.

Your next question comes from the line of Mark Palmer with StoneX. Your line is open. Please go ahead. Thank you.

Good morning, and thank you for taking my questions. I wanted to ask about the expense base in the second quarter and how we should think about expenses during the balance of the year. And I guess this question is for Francisco. How do you view of the expense base that is structural versus what is transitional? And as you are thinking about reaching positive adjusted EBITDA, how does that mesh out with the companies?

Yeah, thank you, Mark. So we have disclosed that year-to-date we spent approximately $3.5 million in one-time expenses associated with going public. Those are the one-off that we could separate from the cost base that we shouldn't see meaningful expenses going forward. There's still some that we will report in Q3 as part of closing the transaction, but nothing meaningful in Q4. And again, going into 2027, we shouldn't expect any one associated to this. Operating expenses are increasing with headcount growth, which we expect a modest growth through the remaining months of 2026. But we believe that this year we will end with the headcount structure that will allow us to operate as a public company and also to take advantage of the market opportunities. So you should see a very stable cost base in 2027 and going forward with minor increases adjusted for inflation and modest headcount growth. in in terms of profitability i think it's important to understand that most of our costs are fixed so as as we continue to scale um in volumes aums transactions we will report that directly into improved margins and and improve adjusted db that um i think the only other comment it's important to add is that the fact that we are no longer supporting a positive adjusted EBITDA in 2026 is not related to the economics of the business model itself. It's more related to the structural revenue disruptions caused by the events in the crypto market at the end of 2025, the operating model is pretty efficient in its core structure.

Very good. And I wanted to get your take on the statement in the tokenization space. And in particular, when you are going after customer mandates for fund launches or equity tokenization, who are you typically bumping into? Are these standalone tokenization platforms that are specifically focused on this service, or are you seeing larger entities such as exchanges and custody platforms that are getting involved?

Thank you. Obviously, we are at a point market, and I've been doing this for nine years, not good at anybody else, probably, that there is a lot of talk about tokenization. So pretty much every company in the crypto space out there is figuring out how to participate into the tokenization space, as well as all the Tratify companies, both service providers, as well as asset managers, right? As you know, we focus on issuer-led tokenization. So we talk to issuers, whether they're issuers of equities or ETFs, or they're issuers of asset managers that issue funds. So we do not directly compete with people that are doing, let's say, you know, third-party tokenization where they create derivatives and synthetics, et cetera. Those end up kind of not competing for the same business because they do not approach the issuers, so we don't see them there. We see them in the market, you know, with our products, but not in the competitive processes that we go with issuers to win their mandate. For that part, obviously, I'm going to break down the asset managers for the funds versus equity because it's completely two different segments of the market that are approached differently. On the equity side of things, we have, as you know, strike the partnerships with computer shares and with Continental. So obviously, within those, we don't see any competition. It's just more about convincing the issuer that they need to tokenize than competing with anybody because they have already their existing relationship with the existing transfer agent, and we've already been chosen as the tokenization platform. And as you know, the other part of the market currently is Equinity, which is in the process of being acquired by bullish. So that's on equity tokenization. On the funds side of things, I think we're very focused on the tier one asset managers. So, you know, we don't go after smaller ones. I think our strength is precisely in being able, as I mentioned, to go through the lengthy and complicated process of being accepted and onboarded by a very large, you know, traffic company like, for instance, BlackRock and others. So we don't get to see a lot of competition, to be honest with you. I don't think that there is anybody out there that has the capabilities and the credibility and experience to be able to compete on that space. It's more about convincing them to do it, identifying which product we want to launch, go through the onboarding process, et cetera. Now, some banks now are launching RFQs. These are competitive processes. We don't get to see who else gets invited there, but we're participating in those. So hopefully soon we will see who else can compete there. But as I mentioned, there's not many companies because some of them, they have tokenism platform for transfer agents, but they don't have a broker-dealer. So they kind of participate in non-distributions. others are not regulated entities so they're just not uh not suitable for working with uh with those companies and then on the on the transfer agency side i just want to emphasize that you know just registering a transfer agent is not going to make you eligible to actually work with a large uh asset manager it's it's a very complicated process you have to have the experience you have to have the the operational capabilities etc to do it we just went through the process of onboarding with blackrock for the second fund which is a register fund as i mentioned in my remarks this is a much more complicated process to manage a registered fund than a private fund i don't think that there's many you know of the of the new tokenization platforms that have raised their transfer agents that have experience doing as we do so and then of course there's a little bit of the traditional providers that are trying to get into the space uh they have good broad names and existing relationships i think that they they're like behind us in terms of technical capabilities uh because obviously we'll be building this for longer and we're smaller more nimble company that can move faster when it comes to develop technology.

Carlos, I would jump in for one second, and thanks for that question, Mark. It's a great question. I think it's really important to point out that you have a global market, and what we're seeing offshore is sort of this synthetic product, which is being put out there, which is a very different kind of model than we've been leaning into, as Carlos suggested. That introduces counterparty risk, and it just won't fly in the U.S. And so when we think about the opportunity in the United States, this is where what we have in particular is uniquely positioned, right? As Carlos mentioned, we have a broker dealer, we have a transfer agent, we have an alternative trading system. So we will be able to do this in a regulated framework through regulated entities in the U.S. I think that the way that we're trading our own stock demonstrates that. A lot of others didn't think you could even trade a security on chain in an NMS environment. So there's a really big difference in terms of just sort of model competition. The other thing is like obviously DTCC is trying to do things in the space as well. That is not native tokenization. So that is more of, again, more of an entitlement model. We just don't think it has the breadth of utility. So we think in the niche that we're in, we are particularly well positioned uniquely.

Your next question comes from the line of Aditi Balachandran with Citibank Group. Your line is open. Please go ahead.

Hey, thank you. Good morning and congrats on getting to the public market. So I wanted to break a little bit more into the DTCC October commercial launch and their tokenization program. So I think that your approach of owning the sole stack is a key differentiator here. But do you see a scenario where tokenization is bifurcated or, I guess, split by asset class? So for example, securitized would handle the private or foreign securities, and DTCC would handle public or domestic equities. Is that something that you guys are thinking about or like how you tap it for that? So just curious to know your thoughts.

Good. Thanks for your question. So first, as I mentioned in my remarks, we commend the fact that an incumbent in the industries and a very large company like DTCC is getting into tokenization. I think it's great. I think it's opening, it's creating awareness towards the value of the value proposition of tokenization. It's forcing all the market participants to think about, you know, getting wallets and using tokens, et cetera. Their model is very different than our model and the two models will coexist. So the DTCC tokenization is tokenizing the entitlements while the shares, continue being in a centralized security depository. They're not going to change the settlement cycle. They're not going to change. The only approved market participants can currently create wallets and access is done on a private chain so far. So while our model is to basically take the shares out of it and put them on a public blockchain where permissionless innovation can actually happen, I think that the two models will coexist. Obviously, we're going to move forward with what we do and there's other companies in the space like bullies that are doing the same thing uh and dtcc obviously is going to move forward with what they do i think both are kind of solving for for different problems and going for different uh audiences so i do see you know these two models coexisting in in the market all right thanks for that and also just uh i know they're building on the canton network so how would securitize this chain agnostic model hold up if canton emerges as the de facto institutional settlement standard, I guess? So we're focused primarily on public blockchains. That's where, you know, innovation today is happening and where it's, as I mentioned, permissionless innovation where anybody can create protocols or create, you know, mechanisms to, you know, benefit from tokenization. Canton is more focused on the private side of things, you know, for institutions. That's fine. I think these two models coexist. If you remember how the industries evolved over time, you know, the Internet that back in the days had the open Internet and they had also, you know, American Online and MSN. So those were closed ecosystems as opposed to an open ecosystem. You when cloud emerged and they also have like intranets versus the Internet. Cloud also had private clouds versus the public clouds like AWS or Google Cloud or Azure from Microsoft, etc. So I think that's how industries evolve over time. When there is a new technology, you know, the more traditional players and incumbents tend to adopt the technology in a closer ecosystem environment, as opposed to kind of like the new, you know, players that tend to, you know, move towards the most open environment where, as I mentioned, permissionless innovation can actually happen.

Yeah, I would echo that. The reality is, is that there are a new set of intermediaries who are entering the space that will operate differently than what you're seeing with some of the traditional financial market intermediaries. As Carlos said, they're going to just sort of migrate to sort of walk before you run, baby step kind of thing. But the reality is, is that tokenized securities is going to provide global access to U.S. securities on public chains to non-DTCC members. And so this will start to expand outside of that ecosystem to a new market and to individuals who want to hold things on their wallets and do things with public chains that can't be done on Canton and some of the incremental steps that you're seeing now.

Thank you. Your next question comes from the line of Chris Brenler with Rosenblatt Securities. Your line is open. Please go ahead.

Hey, good morning, folks. Thanks for taking my questions, and congrats on your first call as a public company. I wanted to drill down quickly on the revenue guide for this year. I certainly appreciate the headwinds, but as you look out, I don't know if you mentioned this, But is there any sort of sense of, you know, sort of where the second half rebound will be coming? Because I think the 75 or so million is a little bit higher than the first half run rate. Is that going to be driven more on the tokenization side? Or are you expecting both asset servicing and tokenization to grow in the second half? And then how does that impact or what does that look like on the gross or sort of the cost of revenue side? I know you don't look at it as a gross margin, but it did pick that a little bit this quarter with the pressure on revenues. Will we see that sort of bounce back up if we hit that midpoint of $75 million?

So I'll take part of this question, and then I'll give it to Francisco to talk more about the numbers. I think the asset servicing side of business is more stable, so we'll probably see less volatility of that in the second half, and you'll see more volatility on the tokenization side. That is obviously, you know, more volatile because there's a component that is transactions based. It depends on new issuances of new products that drive tokenization, revenue, you know, protocol integrations and things like that. So that's definitely going to be the case on the second half. You know, in terms of why we provide guidance, we're in an industry. We're still a small company playing on an emerging market. So it's very hard to, like, forecast accurately a particular number. and there is a lot of moving parts on the projects that we're doing that actually have third-party dependencies because we work with large institutions and sometimes it's very hard to forecast exactly when they're going to release a product. Just to give you a simple example, the New York Stock Exchange has announced that they're going to launch their trading platform in Q4. If that happens in early Q4, it's great because we probably will see some revenue happening in Q4 for us. If it slips or it happens at the end of Q4, then that revenue is going to happen in in 2026 and we have a number of projects like that that have a dependency that could move quarter to quarter um so so this is why we've provided a a range guidance and depending on how quickly these projects come to fruition and send driving revenue you'll see the revenue in 2026 or you will see it coming in 2027. yeah i'm just going to um and a few comments to Carlos's response.

As he said, asset servicing is made of recurring revenue in its majority. We see a modest quarterly growth. Please just take into account that in Q1, asset servicing has a little bit of a seasonal impact with some services that are related to audited financial statements. But if you look at Q2 and factoring a modest quarterly growth, I think that will be a very good reference for the remaining of the year. So the rest of the revenue to get to the guidance will come from tokenization, which has very low marginal cost. So what you should expect is to see a very stable asset servicing revenue alongside cost of revenue. and the majority of the revenue associated with tokenization will flow down to the bottom line.

That's super helpful. Thank you. And then a bigger picture question. A lot of people, myself included, when you're thinking about tokenization of real-world assets, focus on equities just because it seems like a sort of most obvious use case, but also sort of fits with our own core business of looking at stocks all day long. But it seems like the opportunity is much bigger. how would you sort of characterize your current discussions, you know, sort of by asset class? Is there, you know, sort of a lot of activity in equities, or is it more broad across the different potential asset classes? And then from a monetization standpoint, I'm pretty excited about securitized markets and having that launch in the fourth quarter, as I'm sure you are as well, and sort of like, you know, it's something we're early days in the monetization opportunity. So having an exchange and having a marketplace that will allow for trading revenue on a more recurring basis and a more regular basis will be a big boost to the model. But how do you juxtapose the opportunity to tokenize multiple different asset classes versus the monetization opportunity that could come with an ATS that I believe would be more equities focused? And do you have similar venues or similar trading goals when it comes to non-equities, RWAs?

Thank you for your question. So as we described in the presentation, we kind of have two distinct markets, right? So one market is the asset managers that have, you know, funds and assets that want to tokenize them, to put them on chain. and where we are particularly focusing on yield bearing assets and treasuries because we think those are the ones that are you know more likely to get tokenized and consumed first and where you can drive utility faster so that's one side of the business and that business is less transactional than than because these are less uh obviously they there we get a much you know bigger um as you see most of our you know five billion a young comes from that that part of the market and that's where we have been focused on the on the last two years so that's one side of the business the second part of the the business is the tokenization of equities which is a very huge market that still is very small so as including all these in offshore things synthetics this uh you know not more than around 2 billion uh in assets compared to you know 100 trillion plus that that you could tokenize and there we obviously see the market behaving very differently because as you mentioned there is a a significant opportunity to monetize transactions but that's not necessarily happen uh on the other market so so there were more focus on on bringing issues on chain but also enabling trading as we've done with our own um stock and that you know participating on other trading platforms like we're doing with the new york stock exchange etc where we will monetize not just the issuance uh but also uh the the transactions of uh of the assets so there are two distinct markets i think you know both are are big opportunities uh both are growing uh and We have the capability to serve both, so we're currently focusing on both simultaneously, but they're very distinct, and the approach we're taking in each one is different.

That's great. Thank you so much for taking my questions.

Your next question comes from the line of John Todaro with Needham & Company. Your line is open. Please go ahead.

Hey, guys. Thanks for taking my question, and congrats on your first quarter here. My first question is around BlackRock. So, you know, how does the BlackRock launching or integrating Biddle on Circle's arc chain impact you guys, if at all? And then on that second BlackRock fund, the Tablecoin Reserve product, you mentioned it was a little bit more complex or demanding of a product, if I heard correctly. So, does that suggest maybe a little bit higher take rate fees? I guess, how should we think about that? And then I have a follow-up.

All right. So, let me answer both questions separately. First, we are the tokenization partner for BlackRock, for Bidl. So when it goes to ARK, it will be with us. So it's not just BlackRock doing that. So Bidl is currently in multiple teams, and we're in active discussions with Circle on integrating with ARK. So when you see that happening, it will be done through us, not BlackRock themselves doing it with Circle. In terms of B-Reserve, what I mentioned is that B-Reserve is a registered fund, right? and it was designed to be genius compliant which requires you know 287 money market funds as opposed to biddle which is a private fund uh based on bbi so but register funds have uh you know more demanding operational requirements from a transfer agent perspective uh so so this is uh this is what i explained on my my remarks that the process we had to go to get um also on boarded and approved by BlackRock to be able to serve B-Reserve was a different one than the one that we had to go through when we did Biddle because they are fundamentally two different types of projects, right? In terms of take rate, this is still treasuries, so it's not going to be significantly different. What we think is that because B-Reserve is being designed for being the backing of stable coins, it has a potential of actually growing and scaling a lot faster, given how there's many new stable coins that are being launched in the market. You might have seen the announcements of OpenUSD where BlackRock is also a market participant and many others that, you know, if B-Reserve were to be adopted as the reserve asset, it has the potential of actually growing a lot faster than Middle-D.

Okay, that's great. Thank you for that. And then my follow-up, that second half 26 guide, you mentioned some more pointed aspects to what's driving that. But just as we think about the second half or even longer term, does there start to be some implicit assumption in crypto macro growth returning? Or should we think the tokenization business is just so decoupled that having a view on crypto markets really won't matter all that much?

I think long term, you know, tokenization is completely decoupled from crypto and it shouldn't matter that much. what happens with crypto em and crypto prices uh and that's our thesis i think short term they're still correlated because there's a lot of like counterparties that we deal with and that are you know crypto native companies that are the ones consuming these assets or or driving transactions and activity uh etc we've seen the the trotify you know institutions coming a lot faster to the organization that we have expected let's say a year ago uh but at the same time some of those projects as we mentioned before they move at a different pace uh so when that starts to become uh something that we monetize that's that's the the kind of like the transition that we're going through now from you know revenue sources that are mainly driven by by crypto institutions versus you know revenue that is driven by by chat fine institutions the good news is when that happens we think that the chat file opportunity is significantly bigger it's like several orders of magnitude bigger than the crypto opportunity because crypto at the end of the day is now at $2 trillion, if you want, economy that has developed a lot of, like, you know, interesting technology, et cetera, that we are, you know, consumers of. But once, you know, the TradFi activity moves, it's going to dwarf the crypto activity.

Yep, that makes a ton of sense. Thank you for that. I appreciate it.

Your next question comes from the line of Gareth Cassetta with Cantor Fitzgerald. Your line is open. Please go ahead.

Hi, guys. Thanks for taking the questions. I wanted to touch on the fund administration sector, and it seems like the acquisitions of Theorem and MG Stover provided a meaningless uplift to both assets under administration and revenue. So, I was wondering if you could talk about how you think about M&A as a growth driver for this segment over the long term.

Thank you. Well, we've studied publicly many times already that one of the reasons we wanted to go public is because we think that crypto uh industry it's in a in a major uh you know transformational uh moment um where i think that the fundamentals of how crypto companies have operated so far um is is right rapidly changing and and it's going to evolve more to be you know like a fintech space where you know a lot of the crypto um infrastructure is being used to to basically improve uh you know capital markets and that type which is our thesis um so so going public is going to allow us to tap into into that uh those opportunities by adding capabilities uh faster uh from companies in the space and we we hire a head of core dev uh as soon as we you know close the the spec deal and and knew that we were going to go public um we've been actively looking at many many different opportunities um we also think that there is some opportunities on the TradFi space where the other way around, we can actually leverage our tokenization technology to improve TradFi operations. So, we're kind of looking at both sides of the spectrum. But yes, you're going to see us being active on the M&A space on the second half of the year.

Great. Thank you. And I know you touched on it briefly there, but how are you guys thinking about the cross-sell in kind of either direction? And I'm wondering if you could touch on within asset servicing, what types of levels of tokenization adoption you see today and how you're thinking about that growth?

Definitely we see a cross-sell opportunity. One of the reasons we decided to buy a funnel business versus building ours just to serve our existing products was because we thought that by acquiring 600 plus customers as well as around 24 billion of assets under administration, there would be crossover opportunities. We're already in the process of actually merging the investor accounts of the two platforms the the ones that that securitize had with securitize id with investors that are on the on the fund platform that it obviously takes some time because you need to basically you know merge those on the single accounts provide the same functionality on both ends etc but we're in the process of of doing that so we definitely see that as a as an opportunity moving forward and then in terms of asset servicing the the asset The servicing portion of our business has two components. It's the transfer agent component as well as the fan admin. So it's not just fan admin business.

We have reached the end of the Q&A session. I will now turn the call back to Samuel Ross for closing remarks.

Great. Well, if there's no further questions, thank you for joining today's call. And we look forward to speaking with you again soon.

This concludes today's call. Thank you for attending. You may now disconnect. Thank you.