Gemini Q3 Revenue Plummets 19%, Trading Volume Down 73%, but Cost Cuts Narrow Losses for Second Quarter

Gemini Reports Q3 Revenue of $40.9 Million, Down 19% Year-Over-Year, as Spot Trading Volume Shrinks

Cryptocurrency exchange Gemini reported its third-quarter financial results on Thursday, with total revenue reaching $40.9 million, a 19% decrease from $50.6 million in the same period last year and a 10% decline from the second quarter. The company narrowed its net loss to $58.6 million, a significant improvement from nearly $160 million in the prior year and $107.7 million in the second quarter. These figures were disclosed in Gemini’s third-quarter shareholder letter. Following the earnings announcement, the company’s stock saw an intraday gain of 6.5% in after-hours trading.

The primary driver of the revenue decline was trading activity. Gemini’s spot trading volume in the third quarter fell to $4.5 billion, a 73% contraction from the $16.4 billion recorded during the peak of the crypto bull market in 2025. Consequently, revenue from the exchange business decreased by 47% year-over-year to $13.4 million. However, on a sequential basis, trading volume increased by 18% from the second quarter, suggesting that the worst may be over, marking one of the few positive signals in the report.

Cost Management Shines

The expense side presented the most favorable aspect of the quarter. Operating expenses were reduced by 30% year-over-year, falling to approximately $120 million. Gemini CEO Tyler Winklevoss stated that operating expenses have now declined for three consecutive quarters, emphasizing the company’s dual focus on investing in growth while maintaining strict oversight of every expenditure.

Shifting Revenue Streams

The revenue structure is also undergoing a transformation. Credit card business revenue amounted to $15.5 million, a 4% decrease from the second quarter, yet it remains the largest contributor to total revenue. Platform assets, on the other hand, grew from $8.4 billion in the second quarter to $13.4 billion, an increase of nearly 60%. This divergence, with declining trading volumes but growing assets, indicates that funds held on Gemini’s platform are not receding with trading enthusiasm. This trend makes the proportion of interest and custody-related income a key area to watch in the upcoming quarter.

Focus on Derivatives and Prediction Markets

The prediction market business, a key area of interest for the market, contributed $800,000 in revenue this quarter, a 52% increase from the second quarter. Gemini aims to open its exchange and clearinghouse to brokers interested in offering event contracts. An letter of intent was signed with Apex Fintech Solutions in August, though the transaction has not yet been finalized. Gemini President Cameron Winklevoss stated that Gemini 2.0 is betting on platforms that “own their underlying regulated infrastructure to survive.”

Market Reaction and Strategic Realignment

Market sentiment remains divided, as reflected in the stock’s performance. Gemini Space Station (GEMI) rose 6.5% to $2.79 in after-hours trading. However, the stock has fallen approximately 75% year-to-date and is a fraction of its peak value since its IPO in 2025. The timing of the earnings report is also notable, as Gemini announced on November 12th the sale of its UK and European operations to stablecoin payment provider KAST for less than $10 million, effectively signaling an end to its independent international expansion.

Placing these events on a timeline reveals a clear cause-and-effect relationship. The sale of its UK and European businesses for under $10 million on November 12th allowed Gemini to cut associated compliance, personnel, and marketing costs in overseas markets. This move aligns with the 30% year-over-year reduction in operating expenses reported for the same quarter, marking the third consecutive quarter of decline. The management’s strategy appears to be focused on reducing fixed costs to a sustainable level and concentrating resources on its U.S.-based regulated infrastructure, particularly the clearing and prediction market services enabled by the CFTC derivatives clearing license obtained in April.

The Challenge of Monetization Speed

The speed of monetization remains a critical question. The $800,000 in revenue from prediction markets this quarter represents only 2% of Gemini’s total revenue of $40.9 million. Despite a 52% sequential increase, this figure falls far short of compensating for the $23 million in lost exchange revenue over the past year. In contrast, competitors have advanced further in their diversification strategies. Kraken’s parent company, Payward, reported that non-trading revenue accounted for over half of its third-quarter earnings, driven by a shift from transaction fees to custody, staking, and infrastructure services. Gemini’s primary non-trading revenue source remains its credit card business at $15.5 million. Coupled with potential interest income from the growth in platform assets, the path forward is becoming clearer, but the depth of this new revenue stream is yet to be proven.

Key Metrics to Watch

Two key figures will be crucial to monitor going forward. First, whether the letter of intent with Apex can be converted into a definitive agreement in the fourth quarter will determine if the prediction market evolves from a “small growing business” into a “next core revenue driver.” Second, the ability to retain the $13.4 billion in platform assets when trading volumes eventually rebound is vital. If trading activity recovers and assets simultaneously reach new highs, Gemini will have demonstrably translated its cost discipline into sustainable growth.