Q3 2021 Voyager Digital Ltd Earnings Call

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Good day, and welcome to the Voyager and digital fiscal year third quarter 2021 earnings conference call. At this time all participants are in a listen only mode. After the prepared remarks, we will conduct a question and answer session and in order to ask a question or make a comment. Please press the star key followed by the number 1 on your.

Touchtone phone at any time.

<unk> will reach about order. They are received at this time I'd like to turn the call over to Mike leg, Chief Communications Officer and Voyager. Please go ahead Sir.

Thank you operator, I'd like to welcome everyone to the Voyager digital earnings call today, we will be discussing our fiscal 2021 third quarter results, which we announced after the market close. This afternoon with me on the call are Steve <unk>, Our Chief Executive Officer, evidenced Europolis Chief financial.

And Sir Gerard and Nancy <unk>, Chief operating Officer, and Dan <unk>, Our Chief Information Security Officer, I would like to take a moment to direct investors to the Investor Relations section of our website at invest Voyager Dot com, we have posted on our investor presentation and upcoming events schedule as well as our latest.

<unk> on selected unordered, and these operating metrics and activities.

Before we get started and want to remind everyone that certain statements discussed on this call are based on information as of today may 25th and May contain forward looking statements, which are subject to risks and uncertainties and given our limited operating history market volatility and unprecedented industry growth trends could materially DVR.

And from today's levels.

Total results could differ materially from our forward looking statements if any of our key assumptions discussed in today's earnings press release and the comments made during this conference call or in our latest reports and SEDAR filings, Egypt, which can be found on our website www dot and best Voyager Dot com on.

And there are profiles and at Www Dot SEDAR dot com a replay.

And he has made assumptions and no significant events occur outside of the company's normal course of business and the current trends and adoptions of crypto assets continue.

Listeners are cautioned that assets under management and trading volumes fluctuate and May increase and decrease from time to time with such fluctuations on beyond the company's control, we do not undertake any duty to update any forward looking statements, except where required by law. Todays release also includes references to non <unk>.

S financial message you should be for to the information contained and disclosures found in today's release, including definitional information and reconciliations of historical non <unk> measures and the comparable <unk> financial measures. This call will touch on some guidance provided in our earnings press release issued today I would encourage.

Each of you to review the forward looking statement risk factor disclosure and similar disclosures in today's press release. Please note dollar amounts referenced and U S dollars unless otherwise noted with that let me turn the call over to Steve Rohde voyages co founder and CEO.

Thanks, Mike and good afternoon, everyone and we'll be discussing highlights from the exceptional March quarter and updating you on some key developments and are reviewing our our future strategic focus as we expect to capitalize on the opportunities ahead.

And afterwards, Evan will walk us through the financial highlights for the period and then.

And we will open up the call for your questions.

For fiscal third quarter, ending in March was a record breaking for Voyager and what.

We believe it's just the beginning of what Youll see from us and the future.

Say that because the momentum we saw on the March quarter.

Continued throughout our fiscal 2021 and fourth quarter to date as we continue to see an acceleration in all of our key metrics.

For the fiscal third quarter, we reported record revenue of 60 million with operating income up $30 million for a 50% operating margin.

Additionally, we continue to see basis points per trade rise as ortho and volume contributed 85% of our spread revenue with.

Putting the cerium contributing just 15% of our spread revenue.

Basis points are currently trending higher and highlighting the dominance of <unk> on our platform.

Operationally this focus on a wide range of clients has contributed to our long term economic model that we believe is among the best and the industry.

As we continue to add retail customers and see further revenue growth.

We anticipate that our operating margin should also continue to grow accordingly.

And shortly of engineered our business. So that there is significant opportunity for margin expansion as we continue to scale.

With our success to date I think it is clear that our consumer friendly transparent and easy to use platform with its leading offerings of all content interest yielding assets.

Swiftly positioned Voyager is a leading crypto trading app for the retail consumer.

That is our strategy and it has created a sticky platform attract and active users at record rates.

Our focus on a wide range of clients has contributed to our long term economic model with the Voyager consumer being highly engaged and trading on average 10 times per month.

During the March quarter, and then subsequent weeks for winter has continued to on board World class talent to support its rapid growth. Most recently hiring former <unk>, Chief marketing officer, Pam Kramer and bringing on former Uber executive and part of that Honey as our chief Global data officer.

I have personally known Tam for more than 15 years and I'm very excited about her extensive expertise that we can expand on marketing footprint and accelerate our key metrics.

I'm also very excited to welcome <unk>, who comes to us with over 20 years of industry experience.

Having app for our joined us to drive and accelerate our competitive differentiation by embedding a state of the art data analytics ecosystem, including machine learning into the Voyager product suite.

This will also fuel wages marketing effort as we believe intelligent and personalized marketing is crucial to be and effective marketing organization and will allow us to continue to be extremely efficient on our cost to acquire accounts.

The support for continued growth as many of you are aware, we raised $146 million during the March quarter.

This provides us with an important growth capital, which we will strategically deploy to ramp up our marketing effort bolster the technology and capabilities of our platform and to enhance our customer service teams, which will be critical as we continue to onboard new customers at such a record pace.

On the marketing front, we are finalizing our search for advertising agency and branding and creative as we scale on our marketing efforts to increase our market penetration penetration.

We have been very receptive to date with our marketing strategy and look forward to expanding our footprint and the near future.

Especially with even deeper data, which again, we believe will enable us to even be more efficient and disregard.

As for technology, and continue to hire new developers and security experts to improve our platform's capabilities and provide even greater security for our customers.

We have been very successful attracting top tier talent and very high and blue chip companies.

Like many in our industry, we have experienced some challenges and bumps thorough and as we've been scaling our infrastructure while at the same time and significantly increasing our capacity to achieve our near term goal of supporting 10 million verified users on the Voyager platform.

Lastly on the customer service side, we significantly increased our service team during the third quarter and following weeks we.

We will continue to scale that team, but more importantly, we will be implementing specific technology and practices to make our service efforts more efficient and user friendly with the goal of being the industry leader and service on the end of this calendar year.

Another part of voyages forward strategy is to develop additional relationships with key strategic partners.

Typically to expedite our growth as we focus our efforts on our product development and customer acquisition as.

And as part of this ongoing strategy, we recently announced the phone partnerships for <unk>.

<unk> partnership with blockchain to extend our interest offerings utilizing their safety and capabilities, which reduces our dependency on lending and reduces related counterparty risks.

We also recently announced the formation of a joint venture with market rebellion to build a full service broker dealer, providing voyager customers the ability to pair cryptos and equities.

We showcased our payment processing capabilities through our pending agreement with lottery dot com integrate our payment processing capabilities and to their service, which will enable lottery dot com users to generate payment transactions with crypto assets using the Voyager platform.

And lastly, we expanded our custody solutions engaging our relationship with Anchorage.

In addition to these working partnerships. We have also recently made strategic minority investments to expand our capabilities and overall presence and the blockchain spectrum.

These include a stake and block Damon who I mentioned earlier, another and so cure RK, 1 provider, 1 and to Alto IRI a technology based platform that will enable Voyager users to open on array accounts and.

And then another and particle and Nf <unk> platform.

For those not familiar with this Nf keys, our blockchain based records debt uniquely represent pieces of media.

The media can be anything digital including our videos music games tax means and code.

These and other strategic investments forget another way that Voyager is expanding its scope drove ever growing digital arena.

Taking a step back I'd like to take a moment and talk about and overall industry environment during the quarter and <unk>.

Voyager fiscal third quarter, and crypto market saw significant volatility as the value of Bridgepoint and other digital currencies continue to fluctuate quickly and economies throughout the world continue to reopen and people adjusted the post Covid World.

However at Voyager 1 of our mantra has always been net market volatility is our friend.

Our platform was built to accommodate this and our risk management procedures low Voyager to operate effectively during such volatile.

For our percentage of assets lend decreased substantially and we are still subject to counterparty risk we have.

2 zero losses on the loan book, we will continue to build our interest often through safety and expect that will increase and the future.

Through all this market volatility we have successfully managed our exponential growth while safeguarding all our customer assets and personal identifiable information as we have stated previously our top priority is keeping our customer assets safe and secure and.

As noted earlier, we recognize customer support at the times and difficulties and keeping up with the growth of our platform.

And while this has to be expected with such rapid growth. Nevertheless, we are working diligently.

Diligently on improving our customer service efforts.

Greater response time by implementing specific technology designed for this purpose is 1 of our ultimate goal is to provide the best customer service and the industry.

Despite any short term hurdles along the way again overall I believe we have been extremely successful as these most recent quarterly results indicate.

We continue to be an industry leader by delivering more regulatory compliance point on the platform with plans to add more than 22 points and the near future <unk>.

Additionally, we will further expand our interest offerings as we utilized sticky capabilities through our relationship with block gaming continuing to provide the leading platform for earning yoga and crypto assets.

Looking ahead over the next 12 months, we plan to increase our payment processing capabilities as highlighted by our pending transaction with lottery Dot com drove Voyager power to crypto payment rails for their services.

This is the only only the beginning of our Voyager pay rollout as we have additional plans and that space. In addition, we plan to expand internationally to Canada, and Europe and further obtain or in New York state bit license on the product front, we continue to work on debit and credit card offerings and of course, the other traditional banking products, including margin.

Bank loans and equity trading.

Turning to our own corporate social responsibility initiatives Voyager recently announced the launch of Voyager for good a breakthrough referral program and the crypto currency space that award for charity of and athletes choice with digital assets. Each time, a new account and it's open and traded with a special referral code.

Kick this off we formed a partnership with 2 time and.

I'll start Victor over depot for the charity focused on empowering the next generation of youth, especially young women to thrive without limits.

We expect to continue to part with Comed and affiliates to help position Voyager as the consumer's choice for investing and crypto currencies.

This expands on voyages already popular refer a friend referral program.

Voyager is also excited by upcoming token swaps, whereby the Voyager community community will be swapping its all bgs rewards tokens for the new token, which is taking capabilities and governance we are.

We're working hard with our exchange partners and believe this gets done really soon.

What will be the next step and the Voyager loyalty program, whereby we continue to deepen our relationships with our community and customers.

Our plan is to continue to add more rewards their program as we add products, such as equities and debit cards.

This has been and eventful couple of weeks for the crypto industry with the volatility has been very good for the Voyager business.

That's an agency broker we self financially when there was more volatility and the market. We believe that this volatility will continue over the near future and then acceptance is increasing and looking forward to being able to continue to deliver our product to retail consumers.

Recently, we announced a normal course issuer bid under which the company can repurchase up to 5% of its common share. This gives the company some additional flexibility and managing its market price for accurately reflect the company's current value and growth projections and in turn strength and shareholder value and.

CIB will commence on May 30, and is scheduled to terminate on May 32022.

In addition to all the operational improvements and the significant growth of the business. You also recently announced some changes to our board.

And I'd like to thank Guy Elliott, Jarrett, Lilien, and Jeff like but for all of their guidance for Voyager over the past 2 years their presence will be missed at the same time I am very excited to welcome Jennifer accurate and Glenn Stevens to our board.

Jennifer joins the voyage reported previously serving 26 years with Raymond James.

Having somewhat of Jennifer's experience working with Irvine, and the board will be invaluable, especially as the accounting standards across the world continue to evaluate this industry.

Personally and on Glenn Stevens for many years and he joined Voyager <unk> being the CEO of gain capital on that.

<unk> listed company, which successfully completed a sale for stone ex another NASDAQ listed company for.

Well, Jennifer and Glenn bring unique expertise and insights to our board and we all look forward to their contributions to Voyager future growth.

In closing again, when my co founders and I started this business we had a vision on how we can grow the company.

A little over 3 years later, we have brought to market a business that now has over 540000 funded accounts and is growing more every single day.

While we all realize the potential of Voyager I don't think any of us could have dreamed of how rapidly and successfully the business, we can grow and such a relatively short time.

I couldnt be more excited about what we're accomplishing and the wealth we are creating for every day individuals.

For future prospects for Voyager extremely bright as we continue to execute our game plan for <unk>.

For I turn the call over to ebb and for a financial review and I'm happy to note that Voyager is a proud sponsor of the Big 2021 conference in Miami June 4th and fifth as we have a booth for sharing with market with volume.

And we plan on being there please feel free to stop by and say Hello to us.

With that I'll turn the call over to Evan to review the quarter and our financial results in more detail.

Thank you Steve and thank you all for joining US today as a reminder, all figures discussed on today's call are and U S dollars under <unk>.

I will speak to our fiscal 2021 third quarter ended March 31, and 2021, as well and selected unaudited metric and activity from our fiscal 2020, 1 and fourth quarter to date, which had been previously disclosed in our press releases and available on our website.

We continued our streak with another record quarter exiting March with and <unk> of $2.4 billion and increase of more than 10 X from the end of Q2.

We had net deposits of nearly $1.3 billion, which accounted for more than 57% of our AUM growth with average net daily deposits in excess of $14 million.

We were extremely pleased to achieve a positive operating margin for the first time and the third quarter with $30 million of operating income with an operating margin of 50%.

Demonstrating scalability of our business and its potential for further margin expansion as we achieved higher revenue.

Total revenue for the third quarter increased to $60.4 million from $3.6 million and the second quarter and 282000 and the same period last year.

Revenue for the third quarter grew to $53.7 million along with interest revenue of $6.7 million.

Our increased fee revenue was driven by $5 billion and volume for the quarter compared to the volume of $350 million and the fiscal second quarter of this year.

Additionally, our average spread increased 70 basis points on nearly 200% from the prior year to 107 basis points and the third quarter.

This is also at 77% increase from the second quarter.

As Steve mentioned, you are seeing tremendous success within our operating strategy with 85% spread revenue attributed to these points.

Our increase in interest revenue was driven by and overall higher AUM.

Although only 17% of the assets under management were loaned out at the end of March 2021, compared to 65% at the end of December.

We are excited about our partnership with Blackstone and as we look to move more assets towards taking model, allowing us to earn more yield with more interest bearing point, while at the same time, reducing underlying counterparty risk.

Turning to expenses total operating expenses for the third quarter increased $28.3 million from the prior period.

Marketing expenses accounted for $8.8 million of this increase with a total of 9 million spent and the quarter and representing a customer and acquisition costs of just under $40 for new funded accounts.

Digital assets.

Net interest expense paid for customers was our next largest expense at $7.4 million versus 67000 expense and the prior year and.

Additionally, customer onboarding expense increased to $2.7 million compared to 49000 and the prior year period.

Lastly, as Steve mentioned, we are rapidly scaling our head count to support our Swift growth, resulting in increased compensation expenses of $1.8 million from the prior year.

As of March 31, and 2021, and our cash and cash equivalents, including net cash held for customers exceeded $150 million.

Our adjusted working capital, which we define as working capital excluding warrant liability was nearly 200 million and increase of $195 million from June 32020.

This increase is primarily due to $145 million from the issuance of common stock and special warrants and $5 million from the exercise of the warrants and a $57 million increase and our net digital currencies and fee acquisition, which represents digital currencies and Fiat as well as digital currencies and CEA on loans.

Digital currency loans payable.

Given this strong liquidity position, we are well poised to continue our growth throughout the rest of fiscal 2021 and beyond.

This concludes our prepared remarks with that I will now turn it over to our operator, who will open the line for questions.

As a reminder to ask a question you will need to press star 1 on your telephone.

Your question press the pound King please Jim by while we compile the Q&A roster.

Our first question comes from the line of George Sutton from Craig Hallum. Your line is now for them.

Thank you.

As someone who follow to Amazon and the early days. This is a little bit like Deja Vu disappoints and their timeframe they were a bookstore and.

And I'm curious with you migrating.

On a much beyond your initial initiatives when we started talking about a lot of these minority investments and we start to talk about a broader roadmap I wondered if you could give us a picture of what the objectives are with the minority investments and what some of the product roadmap pieces may look like if we look out 12 to 24 months.

Yes, Thanks George.

Great question look we the minority investments are for us to gain knowledge and participate in certain parts of the business. So we can make better decisions for our consumers on E block Damon we get.

Related with them and offer the staking on really competitive terms.

Nf key investments so we can start participating and understanding that space and how we can actually bring real value to retail consumers because everything about what we're trying to do over the next 12 months to 24 months is to bring value to retail consumers and build a crypto ecosystem, so that consumers, we become and app.

And our lifestyle app for consumers. So they are using our app to trade and Bask Bank commerce and bring that all together through them as we continue to build out this ecosystem and bringing all those pieces together allows crypto to be the base of that and that's why we're so excited about a lot of these minority partnerships because.

And we're going to get that knowledge, bringing that into our business and help consumers be successful because we believe the whole financial future is based off of crypto and USB C and bitcoin and the rest of the currencies that we have.

And as we looked at some of the operational challenges <unk> had I wondered if you could give us a better sense because you've got a hub.

Aspirational goal of being a customer service leader by the end of the year.

Can you just tell us how do you get there in terms of people and.

And just give us some numbers that might be appropriate relative to that.

Yes.

And we've already begun making changes and adding people.

People to our service organization, but the key to it all is bringing more technology and Dan Constantino Who's here with me today is building out a more technology, along with Gerard <unk> CFO and.

Using technology to have service that enables consumers to the shelf service as well as have operators and reps to help them guide their way along the service and learn more and the crypto space, It's imperative as we build out.

More and more people to help handle all the tickets, but get technology to be the lead and this place I've done that I've been around before it's another reason why haven't and Kramer on board.

As well as really important because we've done that on our early days and <unk>, where we brought technology into the marketplace to handle service on a better way. So that's 1 of the ways that we're using.

And we expect to get ourselves to that leader in customer service.

Last question, if I could you went from a negative operating margin to a 50% operating margin on a quarter I'm not sure if thats ever been done, but you also talked about potentially higher margins over time can you give us a sense of where you think for long term model.

Might move to.

Yes.

Hi, Kevin This is Kevin Thanks for the question.

Sorry, George and thanks for the question. So I think on the short term.

Going forward, we expect similar operating margins.

And our cost structure.

Catches up with our revenue growth.

Over the longer term.

Given the scalability of the business model, we definitely see the opportunity for margin expansion.

Okay, we'll take that thanks, guys great job.

Thank you George.

Thank you. Our next question comes from the line of Kevin and BD, Inc. From HC that William Your line is now open.

Good afternoon, guys. Thanks for taking my question.

You gave us a great outline on your objectives that you've spoken to for the past 6 longer months I guess at this point I was just wondering if you could zero and a little bit on timing save for the European expansion the Canadian expansion.

And the consummation of execution with rebellion, and New York Life, and all the objectives that you highlighted.

Or as much as you can speak to yes.

Thanks, Kevin and.

Thanks for attending the and I'll try to unpack all for those items.

On the international expansion first Canada.

Working closely with the OFC, but we have such low hanging fruit right now and the U S. As we continue to grow and we're building out and scaling the infrastructure to make sure that it's in a place where we want it to be way back in February we said it was going to take us.

Give or take for months to get those platform into a really scalable and we're getting closer and closer to that so.

And so once we get there Canada and Europe is next and we believe will be get that Exemptive relief with the OFC and the near future. We're already able to operate in Europe through the licensing and we just want to make sure that we're bringing the best possible platform for those consumers and.

And make sure that we have are serviced well on the way as we said to be a leader. So when it comes to Europe on that on the bit license side of the <unk>.

<unk>.

We have we're working again closely with them, we think we're getting real close with the New York State.

And it's something that just takes time as most of you probably know I think they've given up 108 license for the last 12 months maybe.

And maybe 18 months, so again, we're making progress on all 3 of those fronts, we are making progress on the equities and market for volume we have a clearing relationship in place, we're working towards getting net operational and getting the broker dealer operational note debt timeframe yet.

But why we did the joint venture with them and show that we have partners to help us build out the service and all the capabilities needed from an administration aspect. So we think we can get there faster with a partner. So we're hopeful that we'll get there and the near future as well.

So my understanding is Steve that Trey.

Trades execute T plus 3 but.

Bill I guess.

Crypto has got to be converted to Fiat in order to execute.

And sort of maybe highlight the.

And how you expect it to function.

I don't want to give away the secret so all my competitors configured on at the same way as me, but this is where my 25 years of being in the equity space really helps and helped building our E trade like I did many years ago, and and Lightspeed and.

As we have a plan on being able to execute allowing consumers to execute from crypto to 2 equities and doing a lot of the stuff behind the scenes on our side with our infrastructure and our technology to make it a swift and easy.

Change so we expect to have that in place as part of our whole value proposition.

And we figured out ways with counsel on how to do it and.

And that's how we'll execute the game plan.

Okay.

And maybe a little bit more on lottery dot com because that seems I mean take you and your platform to commerce could be limitless. So could you just give us sort of and update on.

And where you're going and how long it's going to take you to get there.

Yes, we have on plan in place to do that over the next 6 to 9 months and bringing commerce into lottery Dot com. That's our first for rate and that's the first vendor that we're working with on that we agree with you we think debt.

The ecosystem is limitless when you get into payments and we have a couple of other things. We're working on this and I'm not I can't share right now, but we do believe and and the.

Ability of growing our customer base to where we said over 540 <unk> funded accounts and in the press release $1.6 million verified users, we're starting to grow a pretty big ecosystem.

We can use debt and commerce to our advantage and allow people to use USB C.

And other CRIP dose as payment mechanisms, we're working closely with lottery dot com to embed and make that work.

And allow consumers first for rate from Voyager into Voyager pack.

Right right.

Okay. Thanks, Steve that's all I've got for you for now.

Kevin.

Thank you. Our next question comes from the line of Rich Repetto from Piper Sandler Your line is now open.

Hi, good.

Good evening Steve.

When you go on did you grew the key trade call. After after 5 o'clock here.

And I joined a little bit late so I'm not sure whether you went over this and not but if you did and I apologize but.

With all this volatility that we've seen and crypto prices. Most recently over the last couple of weeks.

Just trying to see the tradeoff between the.

The volume the volume versus the volume volatility crypto and dropped but I would I would suspect and if you've addressed this already again I apologize, but you still see tremendous upside from given all the turnover and that that's going on and if you could speak to that.

Yes, Thanks for joining Richard is it's Deja Vu all over again as Yogi Berra Easter day.

Look I think that the volatility and the marketplace has been really good for us and our business. We tend to say that on some of these days I guess it was a couple of Tuesday to go win win Big point dropped $9 and for.

For 25% in ours.

And it was 1 of the best day speeds, we ever had and.

And I think that we still see and some some volatility we're still seeing people bring more money onto our platform every single day.

And opportunity to buy a lot of these coins and what they see a significant cash.

And if you harken back to when you and I first and that 20 years ago 2001, 2002, when the equity markets for so volatile, especially after 911, and we saw those dips and needs for more money come in and so we're seeing the story over again and people believe and people think and we believe that strongly that this is the future.

Debt blockchain and the cryptos or the future and people are taking advantage of it and bring in more money on the platform and investing and buying assets on our platform. So we see the dip.

We'd like to see bitcoin and the other point up higher but at the same point, we're seeing net deposits on our platform and we're seeing and our customers on net buyers. So we're seeing a lot of net buying from our customers too. So this is a really good time for us to be and agency broker.

Got it got it and.

And I think you mentioned net.

And your spread widened and the quarter I thought you said it was something over 100 basis points.

Could you sort of speak.

Speak to that and what were the drivers of that.

And probably how to correct the spread.

Creasing.

Yes, our strategy from day, 1 was to have multiple points and our spreads on the all clients are larger than the spreads on bitcoin and a big point average spread is significantly less than 100 basis points, we're probably 1 of the industry leaders on the bitcoin spread.

But some of the other claims where we bring set price and liquidity to consumers because we're looking at global market. Our spreads are a little bit higher because we have to access books. The level 2 books on the bid and the assets. So we have a little bit wider spread and so when we have 85% of our trading come from all points.

And that's where we're going to make more of the money than we do on the bitcoin or the ethereum side and the world.

Understood.

That's helpful and.

Congrats on the on the great profitable quarter.

Thank you rich.

Thank you. Our next question comes from the line of Chris <unk> from D. A Davidson your line is now open.

Alright, thanks and.

Thanks, taking my questions.

Yes.

And on the crypto market.

Is it mostly and positive tailwind.

It strikes me that as companies that I follow more closely Paypal and square and others in that realm and get more involved with their extremely deep and <unk>.

Marketing and technology budgets and potentially close the gap. So how do you how do you maintain your sort of superiority and where the barriers to entry and your model.

Yes.

Great question and thanks for joining is that our.

And our model is a diversified <unk> model and I think if memory serves me right. We did 5 billion, which we noted for the quarter ending March which we did more crypto volume and then square in Nevada, and the quarter when I look at their numbers and so we have a position as a leadership position.

And the alternative point space, and we do get people in and they come into our funnel because of the big plenty of theory, and we also pay interest and so the interest part of our model is extremely compelling for retail consumers. Our average account size tends to be higher than that and.

And so the barrier to entry here is everything that we've put together I think people tend to think debt pretty easy to get into crypto, but between the Oems that we built the smart order router or the books and records and multiple custodian agents the pricing engines and all of these pieces together its a pretty compelling enterprise value with <unk>.

And then drove the security layers and regulatory compliant layers on top of that.

Pretty compelling enterprise value that we've created and.

And the fact that we could add more points and we're going to add more points will keep us ahead of people because there is a tremendous.

And all you to having those consumers that are in the states want to buy cardin on for chain link.

Everybody's got dose now, but we've got more claims than that because we've gone to other avenues with all those other coin. So we just think keep bringing that bring more products to the marketplace and we also think that we're in a free on early stages here that there is a big opportunity and the market Tam is quite large.

And so we could continue to be successful off of just gaining market share both domestically and globally.

And that's actually my second question is that it does seem like.

The market is huge results and it seems like theres a bit of a first mover advantage and Florida.

Youre enjoying how do you prioritize beside and some of your.

More tangential growth opportunities and your core business.

Yes, great. Great question look we think that launching our debit card I think our loyalty rewards program. We can't forget net net is such an important aspect to everything we're doing when you look at the competitive landscape. We have a loyalty reward program that I don't see anyone else doing and it really helped.

So stay ahead, because people want to use our platform. They are part of the community and 1 thing about crypto crypto and is about community, it's about generating loyalty through the community we've been able to do that.

25% of our customers actually owned the Voyager token and so we have we've built that debt loyalty and community that will help us expand when we go to debit cards and credit cards and loan products and equity trading all those things we've got that loyal community that we're building upon.

Yes, that's great answers. Thank you so much and very exciting.

Thank you. Our next question comes from the line of Joe Gomes from Noble Capital. Your line is now open.

Thank you and great quarter guys.

Thank you.

So.

Can you can you talk a little bit about what were the most traded all coins and the quarter.

Yes, we saw a lot of activity not surprisingly, we saw a lot of activity and dose we.

We saw a lot of activity and car Dino.

Low coins like store next.

And I'm not sure if everybody knows but store mix.

Has a relationship with Walmart we were 1 of the only places and the U S debt, you can actually acquire and use and by storm acts.

And Youre polka dot with another big 1 for US engine because of the gaming aspects are all big points that we saw a lot of volume and and it changes for US every every day every month.

And can vary and it depends on what where there is volume and where people see opportunity what press releases for coins and the foundations behind them all site, but those were the big ones for the quarter.

Okay. Thanks for that and then when you when you see.

Countries like China talking about.

No limitations or restrictions on.

On the space.

And on crypto currencies.

Concerns about that trending over here to the U S and what are your thoughts on that.

Look I think.

And on multiple.

TV stations last week and speaking about this.

We believe anything I hear out of China, I think they still told us that they have like 2000 and coronavirus death. So.

I think theres and alternative strategy to win and they talked about things I do think that theres going to be careful regulation here and the U S. About it I think theres a lot of you see a lot of information out there and.

And things coming out of IRS and finish and and so forth and I think Thats Smart I think when you think about finished and we have there are rules in place we need to do know your customer and you need to have anti money laundering.

And it's part of it.

Secondly, being a pseudo bank and we abide by them and Thats all stems from the background, we have of being a regulated businesses like E trade and light speed, where we know how to operate in regulated.

Environments with Ky, CNA and now we think there will be some more thoughtful regulation about this and on a go forward, but I think there is there is a lot of ways away on how to regulate a market that is a global market rather than the equity market is all self contained and the U S. And this is crypto. This is a global market. So it's got to be.

For regulation.

But we see some of it theres a lot of it in place already and I think people forget that and.

We have to abide by debt, which makes another piece of this whole equation when someone asked earlier about value.

And is that.

We have all of this and place to make sure we can participate in this environment.

Thanks for that and.

Last 1 for me.

To grow the head count.

How much more do you think needs to be grown or do you have enough right now to support that goal of 10 million users.

We're expecting to over the next 12 or so months to double our head count.

Like I said, we want to be the vast and customer service and that means adding head count that means adding technology, which means head count and service head counts and technology development, we want to keep adding to our security team and we want to keep adding to the marketing team. So we think over the next 12 months, we're going to have to double our head count.

But we also think the revenue is going to continue on growing with that as well.

Okay. Thank you very much for taking my questions. Thanks, Joe.

Thank you. Our next question comes from the line of credit.

And from singular research your line is now open.

Hi, everyone and that just another question on.

Your AUM breakdown I wanted to ask about.

If you could shed some light there and how has.

The AUM fair and since the recent decline and bitcoin and ethereum.

Yeah.

And anyway.

Fluctuates a lot for us based upon the declines, but whats actually happened is even though bitcoins down and all the coins are down and AUR might decrease we're seeing net new deposits every day as well on the platform and we're seeing the turnover by consumers just trading more.

<unk> is not really the greatest.

And number to look at as we grow because we're seeing such turnover on the trades and activity by consumers at the same time, we're growing consumers and growing net deposits from every customer as well so again I think.

$540 and funded accounts of $1.6 million verified users net deposits coming on every day.

Net buyers, we have yet to have a day knock on wood have yet to have a day, where we've had cash for crypto net outflows and it's all inflows. So we're getting more engagement more consumers more turnover and AUM is a nice number.

But the guide for office, how valuable the customers and how are they trading and how would they earn and some interest and really generating more trade and volume with us.

But how has the recent volatility affected the account growth on a number of new number of accounts.

Our day to volatility has been and again as I said earlier is the volatility is our friend as an agency broker more consumers are coming in and they're seeing opportunities to enter the market and a lower price for a lot of these points, we're seeing net inflow versus the outflow was 6 to 1.

Cash and crypto coming in versus outflows and more consumers are coming in they are buying as I said net buyers because they're seeing the opportunity there almost excited debt that theyre seeing prices.

And are they worked 3 or 4 months ago, it's an opportunity for them to get engaged into the marketplace and so we've seen a constant account growth.

And good for business.

Okay.

And along those lines.

Has it affected your interest rates.

Our interest rates have been sustained pretty positive as we've said for a lot of people.

We net a little bit of money on the interest margins.

But we used the interest is a lot of because of our revenue generation from the spread revenue we use the interest as a way to engage customers and theres a marketing tool for us. So our interest is been pretty static.

The rates have been pretty static for us and we expect that in the near future as well.

Okay I.

I guess last 1 for me.

On.

And it looks like interest revenue was about what 12% of debt.

Total.

Or.

Is that is this is going to continue or do you see on.

And any any growth there.

As we when we rollout for debit card, we will see an increase in interest is more and more people will be holding USD <unk> with us.

But we've been guiding people to between 10 and 15% of our revenue being on the interest side, but once the debit card comes to market and people can then use a debit card.

To pay for everyday expenses and earn interest at the same time and make it really and interest bearing checking accounts, we expect those numbers to increase.

And okay, 1 more thing to add to that.

And you talked about our partnership with Black Damian I think youll see us as we.

A couple of things 1 and more coins.

Platform, earning interest and also.

At the end of the March we only had 17% and went out and so we'll be able to continue to use our balance sheet, a little bit more effectively and lending and so to follow up on and that he is right and the fact debt.

Stacy will help us drive more interest for coins will be available for interest and the near future on our platform, we will be able to state more points will be.

And our interest should go up off that too.

Okay, alright, great. Thanks.

Thanks, Chris.

Thank you. Our next question comes from the line of Dan Weiss Kops from Phil Russo Your line is now open.

Steve Great and Steve and the whole team by the way great quarter.

A lot of my questions have been asked but.

And just really kind of a passing question.

Is there a way you can quantify how many ore.

Sure.

As a percentage or in terms of numbers of your clients also have other accounts elsewhere.

Well, thanks for joining Dan and appreciate the support and.

Great question.

It's hard for us to do that.

Yes.

We believe at this point, we have we're starting to get more and more share of wallet from consumers as we see on the blockchain when people bring crypto into our platform, we're see where they're coming from and we believe we are getting a larger share of the wallet.

But we do not.

We do not know exactly how much they have elsewhere, but.

But we are getting our net crypto deposits are outweighing, a crypto withdrawals and so to our direct competitors and we're seeing net inbound rather than outbound for probably the top 3 or 4 competitors, we're seeing more inbound and we are seeing.

Leaving the platform.

Yeah, Yeah. Good I'm curious it great for you guys or continue to Mark.

Amazed me.

And with your with.

The results and thanks very much.

Thank you for support.

And you're making on the kidney and alright.

Yes.

Yes.

Thank you for your next question comes from them.

Thank you. Our next question comes from the line of Jeff Williams from U S Bank. Your line is now open.

Thank you and congratulations on the performance this quarter, Steve you mentioned regarding the Voyager loyalty programs currently in process and expected to happen very soon could you shed any additional detail on where that process stands and expected timing of the launch and the loyalty program and <unk>.

And swap.

Yes, it's a good question and thanks for joining jeopardy.

The first piece of the swap is to work with the exchanges to make sure that that can happen and we're getting.

And really close with the major exchanges to make it happen.

And that's been expected.

Everybody has been really busy but we have a great exchange partner, our primary exchange partner, that's working with us and doing the swap and so we think that will happen in the near future.

With them and then once that's done and Thats when the Voyager loyalty program will take part and we already have pieces of it and place where we're giving away 7% interest.

On the Voyager token.

And we're going to put pieces in place over time.

We think shortly after or sometime after we get the swapped on and people can actually execute and swap because they have I think they can have up to 30% to 45 days to execute the swap once they are done executing the swaps and will the Voyager loyalty programs should happen shortly thereafter.

Great. Thank you.

Youre welcome.

Thank you at this time I'm showing no further questions I would like to turn the call back over to Steve <unk> for closing remarks.

Well.

This was an outstanding quarter for Voyager and we're really excited about what we accomplished but this is just the beginning we haven't stopped we just started and we're super excited about what we've already accomplished.

Through our fourth.

For fiscal quarter, ending June where we are almost 2 months into it our growth has really accelerated and we're excited about the future of Voyager and we thank everybody and we think our customers we think for our investors and we thank everybody for participating today for joining us as we look forward.

To speaking with all you and the near future, but thank you again and we're Super excited about our business to have a great night.

This concludes today's conference call. Thank you for participating you may now disconnect speakers. Please standby.

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