Q4 2021 Voyager Digital Ltd Earnings Call
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Good day and welcome to the square today, Joe Fusco Fourthquarter towards doing one 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.
Order to ask a question or make a comment please press the star key followed by the number one on your Touchtone phone at any time.
Questions will be taken in the order. They are received at this time I'd like to turn the call over to Mike <unk>, Chief Communications Officer Moh. Please go ahead.
Thank you operator, I'd like to welcome everyone to Boise Digital Limited's earnings call today, we will be discussing our fiscal year 2021 fourth quarter and full year results, which we announced prior to the market open. This morning with me on the call are Steve Roberts, Our Chief Executive Officer, and having Sourav Lewis, our Chief Financial Officer.
I would like to take a moment to direct investors to the Investor Relations section on our website at Investor Voyager Dot Com, where we have posted our investor presentation at upcoming events schedule.
Before we get started I'll walk.
To remind everyone that certain statements discussed on this call are based on information as of today October 29th.
It may contain forward looking statements, which are subject to risks and uncertainties, given our limited operating history market volatility and unprecedented industry growth trends could materially deviate from today's level.
Actual results could differ materially from our forward looking statements as 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 each of which can be found on our website www.
You W Dot invest Voyager dotcom, well under our profile at Www SEDAR Dot com are incorrect. The company has made assumptions that no significant events occur outside of the company's normal course of business and the current trends and adoption of Crisp road assets continue.
Listeners are cautioned that assets under management.
News and trading volumes fluctuate it may increase and decrease from time to time that such fluctuations are 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> financial measures.
You should refer to the information contained in the disclosures found in today's release.
Including definitional information and reconciliations of historical non <unk> measures to the comparable <unk> financial measures.
Paul 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 disclosure in today's press release. Please note. The dollar amounts referenced are in U S dollars unless otherwise noted.
Let me turn the call over to Steve Garlic voyages co founder and CEO.
Thanks, Mike and good morning, everyone.
As we report our fiscal year and I want to summarize Voyager significant accomplishments competitive positioning and growth opportunities is one of the largest and fastest growing crypto companies in the world with over $6 billion, a cut of assets under management and more than $2 4 million users.
Our record revenue of $175 million for the fiscal year, which produced adjusted EBITDA of 63 million highlighted the revenue and related long term earnings potential of our platform as we continue to scale our user base.
Additionally, as of June 32021, we had $207 million of adjusted working capital on our balance sheet.
Adjusted working capital as the net of all cash crypto held at custodians picked out went to third parties and held at exchanges less what we owe our customers.
We have the most experienced management team with significant financial services and capital markets expertise guiding the company to take advantage of market opportunities.
Being regulatory compliant in the jurisdictions we operate.
We recently completed our up listing to the Toronto stock exchange and the clearing of our base shelf prospectus by the Ontario Securities Commission is another positive evolution and testimony to the strong fundamental position of our company.
In fiscal 2021, we saw tremendous demand for our platform.
Took advantage of significant opportunities presented to us and in fiscal year 2022, we'll look to aggressively grow our user base by expanding our marketing programs.
Spanning internationally and by delivering additional products and services on the Voyager platform with a mission to become the leading provider of crypto based services to individual customers.
We've recently seen the launch of the first bitcoin futures ETF veto.
For an all time high for bitcoin, reaching 66900.
Peter was the first investment product approved by the SEC linked to the crypto assets and is traded on the New York stock exchange as new ways to access the crypto markets enhance mainstream adoption the market size of crypto is expected to continue to expand.
With crypto adoption is still in its infancy Voyager is focused on growing customers as we build out our ecosystem.
Company earns its revenue through various revenue streams, including trading revenue yield programs, which include both lending and staking and blockchain transactions.
We recently began to significantly diversify our revenues by any statement to our already robust trading and lending revenue.
But those who arent familiar with what's taking is picked up currencies are built on two major concepts.
Work and proof of steak.
More people are familiar with proof of work because that's the big point protocol that Intel's mining.
Proof of state is used by many of the other coins and protocols listed on the Voyager platform and a proof of stake coins or state using validation nodes that act as the source for our pending transactions in approving new transactions to the blockchain.
By sticking your point, you can earn rewards that run as high as 20% annually.
We have found that's taking revenue was a very good customer acquisition retention and engagement tool.
<unk> increased stickiness on the Voyager platform.
As crypto staking its not easy to do on your own.
Typical statement reward programs, often forced customers to lock up their coins on a longer term basis to receive a certain level of rewards.
Voyager a process is seamless and typically does not require customers to lock up their points just by holding your coins with Voyager you can obtain staking rewards and trigger points at any time.
As previously announced the September 30th quarter encompasses significantly industry wide slowdown in Voyager was no exception. However, as we compare on metrics to those of our competitors Voyager outperformed our key public company competitors in this quarter.
We elected in the quarter to focus on our account growth during this period as well and we believe it is the most important long term metric and strategy.
As a result voyage or incurred significant expense to sustain a robust account growth.
This past month, though we have seen volume significantly reroute the current quarter could achieve record revenue. That's starting in October are validating our strategy to focus on account growth.
We expect to continue to invest heavily into marketing product development and security.
As we add more products to the Voyager platform such as trip there back debit cards credit cards, decentralized finance and non fungible tokens, commonly referred to as Nf Ts, we will be adding new revenue streams, increasing engagement and growing customer lifetime value.
I want to turn our attention to some recent news and give investors a picture on where we are focused on head on our marketing and customer growth.
When Pam Kramer joined cheap as Chief marketing officer in the spring, we stated that there would be a ramp up into being more aggressive on the marketing front and we would use our available capabilities to grow accounts.
In July we began ramping up our marketing presence through many digital programs, but also decided to utilize our very popular loyalty and rewards program as an incentive to grow our accounts.
Although the cost to acquire accounts have increased for many reasons.
Marketing program has been very effective as we continue to be one of the most downloaded financial apps in the Apple store and Google play store.
And the top 55, App overall as recently as this morning.
We also announced an ambassador relationship with NFL Superstar, Rob Gronkowski, and NASCAR partnership with driver landed castle.
Both of which have been very successful in building brand identity and presence with new audiences.
Recently, we entered into a long term sponsorship and one of the most innovative NBA teams the Dallas Mavericks owned by Crypto enthusiast Mark Cuban.
Dallas Mavericks relationship is extremely exciting to Voyager as we coupled.
Coupled the NBA with esports with Voyager also becomes the naming rights partner of the mouse Gaming Center, which has been home to many esports programs, including the last NBA <unk> Championship.
We are actively engaged in building more marketing partnerships and sponsorships and look forward to announcing more in the near future as we look to optimize.
A combination of digital strategy and performance brand building sponsorships and our loyalty rewards program.
Voyager has a really unique loyalty rewards program that allows our customers to earn rewards on their trading activity as well as rewards on up to 35 tokens just for holding their coins with Voyager.
The core of the program is its utilization of the Voyager token as a marketing tool to deliver value to customers.
The company is close to 40 million tokens to use as marketing to support this loyalty program.
How does he saw the market slowdown in the summer months, we use this rewards program as a way to engage new and existing customers.
Investing back to maintain our position as a leading crypto platform.
With the recent hire of retested Wanni S. E. T O voyage is well positioned to grow our technology team to expand our platform and continue to bring new market leading products to market as we have seen some major companies try to mimic what Voyager has accomplished.
In early 2022, we expect to deliver an enhanced loyalty rewards program and a crypto backed debit card.
Additionally, we will be active in adding new points of our platform focusing on those we think will be the next policy claims in the market.
I would like to switch our attention to mergers and acquisitions.
In three short years, we have completed four acquisitions, most recently the acquisition of quantify.
Bill payments processor quantified puts Voyager crypto payments category with two distinct revenue streams.
First is the on and off ramps for custodial wallets and exchanges, where customers want to self custody there Keith.
Second is the integration directly with merchants and into payment service provider systems.
Quantify has already embedded thousands of merchants and we will aggressively grow the PSP revenue stream.
<unk> will be the backbone also for our launch in Europe.
We will continue to look for acquisition opportunities, where the management team fits the Voyager culture has revenue integrates into Voyager and can help geographic expansion product and our team expansion.
Now on the regulatory front, we've seen quite a bit of news around crypto.
As we all know Voyager operates at a fast pace is subject to significant regulation or perhaps more important regulatory uncertainty.
Voyager strives for overall compliance and has a team of legal and compliance professionals and outside advisors working hard to help us operate within the rules as they exist today.
One thing I would like to note since I've been in the capital markets for over 25 years, because I have seen times, where rules get clarified our amended one significant growth happens.
If any of you remember the early days day trading there are no account minimums needed to day trade. The SEC examined this and although there were initial thoughts about day trading being curtailed.
Average day trading rules reformed and day trading began to flourish with concrete rule structure and it's core to the markets today.
The reason why I bring update trading because I think there is a correlation between day trading and what we are seeing any evolution of crypto currency regulation.
We believe that thoughtful regulation will occur in the crypto currency space and that regulation will spur adoption and growth for businesses just like Voyager.
Lastly, just yesterday, we announced a strategic investment from Alameda research one of the world's largest market makers and a clear pioneer in the crypto industry.
There are significant opportunities for us to work together, including execution of the order flow asset management, and Ftes and working with regulators.
The investment was at a 14 day average price through October 26th of USD, 971, which amounted to $7 million 723996 shares. There is also a one year lockup on the shares.
We believe that blockchain technology, and digital assets or the future financial services and that being a fully transparent public company with a focus on the retail consumer separates us from the competition.
Our native token and related to the rewards program support a loyal user community drawn to our no commission safe and secure personal crypto finance platform.
With that I'll turn the call over to Evan to review, the annual and quarterly 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 in U S dollars under Ifr S.
I will speak to our fiscal 2021 and fourth quarter as well as full fiscal year ending June 32021.
In our fiscal year 2021, the industry saw a significant increase in trading volumes across all of the major exchanges.
When comparing the last six months of the fiscal year for the first six months industry volume increased six times.
Voyager made an even bigger jumped however, as the company increased trading volumes by nearly 24 times during the same period nearly four times more than the industry average.
With this acceleration in our volume.
We scaled our business to $175 million in total revenue from Jeff 1 million to prior year.
We grew verified users to one 7 million from 86000 in the prior year and funded accounts for 665000 from 23000 in the prior year.
Despite a market pullback in the summer was $2 6 billion at June 32021% versus $35 million on June 32020.
For the fourth quarter, we grew total revenue by more than 80% to $109 million with transaction fees accounting for 89% of total revenues.
The increase in transaction fees was driven by increased volumes.
Of $8 2 billion compared to $5 billion in the prior quarter as well as an increase in average spread to 113 basis points from 107 basis points.
Bitcoin and ethereum spread revenue accounted for only 11% of the total spread revenue as alternative coins continued and even greater dominance on our volume from the prior quarter.
Fees from crypto assets loans in the fourth quarter increased to $12 4 million compared to $6 7 million from the prior quarter.
During the fourth quarter the company started to engage with new high quality borrowers to accommodate additional loan capacity.
We started to see the benefit of these new lending relationships at the end of our September quarter and expect these relationships to continue to grow.
Additionally, as our partnership with Blackstone that occurred late in this fiscal year, taking more rewards were not significant to our top line.
But we expect a more meaningful impact beginning in the first quarter of fiscal 2022.
We believe that at current AUM levels, Voyager should be able to achieve consistent revenues.
The $50 million per quarter, starting in the December quarter, which is incremental to transaction revenue.
Turning to expenses total operating expenses for the fourth quarter increased 153% from the third quarter.
<unk> and adjusted EBITDA margin of approximately 20%.
The increase in operating expenses was due to a more than $30 million increase in crypto rewards paid to customers as well as a $4 million increase in marketing expenses.
As we look to future quarters in the fiscal 'twenty 2022, we expect to increase our marketing spend as well as a reward offerings as we look to prioritize and accelerating growth in funded accounts and deposits.
Lastly on liquidity.
Ended the year in a strong overall liquidity position with $270 million of adjusted working capital, including $193 million in cash and cash equivalents.
This concludes our prepared remarks with that I will now turn it over to our operator.
Line for questions.
At this time I would like to ask a question. Please press star one on your Touchtone phone.
Maybe yourself from the queue at any time for a question. The punky once again that is star and one to ask a question.
Our first question is from Joe Gomes with noble capital.
Good morning.
Yes.
Good morning, Joe.
So I was wondering if.
Talk a little bit more on the Alabama.
Just if you could give us a little more color on our who approached two here what are the real benefits that you see to Voyager from.
This partnership.
So to speak with AR with them.
Yeah. So thanks.
Thanks for the call and thanks for being with us in the morning here.
Usually do these in the afternoon, but I appreciate everyone's jumping on in the morning elevate is a great partner. They are one of the crypto pioneers if not be crypto pioneer.
Led by sandbank been freed and.
With them there are a lot of things that we're going to do with them just as I mentioned the tip of the iceberg is then helping us manage.
The assets the customer assets as we've now grown to over 6 billion of customer assets.
Having a professional help us on that as well is really important.
Same thing from an execution perspective, as we continue to grow and we do more and more volume by having more deeper integrated.
Partners that we can send order flow to is very helpful. But then you know on the end of tea front.
There they understand the NFC space, they've helped build out the Solana network and you all but they used to call <unk> network in NFC is a core to what we want to bring to the market.
You know in 2022, and having some more assistance as we grow out our own teams to do that is really important to us. So it's a great partner one that is extremely well respected in the space and crypto and there was a good opportunity for us to get some assistance as we want to grow into different areas.
Okay, Thanks for that and.
We've seen the price increase obviously of a lot of the a lot of the coins, especially bitcoin hitting.
New highs here recently.
But volumes haven't increased to the levels that they were back in let's say in May and it's just trying to get your viewpoint as to why you don't think that volumes have increased back to where they were.
When we had a similar situation occurring last may.
Yeah, I think the summer months, where were quite slow.
Especially July and August were very slow months.
Picked up in September but.
We can't say that about October October has been quite active for us.
Seen tremendous amount account growth I think.
Tremendous volume coming through our platform.
And I think some of the things we from our perspective, I think we're gaining market share on people.
Just look at the App store. This morning, we I looked at it before we got on this call and we were 50 staff.
All apps in the U S on the Apple store.
The closest we've ever been to that company called Hood that was 54, we've never been one behind them. So we're gaining market share with the coins, we had with the ease of use.
On the platform and how intuitive it is I can open an account in three minutes or less we're gaining market share and the things that we've done like the Mab steel has really put us. We always told investors that we were going to make more of an investment into marketing and do some more brand investment, but we're doing it theres more to come we're working on other things.
And we're getting our brand out there, which is growing up so maybe the market's a little bit less but we're gaining market share on people as we just see that with our App store rankings and same thing is happening on the Google Google Playstore. We're just we're gaining market share on people. So EBIT, if the market's coming down and I think it's starting to pick up again when I look at the market volumes there is a lot.
Interest in crypto again, we're.
We're gaining market share.
Great and if I could sneak in one more so you you mentioned a little bit here.
On the Dallas Mavericks.
Our collaboration and.
Yeah.
Mark Cuban tweeted, giving $100 a bitcoin for anyone who downloaded your app and its just wondering.
You know, you're saying you're at 55 out of downloads today I mean, how much have you actually seen.
Interest sensitive his tweak it seems like a great way to start off the relationship.
Marks a great Guy we had a great press conference the other day and it's such a great crypto advocate.
Yes and to answer your question is that okay.
We werent even in the top 200 before that.
From all apps in the App store prior to that press conference and now we're 55, so I think we could make some some judgment that it's really help.
Mark Thanks for that or if there's someone else ask some questions and I'll get back in the queue.
Thank you thank.
Thanks, Jeff.
Well go next to Mark Palmer with BTG.
Yes. Thank you good morning, and thanks very much for taking my questions.
With regard to the NFC initiatives.
Could you give us a sense of what that could look like is this going to be.
Hum.
The marketplace is it going to be that straightforward.
Or are there other aspects to that initiative that would be involved.
Yeah morning, Mark Thanks for thanks for joining the our initiative, we set ourselves out to be an agency platform, where we're trying to find the best of breed for our customers and that's how we're going to take the approach with Nf Ts. We want we want to make N F. T's on multiple platform is accessible to our customers.
May we build a little bit of our own NFC sure. We have some ideas we have some great relationships with with gronk and with land in a NASCAR that we we could build some of our own ftes, but we want to be truly the agent that tries to find and.
And open up the world to more people with you know with various Rfps and NFC market places, but that's our goal.
Very good could you provide an update on where things stand with regard to approvals for geographic expansion.
Canada, New York and just to clarify.
Are you.
Fully capable of expanding into Europe, right now with no restrictions from a regulatory standpoint.
So our work on kind of the first we're in the process with the Ontario Securities Commission still waiting on that Exemptive relief, we believe it's coming soon.
We did have a base shelf prospectus.
So that we think we're right on the verge of getting that exemption New York is.
As New York, Theres really not much more I can say I haven't given out a bit license still in almost two and a half three years now I don't I don't know what else to say anymore I sound like a broken record and I hate to answer that question, just because I really have nothing new to say except for we're in the process.
And in Europe.
In France gave us our license is fit and proper to operate that allows us to solicit within France and other countries that are less stringent on crypto. There are some countries that we could unsolicited take customers through Europe, and then file.
Much much slimmed down our regulatory.
Bilings, because where we're overseen by the IMF, which is considered one of the best regulators in Europe. So we're ready to go there we're pushing to be there by the by the end of March as we said in our recent press release.
And if I could just ask one more.
What is your thinking with regard to potential timing on listing.
In New York in the U S and what that process would entail.
Yeah, well have more to share on that and probably the next call after.
After the September quarter, when we do that we're working towards it that's our goal and we've said that all along that's our goal and getting the base shelf prospectus cleared was definitely a hurdle for us and we'll probably have more to share in about two weeks.
Very good thanks very much.
Thank you.
Well go next to Ed here could lead with eight capital.
Good morning, guys. Thanks for taking my questions here. So I wanted to talk on the user acquisition front, obviously really good growth too.
$2, one 5 million users 860, K funded accounts I want to talk about you know your conversion from your users to funded accounts, it's kind of it's already funded accounts to users is kind of growing can you maybe talk about what sort of marketing efforts you guys have targeted towards that that specific group as opposed to like a broader group and how that is.
Different a little bit.
Yeah, well, thanks Covid here I appreciate you being on this morning.
Good question and the fact that I'd love to tell you exactly how our key has always been to get to users in the platform get their information.
And we get a certain segment of those that will always go right through the funnel immediately.
But we've made it a priority of ours to once we get the info to get them down funnel when they don't do it immediately we have some tools in our arsenal that we use but I really don't want to share them. Because then somebody a copy me.
But we do have we have some tools and techniques that we used to get people down funnel.
To do that but we have been effective we've made it a priority and I think that was one of the keys.
And the slower summer months moving people down that funnel, we had access to customers.
Because they actually had interest in the platform. So how did we convert at a higher rate and that's that's one of the goals, we're always trying to convert it.
Increased those funnel metrics.
Okay totally fair and then maybe just maybe asking a question on the broader the broader user acquisition front and it seems as though you guys are really targeting sports as a source of of marketing you know with the mask with NASCAR, the maths landed castle, leaving Kieran.
Patients there will share the sports continue to be making I shouldn't take a lion's share of the marketing dollars are you guys kind of look to expand into like other areas of I don't know call.
Call it that kind of pop culture and stuff like that.
Yes.
We recently hired.
Erika Schakowsky America was with him and I at E trade and Eric did a lot of the brand building and so.
As well and so we're going to expand into other areas of.
Sportswear is the first place we wanted to attack and we wanted to do it differently than what we saw others do it probably more cost effective manner.
And because we believe everything we do we have to have that form of activation. When we go and if its sports for pop culture, where we're moving towards that pop culture as well Everything's got have activation and I don't know if you guys noticed last night, we gave away.
$100000 when someone here to half court shot at the Mammoth game Voyager was everywhere, it's all over social media Tonight. So we've tried to be we try to activate stock to make sure we're getting the best value for $1, because that's what investors want and.
So we will enter other spaces as we find the right opportunities.
For us to really grow the brand and build activations.
Alright, I appreciate all the color guys. Thank you very much and I'll pass the line.
Thanks.
Well go next to George Sutton with Craig Hallum.
Thank you, Steve I listened to the June quarter of fiscal year and until it.
Giving a summary of the Yellowstone season, one when we're starting Yellowstone season four so.
When we and that's credit to all of the major things you're involved in right now. So I'm wondering if you could break down some of what you're working on in terms of near mid and longer term opportunities because theres a lot thrown out and not a lot of clarity in terms of when we'll start to see some of these items.
Yes.
<unk> and.
George Thanks for thanks for attending I appreciate you being here this morning.
The near term stuff for us is absolutely.
The debit card.
Pardon in early 2022.
As well as being an international in 2022, the other projects and Ftes are some of the things we're working on defy credit Theyre, all being scoped out they're all being worked on from a business programs and business analysts looking at and the best way for us to do that but the most immediate stuff.
Is is the debit in international.
Really excited about the credit side, because consumers are starting to want to borrow with the significant assets, we have they're going to want to borrow against some of those assets with us. So we're looking hard at the credit side, whether it's lending whether it's credit cards or just collateralized loans, but those are longer term projects for us the immediate.
Is the debit.
Debit and internationally.
Greg You mentioned your CMO and CTO hires.
I've rarely seen a company I've ever grow this fast and I'm. Just curious if you could give us a sense of where you feel you are from.
People perspective, being able to accomplish some of these initiatives.
We're growing aggressively we're looking to hire more developers more product managers.
Obviously more marketing more service.
Our goal is to double our size.
Over the over the next six to nine months, we were trying to grow fast.
And to keep the culture of the same way too which is a very inclusive culture that we have so we're trying to double the staff over the next six to nine months.
And we're being aggressive trying to get there so that's.
That's our goal.
Lastly for me can you just breakdown for us bitcoin and ethereum versus the old coin spud.
Just the mix that you're seeing in the spreads youre seeing as a result.
Yeah quite a theory, you wind up being somewhere around 10% 10 or 11% of our.
Overall revenue and the rest is all the claims that we have and.
We've always set out with the goal to be the place to make all coin trading easy and we've accomplished that we've obviously seen seen a rise in the last few weeks of quite a few of the different all coins.
I know theres a focus on some of the ones that are related to dogs.
But there is a rising a lot of other points that we've seen is things like lunar.
Ah lunar.
So.
90% of our revenue is generated from the oil crisis.
Thank you very much.
Thanks.
Okay.
Sofie with singular research.
Hi, good morning.
Hey, Chris I, just had a question on <unk>.
I see.
Just had a question on <unk>.
For the fourth quarter, what was the cost.
Per account acquisition and how does that relate to other quarters and you know going forward, what do you see that cost being.
We will have to get back to even do you have that sorry do you have do you have that information yet. Thank you yes. It is.
Cost of per new funded account was.
Around $20 for the fourth quarter.
We benefited tremendously from volumes.
April.
I think as the market has gotten more competitive.
Over the summer and in recent times, we've seen that cost rise substantially.
More color on where we are today in our next call.
And then as far as do you have the number on the revenue per account.
Yes revenue per funded accounts.
Around.
Around $55 for the fourth quarter.
Okay, alright, great. Thanks.
Thanks, Chris.
Well go next to Kevin Dede with H C. W.
Good morning, Steve Thanks for holding the call and thanks for having me.
Thanks, Kevin.
So could you talk a little bit about where you're going to take the PSP platform. We talked about that you've talked about your initiatives for next year, but not so much on that integration and not so much on the lottery dot com deal. So maybe give us some insight on that.
Yes, or quantify which will be rebranded under a Voyager name at some point.
<unk> is already working with our ADH provider UCL based out of San Antonio to embed the quantify system. It was a payment merchant into that to add to their merchants theres about four or five others that theyre working on integrating into as well.
Because there's two parts of that the PSA is one is go straight to the systems and embedded there and we're working on I think four or five of them at this point in time.
And you said it was the most public of it that we've actually publicly announced their name.
And we also work to embedding into merchants.
Directly to merchants like with the maps, we will work towards embedding straight into the merchant into their site. So.
Consumers can pay with whether it's bitcoin does Voyager token it doesn't really matter they'll be able to do that so those are coming they are a little bit longer when you start working on those integration, they're not as fast as we would like.
But we've got four or five on the PSP.
<unk> worked on right now.
Yeah.
Okay. So evidence talking about 40 to 50 million and staking revenue.
Through this quarter.
Just kind of curious about how you're going to balance.
Locking those coins up versus the demand you have across the platform.
How the Alameda guys are going to help you manage that staking process.
Who's in possession of the nodes.
Those kind of elementary items in that business line.
Yes, so that 40 to 50 <unk> for the December quarter.
That's our secret sauce is how we manage and the lockups versus the staking versus even lending like what do we what is the amount we lockup of customer assets to still give them the ability for consumers to trade because that's one of the problems with staking that I'm not sure people understand is that many.
Places when you personally state your point you have to hold them there for three 730, sometimes $180 80 days.
So we make it easy all based on our secret sauce, how we built our algorithms how we do that.
And a lot of it some of the nodes we run some of the nodes, we use blocked David some of them, we use parties like Alameda and we will use people like that so we can actually bring value back to our consumers to allow them to take part in something that is not the easiest thing for them to do personally we're making it easy for consumers. So we have multiple way.
To do it that's all part of our secret sauce, how we execute how we custody how we stake how we lend is a complex and that gives us its leadership position in crypto because of everything we do and how we put that together all of us because we think of things from a customer perspective like how are we going to make this world.
Z for customers. They don't know how they know customers don't know how the inner network today, it's still 20 something years. After the Internet don't know how it works, but they use it we want them to use the system and make it easy that's why we look at the gain of PS.
And how do we bring that marketplace, whether it's on Solana.
Olga Rand Avalanche.
How do we bring that to consumers to make it easy for them to access that's how we do it on the stapling as well.
So will you do you imagine when the time comes to report the December quarter, you'll show that as a separate line item in revenue.
I think we're just going to.
I'm not sure how we have to do it might be all grouped with lending and staking, we're not sure we're working with our auditors on that one.
Alright, Thanks, Steve back to you.
Thanks, Kevin.
As a reminder that is star one to ask a question we will take our next question from Chris Allen with Compass.
Compass point.
Good morning, guys. Thanks for taking my question.
I just want to follow up on the Alameda relationship.
One just in terms of helping to manage the customer assets.
Is that one of the new high quality borrowers you referred to.
I'm going to kick in at the end of the September quarter.
Two on the execution perspective can you give us some color how this benefits you from a revenue perspective.
[laughter].
So the first question.
Alameda, where lending we do a little bit with them theyre, helping us with staking. So they are of high quality borrowers. So we've expanded our relationship to it.
To them as well.
And they're going to help us with other parts of that asset does it make statements.
So thats big there and do you mind repeating the second question I'm sorry, Chris.
Yeah just on.
On the execution perspective, you said, it's kind of order flow and the press release, just wondering like how are you guys really have their health benefits you from a revenue perspective.
Yes, so as our.
Our pool of coins keep increasing as the.
Volume increases, we work with exchanges and market makers and Theyre now another market maker that we can send volume too.
And based upon the bid asked that they give us we'd get more depth of market and the number of the <unk>.
<unk> set at different prices, we get all of this.
All of the value of a lot of market makers and Theyre now another big market maker Thats within our wheel and looking at the bid ask spreads. So we can determine where to send the order flow to them.
Got it and then.
On the international opportunity in Europe.
Can you give us any numbers in terms of how to quantify the opportunity.
Well the size of the market is substantial.
And so we think that.
We havent specced out exactly to give you guys. Some some idea on what that revenue will be and what to expect.
Because again I think we're going to do where to go in and we're gonna start hard in France, because that's where the regulator is and that's what we promised them as well and then we're going to continue to expand throughout Europe, but we know it's substantial we have a substantial waiting list to people who are excited for the product and Theres a lot of people who hold the boys are totally.
And throughout Europe that want to put on our platform and start using the benefits of all our rewards programs.
To do that so.
I don't have it can't give you any color yet on the revenue side and what we think but we know population wise, it's quite substantial and it's growing in crypto is growing in Europe and we'd be.
Probably one of the if not the leading agency platform there.
Thanks for everybody in the queue.
Okay.
And there are no further questions at this time.
Well. Thank you everyone for taking your time I appreciate you spending a little of your your day with us here.
And look forward to our next call at the end of our first fiscal quarter.
That will happen in November look out for the details. So thank you again and have a great day.
This does conclude today's program. Thank you for your participation you may disconnect at any time.
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