Fold Holdings Inc (FLD) Q1 2026 Earnings Report, Transcript and Summary

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

Thank you, operator. Good afternoon, and thank you for joining us for Fold Holdings First Quarter 2026 Earnings Call. Joining me on the call today are Chairman and CEO, Will Reeves; and CFO, Wolfe Repass. Before we begin, please note that the information reported on this call speaks only as of today, May 12, 2026, and therefore, any time-sensitive information may no longer be accurate as of the time of any future replay, listening, or transcript reading. A replay of today's call will be available by webcast on the company's website at investor.foldapp.com, and more information on how to access this replay feature will be included in the company's earnings release. Comments on this call may contain forward-looking statements within the meaning of the U.S. federal securities laws. These statements are based on our current expectations and beliefs and are subject to risks and uncertainties that could cause actual results, products, activities, or time frames to differ materially. For example, statements suggesting or implying the company's ability or positioning for growth as well as any statements which include future dates or time frames are forward-looking statements and inherently uncertain. In some cases, you may identify forward-looking statements by terms such as believe, expect, potential, should, plan, or similar terminology, but any statement that is not a statement of historical fact may be a forward-looking statement. These statements reflect the current views of Fold's management and are not guarantees of future performance. Please refer to Fold's Form 10-K and other filings within the SEC for discussion of risks and uncertainties that may affect our upcoming results, future plans, and product rollouts, among other things. We will discuss certain non-GAAP financial measures during this call. These measures should not be considered a substitute for GAAP results. A reconciliation to comparable GAAP measures is included in our earnings release and SEC filings. With that, I'll pass the call to Fold's CEO, Will Reeves.

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

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

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

[Operator Instructions] Our first question will come from the line of Dave Storms with Stonegate.

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

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

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

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

[Operator Instructions] Our next question will be coming from the line of Mike Grondahl of Northland.

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

Yes. Mike, it's good to hear from you. So let me take a step back. So right now, Fold is sitting in a reality where all of our product lines are contributing to positive contribution margins, every dollar in, every customer in is accretive to the business. The Fold Credit Card is now live and in market and will begin to rapidly scale over the coming months. All Fold needs is to increase our scale. And what that ends up is a company generating cash flows and consistent growth, especially if we see the market return and Bitcoin start to perform. And so for us, we wanted to gear our business for maximum scale. And what we learned from the Bitcoin Gift Card with its pilot season at Kroger was it is bringing in thousands of customers. One of my favorite customer examples of this is I believe it is a top 5 spender at Fold came off with a gift card now. We are seeing it become an incredible area of growth for referrals. And as we look forward to the future, we want to remove any impediment to growing this program, both for new customers coming in, but also new retailers carrying this. And the #1 area of friction that we heard was the fee. And that's a function of the costs associated with getting these things physically in the doors, which varies by retailer. And as we ran the numbers, looked at what are these customers doing once they're in? Are they engaging with our other products? We very quickly came to an obvious outcome where removing the fees is going to generate more customers in the door. It's going to have more retailers interested in carrying this. And ultimately, that's what we want. That's good for Fold. That's going to scale the user base much faster. And so when we talk about where the fees are going, the customer is going to see significantly reduced fees upfront, but that's all been done based on the -- working with our retailers to reduce their fees. So reducing the built-in cost there and seeing the payback period that we are seeing on some of these customer cohorts coming through there. So it still is very relevant to and dependent on retailer by retailer. But for the customer side, making it maximally available, reducing friction, those fees are going to go to 0.

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

Yes, correct. A lot of it was just passed on to the customer. And ultimately, what it made was a great gift, but it wasn't necessarily a great way to continue to buy. And we see just by simply making this change, we see a whole different set of customers come to the product that use it more and more often. And so for us, the big question was, well, who are these users coming in? Are they going to make good users? Are they going to mature into users using multiple of our products? And what we've seen is, yes, a lot of them are. Some of them are still holding it, just really holding their gift card. But ultimately, when we look at the profile of them, we believe they're going to grow into a great credit card holder, great debit card holder and ultimately start buying Bitcoin. We just had a customer write in and say, I came into Fold off a gift card. I was earning rewards and now I've become a Bitcoin investor. And they said that really wouldn't have happened without these types of on-ramp products that we bring. And so we look at the Bitcoin Gift Card as turning a wider segment of the population into future Bitcoin investors, and they're doing it through Fold.

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

Yes. I mean for me, very -- Wolfe is going to probably have a more specific way of talking about this. But for me it is as fast as possible to as many people as possible. We have 1,000 cardholders right now running on credit lines that extend upwards of $20,000. We are seeing very strong spend. And now we need to see the billing cycle go through. We need to see how our charge-offs are, what -- how many are revolving, how -- what our average spend rate is. And that's all going to go and inform not only how much we can scale within our existing confines about our facility, our credit facility that we have today, but also what facilities we need to bring to scale into later. And all this data is going to make a very attractive -- is making a very attractive value proposition for more credit facilities to come in and participate. And so this next month is really critical for really seeing that full life cycle. But it's in my belief that we scale all the way through the wait list and our full customer base within the year, absolutely, if not more. Now I'll leave it to Wolfe to talk maybe a bit some of the constraints and maybe how he's thinking about it from balancing customer behavior that we're seeing really on the ground with the backing of the credit facilities that we need and all of that.

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

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

Thank you all. And I want to thank specifically the team at Fold who's been able to -- through a bear market. These bear markets come and go. We've been building in Bitcoin for a while. This is not new to us. But what Fold's team has demonstrated is that we're shipping some of the most important products that will have the biggest impact, and we're shipping a higher velocity and higher quality than ever before. So first and foremost, I want to say thank you to the team, of course, investors and partners and analysts for jumping on and asking questions and following the Fold story. I think we've waited a little bit longer than we wanted to, to get the credit card to market. But now that that's here, there's a lot of products and launches that we haven't discussed that kind of have been placed secondary while we get through this milestone. And now that we're through it, I think this summer is going to really mark the beginning of Fold emerging as a clear leader, not just in Bitcoin, but in financial rewards overall. And it's going to be due to some of the big product launches and announcements and partnerships we're going to be releasing this summer. So I'm incredibly excited for what's ahead. And again, thank you all for participating in the journey. We truly believe that Fold has been making all the right investments even when Bitcoin is down, which shows our belief and confidence in where we're going. And I think we're going to see the return show up not only as the Bitcoin market returns, but as Fold moves beyond a company specifically tied to Bitcoin, but just financial rewards overall, I think it will really be a paradigm shift. So thanks, everyone, for following. And I would like to say also finally, a happy birthday to my dad today. So thanks, everyone, and have a great rest of the day.

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