Bullish (BLSH) Q3 2025 Earnings Call Transcript

Access earnings results, analyst expectations, report, slides, earnings call, and transcript.

Overview

The earnings call highlights strong financial performance with record net income and significant revenue growth. The company has strategic plans for U.S. market entry and options trading, bolstered by regulatory approvals. Despite some challenges like customer onboarding and market volatility, management is optimistic about regulatory developments and partnerships. The Q&A reveals positive sentiment towards the company's strategic initiatives and regulatory achievements, despite some vague responses. Overall, the strong financial metrics and strategic advancements suggest a positive outlook for the stock price.

Key Financial Performance

Adjusted Revenue $76.5 million, up 72% year-over-year. The increase is attributed to strong performance in liquidity services and CoinDesk-branded products.

SS&O Revenue $49.8 million, up over 300% year-over-year. Growth driven by liquidity services and CoinDesk-branded products.

Adjusted Operating Expenses $47.9 million, down 2% sequentially. Reflects cost control measures.

Adjusted EBITDA $28.6 million, up 271% year-over-year. Indicates high incremental margins and scaling business.

Adjusted Net Income $13.8 million, a record figure. Reflects scaling business and cost control.

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Operating Highlights

Options Franchise Launch: Fully launched on October 31, 2025, with over $1 billion traded in just over 2 weeks and $1 billion in open interest. Achieved a daily trading volume of $240 million, representing 4% market share.

U.S. Exchange Business: Launched and onboarded marquee customers, including retail brokers like Webull and Moomoo, and institutional brokers such as Cantor Fitzgerald.

Indices Business: Gaining traction with U.S.-based ETFs and other listed products tied to benchmarks. Supported 5 of 6 newly launched U.S.-based exchange-traded crypto products and 4 additional global ETPs.

CoinDesk Research: Launched a subscription-based vertical for high-quality research and analysis, serving as an upsell to liquidity services clients.

Global Expansion: Added major retail brokerages in Europe, the Middle East, and Latin America. Integrated crypto-focused hedge funds and asset managers for derivatives trading.

Layer 1 Blockchain Relationships: Expanded partnerships to include Canton, Cardano, Midnight, and VeChain, alongside existing relationships with Solana, Ripple, and TRON.

Liquidity Services Growth: Fastest-growing business segment, with active partner count up 100% sequentially. Added a record number of liquidity services partners in Q3.

Cost Control: Adjusted operating expenses decreased by 2% from Q2 2025, contributing to high incremental margins.

Tokenization Leadership: Positioned as a leader in tokenizing assets beyond stablecoins, with plans to tokenize major asset classes. Submitted an SEC application for regulatory approval as a transfer agent to support tokenization strategy.

Regulatory Compliance: Strong regulatory footprint, including a prestigious BitLicense, enabling U.S. onboarding for institutional clients.

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Risk or Challenges

Regulatory Risks: The company acknowledges the need for regulatory approval, such as the SEC transfer agent application, which could delay or complicate their tokenization and liquidity services strategy. Additionally, the evolving regulatory landscape for crypto assets poses ongoing compliance challenges.

Market Competition: Bullish faces intense competition in the rapidly growing crypto options market and broader crypto ecosystem. The ability to carve out substantial market share is uncertain, especially given the presence of established players.

Operational Risks: The company is expanding into new asset classes and blockchain ecosystems, which may require incremental asset-specific capabilities. This expansion could strain resources and operational efficiency.

Economic and Market Volatility: The company's financial performance is tied to market volatility and trading volumes, which are inherently unpredictable. A downturn in market activity could adversely impact revenue and profitability.

Customer Onboarding Challenges: The onboarding of U.S.-based institutional clients is described as a lengthy process, which could delay revenue realization and market penetration.

Dependence on Key Partnerships: Bullish's success is partly dependent on partnerships with blockchain ecosystems like Solana and stablecoin issuers. Any disruption in these relationships could impact their liquidity services and tokenization business.

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Guidance & Outlook

Future Revenue and Growth Expectations: Bullish expects record performance for 2025 as a whole, with continued momentum into Q4. The company anticipates materially higher transaction revenue for Q4 2025 compared to Q2 and Q3, driven by higher volatility and increased active trading customers.

Tokenization Growth: Bullish is positioned to lead in the tokenization of assets, which is expected to scale significantly in the coming years. The company has applied for SEC approval as a transfer agent to support its tokenization and liquidity services strategy for U.S. securities.

Options Trading Expansion: Bullish launched its options trading platform in October 2025, achieving over $1 billion in trading volume within two weeks. The company expects the crypto options market to grow by multiples in the coming years and anticipates significant contributions to financial performance from this segment.

U.S. Exchange Business Growth: Bullish has onboarded several U.S.-based institutional and retail clients, including Webull, Moomoo, and Cantor Fitzgerald. The company expects to continue gaining market share in the U.S. in the coming months.

Global Exchange Expansion: Bullish is expanding its exchange business outside the U.S., adding major retail brokerages in Europe, the Middle East, and Latin America, as well as integrating crypto-focused hedge funds and asset managers.

CoinDesk Business and Indices Growth: Bullish's CoinDesk business is growing, with indices underpinning multiple newly launched U.S.-based and global exchange-traded crypto products. The company has also launched CoinDesk Research, a subscription-based vertical, which is expected to drive further growth.

Q4 Financial Guidance: Bullish projects SS&O revenue between $47 million and $53 million and adjusted operating expenses between $48 million and $50 million for Q4 2025.

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Shareholder Return Plan

The selected topic was not discussed during the call.

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Key Q&A

Q:How many stablecoins is the company servicing, and how do the economics of non-stablecoin tokens compare to stablecoins?

A:The company is partnered with about 9 or 10 total stablecoins, excluding USDT. The economics of non-stablecoin tokens vary as they are more bespoke with different degrees of utility and contract sizes. Both stablecoin and non-stablecoin pipelines are growing, with more emphasis currently on non-stablecoin tokens.

Q:What is the company's focus regarding ICOs and competition with Coinbase's ICO service?

A:The company focuses on servicing institutional customers and high-quality crypto platforms with market caps of at least $0.5 billion. This differs from Coinbase's focus, which targets a different segment of the market.

Q:What motivated the company to seek transfer agent capabilities and licensure?

A:The company sees tokenization as a major trend and aims to expand its offerings to include services like writing smart contracts and tabulating securities ownership. The transfer agent license allows the company to engage more actively with asset issuers who are tokenizing U.S. securities.

Q:How did the company's AMM perform during recent market volatility?

A:The AMM performed well, preserving more depth in order books and experiencing fewer liquidations compared to other venues. This highlighted the company's focus on regulated, robust systems that appeal to institutional customers.

Q:Why is the company's Q4 guidance flat despite strong momentum in subscription services and other revenue?

A:The flat guidance is due to seasonality (no events revenue in Q4), downward price movements in the digital asset space, and the timing of new contract signings, which are occurring later in the quarter.

Q:What is the impact of the BitLicense approval on the company's business?

A:The BitLicense approval has led to early wins and a quickly filling pipeline. However, onboarding new customers is a rigorous process due to robust diligence requirements, partly influenced by the FTX collapse.

Q:What is the company's outlook on the CLARITY Act and its potential impact on the business?

A:The company is optimistic about the CLARITY Act's passage, which would simplify regulatory requirements and provide legal certainty. This is expected to boost growth in infrastructure and tokenization services.

Q:Why has the U.S. launch been faster and more successful than expected?

A:The company spent years obtaining tough regulatory approvals and building a global order book, allowing for quick onboarding of U.S. customers once the BitLicense was approved.

Q:What is the company's strategy for options trading and its early success?

A:The company offers a single matching engine for all transactions, enabling efficient portfolio margining. This has attracted options traders and led to early success, with options expected to contribute significantly to revenue in 2026.

Q:What are the company's plans for expanding into new geographies?

A:The company has covered major regions (Asia, Europe, U.S.) and will focus on consolidating existing markets. The U.K. is a notable exception where legislation is still pending.

Q:Review of Unclear Management Responses

A:Management avoided directly answering questions about the specific timeline for perpetual futures revenue turning positive and provided vague responses about the exact impact of tokenized money market products on collateral management.

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Earnings Word Cloud

The most frequently occurring keywords in this quarter's earning call

BLSH Transcript

Bullish (BLSH) Q3 2025 Earnings Call Transcript

Positive11-19

Bullish (BLSH) Q2 2025 Earnings Call Transcript

Unknown9-24

The earnings call presents mixed signals: while there are positive developments in SS&O revenue and assets under management, adjusted EBITDA is down significantly. The Q&A section reveals management's reluctance to provide specific guidance, which raises concerns. Positive factors include growth in Liquidity Services and new product launches, but the lack of detailed guidance and a significant drop in EBITDA balance these out, leading to a neutral sentiment.

BLSH Report

Bullish 6-K

6-K

2025-11-19

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