ANTA

Good day, and thank you for standing by. Welcome to Antalpha's first quarter 2026 earnings conference call. Today's call is being recorded. All participants are now in a listen-only mode. After management's prepared remarks, there will be a question-and-answer session. I would now like to turn the call over to Chris Mammone, Managing Director of The Blueshirt Group and representative for Antalpha's Investor Relations team. Mr. Mammone, please go ahead.

Thank you, operator. Welcome to everyone participating in this call. Joining me today is Paul Liang, Antalpha's Chief Financial Officer. Please note the following. First, all year-over-year comparisons in today's call are for Q1 2026 versus Q1 2025, unless otherwise stated. Second, consolidated financial statements, including Aurelion, began from Q4 2025. As such, Q1 2025 comparative figures reflect Antalpha's stand-alone results. Third, our remarks today will include forward-looking statements based on current expectations. These statements involve risks and uncertainties that could cause actual results to differ materially. For discussion of these risks, please refer to Antalpha's filings with the SEC. We do not undertake any obligation to update forward-looking statements except as required by law. This call also contains references to unaudited non-GAAP financial measures. Reconciliations to the most comparable GAAP measures can be found in our press release and SEC filings.

Now I'll turn the call over to Paul Liang, who will provide the Q1 operating and strategic overview, as well as the financial highlights and outlook. Paul, please go ahead.

Thanks, Chris. Good day, everyone. Thank you again for joining us. I'm Paul Liang, CFO of Antalpha. Let me start with a brief framing of the quarter. Q1 10, 2026 was a period of solid execution and business development for Antalpha, amid of a dynamic and challenging market backdrop for the crypto ecosystem. We delivered 52% year-over-year revenue growth and maintained our record of 0 principal loss. At the same time, our loan book saw a one-time reduction driven by substantial repayments from certain large borrowers, which notably Cango Inc. I will address this in detail, but the key point is all borrowers repay with no loss of principal. We view it as a strong reflection of our borrowers' overall financial health and the soundness of our credit model.

Finally, we also want two important strategic growth initiatives, the beta launch of our Web3 AI agent and the transition of our tokenization gold holdings into yield-generating deployment. I want to provide some extra context on the Cango repayment before moving to the loan book. On the large borrower Cango's, Cango repayment, I want to provide some extra context here before the financial results section. During the first quarter and into early quarter two, Cango Inc, a NASDAQ-listed Bitcoin miner, has repaid approximately $530 million of its outstanding loan balance. This represents over 95% of Cango's outstanding balance as at December 31, 2025. Cango funded the repayment through a combination of publicly disclosed Bitcoin asset sales and equity transactions. This is the type of positive outcome of that our credit model is designed to produce.

We were pleased with how it all played out in practice. I will now cover our loan book update and risk management activities, followed by our strategic initiatives, walk through the rest of the financials and close with our Q2 outlook. Antalpha's operating philosophy is a risk management-first philosophy. We have been consistent in this approach since our inception, and it's central to how we manage the platform in Q1. Bitcoin prices were under considerable pressure in Q1, declining approximately 40% from their October 2025 peak. In this familiar environment, our approach was deliberate. We maintain active dialogue with every client to review market conditions, stress test positions, and discuss their options as we do in our daily operation, especially every period of price volatility. We do not simply wait for the market to move. We engage proactively.

Our overcollateralization model continued to underpin the loan book. We require overcollateralization at origination, and Bitcoin mined by client is deposited directly into our wallets, allowing the collateral pool to build continuously. The result of this approach is a proven track record we are proud to stand behind. As of March 31st, 2026, Antalpha has recorded no loss of principal since the inception of the company, and it is the direct outcome of the prioritization of risk management above all else amidst every market backdrop. Before reviewing our loan book matrix, let me provide some broader market context. We just discussed the devaluation of Bitcoin versus the October 2025, which created a more cautious environment for new loan deployment and borrowers' activity.

While the near-term sentiment for digital assets has been softer and the long-term demand backdrop remains constructive, spot BTC ETF assets under management stood at approximately $102 billion as of mid-May 2026, reflecting continued institutional participation in the asset class. Historically, periods of price softness have been also coincide with increased interest in machine upgrade financing as miners began positioning for the next cycle. We expect this dynamic to once again support the loan demand as market conditions stabilize. With that context, let me walk through the loan book matrix and in detail, starting with TVL per client, which I think it gives the clear picture of the underlying business. TVL per client increased 36% year-over-year, reflecting growth in average loan size across the client base and the continued deepening of our client relationships.

This growth stems from our proactive strategy to prioritize lower-risk consumers, ensuring a higher quality portfolio. Total value of loans were $1.6 billion as of March 31st, 2026, was down 3% year-over-year. This change reflects three factors. First, more measured new loan deployment in a weaker Bitcoin price environment. Second, substantial one-time loan repayment from two large borrowers, mostly from Cango, which we mentioned earlier, which repay approximately $510.6 million during the 1st quarter of 2026. Third, a modest reduction of approximately 3% in the remaining portfolio on a sequential basis. It is worth re-emphasize that we have never had a credit loss. We have never had a loss on principal across the entire loan book. We enter the recovery phase of the cycle with a well-protected portfolio.

As market conditions stabilize, we are positioned to redeploy capital and grow the loan book. Hash rate loans finance approximately 44.2 exahash of hash rate capacity as of March 31st, 2026, representing approximately 3.3% of global hash rate. This compares to 81.3 exahash, EH, as of December 31st, 2025. The decrease was mainly attributable to Cango's repayment, as Cango's facility were predominantly hash rate backed loans. In summary, the overall health of our loan book remains quite sound. Shifting gears now to our strategic initiatives, let me cover our Web3 AI agent first, followed by our tokenization gold update. In May 2026, Antalpha launched a Web3 AI agent in public beta.

I want to take some time discussing this initiative because we think it is important for the market to understand what we are building, why we are building it now, and how it interconnects into the core of Antalpha. Nina is an early stage of Web3 AI agent and part of Antalpha's broader innovation into AI-driven infrastructure. It is built on our proprietary in-house MCP or Model Context Protocol framework, which is designed to support intelligent routing and coordination across data and execution environments. As it is core, Nina reflects our view that the next generation of digital infrastructure should make AI and Web3 more intuitive for users to engage with. As AI becomes more deeply embedded in financial and digital system, users will need an intelligent interface that can help them navigate increasingly complex blockchain-based environment with greater confidence and convenience. Why now?

Three factors come together to make this the right time to introduce a new solution like this. First, the capability of AI models to interpret natural language and reliable translate it into on-chain execution has only recently reached a level where user-facing product is viable. The technical barrier that previously required developer knowledge to interact with blockchain networks can now be adjusted through AI. That barrier has been broken. Second, there's no established market leader in Web3 AI today, particular in Asia Pacific region. We see a clear opportunity to build a scalable solution that is available now. Third, and I want to be specific about this, Nina is further leveraging the domain it knows best. We have built a deep operational knowledge of Web3 infrastructure on-chain data and blockchain system through years of running our financing platform.

Our interconnection within the Bitcoin mining ecosystem give us a unique foundation in the space that other new entrants to Web3 AI does not possess. We are applying existing capabilities and relationships to an adjacent market. Next, I will talk about the tokenization goal. As of March 31st, 2026, Antalpha held 39,371 units of XAUT. In Q1, we recognized $12.9 million in unrecognized fair value gains on these holdings. In April, subsequent to the quarter end, we took the next step in our tokenization growth strategy by committing 6,052 units of XAUT to the XAUE yield protocol. Aurelion, our subsidiary, separately committed another additional 10,000 unit to the same protocol.

This is the first deployment of our XAUT holdings into a yield-generating arrangement, which represents a meaningful transition from holding XAUT as treasury and balance sheet asset to actively deploy to generate yield. Now, let's move to discuss our financial performance in the first quarter. Total revenue was $20.7 million in Q1 2026, up 52% year-over-year, reflecting a continual growth in both our key revenue components. Technology financing fees on supply chain loan were $50 million, up 49% year-over-year, driven by continued strengthen in our hash rate loan portfolio. Technology platform fees on margin loan were $5.7 million, up 62% year-over-year, reflecting healthy take rates and continued utilization of our margin loan facilities. The net fee margin increased 21 basis points year-over-year, reflecting price discipline across the platforms.

The expansion was led by our margin loan business, where net fee margin improved year-over-year and remained healthy on a sequential basis. Our supply chain loan net fee margin saw a modest year-over-year decrease, driven by a higher proportion of hash rate loans within the portfolio. Hash rate loans carry a lower blended rate than machine loan, and as the mix shifted towards hash rate loan through the period, it created some downward pressures on the blended supply chain loan margins. Let's turn to operating expense and profitability. Total operating expense, excluding unrealized gain of crypto assets, were $25 million in Q1, up 102% year-over-year. This includes funding costs of $10.4 million, one-time restructuring charges of approximately $3.3 million, and non-cash equity-based compensation of approximately $1.3 million. Excluding these two items, non-GAAP operating expense were $20.4 million.

On funding costs, at 79% of technology financing fee on supply chain loans, funding costs increased modestly from 65% in Q1 2025. For additional context, funding costs were 70% of technology financing fee in Q4 2025. The sequential improvement reflects a reduction in the loan base following a substantial repayments received in the period. Turning to profitability, GAAP operating income was $6.6 million, representing an operating margin of 32%. This was mainly reflects $10.9 million unrealized fair value gain from XAUT holdings flowing through our operating results. Non-GAAP operating income, which exclude one-time restructuring costs and non-cash ESOP expense totaling $4.6 million, was $11.2 million, representing a non-GAAP operating margin of 54%. Net income attributable to Antalpha was $2.7 million in Q1 2026 compared to $1.5 million in Q1 2025.

As a reminder, Q1 2025 reflects Antalpha's standalone result as consolidation of Aurelion began in Q4 2025. Adjusted EBITDA was $13.3 million, representing an Adjusted EBITDA margin of 64% compared to 18% in the prior year period. This includes approximately $12.9 million in unrealized gain on the fair value of XAUT holdings. Excluding XAUT related gains, Adjusted EBITDA was approximately $0.4 million, with a margin of approximately 2%. The consolidated result I just walked through include contribution from both Antalpha Prime, the lending business, and Aurelion. To give investor a clear picture of each component, let me briefly separate them before turning to the valuation framework. Antalpha Prime, our core lending platform, generated standalone revenue of $20.7 million, up 52% year-over-year.

Standalone adjusted EBITDA of $4.4 million, a 77% improvement from $2.5 million in Q1 last year. Standalone GAAP operating loss was $2.3 million, including the $3.3 million one-time restructuring cost and $900,000 non-cash ESOP compensation in the period. If we exclude that charge, standalone operating income was approximately $1.9 million, compared with $1.5 million in the first quarter of last year. The EBITDA is 12% for standalone Antalpha Prime lending business. Aurelion contributed to the remaining $9.3 million of operating income at the consolidated level, driven by entirely by XAUT fair value gains. With that separation established, let me now turn to Aurelion's result and our sum of parts valuation framework. Turning to Aurelion's balance sheet.

As of 31st March 2026, Aurelion's NAV was $116.4 million or $3.16 per share, reflecting 33,318 units of XAUT value at $4,667 per unit, net of $41.2 million in debts. Consistent with prior quarters, Antalpha's 42% economic interest in Aurelion represents approximately $47 million of attributable NAV. Deducting this from Antalpha's market cap of $206 million based on last Friday's closing price, implied value of Antalpha's core lending platform is approximately $169 million or approximately 1.9x of trailing 12 months revenue of $86.8 million and 11.7x trailing 12-month net income attributable to Antalpha's $14.5 million.

Aurelion's value is tied to gold appreciation and its XAUT treasury strategy. Antalpha Prime's core platform value reflects the lending business fundamentals. We present this framework so investor can better assess each on its own terms. Turning to outlook. We expect second quarter 2026 revenue between $11 million and $13 million, excluding the impact of the single customer Cango. The year-over-year decline will be between 7%-22%. The main driver of this sequential change from Q1 is the reduction in our interest-bearing loan base following the one-time repayment received in early 2026. Importantly, net fee margin and operating margin are expected to remain broadly stable quarter-over-quarter. New loan deployment activity was limited in February through April period, reflecting market conditions.

We remain engaged with existing and prospective clients on new loan deployment opportunities, and we'll provide updates as the loan book develop. Our guidance reflects the strong visibility we have in the business and assumes continued demand for crypto-collateralized financing in the market environment. Further consistence what we see today. As always, actual results may differ from our expectation, and we will provide updates on our next quarterly call as appropriate. Now let me close with our 3 priorities for 2026. First, risk management. We will continue to apply disciplined collateral management and maintain active client dialogue through what remains a volatile market environment. Our 0 loss of principal record reflects the way we have run this business since inception. Second, core lending growth. TVL per client growth of 36% year-over-year reflects the quality and engagement of our client base.

We are actively re-deploying capital, and remain focused on growing the loan book with the right clients. The demand for crypto-collateralized financing is intact, and we are well positioned to continue to grow. Third, additional strategic growth curves. Our tokenization growth strategy is advancing. XAUT is now deployed into yield-generating protocols, which is a meaningful step forward. Our Web3 AI agent launched this month, applying our Web3 domain expertise to an adjacent market where we see a clear scaling opportunity. Both initiatives are at a very early stage, and we look forward to updating investors as they develop. With that, let me open the call to Q&A. Operators, please go ahead.

Thank you. To ask a question, you will need to press star one and one on your telephone and wait for your name to be announced. To withdraw your question, please press star one and one again. Our first question comes from the line of Devin Ryan from Citizens Bank. Please go ahead. Your line is open.

Hey, team. This is Noah Katz on for Devin. Thanks for the questions.

Hi, Noah.

Lots of developments here to dive into. First, just want to touch on your announced further expansion into AI infrastructure with the Web3 AI agent, Nina. Can you help us unpack this a bit more and tell us why Nina is the right product for your AI strategy? Should we think of Nina as a user acquisition tool and a way to deepen engagement with your clients, or as more of a foundational piece for future AI revenue streams? Thank you.

Yeah. Thanks, Noah. Thanks for the question. I think firstly, we believe LLM has become the next generation of entry point. I think now we are turning to I mean, all the users interact with like digital world basically through AI to some extent. This shift kind of create a meaningful vary, value, especially in the AI industry. As today, the Web3 users experience remain highly fragmented. Users often need to move across like multiple wallets, protocols, data source, analytical tools. It's a little bit complicated sometimes, if they do this on their own, especially for those like the new users.

We do think that it's a very highly attractive vertical opportunities for us here in the Web3 area. Yeah, I think it's very difficult for most of the users to navigate around, so this create a very strong user case for AI-native products. We understand the pain point of the users, and Nina is basically designed to bridge this gap, and it provides a neutral, like, natural language interface to help the users to access Web3 information and services.

The goal, our goal is to lower the barrier to Web3 participants to support a broader adoption. We do think that Antalpha is kind of unique, have some unique competitiveness advantages. Firstly, we develop our own MCP framework, which give us a greater control over the underlying connection between user status and Web3 environments. Over time, this could become a important platform-level capability. The second, Nina addresses a real pain point, as mentioned just now in the Web3. Instead of requiring users to set up and manage a lot of different tools separately, Nina basically provide a simpler and more integrated experience. The third, Antalpha has accumulated deep knowledge through the years operating in this area.

in this ecosystem. We understand data, the workflow, the user needs, and operational complexity of the market, which gives us a very strong foundation to build a differentiated AI product for Web3. Looking ahead, I think the first priority for us is to continue to strengthen the function of Nina across kind of like the data infrastructure model adoption. I think we are kind of also, we have been knowing this industry quite well, right? We have also a lot of connection with our miners. I think it's easy for us to get some to have, like, the resources of the computing power to support our growth. I believe that give us a kind of unique competitiveness in this also.

In terms of revenue, I think this is not our priority at this moment. I think we will spend more some time to understand the needs of the user. I think firstly, I think we need to accumulate some meaningful users before we talk about monetization. I hope this helps.

Yeah, that was very helpful. I was gonna dive into maybe what differentiates Nina from other Web3 AI agents. I think you answered it, unless you have anything else you want to add there.

Yeah, that's.

Okay.

Not really. I mean, compared with the other AI agent, I think, I mean, nowadays, you can find a lot of like generic ones, right? In terms of Web3, there's not a specific product at this moment. We do think some startups are doing, are exploring, we think that we are a listed company. We understand the industry well. I think we are in a very good position to, well, to promote this, the Nina, the AI agent product. Definitely, there's a lot of like general products outside. People use it a lot, it's not specifically for Web3 users.

That's helpful. Thank you for answering my questions there. If I could sneak one more in, I want to touch on updates on the Clarity Act as it stands today. How are you thinking about the opportunity for Antalpha if digital asset rules become clearer and more defined, and could clearer rules change the pace at which you continue to scale? Thanks.

Thanks. I think, it's not that I mean, at this stage, I think, definitely we need to take a second look, I mean, a deeper look on how it impacts. Based on my understanding right now, it doesn't affect that much. From our side, we are basically connecting, we are in the kind of like infrastructure level. We provide financing to the miners and it will not create a lot of impact on us at this moment. Definitely, with a more clarity on the regulation level, it helps basically the whole ecosystem or the whole stack base to develop.

Definitely it's gonna help us also to some, I mean, to some extent in a broader level.

Thank you.

Thanks, Noah.

Thank you. We'll now move on to our next question. Our next question comes from the line of Ed Engel from Compass Point. Please go ahead. Your line is open.

Hi, thanks for taking my question. I just wanted to drill down quickly on the impact of the Cango loan payment. Did the entire $500 million get paid off in the first quarter, or was some of the impact also in the early second quarter?

Yeah, I think mostly it's paid in the first quarter. I think we mentioned roughly like just a small portion was repaid in April, the second quarter.

Great. Thanks for that. On the XAUT yield generation, deployment, just kind of curious, can you just give more color on, I guess, how those tokens are generating yield and then just like the expected, yield or target yield that you're hoping for that allocation? Thanks.

Okay. For the yield generation, basically, the foundation, issuing the XAUT, they have some kind of like very conservative investment opportunities, using the existing XAUT, which we base on our estimation at this moment is roughly between 1%-2%. It's not that much, anyway, it's a kind of a step forward comparing with the pure holding of XAUT in the past.

Great. Thank you for the color.

Thank you. We'll now move on to our next question. Our next question comes from the line of Dillon Heins from B. Riley Securities. Please go ahead. Your line is open.

Hey, thanks for taking the question. I'm just wondering, on top of Cango, do you expect any other repayments, you know, coming up? I just have a follow-on question after that.

I think the loan balance at the smallest moment is roughly $40 million. We don't anticipate any repayment at this moment, but we never know. Anyway, the impact will not be significant since the balance has been reduced significantly compared with the previous quarter.

Got you. Thank you. I was wondering, you mentioned an initiative in the Asian Pacific. I was wondering if you could go over again what you were talking about there.

Can you kind of ask the question again?

Yeah. There's an initiative you're talking about in Asia Pacific regarding blockchain operators. I was wondering if you could go over that again. Missed that.

You mean the AI agent or any other initiatives we talk about?

I'm not sure. You said something about Asian Pacific. Maybe I'll have to go over it again, but okay. Nothing else for me then. Thank you.

Okay, thanks. Thanks, Dillon.

That concludes the questions-and-answers period. Thank you again for joining our call today. You may now disconnect.

Thank you. Thank you.

Good day, and thank you for standing by. Welcome to Antalpha's Fourth Quarter and Full Year 2025 Earnings Conference Call. Today's call is being recorded. All participants are now in a listen-only mode. After management prepared remarks, there will be a question and answer session. I would now like to turn the call over to Mr. Chris Mammone, Managing Director of The Blueshirt Group and representative for Antalpha's Investor Relations team. Mr. Mammone, please go ahead.

Thank you, operator. Please note that our remarks today will include forward-looking statements based on current expectations. These statements involve risks and uncertainties that could cause actual results to differ materially. For a discussion of these risks, please refer to Antalpha's filings with the SEC. We do not undertake any obligation to update forward-looking statements except as required by law. This call also contains references to unaudited non-GAAP financial measures. Reconciliation to the most comparable GAAP measures can be found in our press release and SEC filings. I'll now turn the call over to Herman Yu, Head of Strategy at Antalpha. Herman will provide key operational highlights, followed by Paul Liang, who will provide financial highlights. On the call today, both Herman and Paul will discuss our results on a year-over-year basis unless they mention otherwise. Herman, please go ahead.

Welcome, everyone. Thank you for joining our call today. Antalpha delivered a strong fourth quarter to wrap up a milestone year, reflecting the continued execution across our long-term roadmap. Revenue growth accelerated every quarter throughout 2025, with fourth quarter revenue reaching $28 million, up 110% year-over-year. Despite Bitcoin prices declining 23% in the fourth quarter, Antalpha revenue remained resilient. For the year, Antalpha revenue was $80 million, up 68% year-over-year. Total loan book grew at a consistent steady pace with prudent risk management. Total value loan on Antalpha Prime reached $2.8 billion at the end of 2025, up 59% year-over-year. Bitcoin pledge on the total loan book was $3.7 billion.

Loan-to-value or LTV on supply chain loans was 57%, representing our disciplined approach to underwriting and collateral management. Loan balance per client grew 43%, and new client adds increased 12% year-over-year. At the end of December, our clients generated 81.3 EH/s, approximately 7.3% of global hash rate. For the fourth quarter, adjusted EBITDA was $18.4 million, up 802% year-over-year. adjusted EBITDA margin reached 66%, up 51 points from the prior year. For 2025, adjusted EBITDA was $33.2 million, up 460% year-over-year. adjusted EBITDA margin reached 42%, up 30 points for the year. As a crypto-native financing platform with tokenized gold upside, Antalpha revenue and profitability reached a historical high in the fourth quarter.

Our mining financing business is aligned with the economics of compute, energy, and collateral-based lending. Our clients are more long-term focused. They rely on Antalpha's risk management capabilities to better equip them in navigating macro volatility. In addition, by embracing Tether Gold and acquiring XAUt as part of our long-term roadmap, such risk management strategy not only improves our balance sheet resilience and funding source, but also provides our shareholder with the upside to gold appreciation. In an industry susceptible to volatility and large market swings, it is important for us to solidify our current strength while seizing new opportunities in adjacent industries. When we look at large global financial institutions, we often find market leaders that have solid balance sheets to weather market turbulence and be ready for market opportunities as they arise.

To us, this means having an active risk management strategy to weather the market volatility and leveraging our marketing position and competitive mode to build on new market opportunities. Let me talk about our risk management and product innovation. Let's start with risk management. Antalpha's operating philosophy of risk management first has been prevalent since our inception. We require overcollateralization on day one instead of relying on clients' credit rating for loan origination. We require our clients to store their machines at a data center where we know the operator, and all the BTCs our clients mine are deposited in our wallet during the term of the loan, which allows our clients' collateral pool to accumulate. With Bitcoin down approximately 50% from its peak last October, we have been in conversation with our clients to review the current market situation.

There have been four other periods in BTC's 17-year history with a drawdown of 50% or more. The market rallied back each time. From a risk management perspective, it's important to be in conversations with our clients to discuss potential scenarios and options with them. Helping our clients navigate market volatility and maintaining a stable financial position is crucial to our clients' long-term participation in the Bitcoin mining industry. This not only brings tremendous value to our clients, it also strengthens our own business overall. Let me turn to product innovation and seizing new market opportunities. Our competitive mode comes from our ability to serve clients. We work closely with our clients to understand their needs and offer new financing solutions in anticipation of new market opportunities.

For example, it has always almost been a year since we foresaw the importance of tokenized gold in serving the mining community and the crypto industry at large. Initially, we acquired $20 million in Tether Gold. Last October, we acquired Nasdaq-listed Aurelion, anchoring its $100 million pipe and purchasing $134 million in Tether Gold, which further strengthened our balance sheet while building for gold appreciation upside. As of year-end, total accumulated unrealized gain on Tether Gold was $16.6 million. $9.5 million of that is attributed to Antalpha. Year to date, gold prices have gone up another 22% as of last Friday. Aside from Treasury gains, our involvement with Tether Gold in launching Antalpha RWA Hub have also allowed our customers to diversify into Tether tokenized gold and improve the resilience of their crypto holdings.

Starting in Q4, a client can purchase XAUt from us and redeem London Good Delivery in both Singapore and Hong Kong. As our long-term roadmap, it's important to incorporate tokenized gold into our risk management strategy. Gold has low correlation with Bitcoin and low volatility. Tokenized gold is well-suited for the use as a collateral and as a store of value. We are looking into offering XAUt collateralized loans to our clients for resilience and diversification. With a strong supply of HPC coming to market, the backdrop suggests that AI agents are expected to drive demand for inference compute. With the advent of AI engines, we see financing opportunities that in the past were not possible due to the high administrative costs, are now opportunities for us, such as agent-led financing solutions.

2026 will be an exciting year for us as we align Antalpha with new AI capabilities and market opportunities, as well as adjusting the way we operate to become an AI-driven company. We will brief you more on how we approach AI when we are ready to share more details. With that, let me turn the call over to Paul to walk through our financial highlights.

Thank you, Herman. I will walk you through Antalpha's financial performance for the fourth quarter of 2025, focusing on the underlying drivers of our results. We closed the acquisition of Aurelion and their $100 million PIPE, raising on October 10th last year, with 73% of Aurelion's share voting rights. We started consolidating Aurelion's operating results subsequent to the deal closing. We released the Q4 earnings release earlier today. As you can see, our Q4 earnings release saw Antalpha's operating results at three levels. The first, Antalpha combined and consolidated. Second, Antalpha Prime, which is the Antalpha business prior to the acquisition of Aurelion. The third, Aurelion. Herman summarized Antalpha's consolidated results. Let me now give you more color on Antalpha Prime and Aurelion. Let me talk about Antalpha Prime first.

Fourth quarter revenue on our Prime business was $28 million, which reached the high end of our guidance, growing 110% year-over-year. All revenue derived in Q4 was organic. There was no contribution from Aurelion. Tech financing fees on supply chain loans was $18.5 million, up 79% year-over-year, driven by continuous strengthen in hash rate loans. Tech platform fees on margin loan was $6 million, up 98% year-over-year. Other revenue was $3.5 million. This was mainly related to pirate loans, which did not have such revenues in prior years. Turning to net fee margin or NFM. Total NFM increased 25 basis point year-over-year, driven by margin loan improvements. Margin loan NFM increased 30 bits year-over-year to 1.49.

For supply chain loans, funding costs increased slightly faster than revenue growth due to the redeployment of $40 million as part of our investment in the Aurelion PIPE. Turning to non-GAAP operating expense, excluding funding costs. Antalpha Prime non-operating OpEx, excluding funding costs, was $8.5 million, up 45% year-over-year, which grew slower than the 110% year-over-year revenue growth, reflecting continued operating leverage from Antalpha Prime technology platform. With Prime operating expense on a non-GAAP basis, tech and development fee increased 32% and G&A expenses increased 35% year-over-year, which reflect operating efficiency. Sales and marketing increased 121% year-over-year, or $1.6 million, mostly due to increase in industrial event sponsor and to a lesser extent due to the increase in personal related expense. Prime adjusted EBITDA was $9 million, compared to $2 million last year.

Prime adjusted margin was 32% compared to 15% last year. Q4 Prime adjusted EBITDA includes $3 million unrealized gain on Tether Gold. Turning to Aurelion. Aurelion did not have any revenue in Q4. Adjusted EBITDA of Aurelion for the Q4 was $9.4 million, which includes $10.4 million in unrealized gain on Tether Gold. Let me dis-decompose our current valuation. Aurelion's net asset value at 31st December was $106.8 million, not counting the gold appreciation since. Antalpha's economic interest of 32% in Aurelion would be worth approximately $34 million. When you add back, take this out from Antalpha's market cap of $208 million using last Friday's closing price.

Antalpha is being valued at roughly 2.2x of 2025 revenue and 9.3x of 2025 net income attributed to Antalpha. We have built a very sizable crypto native lending platform with strong risk management, which positions us in a very unique position to take advantage of new blockchain lending scenarios, including insurance, compute, and AI agent lending opportunities. Turning to Q1 guidance. We expect revenue for the first quarter of 2026 to range between $20 million and $23 million, representing an increase between 47%-69% year-over-year. This assumes that market conditions remain consistent with what we see today for the remaining period of the quarter. With that, I will turn over to Herman for closing.

We exited 2025 with strong execution across our strategic priorities, growing consistently across Bitcoin up cycles and down cycles. We have scaled Antalpha Prime lending. At year-end, our loan book stood at $2.6 billion, and our client provided $3.7 billion in Bitcoin collateral, which is an amazing feat for a three-year-old company like us. Looking ahead in 2026, our priorities are of threefold. First, we will remain focused on active risk management and continue to work closely with our clients to manage market volatility. Having a sound balance sheet positions our clients to expand mining activities in the future. Second, as a crypto native lending platform with established trust and brand in the industry, we are well positioned in the mining industry and leveraging Antalpha Prime to branch into new areas.

We are super excited about using our platform to tap into AI and the tremendous opportunities that AI agents will bring to the industry. Lastly, we'll continue to innovate in the area of Tether Gold, including Antalpha RWA Hub and other opportunities to release the value of tokenized gold. Real-world assets will be an important category in the crypto industry. Tether announced in January that they have acquired $23 billion in gold, which tees them up to make tokenized gold a very big business. With that, let's go into Q&A. Operator, please go ahead.

Thank you, management. At this time, if you'd like to ask question, please press star one one and wait for your name to be announced. If you'd like to cancel your request, you can also press star one one again. One moment for the first question. Our first questions comes from the line of Edward Engel from Compass Point. Please ask your question.

Hi. Thank you for taking my question. Do you mind just talking about the performance of the loan book, whether or not there was any write-offs or provisions in the fourth quarter? I guess just quarter to date, how that's been holding up?

Paul, you wanna talk about loan provisions?

Hello? Oh, sorry, I was on mute just now. For the fourth quarter, we don't have any write-off on the loans. We do calculate provision based on the CECL, which is a normal practice for assessing the provision of our. Can you hear me?

Yeah, we can hear you.

Yes.

Yeah. Okay. Yeah. Basically it's, well, calculated based on the loan book. Yeah.

Okay. Yeah.

Yeah, I guess-

You can see from Sorry. LTV, it's at 57%, which is pretty healthy.

I guess just in the first quarter, would you expect continued no write-offs either?

Well, we're managing our loan book now, as I mentioned in the prepared remarks, that we're talking to clients and, you know, monitoring them and working with them. I think at this point, we are managing our thing, and we are obviously, you know. As we mentioned, the way we work our business is we want a client to have sound balance sheet, right? That with new versions of machine that come out, they can participate in the next upgrade. They can continue to have hash rate financing and so forth. We're working with them right now, and that's what we pride with, you know, our risk management.

We're managing this and, so far, we haven't seen any, you know, major issues with these, you know, bad debt write-offs and so forth. We're gonna have to manage the situation because the situation is fluid, as you know, with so many events that's happened just in the last few weeks.

Great. No, that's helpful. You talked about the $3.5 million of revenue, from pirate loans. Those were also repaid by the end of the year. Do you mind just kind of explaining to me what those pirate loans were? Would you expect to have those again in 2026?

You know, we've been having experiments with different type of loan scenarios, in the last few quarters. In Q4 specifically, the majority of the loan came from, you know, a loan, a bridge loan that we gave for that. Because the loan term expired by the end of the quarter, we don't expect to have that kind of a loan, in Q1.

Great. Thanks for the color and, great to hear everything's going up. Okay, thanks.

Thank you.

Thank you for the question. Our next questions comes from Darren Aftahi from Roth. Please go ahead.

Hi, guys. Good morning, good evening. Just three, if I may. Just, you know, in light of power and globally, people may be reallocating power from Bitcoin mining to AI, can you maybe talk about what you're seeing in the market in terms of opportunity? Obviously, in crypto winters, sometimes people lean into things, and then there's other times where, you know, cost of mine becomes a little bit prohibitive. Just maybe the macro environment there. Two, your AI lending and financing platform, like, what sort of KPIs do you need to see in order for that to become kinda a real product/revenue line? Is there any thought from the management or board level about share buybacks or redeploying capital for shareholders? Thank you.

Okay, great. That's a lot of questions. Let me try. Energy, I think, couple things. You know, we're seeing a lot of public companies, you know, shifting their data centers for AI use. I think in that sense, it is probably positive for our business because then that will level the playing field for everyone. As you know, there's limited amount of Bitcoins out there, so if everyone's at the same energy efficiency then it's easier, you know, for our clients and so forth. I think from that perspective, in terms of the energy cost, there's many, there are many factors going to that. It's hard to generalize.

Um, so when you look at our customers, it's, you know, across different regions of, uh, the US, um, and, uh, the cost of, uh, energy, there's factors like, for example, you know, different cities, they would have, uh, you know, probably different price for mining versus the, you know, the, the typical commercial and res-residential. So if you have too many people doing mining and it's sucking away from commercial and residential, you probably get taxed. Um, so that is more of a function of how many machines, how dense those machines are in that particular city. And obviously, uh, across different cities they have different, uh, you know, way to charge a rate What we normally see is, you know, because of the fluctuation in Bitcoin prices, because of, you know, people coming in with new machines and so forth, those things are usually more direct impact to this energy. Okay. I would say, you know, the cost of mining a Bitcoin today probably just is higher than, for example, a year ago, right? You saw some of the, you know, public companies reporting the cost of getting one Bitcoin. Okay. AI lending. I think AI lending is really two ways. One is we talked about, you know, inference chip compute. What we're talking about today, I think, opportunity that we're also looking at is using AI agents.

You know, in the past, as you know, this whole lending business, there's a lot of administrative things you have to do. You know, number one is, all the KYC, all the checks and stuff. Secondly, I think it's very unique. I think in the going forward that, you know, today, for example, if I go into my account, you know, I want to buy certain type of bond, buy certain type of, you know, products and so forth, I have to manually shift it. There's a lot of things that you select. If you have different, you know, different, you know, platforms and so forth, you got to go through each one of these and read the details, right? What we envision is with, you know, these agents, in the future, you just set the criteria.

It basically just continues to go out and it just searches for these. Between, you know, agents and so forth, you can consummate these type of transactions versus manually have to, you know, seek them out. I think with the advent of AI, I think people who are in the blockchain who can do risk management, who has the whole platform set up, gives us an opportunity to actually leverage the blockchain technology, which, you know, agents can be able to basically talk to another agent. You could basically go out and scout out, here's the criteria that we want and so forth. And then, if it meets my criteria, then I'm willing to transact. It brings a really interesting dimension.

We're looking at that, and we're also looking at how our company is structured and how do we adjust that so that we're, you know, seizing and taking, you know, putting ourselves set up to take advantage of such opportunity. In terms of share buyback, you know, our stock price has been going, you know, volatile and we're watching the market. We announced a share buyback a while back, and we are watching the market and we're looking at it opportunistically.

Obviously, with, stock prices going up and down because of recent news and so forth, you probably wanted to, settle down or you wanted to see if there are, you know, opportunistic way for us to do this so that it adds value to our shareholders.

Okay. One moment for the next question. Our next question's from Hal Goetsch from B. Riley Securities. Please go ahead.

Peter, you know, in Q4, there was quite a drawdown in Bitcoin prices. The results were, you know, pretty good, solid results for the quarter, $28 million revenue. another drawdown in the quarter, Q1. The guidance is for $20 million-$23 million revenue, down from $28 million in Q4. I wonder, are you give us some a bridge to how you think about that quarter shaping up versus Q4? Just kinda, you know, what are some of the drivers of how you're thinking about that guidance and how it steps down from $28 million to the $20 million-$23 million range? Thank you.

Okay. I think number one is, as we mentioned earlier, we had, you know, other revenue that we test pilot in Q4, that $3.5, that's gonna go away in Q1, right? That brings us in the $24 range. Our guidance right now, you know, the $20-$23 versus the $24, that gap is the anticipation of maybe some of the loans, there could be early retirement. Because as I mentioned earlier, we talked to, you know, these, our clients and so forth, and some of them, there are those that wanna continue mining, thinking that there could be, you know, Bitcoin going up.

There are those that as we talk to, they feel like closing it out, would make sense. You're seeing that, those kind of discussions reflected in our guidance.

Is, you know, I think in our prior discussions over the last, you know, year or so, Herman, talk about how if there's drawdowns in Bitcoin prices, you know, miners get more active and maybe you don't have the loan balances and margin loans, but, you know, the Bitcoin mining gets more active. Are you seeing that behavior now? People are kinda leaning into more mining machines to buy Bitcoin when it's in a drawdown? Or how is that, how is that progressing?

I think at this point, because, you know, Bitcoin prices has gone down pretty significantly in a very short amount of time and because there's a lot of uncertainty in the market, you probably want that to settle a little bit before people going in. I think, we need to stabilize a little bit and then. From our perspective, if prices are coming down or going up, any type of these big changes, you know, we want to have a more stable price and a more stable environment before we're willing to lend it out, right? Because we're based on LTV.

If it's, you know, going down in a certain speed, and then all of a sudden you lend it out with this LTV, that error margin could be eaten up very quickly. I think that there's a demand there. From a risk management perspective, as I stressed in the prepared remarks, at this environment it's very important for us to make every loan origination, make sure that, you know, it doesn't blow up in us a couple of quarters down the line. We're gonna be looking at the current, you know, macro situation. As things get more stable and so forth, then what you said, there's more opportunity for us to do that.

Okay. Thank you.

Thank you.

Thank you for the questions. One moment for the next question. Our next question comes from Devin Ryan from Citizens Bank. Please go ahead.

Hey, guys. This is Neo Eloff on for Devin. Just kind of a quick question on policy and how you guys are thinking about it. Obviously the CLARITY Act is kind of a big topic here in the U.S., but you could talk about various legislation around the world. I guess, what do you see as the opportunities as some of this legislation kinda comes through for your various businesses? What are some challenges you expect as some of the incumbents, you know, potentially are more willing to get into this lending game, as it becomes more institutionalized?

I think first of all, I think when you think about, you know, crypto with these new legislation and so forth, you're seeing a lot of the existing financial institutions going into it, right? And you're seeing a lot of the, for example, asset management going into, you know, RWAs and so forth. What that means, I think, is, number one, access is gonna open up. I don't think in a market that even today is $2 trillion you're concerned with competition because, you know, the size of $2 trillion is a huge market, right?

If you look at just our client right now, you know, you have, you have a, you have a crypto on their hands over $3 billion some, there's a lot of things you could do for them to actually diversifying their investment. I think the opportunity is there. I think number two is, as I mentioned earlier, when you think about first, you know, the mining business and outside of the mining, you gotta have a platform, you gotta have a brand, you gotta have all this, you know, situation worked out for risk management, being able to deal with stablecoin, being able to deal with, for example, like tokenized gold. Because any type of these exchanges, you need a place of safety, right?

If some of these investments have high volatility and so forth. I think from that infrastructure stack, I think we're well set up, you know, over the last three years. As these market opportunities arise because of our brand, because our customers currently have a lot of the assets in their hand, that gives us kind of that foundation to go into these new businesses. I think whether it's CLARITY Act or any other things that gives it more clarity, it just means that there's more partners that we could work with. Because of our platform and the clients that we have, the current assets that we have, we could do a lot with these kind of opportunities.

Awesome. Thanks.

Thank you for the question. That concludes the question and answer period. Thank you again for joining our call today. You may now disconnect.