SECZ

Hello, everyone. Thank you for joining us, and welcome to Securitize's second quarter 2026 earnings call. After today's prepared remarks, we will host a question-and-answer session. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, press star one again. I will now hand the conference over to Sam Ross, Head of Investor Relations. Sam, please go ahead.

Thank you, Chase. Good morning, and thank you all for joining Securitize's Second Quarter 2026 Earnings Call. For our prepared remarks today, I am joined by our Chairman and Chief Executive Officer, Carlos Domingo, our Chief Financial Officer, Francisco Flores, and our President, Brett Redfearn, who will be joining us for the Q&A portion of the call. I'd like to remind you that today's presentation, which is available for download on our Investor Relations website, investors.securitize.io, may contain forward-looking statements which are based on management's current expectations and are subject to risks, uncertainties, and changes in circumstances. Actual results may differ materially from these statements due to a variety of factors, including those described in our earnings materials as well as in our SECZ filings. With that, I'll turn the call over to Carlos.

Good morning, everyone, and thank you for joining us on our first earnings call as a public company. Close to nine years ago, when I started the company with my co-founders, this moment was a very distant dream. Today, it has become a reality, and I'm incredibly excited to be here. Before I discuss the quarter, I want to thank the Securitize team, our customers and partners and investors who believed in Securitize and the opportunity from the start. Now, let me tell you why this moment matters for more than just at Securitize. For years, the debate about tokenization was whether it was real. Will financial assets move onto blockchains? Will this remain a crypto experiment at the edge of the financial system? That debate is largely over. The question is no longer whether capital markets move on-chain.

It's how fast and which companies will build the regulatory infrastructure that enables that transition. We believe this represents one of the largest shifts in financial market infrastructure in a generation, and we intend to be the company that leads that shift. In an emerging industry like ours, and particularly as a newly public company, numbers alone do not tell the full story. What matters is what those numbers tell us about our progress towards a much larger goal, the adoption of tokenization across global capital markets. With that in mind, I want to begin somewhere different than where most earnings calls typically begin. First, I want to walk you through who we are and what we do. Then I'll discuss the size of the opportunity ahead of us and our strategy to win. From there, we'll move into our second quarter business highlights.

Given how large and diversified this industry is, we will break those highlights across the key areas of the market where we're focusing our efforts. Finally, I'll provide an update on the regulatory environment before handing the presentation over to our CFO to walk through the financials. Let's start with our stated mission: tokenize the world. Capital markets today still run on outdated ledger technology. A single transaction can require updates across multiple siloed ledgers, all of which need to be reconciled and coordinated through a web of intermediaries before that transaction can successfully settle. Our thesis is very simple. The underlying plumbing of global finance comes from the '70s. Archaic ledgers, manual settlement cycles, and the constant need to reconcile silo systems was built for a world of couriers and physical document transmission. That world has disappeared, but the infrastructure remains.

It persists not because it's efficient, but because it's deeply entrenched and because many institutions have been incentivized to equate that entrenchment with quality. For years, skeptics argued that blockchain was a technology looking for a problem. They insisted that major incumbents will never adopt it, and that regulation will stifle the industry from growing. These claims were made with absolute certainty, but the market has already changed dramatically, and they're no longer true. Our technology and regulatory stack is modernizing how capital is raised, managed, and traded. That means broader access, always-on markets, significant operational efficiencies, lower structural costs, fewer intermediaries, and more transparent ownership. Securitize provides the most comprehensive regulatory stack for assets issuers looking to move their securities on-chain.

It begins with our regulated transfer agent, a first in the industry registered back in July 2019, way before transfer agents were sexy and crypto companies were purchasing them or registering new ones. We complement this with the largest digital fund administration business in the industry. We have further expanded our stack through our investment advisor, which became a fully registered investment advisor in early Q3. That gave us the ability to manage or co-manage tokenized assets alongside our customers. Together, these capabilities allow us to provide an end-to-end service to asset managers and issuers for their tokenized assets. But issuing assets on a blockchain is only one side of the story. Tokenized assets also need to reach investors. This is why Securitize has operated a broker-dealer and alternative trading system since late 2020.

These capabilities support both primary distribution and secondary market trading of our customers' tokenized assets, giving investors the ability to access them with a strong regulatory framework and the protections they expect from traditional markets. But tokenizing an asset and putting it on a blockchain is only the beginning. To become truly useful for investors, tokenized assets need to be integrated throughout the on-chain financial ecosystem. Over the years, Securitize has built the most comprehensive ecosystem of integrations in the tokenization industry. We've integrated with 23 different blockchains, including all the major ecosystems. We work with many of the largest qualified custodians, as well as the leading oracles providers that bring asset pricing on-chain. We've also built integrations across major DeFi protocols and stablecoins with support from leading prime brokers and market makers. All of that is surrounded by an interoperability security and compliance layer designed for Web3 markets.

And this is how we win. Since 2018, we have been building the largest and most comprehensive technology platform in the tokenization industry, a platform that is supported by the broadest and most compliant regulatory stack. That combination has helped us attract the largest institutions in the world. Companies like Apollo, BNY, BlackRock, or Hamilton Lane have chosen to issue their assets with our technology and put their trust with us. That creates a flywheel. Having high-quality assets drives investor adoption of our platform. Greater investor adoption creates additional demand from issuers that, in turn, brings more assets onto the platform. We are very proud of our work today, but the real opportunity lies ahead of us. Let us now focus on how we are tackling this accelerating market. Tokenization is growing faster than any other part of the digital asset ecosystem, but the industry is still at its infancy.

Today, there are roughly $38 billion of assets tokenized on public blockchains, excluding stablecoins. However, most analysts predict that that figure will grow into a multi-trillion dollar market over the next five years, with that growth distributed across multiple asset classes. Let us talk about that and where we see that growth happening. As we have stated, our long-term ambition is to tokenize the world, which means every single financial asset. But not every asset class is equally ready today to benefit from tokenization. Some categories, like treasuries, are already growing at a meaningful scale. We have established a leadership position there that I will expand on shortly. Other categories like equities, bonds, and credit are early in the adoption curve but are ready to scale. Some others, like alternative assets or real estate, we believe will take longer.

The rate of adoption, the size of the addressable market, and the opportunity we see over the next five years informs our strategy and focus. Today, much of the tokenization economy revolves around the $2 trillion crypto market. Think about the participants in that market. These are retail and institutional users who are already familiar with managing wallets, signing transactions, using stablecoins, and other crypto-native tools. That makes it easier for them to benefit from tokenized assets today. But as we mentioned, the much larger opportunity is the shift to traditional financial institutions and investors. That expands the addressable market to 100x, from $2 trillion to $400 trillion. So while we continue to scale our business with crypto-native markets, we are also preparing for much broader adoption of tokenized assets by traditional financial participants. From a monetization perspective, our strategy is also evolving.

Today, we primarily monetize the creation and servicing of assets through our transfer agent and fund administration business. Over time, we see an opportunity to move upstream and capture more value from the growing transaction activity these assets generate. That includes trading and on- and off-ramping as examples. We have started to do a bit of that, but there is a larger opportunity ahead. We also see a large opportunity to become a more active participant in the on-chain economy where tokenized assets can be lent, traded, and used as collateral. As we mentioned, tokenization creates new opportunities depending on each asset class. In the next section, we will walk you through the three areas we are most focused today: treasuries, yield-bearing assets, and public equities. I will explain why we believe each category matters, how we are approaching it, and the progress we have made in each area.

Before we dive in each area, I want to quickly highlight how productive the second quarter and overall this year has been so far for Securitize. We expanded major institutional partnerships, continued building the utility of our assets across DeFi and on-chain markets, and added important regulatory and market infrastructure capabilities. These are all important building blocks for the business, and we will walk through each of them in more detail over the next several slides. First, I want to emphasize that Securitize continues to be the largest tokenization platform in the industry. We were the only platform with more than 4 billion assets at the end of Q2, and in early Q3, we surpassed 5 billion, becoming the first tokenization platform to reach that milestone as well. Currently, no other platform has surpassed the $4 billion AUM market except us.

We have mentioned the diversity of the products we strive to provide. We are also the only platform with more than seven individual assets that exceeded $100 million in AUM, products that span multiple asset classes. We are the leader in permissioned tokenized treasuries. We have the largest tokenized equity in the industry, SECZ, our own New York Stock Exchange-listed stock. More on that later. We have the largest tokenized institutional fund, BCAP, at close to $1 billion of AUM. We also have one of the largest tokenized credit platforms, with more than $450 million in AUM. We are not only the largest platform, we are also winning in many categories. As you can see in this chart from the gray line, crypto market cap peaked in late Q3 2025 and has since then continued declining each quarter to be now at around 50% of the size that it was back then.

While we saw some outflows during Q4 and Q1 as a result of the market downturn, our AUM has recovered successfully, and in Q2, we are back at $4.2 billion. As I mentioned, in Q3, we already exceeded 5 billion, which is our all-time high in tokenized assets. We have now basically decoupled from the crypto market direction, and we are now growing while crypto is declining. We are also closely tracking transaction volume across our platform because it is important for two reasons. First, it is an indicator of the health and utility of our products. Second, we believe it represents an important future monetization opportunity that we have started to explore. There was an unusually large increase in Q4 last year when one of our customers generated significant peer-to-peer transaction activity across its holdings, followed by a decline in Q1.

Outside of that event, transaction volume across the platform has been growing steadily, and in Q2 we had $5.3 billion in volume and a healthy 170% growth from last quarter. Our fund services business was also initially impacted by the decline in crypto prices and activity that followed the October 2025 crash. That was driven by lower digital asset prices, which reduced the value of the assets in the funds and therefore the assets under administration. Also, a few funds have to close as a result of deteriorated market conditions. However, since then, our assets under administration have remained relatively steady at around $24 billion for the past three quarters. It is very important to note that our asset administrations stay consistent even as the larger crypto market continued to decline that you can see here on the gray line on this chart.

We believe that it speaks of the quality and resilience of the fund managers that use Securitize to serve this business. Since we recently went public, we had to overhaul our board of directors. As you can see, we have assembled a very strong board with a combination of both TradFi and crypto, as well as company veterans and fresh blood that we think will strongly help us on this new stage as a publicly traded company. Let's now look at the business through the lens of each major asset category, starting with yield-bearing assets and Treasuries. Yield-bearing assets are in high demand among crypto market participants. They can be used as a reserve asset or Treasury management tool for protocols. They can also be used as collateral for trading and lending across centralized and decentralized markets.

This is why we focus on building a broad spectrum of products in this category. At one end are the highly liquid, lower-risk products such as Treasuries. We'll go in more detail on our work with BlackRock and VanEck there shortly. At the other end of the spectrum are higher-yielding products with greater risk or duration, including private credit strategies from firms like Apollo and Hamilton Lane. Early this year, we began filling the gap between those categories with the launch of a AAA CLO product with BNY, and more recently in Q2, with a USAFi product with Atlas. For the rest of the year, we will continue to expand that spectrum with products across areas like corporate bonds, asset-backed securities, and other high-yield strategies. Tokenized Treasuries have been one of the fastest-growing categories in the entire digital asset and tokenization ecosystem.

The major catalyst for this growth came in March 2024 when BlackRock chose Securitize to launch BUIDL. The chart speaks for itself. When BUIDL launched, the total AUM in tokenized Treasuries had not even reached $1 billion. Today, the market has grown to over $16 billion across a total of 87 products. That represents market growth of 20x or a CAGR of 250%. As that market has grown, Securitize has solidified its leadership. Today, tokenized Treasuries by Securitize represent around 20% of the entire market. While the growth of that market has been impressive, we believe there is still significant room to grow. If you look at the stablecoins today, they represent around a $300 billion market. In traditional finance, the Treasury market is considerably larger than the amount of dollars in circulation. So we expect tokenized Treasuries to continue growing with that pattern in mind.

As mentioned, we have established a leadership position through our work with BlackRock, and now we're expanding our product portfolio from private Treasury funds into registered funds through the launch of BlackRock's second tokenized fund, the Daily Reinvestment Stablecoin Reserve Vehicle, or BRSRV. This is the second BlackRock fund tokenized by Securitize, and it's a registered fund designed to be used as a stablecoin reserve asset to address the opportunity created by the GENIUS Act. Servicing registered funds is a significantly more complex and demanding task for a transfer agent, so we're very pleased that we managed to meet BlackRock's requirements to manage this newly created registered fund. One detail that is particularly interesting is BlackRock's decision to include the word daily reinvestment in the name of the product. That capability illustrates one of the advantages of putting the assets on chain.

Using our infrastructure, interest can be efficiently reinvested on a daily basis with a simple blockchain transaction. That process requires significantly less manual intervention and reduces the potential for reconciliation errors. BUIDL and now BRSRV are differentiated within BlackRock's Treasury-based product portfolio, which typically allows for monthly reinvestment, only with our two funds being the only ones that do daily reinvestments. Our ability to support daily reinvestments allows interest to compound more frequently and can enhance the resulting return for investors, making the product more attractive. We also announced our partnership with Atlas Capital, founded by renowned economist and longtime crypto skeptic Nouriel Roubini. Atlas has developed a product called USAFi under a novel concept of a techno-dollar, a diversified strategy combining Treasuries, gold, real assets, and strategic commodities that is designed to be resilient across different macroeconomic environments because it's not just backed by dollars and T-bills.

The planned USFi token will provide a digital representation of that strategy under the novel Dubai's VARA framework. For Securitize, this is significant for two reasons. First, it brings another differentiated yield-bearing asset on chain with a structured design, as we mentioned, to be resilient across different macroeconomic environments. Second, this marks our first collaboration under VARA in Dubai and gives us a foothold to expand our Asian business in one of the world's leading digital asset jurisdictions. It's another example of how can we expand both the types of assets we tokenize and the markets in which we operate. As I mentioned earlier, one of the reasons we are investing heavily in yield-bearing assets is that we believe they can become a superior form of collateral. That applies to both centralized derivatives exchanges across crypto and traditional finance and to DeFi protocols.

In some cases, the advantages come from bringing high quality assets like treasuries on-chain. In other cases, it comes from enhanced collateral mobility. Tokenized assets can be posted, transferred, and redeemed on-chain 24/7 and near instantly. The centralized trading opportunity is very large, potentially reaching $2 trillion by 2028, with potentially $600 billion of that coming from treasuries and tokenized money market funds. On the decentralized finance side, Standard Chartered projects that the market could reach $2.7 trillion by 2030. Tokenized assets to date represent a very small percentage of collateral used across lending protocols, but that percentage is growing. If tokenized assets make up 10% of that market, that will be a $270 billion market cap. We believe this creates significant opportunity as DeFi protocols are already building mechanisms to integrate tokenized assets into permissionless environments, and we're actively supporting this effort with our regulatory expertise.

This shift is already happening, as you can see from this chart. While the stablecoin reserves on crypto derivative exchanges have been stagnant or even declining, the use of treasury is increasing. Securitize has already secured integrations for BlackRock's BUIDL across major crypto derivative exchanges, including Crypto.com, Deribit, Binance, and more recently in this quarter, OKX using Standard Chartered custody solution. These integrations increase the utility of BUIDL and help drive further adoption. The next step is to extend that model to traditional finance derivative exchanges like CME following CFTC's recognition of tokenized treasuries as an acceptable form of collateral. We also continue making progress on the DeFi side. For some time, we have been working to integrate tokenized assets compliantly with all the major DeFi lending protocols, including Aave and Morpho.

This quarter, we unveiled two on-chain liquidity facilities through our partnership with Ethena and Gro, which is part of the Sky system. We also made progress through integrations with LooksRare and Zaria to enable recursive lending. This allows yield-bearing assets to be leveraged multiple times in an efficient manner while maintaining controls around the collateral and its liquidation. This is a process that is extremely difficult to achieve in traditional finance markets, where lending and issuance process remain much more manual. On the previous slide, I mentioned our ability to integrate with permissionless DeFi ecosystem in a compliant way. A key part of that capability is the technology called Vault Registrar, which we released publicly during this quarter. Vault Registrar allows investors to create vaults that function as a smart escrow for collateral. But we believe this opportunity goes much faster as two super trends, tokenization and AI, converge together.

We see this technology as part of the foundation for a compliance layer supporting agent-based tokenized finance. We believe AI power agents will increasingly become a standard way that trading occurs on the internet. That will be particularly relevant for tokenized assets because those assets are natively digital and programmable. We intend to help lead the industry development toward that future. Finally, let's move to tokenized equities. This is one of the largest opportunities in the market, given that U.S. equities and ETF markets alone exceed $100 trillion. Think about that. If only 2% of that market moves on-chain, it will double the size of the crypto market today. But tokenized equities currently represent around $2 billion.

This is still a rounding error relative to the size of the underlying market, and many of the activity is currently synthetic exposure that is offered outside of the United States regulatory framework. The SEC recently outlined a taxonomy that divides tokenized equities into three broad categories. First is issuer-sponsored tokenized equities. In this model, the issuer chooses to tokenize its shares through its registered transfer agent. The token represents the share itself, preserving the applicable shareholder rights without introducing counterparty risk. This is the model Securitize demonstrated with our own equity, which I will discuss in a moment. The second category is the custodial third party model. Here, the token does not represent the underlying share. Instead, it represents a claim on an asset held by a regulated intermediary. This is also a regulated model available in the United States. That is the approach that the DTCC is pursuing.

We welcome the involvement of a major incumbent like DTCC in the space. Their entrance into tokenization expands awareness of the opportunity and encourages traditional financial institutions to think seriously about tokens and wallets. At the same time, we believe this model remains more closely tied to the existing intermediary architecture of traditional finance. Long term, we continue to believe that there is significant benefits to bring assets directly onto public blockchains and enabling permissionless innovation around them. The third category is the synthetic exposure we've seen through offshore wrappers. These structures are generally not available in the United States given that they are not compliant with U.S. regulations. They introduce additional intermediaries and counterparty risk while potentially creating multiple derivatives representations of the share underlying asset fragmenting liquidity.

We do not believe regulatory arbitrage is the most durable long-term model for tokenized securities, and it is not the approach we're pursuing. So what is Securitize doing to position itself to win in this large but still emerging market? We have assembled what we believe is the most comprehensive and consequential set of partnerships in the tokenized equities industry. We are only at the beginning of connecting tokenized equities and ETFs with existing capital market infrastructure. First, Securitize has been selected as the tokenization partner for the first and the third largest transfer agents in the industry. Computershare is the largest global transfer agent and serves closely to 60% of the Standard & Poor's 500, as well as more than 2,500 U.S. publicly traded companies. Continental Stock Transfer is the third largest transfer agent and has the particular strength among small and mid-cap companies, IPOs, and SPACs.

Together, these relationships give us access to very different segments of the public company market. Second, we have partnered with the New York Stock Exchange, the world's largest equity exchange, as it develops a digital ATS designed to support 24/7 trading and instant settlement of tokenized equities and ETFs alongside its traditional business. Securitize has been selected as the design partner for the ATS, as well as an initial transfer agent and tokenization partner. Our broker-dealer is also expected to connect to their ATS and provide investor flow. Third, we have partnered with Jump Trading, the largest crypto market maker and one of the largest proprietary trading firms in the world. Jump is acting as a market maker for tokenized equities, beginning with our own stock. Finally, we want tokenization to extend beyond secondary trading into capital formation.

We want investors with digital wallets to be able to participate in IPOs and secondary offerings in tokenized form. This is why we've partnered with Cantor Fitzgerald, one of the leading investment banks in SPACs and digital assets, to explore enabling these offerings through our infrastructure and recently expanded regulatory capabilities. I want to emphasize that the partners that we've announced so far are only the beginning. We continue to have conversations with many of the largest participants in the industry that are highly interested in tokenization, and we look forward to building a broader ecosystem for bringing capital markets on chain through tokenization. We also believe in walking the talk. So when Securitize became a public company, we did something that had never been done before.

We made our own equity available on chain on the same day our shares began trading on the New York Stock Exchange. The same share and the same rights, but in token format, issued on a public blockchain. We do not believe on-chain markets yet have the same depth of liquidity as traditional markets. But we do believe the two markets can be complementary and can coexist. So we put our own stock on chain through a regulated structure using Continental as our transfer agent and Securitize tokenization infrastructure. Tokenized SECZ was available on listing day, including to eligible investors in the United States. It immediately became the largest tokenized equity in the industry. More importantly, we demonstrated that it's possible to tokenize U.S. public equity within the existing regulatory framework.

There is a tendency in crypto to assume that offshore synthetic structures are necessary because compliant tokenization cannot be done in the U.S. We have always said this is not the case, and we have now demonstrated otherwise. We issued tokenized SECZ on both Avalanche and Solana, two of our long-standing existing partners. Doing so also demonstrated our ability to support multiple blockchain ecosystems simultaneously through our multichain infrastructure. We did more than simply issue the shares on chain. We enabled tokenized SECZ to trade through atomic swaps, again, USDC from self-custody wallets with Jump Trading acting as a market maker, using a very familiar process and UI for any person that has traded crypto on chain before. We did that while operating within the regulatory requirement governing public securities in the U.S. Again, it's possible.

The next step is to continue increasing the utility of tokenized SECZ and to bring additional equities on chain. For anyone listening to this call who wants to experience this directly, I encourage you to visit stocks.securitize.io. You can create a Securitize iD, complete a simple KYC process, connect your wallet, and use USDC to begin trading. For anyone that has traded crypto before, the experience should feel very familiar. If you haven't, we encourage new users to introduce themselves to the platform and technology we're so proud of. When you purchase tokenized SECZ, you receive the shares directly in your wallet at pricing tied to the traditional markets. The key difference is that settlement happens immediately into your wallet, allowing you to hold, use, or transfer the asset directly, rather than rely entirely on a third-party broker-dealer to custody it for you.

Let me now close with a brief update on the regulatory environment. Under Chairman Paul Atkins, the SEC has taken a much more constructive approach towards tokenized securities. Over the past year, we've seen greater clarity around the use of public blockchains by transfer agents, broker-dealer custody, and the different models for tokenized securities. We have also continued expanding our own regulatory capabilities. Securitize Markets now has the ability to custody and facilitate trading of tokenized securities, supporting atomic settlement against stablecoins, and participate in initial and secondary tokenized offerings. There are additional regulatory developments under discussion in Washington that could make it easier for tokenized markets to grow, including an innovation exemption and more practically custody frameworks that the SEC has announced that some of these things are actually coming as soon as Friday this week. We will certainly welcome those developments.

Importantly, our business does not depend on them, although it will benefit from them. Securitize has spent years building within the existing U.S. regulatory framework. We are already issuing, servicing, trading, and settling tokenized securities today. So additional regulatory clarity can accelerate the market and expand our opportunity. We don't need to wait for Washington to build the business. We're already operating. Let me close where I started, with our mission to tokenize the world. When we founded Securitize nearly nine years ago, that ambition sounded incredibly bold. Today, some of the largest institutions in global finance increasingly share that vision. As BlackRock's Chairman and CEO, Larry Fink, has said, "Every stock, every bond, every fund, every asset can be tokenized." We agree with our partners at BlackRock. If that is where financial markets are going, the opportunity in front of Securitize is enormous.

We've spent nearly a decade building the technology, regulatory infrastructure, products, and institutional partnerships required to make that future possible, which is early, but the direction is becoming clearer every day. We believe we've never been better positioned to do it. With that, I will turn over to our CFO, Francisco Flores, to walk you through our financial results. Thank you.

Thank you, Carlos. Good morning. I'll just briefly echo Carlos' comments that it is great to be with you all for our first earnings call as a public company, and I look forward to engaging with all of our investors and analysts going forward. For my prepared remarks today, all referenced growth rates are on a year-over-year basis, unless I indicate otherwise. Now, on to the second quarter results. Total revenue was $14.4 million in the quarter, down 5% versus the prior year period, driven by lower tokenization revenue, partially offset by continued growth in asset servicing revenue. Despite the quarterly decline, total revenue for the first half of 2026 was $33.9 million, an increase of approximately 16% versus the prior year period and a record half for the company.

Tokenization revenue was $7.9 million, a decrease of 12% versus the prior year period, primarily due to fewer new on-chain integrations, as the prior year period had benefited from a number of new protocol launches. As you might recall, tokenization revenue tends to be a bit more volatile on a quarter-to-quarter basis, reflecting the project-based nature of on-chain integrations, which vary between periods based on the number, timing, and mix of completed projects. Asset servicing revenue was $6.96 million, an increase of 3% versus the prior year period, driven by growth in the underlying business. Turning to expenses. Total operating costs and expenses were $24.1 million, an increase of $8.7 million or 56%, driven by higher compensation and benefits, higher SG&A, including professional services fees as we prepare to become a public company, and higher cost of revenue.

Compensation and benefits were $10.5 million, an increase of $2.5 million versus the prior year period. The increase reflects continued headcount growth, including several senior hires added in connection with our transition to being a publicly traded company. SG&A expenses were $8.2 million, an increase of $4.7 million versus the prior year period. The increase was largely attributable to the underlying growth of our businesses, increased conference and marketing expenses heading into our public listing, as well as approximately $1.9 million of one-time costs associated with our public listing, including professional and consulting fees. Cost of revenue in the second quarter was $4 million, an increase of approximately $0.5 million or 13%, predominantly driven by revenue-generating headcount expansion. As a reminder, cost of revenue consists largely of direct labor in our blockchain engineering and integration divisions, fund accounting and client-facing personnel, and capitalized software amortization.

On a sequential quarter basis, cost of revenue decreased $0.5 million or 11%, consistent with the lower asset servicing revenue in the second quarter. Provision for credit losses increased by $1.2 million versus the prior year period, primarily related to a terminated contract with a single protocol, which was not able to meet its financial obligations. As a result, we do not anticipate any additional financial impact related to this contract going forward. Turning to non-operating expenses in the second quarter. Interest expense was $1.1 million, a decrease of $0.3 million versus the prior year period. Recall, on July 1, 2026, at the close of our business combination, all outstanding convertible notes, approximately $80 million in total, converted into equity. As a result, we do not expect any material interest expense in the third quarter of 2026.

Adjustments to the fair value of complex financial instruments led to a combined expense of $11.7 million. This includes a $4.3 million loss associated with SAFE agreements and a $29.3 million charge for option liabilities, largely offset by a $21.9 million unrealized gain from derivative liabilities. While there are some moving pieces in each of these line items, in the aggregate, the total expense for complex financial instruments was driven by a combination of actual shares exercised and issued as part of Securitize going public versus prior estimates, as well as the impact from the final price per share for these shares versus the previously modeled price per share. Importantly, I will point out that these line items do not have a cash impact. Obviously, given that these expenses were all related to us finalizing the business combination, we do not anticipate any material impact in these line items going forward.

Looking at adjusted EBITDA. Adjusted EBITDA was negative $5.95 million, compared to positive $1.8 million in the prior year period, a decrease of $7.3 million. The decrease was primarily driven by higher compensation and benefits as we continue to scale the business, higher SG&A expenses, including professional and consulting costs associated with becoming a public company, and a modest decline in total revenue. For the second quarter of 2026, Securitize reported a GAAP net loss of $21.7 million, compared to a net loss of $6.1 million in the prior year period, an increase of $15.5 million. The higher year-over-year net loss was primarily driven by higher expenses, including headcount growth to support the expansion of our business and prepare for being a publicly traded company, along with non-recurring costs associated with the company's public filing process.

The higher net loss also reflected higher non-cash fair value losses resulting from the periodic remeasurement of our financing instrument, as well as lower revenue versus the prior year period. Net loss per diluted share in the second quarter was $2.37 compared with a loss per share of $0.72 in the prior year period. From a capital and balance sheet perspective, let me remind you that when we closed our business combination on July 1, it resulted in approximately $350 million in net cash and liquid securities on our pro forma balance sheet with zero debt, or roughly $2 per share in net cash. Before I discuss our updated financial outlook for 2026, I thought it would be helpful to ground everyone on where the industry is now versus where it was when we last provided our outlook back in November 2025.

There were several macro assumptions that were embedded into our outlook, which so far are playing out well short of our initial expectations. For instance, in the fall of 2025, the overall crypto market was nearing all-time high of $4 trillion. We had assumed at the time that the overall crypto market would continue to grow to roughly $5 trillion by the end of 2026. However, the market has clearly taken a step back with the overall crypto market below $2.2 trillion. Similarly, we had assumed that the overall stablecoin market would grow from approximately $300 billion at the time to around $450 billion by the end of 2026. This market has been largely stagnant, currently sitting at roughly $300 billion.

Lastly, we assumed that the overall RWA market would grow to roughly $77 billion by year-end 2026, and this market has also experienced more modest growth than we had hoped, now sitting at approximately $38 billion. All of these factors have impacted our AUM growth expectations, which we were initially targeting $9 billion by year-end 2026. While we have seen a good rebound off the bottom earlier this year, we sit here today in August with AUM of roughly $5 billion. However, despite these industry headwinds, we continue to see very healthy levels of engagement with asset issuers and a strong demand for products, both from tokenized funds and equities. You see this momentum with the announcements Carlos mentioned, such as the NYSE partnership, the Computershare agreement, and Continental announcement, as well as several other initiatives we have in the pipeline that we believe will accelerate our growth trajectory.

While we are managing our business through this volatility on the crypto side of the industry, momentum on the TradFi and tokenized equity side of things provide some solid tailwinds to support the business. As you may recall, when we provided our initial 2026 revenue outlook, we indicated that we had expected $85 million in revenue that was either contracted or based on AUM at the time. While we continue to expect to recognize the vast majority of this revenue, given the lower AUM trends and the other industry headwinds I just mentioned, we now expect total revenue to be in the range of $70 million-$80 million for the full year 2026. Note that at the midpoint of this range, it still implies a growth rate of more than 20%, which is quite strong against the current macro backdrop.

In conclusion, the pipeline remains very strong across our businesses, and we see healthy organic growth ahead despite the industry headwinds I just outlined. When we look at the industry-leading firms we're already working with, the key partnerships we have entered into so far this year, and the strength of our balance sheet, we believe that Securitize is well positioned to capitalize on the secular tailwinds towards tokenization, which we believe is still in its infancy. With that, we'll be happy to take your questions. Operator, please go ahead and open the line for Q&A.

Thank you, Chase.

We will now begin the question-and-answer session. Please limit yourself to one question and one follow-up. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, press star one again. We ask that you pick up your handset when asking a question to allow for optimum sound quality. If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question comes from the line of Devin Ryan with Citizens Bank. Your line is open. Please go ahead. Devin, your line is open. Please go ahead.star

I'm sorry, I was muted there. Good morning, Carlos, Francisco, and Brett. Congratulations on getting to the public markets here and on your first call. I want to start with a big picture question on the opportunity. You've made obviously tremendous progress getting to $5 billion of tokenized AUM, and you mentioned seven assets above $100 million. At the same time, that's very small relative to your current customer base, which has tens of trillions in AUM, and many of them are vocal about wanting a lot of their assets to move on chain over time. When you talk with your existing asset management partners today, what is driving the decision to think about launching that second or third tokenized product? What are the decision points? What are the gating factors?

If you can also just weave in how you think about the incremental economics as additional funds launch relative to that kind of initial launch with those partners.

Good. Thank you. This is Carlos Domingo. I think most of our partners want to launch one first and then see it move successfully and get familiar with the entire process. Also, one thing you need to think about is when we launch a product, the product doesn't just stay there. If you think about BlackRock BUIDL, even though it launched in March 2024

Until we announced the second one recently, the B Reserve, we actually have been making a lot of progress in increasing the features of the fund. It initially launched on Ethereum only. It was a monthly dividend. Over time, we moved it to multiple different chains. We also moved it from monthly to daily dividend, which now the B Reserve, as we mentioned in the call, is also daily dividend reinvestment. We added on-chain data, integrating with oracles, et cetera. There's been a lot of progress in the product itself, improving it to integrate more features before they take the decision to launch the second one. With the rest of the partners that we have, it's kind of like the same journey.

They want to launch something first, see it out there, how it's being consumed, how the features can be improved over time before they move into the second one. Obviously, we think that most of these products, because of being successful in the market, will lead to other launches in the future with the same partners.

Yeah. Carlos, if I could add, and hi, this is Francisco. Hi, Devin. Devin, thank you for your question. In terms of incremental economics, it's important to understand that our platform exhibits high operating leverage. We have already made most of the investments needed to support the infrastructure. As we continue to scale in terms of AUMs and transactions, we will see improved margins flowing down to the bottom line. Also, as Carlos mentioned, as our business becomes more mature, onboarding new asset managers becomes more efficient because we require less resources, as well as whenever we try to launch new products with existing clients or the second type of an existing product category, we become more efficient. As we continue to launch products, we will improve our economics considerably.

Also, just to add, Devin,

Yeah, and thank you both.

It is easier for us to launch another product with an existing asset manager that we already have a contractual relationship than onboard a new one. Because the process of onboarding to become a service provider for a large asset manager is very lengthy. Most people don't realize that it's very demanding. There is a lot of due diligence involved, a lot of legal red tape to negotiate contracts, terms, et cetera. This is why we're looking at not launching with hundreds of different asset managers, but launching with few selected ones and then try to scale from there.

Excellent. Thank you so much. My follow-up question, I want to dig in a little bit on tokenization revenue and some of the components that go within that, because I think, obviously there's a lot of drivers within that line item, and so if we're just looking at kind of a yield on assets as a kind of brute force modeling. Based on the disclosure, I think that's the way some investors are looking at it. You had the first quarter yield over 140 basis points on AUM, and then dropped down to a little bit over 70 basis points in the second quarter. It would seem to get to your full year guidance on revenues, that there's probably a step-up from the second quarter.

I appreciate that they're volatile, but just how we should be thinking about the components of tokenization revenue and how much to get to the $70 million-$80 million is based on kind of a spread on AUM growth versus transactional that is going to fluctuate. Because again, I think the second quarter is probably a little bit lower yield, but also there's a lot of components that go into it.

This is a great question. Thank you, Devin. Let me start by saying that currently our AUM based revenue is not material. It's still growing, and it has grown in line with AUM growth. But the majority of the revenue from the tokenization part still related to the expansion of our ecosystem by integrating new protocols. Regarding transactional based revenue, this is an opportunity for the medium to long term. So currently, very little of that volume is being monetized. In regards to the guidance, I think it's important to understand our revenue model that separates between tokenization and asset servicing. Asset servicing provides a stable, recurring source of revenue, which is growing modestly quarter by quarter. So that is a portion of the updated guidance.

The remaining is currently basically driven by the protocol integrations with a small portion of AUM based revenue that is going to become more meaningful in the medium term.

Excellent. If I could just squeeze one more because it's related. Just as we hopefully move to a world where tokenized equities are scaling materially, how will the economics on that look relative to the economics on the funds? If you could just walk through briefly for everyone the revenue opportunities in a tokenized equity world to the extent we see material scaling there over the next couple of years.

I can take that one. On the tokenized equity side, we think that because equities are very liquid assets, there will be a lot more trading than some of the assets that we hold that don't move a lot because they're more reserve assets like treasuries or credit or other things like that. We think that transaction monetization is going to be more meaningful compared to the pure just tokenization and issuance and asset servicing portion of it. As we announced in the past in the New York Stock Exchange project, we're not just a tokenization and the transfer agent, but we're also a broker-dealer that can bring retail flow, but obviously we'll monetize the transactions.

We think on equities, transaction monetization will become a much bigger component of our revenue as opposed to with other assets where it's more like the issuance and the asset servicing.

Excellent. Okay. I will leave it there, but thanks so much for taking the questions.

Your next question comes from the line of Mark Palmer with StoneX. Your line is open. Please go ahead.

Yes, thank you. Good morning, and thank you for taking my questions. Wanted to ask about the expense base in the second quarter and how we should think about expenses during the balance of the year. I guess this question is for Francisco Flores. How do you view the portion of the expense base that is structural versus what is transitional? As you are thinking about reaching positive adjusted EBITDA, how does that mesh out with the company's revenue projection or revenue estimate? Thank you.

Yeah. Thank you, Mark. So we have disclosed that year to date, we spent approximately $3.5 million in one-time expenses associated with going public. Those are the one-off that we could separate from the cost base, that we shouldn't see meaningful expenses going forward. There's still some that we will report in Q3 as part of closing the transaction, but nothing meaningful in Q4. Again, going into 2027, we shouldn't expect any one-offs associated to this. Operating expenses are increasing with headcount growth, which we expect a modest growth through the remaining months of 2026. But we believe that this year we will end with the headcount structure that will allow us to operate as a public company and also to take advantage of the market opportunities.

You should see a very stable cost base in 2027 and going forward, with minor increases adjusted for inflation and modest headcount growth. In terms of profitability, I think it's important to understand that most of our costs are fixed. As we continue to scale in volumes, AUMs, transactions, we will report that directly into improved margins and improved adjusted EBITDA. I think the only other comment it's important to add is that the fact that we are no longer supporting a positive adjusted EBITDA in 2026 is not related to the economics of the business model itself. It's more related to the structural revenue disruptions caused by the events in the crypto market at the end of 2025. The operating model is pretty efficient in its core structure.

Very good. As a follow-up question, just wanted to get your take on the state of the competitive environment in the tokenization space. In particular, when you are going after customer mandates for fund launches or equity tokenization, who are you typically bumping into? Are these standalone tokenization platforms that are specifically focused on this service or are you seeing larger entities such as exchanges and custody platforms that are getting involved in tokenization? Thanks very much.

Thank you. So obviously we are at a point in the market, and I've been doing this for nine years, longer than anybody else probably, that there is a lot of talk about tokenization. Pretty much every company in the crypto space out there is figuring out how to participate into the tokenization space as well as all the TradFi companies, both service providers as well as asset managers, right? As you know, we focus on issuer-led tokenization. We talk to issuers, whether they are issuers of equities or ETFs, or they are issuers of asset managers that issue funds. We do not directly compete with people that are doing, let's say, third-party tokenization where they create derivatives and synthetics, et cetera. Those end up kind of not competing for the same business because they do not approach the issuer, so we don't see them there.

We see them in the market with our products, but not in the competitive processes that we go with issuers to win their mandate. For that part, obviously we have in the equity. I'm going to break down the asset managers for the funds versus equity because it's completely two different segments of the market that are approached differently. On the equity side of things, we have as you know, strengthened partnerships with Computershare and with Continental. Obviously within those we don't see any competition. It's just more about convincing the issuer that they need to tokenize than competing with anybody because they have already their existing relationship with the existing transfer agent, and we've already been chosen as their tokenization platform. As you know, the other part of the market currently is Equiniti, which is in the process of being acquired by Bullish.

That's on equity tokenization. On the funds side of things, I think we're very focused on the Tier 1 asset managers, so we don't go after smaller ones. I think our strength is precisely in being able, as I mentioned, to go through the lengthy and complicated process of being accepted and onboarded by a very large trust-like company, like for instance, BlackRock and others. So we don't get to see a lot of competition, to be honest with you. I don't think that there is anybody out there that has the capabilities and the credibility and the experience to be able to compete on that space. It's more about convincing them to do it, identifying which product we want to launch, go through the onboarding process, et cetera. Now, some banks now are launching RFQs. These are competitive processes.

We don't get to see who else gets invited there, but we are participating in those. Hopefully soon we will see who else can compete there. But as I mentioned, there's not many companies because some of them, they have tokenization platforms with transfer agents, but they don't have a broker-dealer, so they cannot participate in distribution. Some others are not regulated entities, so they're just not suitable for working with those companies. On the transfer agency side, I just want to emphasize that just registering a transfer agent is not going to make you eligible to actually work with a large asset manager. It's a very complicated process. You have to have the experience. You have to have the operational capabilities, et cetera, to do it.

We just went through the process of onboarding with BlackRock for the second fund, which is a registered fund, as I mentioned in my remarks. This is a much more complicated process to manage a registered fund than a private fund. I do not think that there are many of the new tokenization platforms that have registered transfer agents that have experience doing as we do. Then, of course, there is a little bit of the traditional providers that are trying to get into the space. They have good brand names and existing relationships. I think that they lag behind us in terms of technical capabilities, because obviously we have been building this for longer and we are a smaller, more nimble company that can move faster when it comes to develop technology.

Carlos, I would jump in for one second, and thanks for that question, Mark. It is a great question. I think it is really important to point out that you have a global market, and what we are seeing offshore is sort of this synthetic product which is being put out there, which is a very different kind of model than we have been leaning into, as Carlos suggested. That introduces counterparty risk and just will not fly in the U.S. So when we think about the opportunity in the United States, this is where what we have in particular is uniquely positioned, right? As Carlos mentioned, we have a broker-dealer, we have a transfer agent, we have an alternative trading system, so we will be able to do this in a regulated framework through regulated entities in the U.S. I think that the way that we are trading our own stock demonstrates that.

A lot of others did not think you could even trade a security on-chain in an NMS environment. So there is a really big difference in terms of just sort of model competition. The other thing is obviously DTCC is trying to do things in the space as well. That is not native tokenization, so that is, again, more of an entitlement model. We just do not think it has the breadth of utility. So we think in the niche that we are in, we are particularly well positioned uniquely.

Thanks very much.

Your next question comes from the line of Aditi Balachandran with Citigroup. Your line is open. Please go ahead.

Hi. Thank you. Good morning, and congrats on getting to the public market. I wanted to dig a little bit more into the DTCC October commercial launch and their tokenization program. I think that your approach of owning the full stack is a key differentiator here, but do you see a scenario where tokenization is bifurcated or I guess split by asset class? For example, Securitize would handle the private or foreign securities and DTCC would handle public or domestic equities. Is that something that you guys are thinking about or how are you preparing for that? Just curious to know your thoughts. Thanks.

Good. Thanks for your question. First, as I mentioned in my remarks, we command the fact that an incumbent in the industry and a very large company like DTCC is getting into tokenization. I think it's great. I think it's creating awareness towards the value proposition of tokenization. It's forcing all their market participants to think about getting wallets and using tokens, et cetera. Their model is very different than our model, and the two models will coexist so that DTCC tokenization is tokenizing the entitlements while the shares continue being in a centralized securities depository. They're not going to change the settlement cycle. They're not going to change. Only approved market participants can currently create wallets, and access is done on a private chain so far.

While our model is to basically take the shares out of it and put them on a public blockchain where permissionless innovation can actually happen. I think that the two models will coexist. Obviously, we're going to move forward with what we do, and there's other companies in the space like Bullish that are doing the same thing, and DTCC obviously is going to move forward with what they do. I think both are kind of solving for different problems and going for different audiences, so I do see these two models coexisting in the market.

Got it. Thanks for that. Also, just, I know they're building on the Canton Network, so how would Securitize's chain-agnostic model hold up if Canton emerges as the de facto institutional settlement standard, I guess?

We're focused primarily on public blockchains. That's where innovation today is happening and where it's, as I mentioned, permissionless innovation where anybody can create protocols or create mechanisms to benefit from tokenization. Canton is more focused on the private side of things for institutions. That's fine. I think these two models coexist. If you remember how other industries evolved over time, the internet back in the days had the open internet, and they had also America Online and MSN. Those were closed ecosystems as opposed to an open ecosystem. When cloud emerged, they also have intranets versus the internet. Cloud also had private clouds versus the public clouds like AWS or Google Cloud or Azure from Microsoft, et cetera. I think that's how industries evolve over time when there is a new technology.

The more traditional players and the incumbents tend to adopt the technology in a closer ecosystem environment, as opposed to the new players that tend to move towards the most open environment where, as I mentioned, permissionless innovation can actually happen.

Yeah, I would echo that. The reality is that there are a new set of intermediaries who are entering the space that will operate differently than what you're seeing with some of the traditional financial market intermediaries. As Carlos said, they're going to just sort of migrate to sort of walk before you run, baby step kind of thing. But the reality is that tokenized securities is going to provide global access to U.S. securities on public chains to non-DTCC members. This will start to expand outside of that ecosystem to a new market and to individuals who want to hold things on their wallets and do things with public chains that can't be done on Canton and some of the incremental steps that you're seeing now.

Got it. Thank you.

Your next question comes from the line of Chris Brendler with Rosenblatt Securities. Your line is open. Please go ahead.

Hey, good morning, folks. Thanks for taking my questions and congrats on your first call as a public company. I wanted to drill down quickly on the revenue guide for this year. I certainly appreciate the headwinds, but as you look out, I do not know if you mentioned this, but is there any sort of sense of where the second half rebound will be coming? Because I think the $75 million or so is a little bit higher than the first half run rate. Is that going to be driven more on the tokenization side, or are you expecting both asset servicing and tokenization to grow in the second half? Then how does that impact, or what does that look like on the cost of revenue side?

I know you all look at it as a gross margin, but it did tick that a little bit this quarter with the pressure on revenues. Will we see that sort of bounce back up if we hit that midpoint of $75 million? Thanks.

I will take part of this question, and then I will give it to Francisco to talk more about the numbers. I think the asset servicing side of business is more stable. We will probably see less volatility of that in the second half, and you will see more volatility on the tokenization side that is obviously more volatile because there is a component that is transactions based. It depends on new issuances of new products that drive tokenization revenue, protocol integrations and things like that. That is definitely going to be the case on the second half. In terms of why we provide guidance, we are in an industry, we are still a small company playing on an emerging market, so it is very hard to forecast accurately a particular number.

There is a lot of moving parts on the projects that we are doing that actually have third-party dependencies because we work with large institutions and sometimes it is very hard to forecast exactly when they are going to release a product. Just to give you a simple example, the New York Stock Exchange has announced that they are going to launch their trading platform in Q4. If that happens in early Q4, it is great because we probably will see some revenue happening in Q4 for us. If it slips or it happens at the end of Q4, then that revenue is going to happen in 2026. We have a number of projects like that have a dependency that could move quarter to quarter. This is why we have provided a range guidance.

Depending on how quickly these projects come to fruition and start driving revenue, you will see the revenue in 2026, or you will see it coming in 2027.

Yeah. Just going to a few comments to Carlos's response. As he said, asset servicing is made of recurring revenue in its majority. We see a modest quarterly growth. Please just take into account that in Q1, asset servicing has a little bit of a seasonal impact with some services that are related to audited financial statements. But if you look at Q2 and factoring a modest quarterly growth, I think that will be a very good reference for the remaining of the year. The rest of the revenue to get to the guidance will come from tokenization, which has very low marginal cost. So, what you should expect is to see a very stable asset servicing revenue alongside cost of revenue. The majority of the revenue associated with tokenization will flow down to the bottom line.

That is super helpful. Thank you. A lot of people, myself included, when you are thinking about tokenization of real world assets, focus on equities just because it seems like a sort of most obvious use case, but also sort of fits with our own core business of looking at stocks all day long. It seems like the opportunity is much bigger. How would you sort of characterize your current discussions of sort of by asset class? Is there sort of a lot of activity in equities, or is it more broad across the different potential asset classes? From a monetization standpoint, I am pretty excited about Securitize Markets and having that launch in the fourth quarter, as I am sure you are as well.

It is definitely we are early days in the monetization opportunity, so having an exchange and having a marketplace that will allow for trading revenue on a more recurring basis and a more regular basis will be a big boost to the model. How do you juxtapose the opportunity to tokenize multiple different asset classes versus the monetization opportunity that could come with an ATS that I believe would be more equities-focused? Do you have similar venues or similar trading goals when it comes to non-equities RWAs? Thank you.

Thank you for your question. As we discussed on the presentation, we kind of have two distinct markets. One market is the asset managers that have funds and assets that want to tokenize them to put them on chain, and where we are particularly focusing on yield-bearing assets and treasuries because we think those are the ones that are more likely to get tokenized and consumed first and where you can drive utility faster. That is one side of the business, and that business is less transactional because these are less liquid assets. Obviously, we get a much bigger AUM. As you see, most of our $5 billion AUM comes from that part of the market, and that is where we have been focused on the last two years. That is one side of the business.

The second part of the business is the tokenization of equities, which is a very huge market that still is very small. As including all this off-chain synthetics is not more than around $2 billion in assets compared to $100 trillion+ that you could tokenize. There we obviously see the market behaving very differently because as you mentioned, there is a significant opportunity to monetize transactions that does not necessarily happen on the other market. There we are more focused on bringing issuance on chain, but also enabling trading as we have done with our own stock and participating on other trading platforms like we are doing with the New York Stock Exchange, et cetera, where we will monetize not just the issuance, but also the transactions of the assets. They are two distinct markets. I think both are big opportunities. Both are growing.

We have the capabilities to serve both. We are currently focusing on both simultaneously, but they are very distinct and the approach we take in each one is different.

That is great. Thank you so much for taking my questions.

Your next question comes from the line of John Todaro with Needham & Company. Your line is open. Please go ahead.

Hey, guys. Thanks for taking my question, and congrats on your first quarter here. My first question is around BlackRock. How does the BlackRock launching or integrating BUIDL on Circle's Arc chain impact you guys, if at all? On that second BlackRock fund, the stablecoin Reserve product, you had mentioned it was a little bit more complex or demanding of a product, if I heard correctly. Does that suggest maybe a little bit higher take rate fees? I guess how should we think about that? I have a follow-up.

All right. Let me answer both questions separately. First, we are the tokenization partner for BlackRock for BUIDL. When it goes to Arc, it will be with us. It is not just BlackRock doing that. BUIDL is currently in multiple chains, and we are in active discussions with Circle on integrating with Arc. When you see that happening, it will be done through us, not BlackRock themselves doing it with Circle. In terms of B Reserve, what I mentioned is that B Reserve is a registered fund, right? It was designed to be GENIUS compliant, which requires 2a-7 money market funds as opposed to BUIDL, which is a private fund based on BUIDL. But registered funds have more demanding operational requirements from a transfer agent perspective.

This is what I explained on my remarks that the process we had to go to get also onboarded and approved by BlackRock to be able to serve B Reserve was a different one than the one that we had to go through when we did BUIDL because they are fundamentally two different types of projects, right? In terms of take rate, this is still Treasuries, so it is not going to be significantly different. What we think is that because B Reserve is being designed for being the backing of stablecoins, it has a potential of actually growing and scaling a lot faster, given how there are many new stablecoins that are being launched in the market.

You might have seen the announcements of OpenUSD, where BlackRock is also a market participant, and many others that if B Reserve were to be adopted as the reserve asset, it has the potential of actually growing a lot faster than BUIDL did.

Okay, that is great. Thank you for that. My follow-up, that second half 2026 guide, you mentioned some more pointed aspects to what is driving that. But just as we think about the second half or even longer term, does there start to be some implicit assumption in crypto macro growth returning, or should we think the tokenization business is just so decoupled that having a view on crypto markets really will not matter all that much?

I think long term, tokenization is completely decoupled from crypto, and it shouldn't matter that much what happens with crypto and crypto prices. That's our thesis. I think short term, they're still correlated because there's a lot of counterparties that we deal with that are crypto native companies that are the ones consuming these assets or driving transactions and activity, et cetera. We've seen the TradFi institutions coming a lot faster to tokenization than we have expected, let's say, a year ago. But at the same time, some of those projects, as we mentioned before, they move at a different pace. When that starts to become something that we monetize, that's like the transition that we're going through now from our revenue sources that are mainly driven by crypto institutions versus revenue that is driven by TradFi institutions.

The good news is when that happens, we think that the TradFi opportunity is significantly bigger. It's like several orders of magnitude bigger than the crypto opportunity, because crypto, at the end of the day, is now at $2 trillion. If you want economy that has developed a lot of interesting technology, et cetera, that we are consumers of. But once the TradFi activity moves, it is going to dwarf the crypto activity.

Yep. That makes a ton of sense. Thank you for that. Appreciate it.

Your next question comes from the line of Gareth Gacetta with Cantor Fitzgerald. Your line is open. Please go ahead.

Hi, guys. Thanks for taking the questions. I wanted to touch on the fund administration sector, and it seems like the acquisitions of Onramp and MG Stover provided a meaningful uplift to both assets under administration and revenue. I was wondering if you could talk about how you think about M&A as a growth driver for this segment over the long term.

Thank you. We have stated publicly many times already that one of the reasons we wanted to go public is because we think that crypto industry, it's in a major transformational moment, where I think that the fundamentals of how crypto companies have operated so far is rapidly changing, and it's going to evolve more to be like a fintech space where a lot of the crypto infrastructure is being used to basically improve capital markets and TradFi, which is our thesis. Going public is going to allow us to tap into those opportunities by adding capabilities faster from companies in the space. We hire a head of corp dev as soon as we close the SPAC deal and knew that we were going to go public. We've been actively looking at many different opportunities.

We also think that there is some opportunities on the TradFi space where the other way around, we can actually leverage our tokenization technology to improve TradFi operations. We're kind of looking at both sides of the spectrum. But yes, you're going to see us being active on the M&A space on the second half of the year.

Great, thank you. I know you touched on it briefly there, but how are you guys thinking about the cross-sell in kind of either direction? I'm wondering if you could touch on within asset servicing, what types of levels of tokenization adoption you see today, and how you're thinking about that growth.

Yeah, definitely we see a cross-sell opportunity. One of the reasons we decided to buy a fund admin business versus building ours just to serve our existing products was because we thought that by acquiring 600+ customers, as well as around 24 billion of assets under administration, there would be crossover opportunities. We are already in the process of actually merging the investor accounts of the two platforms, the ones that Securitize had with Securitize iD with investors that are on the fund platform. That obviously takes some time because you need to basically merge those onto single accounts, provide the same functionality on both ends, et cetera, but we're in the process of doing that. So we definitely see that as an opportunity moving forward. And then in terms of asset servicing, the asset servicing portion of our business has two components.

It's the transfer agent component as well as the fund admin. So it's not just fund admin business.

Awesome. Thank you.

We have reached the end of the Q&A session. I will now turn the call back to Samuel Ross for closing remarks.

Great, thank you. Well, if there is no further questions, thank you for joining today's call, and we look forward to speaking with you again soon.

This concludes today's call. Thank you for attending. You may now disconnect.