Securitize shares dropped 22% after hours after the company reported a $21.7 million Q2 loss, more than triple last year. Revenue fell 5% despite AUM growth. The CFO said near-term profitability is the goal.
Securitize shares dropped about 22% in after-hours trading Wednesday after the company reported a net loss of $21.7 million for the second quarter. The loss more than tripled from $6.1 million in the same period last year. Shares had closed at $7.86, up nearly 7% in regular trading before the earnings release.
Revenue fell 5% to $14.4 million from $15.3 million a year earlier. Tokenization revenue, the largest line item, declined 12% to $7.84 million. Asset servicing revenue rose 3% to $6.60 million. The drop in revenue came even as average tokenized assets under management climbed 16% to $4.3 billion. Securitize added roughly $1 billion in new onchain assets during the quarter and now manages close to $5 billion. More than seven platform assets each hold at least $100 million.
Expenses Climb 56% as Platform Scales
Total operating expenses jumped 56% to $24.1 million. Compensation and benefits costs rose 31% to $10.5 million. Adjusted EBITDA swung to a $5.5 million loss from a $1.8 million profit in the same period last year. Changes in the value of option and derivative liabilities also weighed on the bottom line.
The quarter ended June 30, meaning the results reflect the period before Securitize became a public company. Its merger with Cantor Equity Partners II closed July 1, and shares started trading on the New York Stock Exchange on July 2. Chief Financial Officer Francisco Flores said the deal left Securitize with about $350 million in cash and no debt. Reaching positive adjusted EBITDA is a near-term goal, he said.
Securitize expanded its regulatory footprint after going public. Securitize Capital registered as an investment adviser with the Securities and Exchange Commission in July. The company also received FINRA approval for its broker-dealer arm, allowing it to hold tokenized securities and settle trades using stablecoins.
During the quarter, Securitize formed partnerships with Computershare and Continental Stock Transfer and Trust focused on tokenized equities issued by companies. It is also working with the New York Stock Exchange as a design partner on plans for round-the-clock trading and onchain settlement of tokenized securities. The tokenized equity market has been growing – total issuance recently hit $1.48 billion, as AlphaScala reported. The company also expanded its crypto fund products: BlackRock's BUIDL fund became available as collateral through OKX and Standard Chartered.
Securitize will hold its earnings call on August 13 at 8:30 a.m. Eastern time, where management is expected to discuss cost trends and revenue outlook. The Securities and Exchange Commission has an open meeting scheduled for August 14 to consider new rules for crypto-related investment contracts.
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