Bullish (BLSH) Q4 2025 Earnings Call Transcript

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

Overview

The earnings call presents a strong financial outlook with record highs in revenue, customer funds, and active customers. The options trading platform has shown significant growth, and the company anticipates continued expansion in tokenization and global markets. While some uncertainties remain, such as the timeline for regulatory changes, overall sentiment is positive. The Q&A section does not reveal major risks or negative trends, and guidance is optimistic. These factors suggest a likely positive stock price movement in the near term.

Key Financial Performance

SS&O revenue $54.6 million in Q4 2025, an increase of 284% year-over-year. Reasons for change include strong execution on core objectives, scaling liquidity services, and launching options trading.

Adjusted EBITDA $44.5 million in Q4 2025, an increase of 55% from the prior quarter and 181% year-over-year. Reasons for change include growth in revenue and controlled operating expenses.

Total adjusted revenue $92.5 million in Q4 2025, representing nearly 70% growth compared to Q4 2024. Reasons for change include strong momentum across business lines and increased customer activity.

Adjusted operating expenses $48.1 million in Q4 2025, roughly flat from the prior quarter. Reasons for stability include efficient cost management.

Adjusted net income $28.9 million in Q4 2025. Reasons for performance include revenue growth and controlled expenses.

Open interest for options Over $2 billion by the end of Q4 2025, with a high of more than $4 billion earlier in the year. Reasons for growth include the successful launch of options trading and increased institutional client activity.

Customer funds on platform All-time highs in Q4 2025. Reasons for growth include increased onboarding of institutional clients and expanded product offerings.

Monthly active customers All-time highs in Q4 2025. Reasons for growth include global expansion and the launch of new products like options trading.

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Operating Highlights

Options Trading Launch: Launched in Q4 2025, rapidly scaled market position, achieving $2 billion in open interest by quarter-end and $4 billion earlier in 2026. Now the #2 Bitcoin options platform globally by open interest.

Tokenization Services: Scaled liquidity services for tokenization of real-world assets, including stablecoins. Added new assets like IOTA, VeChain, Paxos, and others. Plans to list tokenized securities in 2026.

Information Services: CoinDesk Indices served as benchmark data provider for 30 single-token ETFs in 2025. Partnered with ICE to launch futures benchmarked to CoinDesk Indices.

Global Expansion: Secured Tier 1 licenses in New York, Europe, Hong Kong, and Germany. Expanded institutional client base globally, including broker-dealers and commercial banks.

U.S. Market Growth: Focused on building U.S. presence for all products, including derivatives and tokenization services.

Financial Performance: Achieved record SS&O revenue of $54.6 million in Q4 2025, up 284% YoY. Adjusted EBITDA reached $44.5 million, up 181% YoY.

Customer Growth: Achieved all-time highs in monthly active customers and total customer funds on platform in Q4 2025.

Institutional Positioning: Positioned at the intersection of regulatory clarity, increasing institutional adoption, and expanding tokenization use cases.

M&A Opportunities: Exploring opportunities for organic growth and M&A during market downturns.

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Risk or Challenges

Regulatory Challenges: The company acknowledges the increasing regulatory clarity requiring infrastructure businesses and their customers to operate in a compliant and responsible manner. This could pose challenges in obtaining and maintaining necessary licenses globally, including DCO, DCM, broker-dealer, and ATS licenses in the U.S.

Market Volatility: The digital asset prices have dropped precipitously in the last four months, creating a rough macroeconomic environment for the industry. This volatility could impact the company's financial performance and growth.

Competitive Pressures: The company faces competition in the digital asset space, particularly in options trading where it aspires to become the market leader. Maintaining tight spreads and a singular order book to differentiate from competitors is critical.

Economic Uncertainties: Unfavorable comparable market conditions for asset prices and interest rates compared to 2025 could negatively impact revenue growth and financial performance in 2026.

Strategic Execution Risks: The company plans to expand its tokenization services and global regulatory footprint, which involves complex execution and coordination. Additionally, the selective sunsetting of older liquidity service products could pose risks if not managed effectively.

Supply Chain and Operational Risks: The company is heavily reliant on its liquidity services and tokenization offerings. Any disruptions or inefficiencies in these operations could adversely affect its business.

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Guidance & Outlook

2026 Revenue Guidance: SS&O revenue is expected to be between $220 million and $250 million, reflecting approximately 50% year-over-year growth. This growth is driven by strong momentum across all business lines, increasing tokenized RWA liquidity service bookings, and expanded cross-selling, pricing, and product development.

Adjusted Operating Expenses: Expected to be between $210 million and $230 million, reflecting low single-digit growth in the existing cost structure, incremental expenses for moving the flagship conference to Miami, and new performance-based incentives tied to specific growth outcomes.

Finance Expense: Expected to be between $52 million and $50 million, flat to slightly down from the fourth quarter run rate.

Market Trends and Strategic Focus: Bullish is focusing on three key priorities for 2026: growth in the regulated institutional derivatives market, leadership in tokenization of real-world assets, and acceleration in digital assets, indices, and insights. The company is also preparing to list tokenized securities in 2026 and is working with regulators to achieve this goal.

Institutional Adoption and Market Positioning: Bullish expects institutional adoption to drive the next phase of digital asset growth. The company is leveraging its strong balance sheet and reputation to attract institutional clients, even in challenging market conditions.

Tokenization Services: Bullish plans to scale its liquidity services and expand its tokenization offerings to meet market demand. The company is also exploring additional licenses to enhance its positioning in the tokenization mega trend.

Options Trading: Bullish aims to continue gaining market share in options trading, aspiring to become the market leader. The company has already achieved the position of the #2 Bitcoin options platform by open interest globally.

New Listings and Partnerships: Bullish plans to list five new partner assets, including Fidelity's new stablecoin, in the near term. The company is also focusing on partnerships to drive growth in tokenization and liquidity services.

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Shareholder Return Plan

The selected topic was not discussed during the call.

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Key Q&A

Q:Could you please talk about your key assumptions for the 2026 SS&O guidance and the variables that can influence the high and low ends of the guidance range?

A:Key factors influencing the SS&O guidance for 2026 include the potential passage of an infrastructure bill in the U.S., which could unlock and accelerate the pipeline for SS&O. Macro headwinds are already factored into the guidance, reflecting a conservative mix of expected outcomes from regulatory and market-based perspectives.

Q:Can you talk about the contribution from consensus conferences to SS&O revenue this year and the progression of tokenization of real-world assets (RWA)?

A:Consensus events are expected to be larger than in 2025 and will continue to fuel growth in the SS&O business, though at the lower end of growth rates. Tokenization is already rolling out, with regulatory approvals expected to expand the ability to list and trade tokenized assets internationally and in the U.S. The Clarity Act and infrastructure bill are anticipated to unlock new opportunities.

Q:What are Bullish's thoughts on the Clarity Act and its provisions, including tokenization, DeFi, and stablecoin yields? What is the likely timeline for its passage?

A:Bullish is optimistic about the Clarity Act's passage, with key issues being yield, DeFi KYC/AML requirements, and conflicts of interest. Negotiated agreements are expected to address these issues. The timeline for passage is uncertain, but there is hope for it to occur before the summer.

Q:What impact would banks no longer paying interest on stablecoins have on the stablecoin industry and Bullish's stablecoin promotion business?

A:The impact on Bullish's liquidity services business is expected to be minimal or non-existent. Current legislation drafts include carve-outs for liquidity providers, ensuring the business remains unaffected.

Q:How does Bullish view pipeline growth during periods of heightened crypto market volatility?

A:Pipeline growth has been steady, with strong momentum despite market volatility. The focus on institutional clients and high-quality assets provides insulation from broader crypto price declines. The tokenization market is expected to continue growing due to its inherent value propositions.

Q:Could you provide some color on the mix of SS&O revenue between services, liquidity, and events for the fourth quarter?

A:Bullish does not break out SS&O revenue details due to cross-selling practices. Events revenue in Q4 was minimal, similar to Q3, with seasonality focused on the first half of the year.

Q:What are customers saying about their crypto, digital asset, and tokenization strategies amid the current macro environment?

A:Customers remain committed to tokenization due to its benefits, such as reduced intermediaries and enhanced financial market efficiency. While crypto-native firms may recalibrate investments due to market volatility, institutional interest in tokenization remains strong.

Q:What progress has Bullish made with its U.S. launch, and what impact has it had on volumes?

A:The U.S. launch has shown promise, with a dense pipeline of high-quality trading customers. Onboarding processes are lengthy but result in long-term relationships. Incremental volume from the U.S. is expected to drive growth.

Q:How is the options business performing, and what are the growth expectations for 2026?

A:The options business has exceeded expectations, with significant growth in open interest, volumes, and customer counts. Bullish has become a market leader in crypto options, and the market is expected to grow further due to its relative immaturity.

Q:Review of Unclear Management Responses

A:Management avoided providing a direct answer to the timeline for the Clarity Act's passage, stating uncertainty but expressing hope for passage before the summer. Additionally, they did not provide a detailed breakdown of SS&O revenue components, citing cross-selling practices.

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Earnings Word Cloud

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

BLSH Transcript

Bullish (BLSH) Q4 2025 Earnings Call Transcript

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

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

BLSH Report

Bullish 6-K

6-K

2025-11-19

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