In after-hours trading on Thursday, Gemini (GEMI) shares surged as much as 30% after the cryptocurrency exchange reported a 42% year-over-year revenue growth and disclosed its first operational metrics for its internal prediction market business.
The company reported revenue of $50.3 million. Total revenue for the first quarter increased compared to $35.3 million in the same period last year, primarily driven by growth in services, over-the-counter trading, and the Gemini cryptocurrency-related credit card business.
Since launching its prediction market product in December last year, Gemini has reported its first prediction market revenue of $400,000. While this is a small fraction compared to the trading volumes of pure prediction markets like Polymarket and Kalshi, the company states that over 20,000 users have traded contracts on the Gemini platform, with a total volume exceeding 100 million contracts.
In comparison, Kalshi and Polymarket both frequently see daily trading volumes between $300,000 and $500,000.
The report also preemptively disclosed April's trading volume, with Gemini stating that April's trading volume increased by another 78% compared to the previous month.
Gemini CEO Tyler Winklevoss said in a statement: "Gemini has achieved several major milestones in product and regulation, enabling us to evolve from a cryptocurrency company into a market company."
Previously, Gemini sought to diversify its business from spot cryptocurrency trading into derivatives. In April of this year, Gemini received certification from a derivatives clearing organization. License granted by the Commodity Futures Trading Commission to internally manage settlement, collateral, and risk for derivatives products.
Gemini stated that the DCO license brings the company closer to building a “full-stack, end-to-end market” for predictions, futures, options, and perpetual contracts.
The company also announced that founders Tyler Winklevoss and Cameron Winklevoss invested $100 million through their Winklevoss Capital Fund, with the funds provided in Bitcoin.
Despite revenue growth, Gemini reported a net loss of $109 million this quarter.
Due to a slowdown in cryptocurrency trading, the company's exchange revenue also declined by 27% year-over-year to $17.2 million. Its total trading volume dropped from $13.5 billion a year ago to $6.3 billion.
Its service and interest income (including credit card, staking, and custody services) was the biggest winner, growing over 120% year-over-year to $24.5 million, nearly half of its total revenue. Of this, credit card revenue accounted for $14.7 million, a 300% increase from last year.