TLDR
- Securitize posted a $21.7 million net loss in the second quarter, more than triple last year’s loss.
- Revenue fell 5% year over year to $14.4 million.
- Average tokenized assets under management hit a record $4.3 billion, up 16%.
- Transaction volume reached $5.3 billion, up 147% from a year earlier.
- SECZ shares dropped about 21% in after hours trading following the report.
Securitize 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.
The company released its results on August 12. This was Securitize’s first earnings report since becoming a public company.
Revenue declined 5% to $14.4 million from $15.3 million a year earlier. The drop came even as the company’s platform saw more activity overall.
Securitize went public on the New York Stock Exchange on July 2. The deal with Cantor Equity Partners II closed one day earlier, on July 1.
The quarter covered by the report ended June 30. That means the results reflect the period before Securitize became a public company.
Tokenized Assets Reach Record Levels
Average tokenized assets under management reached $4.3 billion. That is up 16% from the same quarter last year.
Securitize added about $1 billion in new assets during the quarter. The company says it now manages close to $5 billion onchain.
More than seven assets on the platform each hold at least $100 million in assets under management.
Higher asset levels did not lead to higher revenue this quarter. Tokenization revenue fell 12% to $7.84 million, while asset servicing revenue rose 3% to $6.60 million.
Total operating expenses climbed 56% to $24.1 million. Compensation and benefits costs rose 31% to $10.5 million.
Adjusted earnings before interest, taxes, depreciation and amortization swung to a $5.5 million loss, compared with a $1.8 million profit a year earlier.
Changes in the value of option and derivative liabilities also affected the loss for the quarter.
Shares Drop After Hours
Shares closed at $7.86 on Wednesday, up nearly 7% during regular trading before the earnings came out.
After the report, shares fell about 22% in after hours trading, based on Google Finance data.
The company’s balance sheet looks different from what the report shows. That is because the Cantor deal closed one day after the quarter ended.
Chief Financial Officer Francisco Flores said the deal left Securitize with about $350 million in cash and no debt. He said reaching positive adjusted earnings is a near term goal.
Securitize has expanded its regulatory approvals since going public. Securitize Capital became a registered investment adviser with the SEC in July.
The company also received approval from FINRA for its broker dealer arm. That approval allows it to hold tokenized securities and settle trades using stablecoins.
Securitize partnered with Computershare and Continental Stock Transfer and Trust during the quarter. The partnerships focus on tokenized equities issued by companies.
The company is also working with the New York Stock Exchange as a design partner. The exchange has plans for round the clock trading and onchain settlement of tokenized securities.
Securitize expanded some of its crypto fund products this quarter. BlackRock’s BUIDL fund became available as collateral through OKX and Standard Chartered.
The company will hold its earnings call on August 13 at 8:30 a.m. Eastern time. Management is expected to share more details on costs and revenue trends.
The Securities and Exchange Commission has an open meeting scheduled for August 14. That meeting will consider new rules for crypto related investment contracts.
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