Crypto exchange Gemini Inc. posted a net loss of $159.5 million for the third quarter of 2025, its first full quarter as a publicly traded company on the Nasdaq. The significant shortfall was primarily attributed to a more than 70% increase in operating expenses, which ballooned from $98.7 million in Q2 to $171.4 million. The company, which began trading on September 12, heavily cited costs tied to its initial public offering (IPO) as the primary driver.
Revenue Growth vs. Soaring Costs
Total revenues climbed approximately 34% to $50.6 million, fueled by robust growth in service fees and transaction revenues. Service revenue surged 111% quarter-over-quarter to $19.9 million, underscoring the success of Gemini's diversification efforts beyond pure trading fees. Transaction revenue, comprising fees from both retail and institutional clients, accounted for $26.3 million, representing just over half of total revenue. This growth was supported by higher trading volumes across the platform, though lower average fee rates on retail trades partially offset the gains.
However, the expense line told a different story. Operating expenses jumped to $171.4 million, with compensation and headcount costs nearly doubling from $36.8 million in Q2 to $82.5 million. The overwhelming majority of that increase — $45.8 million — was linked to stock-based compensation associated with IPO-related equity awards. Marketing spend also rose as Gemini promoted its Bitcoin-branded credit card and other growth initiatives.
Breaking Down the $171.4M Expense Report
In its letter to shareholders, Gemini provided a detailed breakdown of the cost surge. Compensation and benefits rose sharply due to one-time equity awards granted to employees and executives in connection with the IPO. The company emphasized that these stock-based compensation expenses are non-cash charges designed to align leadership incentives with long-term shareholder value, but they weighed heavily on the bottom line in the quarter. Additionally, marketing and sales expenses grew as the exchange invested in brand awareness and customer acquisition, particularly for its newly launched Solana credit card and the existing Bitcoin card.
Gemini stated: “Together, we believe that these results demonstrate the health of Gemini’s marketplace and the growing depth of liquidity across customer segments.” The exchange expressed confidence in its dual-channel strategy serving both retail and institutional markets, which it says continues to drive balanced growth.
Outlook: Building for the Long Haul
Looking ahead, Gemini said it will continue building a platform designed to capture upside in a bull market while laying the groundwork for long-term resilience in any market environment. The Q3 loss, while steep, is largely seen by analysts as a temporary byproduct of the transition to a public company. Once IPO-related expenses normalize, Gemini's strong revenue growth trajectory — particularly in the high-margin service business — could pave the way for future profitability.
The exchange did not provide specific Q4 guidance, but management reiterated its commitment to cost discipline and operational efficiency. For investors, the Q3 report offers a candid snapshot of the challenges and potential of a major crypto exchange navigating its first months as a public entity.