Bullish Q1 2026 Earnings Call Transcript

Bullish (NYSE:BLSH) released first-quarter financial results and hosted an earnings call on Thursday. Read the complete transcript below. Benzinga APIs provide real-time access to earnings call transcripts and financial data. Visit https://www.benzinga.com/apis/ to learn more. Access the full call at https://events.q4inc.com/attendee/922580200 Summary Bullish announced a transformative acquisition of Equinity for $4.2 billion, aiming to create a leading tokenization platform for capital markets. The company reported a 49% year-over-year increase in total adjusted revenue for Q1 2026, despite macroeconomic headwinds like declining digital asset prices. Bullish reaffirmed its full-year 2026 guidance and highlighted the strategic importance of tokenization in modernizing capital markets infrastructure. Operational highlights included significant growth in the Bitcoin options market and progress in obtaining regulatory licenses for derivatives trading in the US and Europe. Management expressed strong confidence in the acquisition's potential, citing robust market interest and the strategic alignment with Bullish's long-term vision. Full Transcript Michael Fedeli (Vice President of Finance) I'm Michael Fedeli, Vice President of Finance and I'm joined on today's call by our Chief Executive Officer Tom Farley, Chief Financial Officer David Bonanno and Director of Corporate Development Liam Foley. This call will contain forward looking statements including those relating to our expected performance and business opportunities, our proposed acquisition of Equinity Group, the anticipated benefits and strategic rationale of the transaction, expected timing and closing conditions, and business opportunities following the transaction. These statements are not assurances of future performance and are subject to risks and uncertainties that could cause actual results to differ materially. Such risks include, among others, the possibility that the affinity transaction may not be completed, failure to obtain required regulatory approvals, and the possibility that anticipated benefits may not be realized and risks related to the integration of Equinity's business. For more details on these and other risks, please refer to today's earnings press Release and our SEC filings, including our 20-F dated March 9, 2026. We undertake no obligation to update or revise any forward looking statements. This call will also include a discussion of non-IFRS financial measures. A reconciliation to the most directly comparable IFRS metrics can be found in our earnings press release and presentation which also contain additional information regarding non IFRS financial measures and key performance indicators. I'll now turn the call over to Tom. Tom Farley (Chairman and CEO) Thanks, Michael. Good morning, everyone. Thanks for joining. I'm Tom Farley, Chairman and CEO of Bullish. I'm going to leave today with the most significant strategic milestone in our history, our agreement to acquire Equinity, a leading global transfer agent, before turning to our first quarter results. For those of you who have followed our calls closely. First of all, thank you. You'll remember that I spoke at length during our Q3 call about tokenization and how we would grow our already successful stablecoin tokenization business. I'm sure some of you were thinking during those during that call what Is this guy talking about tokenization is only part of their existing business and he's spending quite a bit of time on it. Well, for those of you who know Dave and me, one of our favorite expressions is promises made, promises kept. On these earnings calls, we will give you an idea of where we are headed as a public company and then we will go there. On May 5, we announced a definitive agreement to acquire Equinity for $4.2 billion, creating a tokenization powerhouse with an end to end stack spanning origination, issuance, trading, liquidity and visibility. Purpose built for the blockchain era. I want to walk you through the strategic logic because this transaction is transformative not just for bullish, but for the broader evolution of capital markets. Capital markets move in infrastructure eras we went from the paper era with physical certificates and manual ledgers to the electronic era which delivered dematerialization, electronic settlement and ultimately T plus one. We are now entering the blockchain era which offers something fundamentally different. Unconstrained programmable ownership through tokenized assets. Tokenization is the process of turning traditional financial assets into blockchain based assets. It turns static assets into active infrastructure assets that are always on, that settle instantly and that carry dynamic functionality embedded in the instrument itself. We've already seen this migration play out with digital commodities and with stablecoins which now exceed $300 billion in market capitalization and many trillions in annual payments volume. The next wave is tokenized securities. The global securities market is a $270 trillion market cap opportunity. We are in the first inning, but the drivers of the deal thesis include three structural elements working in concert. First, an end to end tokenization services stack from token design and smart contract deployment through regulatory compliance, distribution, liquidity and research. Second, a unified transfer agent ledger. One source of truth that bridges certificated and tokenized shares and tokenized shares, enabling real time settlement without displacing existing market infrastructure like the DTCC, Euroclear, Clearstream, so on and so forth. And third, a broad base of blue chip issuer relationships, public company client relationships, the ability to go directly to issuers and say hey, we can do this for you seamlessly with no listing change, no vendor switch and day one compatibility, including the ability to embed smart contract logic in share issuances. We at Bullish have already been building the first element for many years, the technology and the market infrastructure. In fact, since our founding, we operate the exchange, the liquidity engine, the indices, the data, the research and the distribution platform. What we did not have and what no one in crypto or globally had were the second and third elements. A regulated transfer agent with direct relationships to thousands and thousands of public company issuers and a unified ledger that bridges TradFi and blockchain Equinity, and more specifically, Equinity plus Bullish offers exactly that. Acquinity is a transfer agent of record for nearly 3,000 public company issuers, including over 50% of the FTSE 100 and over 30% of the S&P 500. They serve 15,000 total corporate clients. They have 20 million Know Your Customer (KYC) shareholder customers on their platform who are just a wallet address away from accessing the benefits of tokenization. They process over half a trillion in payments, primarily dividend payments annually. Average transfer agent client tenure exceeds 15 years, and average transfer agent client retention is approximately 99%. Equinity operates in a duopolistic market characterized by high barriers to entry and deep institutional trust. Now let me share something that has reinforced our conviction. Even since the announcement nine days ago, the volume and quality of inbound interest has been extraordinary. We have received scores of inbound inquiries from issuers interested in tokenization, financial services firms interested in liquidity services on already tokenized assets, technology partners interested in building on our combined platform, and even regulators seeking to tokenize in their jurisdiction. The breadth of interest spans our exchange, our liquidity services business, and of course, the tokenization opportunity specifically. This is exactly the kind of market validation we hoped for, we anticipated even, but frankly, the pace has exceeded our expectations. We are clearly building something with strong end market demand today. Why is it that our acquisition announcement has been so compelling to the leaders of our industry and the leaders of our potential customers? It is for one primary reason industry participants realize the obvious. Only the issuer, the public company itself, can allow for tokenization of public company equity that results in the token being the actual share of stock in that particular company. If anyone else attempts to tokenize, they are creating something other than the actual stock. This goes for electronic brokers, crypto platforms, traditional brokers, settlement providers and clearing providers. The transfer agent defines the legal ownership in partnership with the issuer. The token is the share without a transfer agent. Tokenization is synthetic, off register, it lacks legal standing and ultimately will be unacceptable to institutional capital. The resulting token in those circumstances is actually a derivatives transaction or a warehouse receipt, or in more colloquial language, an iou, all of which have complexity and counterparty risk in tokenization performed by the transfer agent. However, tokens represent true legal title. This is the bridge between Tradfi plumbing and next generation digital asset rails. And this is what unlocks institutional adoption at scale on the transaction itself, we are acquiring 100% of liquidity for $4.2 billion. The consideration consists of approximately 2.35 billion in newly issued Bullish Ordinary shares and the assumption of 1.85 billion of existing liquidity debt Ceres, the current owner will receive two board seats and retains a call option to acquire certain non core equity business lines that are excluded from all of our financial outlooks. We are targeting a close in January 2027 subject to customary regulatory approvals. I'd also like to take a moment to thank Frank Baker and the Cirrus team for sharing our conviction and excitement as we execute on our vision to become the global leader in tokenization. The combined company will be formidable. We will be the global tokenization leader, providing the base layer of tokenization services with the value added services that ensure tokenization succeed. David Bonanno will take you through more of the financial details of the combined company in just a few minutes. Before I shift it to Dave and before I shift to our Q1 results, let me say this. When Dave and I came to Bullish, we said we wanted to build the ICE of crypto, a diversified institutionally trusted infrastructure platform that would define how digital assets are traded, serviced and understood. With this equinity acquisition, we are building the bridge between traditional capital markets and the blockchain era. We are not trying to displace existing infrastructure, we are upgrading it, and we are doing so with the regulatory standing now, the issuer relationships and the technology to drive this transformation. This is a 20 year opportunity and we're just getting started. Now let me turn to a qualitative review of Q1. Dave will take you through the financial results in just a moment. On the exchange side, our business continues to gain traction. We traded $11.6 billion in options market volume during Q1 and have built our open interest share to 14% of the global Bitcoin options market, making Bullish the clear number two exchange globally for Bitcoin options. In April we hit a single day volume high of $858 million and we signed several new clients including for example Ripple Prime, QCP and others. We're building a world class derivatives franchise and continue to be excited by our progress. We also recently filed last week to officially receive our futures and options exchange and clearinghouse licenses known as DCM and DCO licenses which will help us expand our derivatives products to the United States. We continued to make progress towards attaining licenses to facilitate trading of securities on both sides of the pond and remain on track to receive European U.S. licenses prior to the end of 2026. Our liquidity services pipeline remains robust in Q1. We signed Metso, Anvil and others and we have carried that momentum into Q2. CoinDesk continues to extend its leadership position. Total page views were up 30% and monthly unique visitors surged roughly 60% higher quarter over quarter. CoinDesk's progress continues into the second quarter. Our visits were up 82% year over year in April. CoinDesk indices now serves as the benchmark for Morgan Stanley's BTC ETP (MSBT), sorry, the three acronyms and soon to be launched ETH and Solana exchange-traded product (ETP)s slated to launch in the coming months. MSBT commenced trading on April 8 and swiftly amassed over 220 millions in assets under management (AUM), one of the more successful ETF launches in history. This is particularly exciting given Morgan Stanley's $7 trillion wealth management platform servicing over 17,000 financial advisors and wealth professionals. On the events side, Consensus Hong Kong and Consensus Miami were each home runs drawing a combined 26,000 plus attendees from more than 100 countries. Net ticket sales for Miami were 120% greater than sales for Toronto, and I can truly attest that Miami was abuzz with talk of our quinity acquisition and and with enthusiasm around tokenization in general. I don't want to be the one to call the end of a bear market, but Miami certainly did not feel like a bear market. With that, I'll turn the call over to my partner Dave to walk you through our Q1 financial results in detail and provide additional context on the combined financial outlook. David Bonanno (Chief Financial Officer) Thank you Tom and good morning everyone. This morning we published our first quarter 2026 financial results alongside the 6-K filed with the SEC, as well as our earnings press release and investor presentation available on our IR website. As a reminder, reconciliations of our non-IFRS metrics are included in today's earnings presentation and 6-K. Before discussing our financial results, I want to highlight that we will be providing a first half 2026 financial update on liquidity during Bullish's next earnings update in a few months from now. Additionally, before concluding my remarks, I'll spend a little time reviewing the previously disclosed outlook for the combined company that we discussed last week at our consensus event in Miami. Now turning to 1Q 2026 results starting on page 11 of the presentation. Total adjusted revenue for the quarter was 92.8 million, up approximately 49% year over year compared to 4Q25 total adjusted revenue, adjusted transaction revenue and subscription services and other revenue all posted slight growth despite significant digital asset price weaknesses including Bitcoin being down approximately 24% quarter over quarter. Our ability to grow all revenue line items quarter over quarter despite the significant macro headwinds is a testament to our diversified revenue model and organic growth profile of the business. Adjusted operating expense was 57.7 million in the first quarter, up from 48.1 million in the fourth quarter. That is an approximately $9.5 million increase which includes roughly 7 million of expenses related to our consensus Hong Kong event largely contained in the advertising and promotion expense line item. Of the remaining approximately $2.5 million of incremental expense, 50% was attributable to our investment in artificial intelligence tools across our entire business, including the expectation that we would announce the Equinity transaction. The remainder was split about evenly across additional employee expense and the targeted performance based rewards I discussed when we provided our full year guidance back in February. Adjusted EBITDA for The quarter was 35.1 million with an approximately 38% margin. This compares to 1Q25 adjusted EBITDA of 13.2 million at a 21% margin. This year over year increase reflects an approximately 72% contribution margin despite increased consensus related expenses and increased investments that I just discussed. Adjusted net income was 20.3 million for the period or $0.13 per adjusted diluted share on a base of approximately 161.2 million adjusted diluted shares. This compares to adjusted net income of 28.9 million in 4Q25 and 2.1 million in Q1 2025 finance expense was 14.1 million in the first quarter, modestly below Q4's 14.9 million. Regarding our previously provided full year 2026 guidance on page 22 of the presentation, we are reaffirming all of those ranges for the full year. Additionally, I would like to highlight a little more context on our expectations for adjusted operating expenses as we move through the remainder of the year. First, as noted on page 22, we expect full year 2026 adjusted operating expense between the midpoint and upper end of the range as we accelerate investment in our tokenization platform. This slightly elevated spend is essentially the pull forward of future platform investment included in our net cost reduction guidance of 25 to $50 million post closing of the Equinity transaction in early 2027. Second, I just note that we expect Q2 2026 to be our highest quarterly expense level during the year driven by spend related to our highly successful Consensus Miami event. Last week. Hopefully this additional context helps everyone sharpen their pencil a bit on the cadence of the cost base as we progress through the remainder of 2026. Before turning it back to Tom and beginning the Q and A, I want to provide a quick financial refresh regarding our outlook for Bullish on a combined basis as covered on page 22. First, we expect the pre synergy combined 2026 adjusted total revenue outlook of between 1.25 and 1.35 billion, adjusted EBITDA less CAPEX between 490 and 530 million and adjusted net income between $270 million and $290 million. Turning to page 23, covering our medium term outlook as compared to the combined 2026 financials, we expect approximately 6 to 8% annual revenue growth, 25 to $50 million in net cost reductions and EBITDA less CapEx growing at approximately $100 million per year. Additionally, we expect to generate approximately $1 billion of free cash flow over the medium-term period and exit 2029 with about a 50% EBITDA less CAPEX margin. Please refer to last week's announcement presentation and today's slides for additional detail on this outlook, and with that I'll turn it back to Tom for closing remarks. OPERATOR Thanks Dave. We've delivered a strong Q1. We've announced a deal that fundamentally reshapes our company and we're excited to keep executing and proving out our thesis. The positive market response from our current and potential clients from the industry over the last week or so certainly helps. With that, I'll ask the operator to open the line for questions. Thank you everyone. At this time I would like to remind everyone in order to ask a question, press Star, then the number one on your telephone keypad and your first question comes from Owen Lau with Clear Street. Please go ahead. Owen Lau (Analyst) Good morning and thank you for taking my question. Could you please talk about the timeline of getting your DCO and DCM licenses? Does Bullish have any plan to get into traditional equities, commodities, and metal derivatives trading, which Tom, you have a lot of experience on? Thank you. Tom Farley (Chairman and CEO) Thanks Owen. Good to hear from you again. Having been in that world now for most of my career, I can tell you there's a lot of tea leaf reading in estimating a regulator's response time. The good news is we are already, as you know Owen, regulated by the most stringent regulators in the world, including the SEC, but also BaFin in Germany, the SFC in Hong Kong, the New Yorkers here with the BitLicense, so on and so Forth. So that gives us a good bit of credibility. I also think that the regulators tend to look favorably on our management team given that we've kind of been there, done that with running really, really important regulated businesses with good hygiene, good compliance and regulatory hygiene. With all that said, to give you a more specific answer, the DCM and DCO licenses really range in terms of the timing, but we have seen with this Commodity Futures Trading Commission (CFTC) a lot more alacrity and we're seeing full approvals come for DCOs in under a year. I'll put it like that, Owen. I don't want to be too aggressive with what I tell you and you can look up and see, you can kind of do the research and see what I'm describing. But so far everything's gone well and our conversations with Commodity Futures Trading Commission (CFTC) have gone well and I've spent time with the chairman and the heads of the various divisions and it feels great, it feels good. In terms of the start here, to answer your question directly, this DCM and DCO positions us in a couple different ways, Owen. In general, we believe that this whole tokenization thing is going to take off as you know, and having the US licenses, the appropriate US licenses, and it's not just the DCM and dcl, but we will also be filing our broker dealer license, I believe this month here in May, which typically has a shorter window for approval than the DCM and dco. Those collectively will give us the ability to trade on a secondary basis these tokens as they come to market. So it really helps us with the kind of full stack pitch to firms as they're contemplating tokenization. And not only can we list them for trading, but we can also help them with their liquidity and help them with their visibility through CoinDesk and consensus. So it kind of perfects the offering. But also just more tactically, if you think about the old, you know, what I'll call the old bullish standalone business. This enables us to take an options market which we have not been able to bring to the US because we don't have that DCM and DCO and has gone from 0 to 14% market share, as you heard in the prepared remarks, in just six months. And it opens up the single largest market in the world for us for options for data futures and perpetual futures just on our core kind of crypto derivatives franchise. So those are the two strategic reasons why we pushed ahead and done this. We have a great team that's worked on these applications and got them in and I'm confident that we have a full package and we'll be able to move through this process as expeditiously as possible. OPERATOR Your next question comes from the line of Pete Christianson with Citi. Please go ahead. Pete Christianson (Analyst) Good morning. Thanks for the question. Hi Tom and Dave. Great event last week and again, congrats on the Equinity deal. Thanks, Steve. Simple question here. The industry, you know, often and we're hearing it from a number of sources here that demand for tokenized securities is large. But when we talk about the issuer side of the equation, you know, I feel like, you know, their voice isn't as heard as much. From your perspective, what do you believe becomes compelling enough for existing public company CFOs to actually change their shareholder infrastructure that some may question is already functions reasonably well today. Just helpful if you could give us your view of the other side of the equation here. Thank you. Tom Farley (Chairman and CEO) Yes, Pete, I love this question. It really gets to the heart of the matter and I guess if I can do a little couch time here with this broad audience when I've had my doubts, it's been exactly around this issue which is what's going to be the catalyst from this to really take off and to see that 270 trillion global securities market tip. And I will tell you Pete, that even in the last week it's just all the potential fears or insecurities we have around that have been blown to smithereens. We've heard from Dow companies that they want to get on the path of tokenizing their stock and they want to do it pronto. I was tabulating last night the number of inbounds that we've gotten from issuers, but also partners who work, partners who work with issuers and literally lost count. It's in the dozens and dozens just in the last week. And so that alone gives us great comfort. And that's probably what you can hear in our tone to get down to kind of brass tacks. For the issuers, the benefits are both their own benefits but also the benefits for the investors. And a happy investor makes for a happy issuer because it ultimately reduces the cost of capital. And so from the issuer's perspective, they realize very quickly that tokenization gives them much more visibility into who owns their shares. But even if there's privacy and obfuscation around who owns the shares, how often are they trading, how long are people holding their shares? Are these buy and hold shareholders? It gives them the ability to reward buy and hold shareholders. You can imagine structures where dividends reward buy and hold behavior. And so if you go talk, Pete, to the IROs and the CFOs of public companies, which I've done most of my career, frankly, the number one thing they will tell you is they're in the dark that the nested infrastructure that's built up in this country over 200 years means that they get very, very little information. We live it as a public company. It's almost comical how little information we get about our own shareholders. So the tokenization, the promise of more information is very, very compelling. On the investor side. It's going to give the investors much more opportunity to trade. For example, 24/7. So imagine you're a large investor in Asia interested in trading US Securities. It'll give investors more options in terms of lending and borrowing their shares, and pledging their shares as collateral. And so if you're making investors happy, you're also making the issuers happy. But the thing I just set you at ease with is what's really set me at ease as well. Because like the thing Dave and I have said publicly, but I'll repeat it again, the only doubt, the only question here is how quickly will the adoption curve be? And we made a conservative assumption when we put out figures last week, quite conservative as you can see yourself, Pete. And in the last week what we realized is, oh boy, there's an opportunity. This thing is going to take off real fast. And it's because of that groundswell of David Bonanno (Chief Financial Officer) support that we've received on the transaction and interest in tokenizing shares. And Pete, I'll just add a little bit from my seat as the cfo. I do think the person purchasing transfer agent services and tokenization services in the future will be the CFO tier. 4. The transfer agent service was largely a tax for no value add. It was required by law, but you didn't see it. You weren't really sure what functionality provided you. And it was handled by your legal team and probably someone down the rung in the legal team. 24. 7. Price discovery, access to new buyer bases, and any modicum of incremental visibility into my shareholder base is worth substantially more than the product I paid for today at Liquidity. I feel deeply convicted about that and I look forward greatly to discussing this with all the CFO issuers of the world, frankly. And I do think that this product is going to have instant traction. From what we've seen, we need the liquidity venues to catch up. We are pursuing, as Thomas mentioned, two different licenses to enable bullish to trade securities in our single global order book and unified account structure around the world. We expect both of those licenses to be obtained during the course of 2026. We also expect third party trading venues, both here and possibly abroad as well, to begin during this year. And so we think the liquidity problem and the 24x7 price discovery promise will be fulfilled in the not too distant future, followed by incremental visibility into your shareholder base and then additional services and benefits that Tom just mentioned which turn your stock into an asset it's never been before. And we're quite excited about the future. The inbounds we've gotten are beyond crypto native companies. As Tom mentioned, we've spoken and gotten inbounds from industrial type companies. So it's so it's exciting. We look forward to getting back to work and building the future of tokenized equities. Tom Farley (Chairman and CEO) I wanted to give you one last example, Pete. I know I'm going kind of full nerd on the market plumbing here, but going back to, well, going back to my days at the New York Stock Exchange, spending time with issuers, but frankly going back to Monday when I was at the SEC. One issue that vexes CFOs and investor relations is is so called naked short selling. I know to many of us on the call, we know oh geez, how big of a problem is that? It is detested in the issuer community, Pete Christianson (Analyst) and tokenizing shares instantly causes that issue to go away for those tokens. So it's just another example of where the transparency will really benefit the issuers. It's very encouraging. Thank you guys. OPERATOR Your next question comes from the line of Ken Worthington with JP Morgan. Please go ahead. Ken Worthington (Analyst) Hi, good morning and thanks for taking the question. I wanted to dig a bit into more of the SSNO line. This quarter it was flat despite the consensus Hong Kong event this quarter. Can you give us the puts and takes in SSNO this quarter that kept revenue flat relative to 4Q levels? David Bonanno (Chief Financial Officer) Yeah, Ken, appreciate the question. As we discussed in February when we gave the full year guidance, we said in terms of the puts and takes on ssno, the headwinds would include macro forces outside of our control, namely digital asset prices. As I mentioned, Bitcoin was down 24% quarter-over-quarter. Every other digital asset was down 30, far worse than that. Additionally, interest rates which do affect some of our stablecoin based revenues were also down 10%. And finally I mentioned the selective discontinuation of legacy liquidity service offerings that originated from approximately the 2023 time period that are no longer priorities for our business Going forward, we took all of those headwinds instantly in the first quarter. We got on with business with regard to focusing on our resources around liquidity services we plan to continue providing into the future, did not renew most of the contracts or nearly all of the contracts that we intended to exit for the year. We absorbed the price immediately and we absorbed the rate impact immediately. Despite all those headwinds, we were able to have consensus. Hong Kong, which is the smaller of the two events, helped more than offset that. And we were able to eke out a slightly positive sequential growth quarter, which all things considered in the current environment, we're pretty proud of, we can always do better. But we did absorb all the negative headwinds I discussed for the full year immediately in the first quarter. Ken Worthington (Analyst) Okay, that's great. Thank you so much. David Bonanno (Chief Financial Officer) Thanks, Ken. OPERATOR Your next question comes from the line of Joseph Voffi with Canaccord Genuity. Please go ahead. Mr. Rotha, your line is open. Your next question comes from the line of Chris Brendler with Rosenblatt Securities. Please go ahead. Chris Brendler (Analyst) Hi. Thanks and good morning. Guys. I saved my question I'd like to ask on the hey. On the US Expansion. You know, sort of that wasn't that long ago that you were able to start soliciting U.S. clients. And it sounds like this tokenization initiative is very US Focused. So you can give us update on. On your progress in building your US Client base and how this acquisition actually might accelerate that growth. Thanks. Tom Farley (Chairman and CEO) Yeah, kind of taking it in reverse order. The. I just want to highlight that Equinity is the market leader in the Chris Brendler (Analyst) UK and has a presence in many countries. So if our message seems too US Centric, it may just be because it's coming from Americans who happen to be sitting in New York City. But this is truly a global opportunity that extends beyond the US and includes both equities and debt securities. The US Initiative is going very well as you, as we, as we've told you about on prior calls, the customers continue to ramp up. But perhaps the most exciting part of it is that now we're seeing a US Funnel or pipeline that includes some of the largest financial institutions in the world. Now, the downside of that is it extends the sales cycle because these are firms that go through extensive diligence, reverse diligence, compliance, regulatory, and we can stand up to the scrutiny, but it takes time. But our US Launch that we started just post the IPO back in the early fall is moving apace, just as we expected it would and perhaps slightly exceeding expectations. Okay, great. And then I had a follow up. Can you guys just give us, I guess, a little bit of insight into the level of competition between Computershare and Equinity? I feel like it's like a happy duopoly. But is there an opportunity as you add these services and potentially differentiate the platform as you take over, is there an opportunity for Equinity to gain share in your mind? Tom Farley (Chairman and CEO) Yeah, great question. There's a little bit of Back to the future for me, having spent many years leading the New York Stock Exchange. It's not an entirely dissimilar market structure. So I can speak somewhat authoritatively on it. Even though we haven't closed down the transaction and still have several months here to get the deal completed, there is absolutely an opportunity to grow market share. In fact, we've received inbound from multiple customers from other transfer agents in just the last week who have acknowledged that having one unified transfer agent ledger. In other words, we don't have a crypto transfer agent working together with a traditional certificated share transfer agent, which introduces great complexity to the issuer. We have one traditional ledger has already been an appealing, has been an appealing message for us. I will say the retention rates for both equity and competitors are fairly high in this industry. And so the battleground is often on new listings, IPOs and then slowly growing the share from the installed base slowly. So this isn't something that's going to flip overnight from, you know, 50% market share globally to 75. But clearly we will have a better mousetrap and we are going to accelerate our, our build efforts, our investment efforts. You saw a little bit of that as Dave highlighted in the first quarter. And if I can editorialize for a second here, I know it's going to sound like an elliptical answer. I wanted to give everybody a sense of the context here. It became clear to us, and frankly to many in the industry about a year ago that the unlock here for tokenization is the transfer agent. And the reason is the transfer agent works hand in hand with the issuer and only the issuer. Only. Only. Only the issuer. If you remember one thing from this earnings call, please remember this. Only the issuer can allow for a token to be the share of stock in the company. No one else can do that. And so when that really dawned on us, as it dawned on others, Dave and I decided to zig when others were zagging and we said we need in one fell swoop to have a unified transfer agent ledger and thousands and thousands of issuers. And so this equinity deal has, has been in the works since the week of Labor Day 2025. And in fact we've been moving towards an announcement in earnest here most of 2026. And so we have been investing in our capability to acquire these assets, integrate this business, do it in a thoughtful way, and preparing for this day for many months. This isn't something that was slap dashed Chris Brendler (Analyst) or came out last week. And so you're seeing those investments and we will be prepared. That's fantastic. Thanks, Tom. Congrats. OPERATOR Your next question comes from the line of Joseph Foffe with Canaccord Genuity. Please go ahead. Joseph Foffe (Analyst) Hey guys, good morning. Sorry about my inability to find my unmute button here. Do you think you could for frame? It's early days, but the revenue opportunity coming from an issuer that is obviously on Equinity today, that would add a tokenization option on their equity and how that may look just from a issuer perspective and then a broader ecosystem revenue opportunity play. Thank you. Tom Farley (Chairman and CEO) Yeah. Hey Joseph, can you just re ask the first part of the question? Are you just saying like how far is the day when somebody can have tokenized stock available? Is that right? Well, not really. Well, more like if an issuer decides to provide a portion of their stock in a tokenized form, what does that mean for Equinity Bullish from a revenue perspective, you know, maybe providing that service and then from there, what does it mean kind of in a broader ecosystem opportunity for the company, you know, providing that, you know, that, you know, that stock service both in traditional electronic and then tokenized form. OPERATOR Yeah, yeah, no, excellent. Great, great question. I get it. It's, it's kind of, hey, we're trying to build a financial model for something that's never been done before. Give us a little more context and contour around it. I'll just highlight, I'll let Dave offer a few words. I'll just highlight a couple things. One, this is not pie in the sky or on the come. This has actually been done by a great public company called Bullish. So last week and part of why this announcement really resonated, the Bullish board on Monday night voted to tokenize the shares of Bullish. And in fact we went ahead and minted, I think it was 151 million of share. 151 million shares on the Solana blockchain. And so we didn't so called kind of tokenize, as you call it, a sleeve or a portion or a single class of shares. We just tokenized all of our shares, which is to Say we just added a characteristic to shareholdings, which is they can be in tokenized form, so you don't have to ask. If you're a bullish shareholder, you don't have to ask, hey, can you please go through some cumbersome process to tokenize their shares? They're all tokenized, and if you want to withdraw them, you can withdraw them. And this is on the bullish investor relations website, what Dave highlighted earlier that I'll highlight again, the thing that will grow very, very rapidly in 2026 is the ability to then do some very interesting thing with those tokens. That's the beauty of blockchain technology. And for those of you who haven't gone down the rabbit hole, the programmability and the composability are what create endless opportunities for what you can do with those tokenized shares. I haven't even mentioned on this call the rise of AI agents and the intersection of tokenized shares with AI agents. But it's hard for any of us to comprehend exactly how powerful that combination will be. Just think back two years ago to the very first time you logged into ChatGPT versus what you can accomplish now with with Claude coworks. So when you think about, hey, what will be the precise financial model here, I'll just start by saying it's very difficult for us to enumerate all of the opportunities for us to grow our financial model in really exciting ways. At a base level, can we charge for tokenization services to the issuers? Of course. Can we make incremental money from trading tokenized securities on our platforms where we're approved on both sides of the Atlantic, obviously. Will we be able to add liquidity services to help these tokenizations be successful? Much like we offer liquidity services for stablecoins, which are simply the tokenized US dollar, so that they can be successful? Of course. And this creates exponentially more opportunities to do so than the 40 or 50 stablecoin issuers that are in existence today. We're talking about global security issuers in the dozens of thousands all around the world. So those are the obvious ones that we can point to. But the less obvious ones are how are we embedding fee infrastructures and revenue models into ongoing trading of the tokenization or that intersection of AI agents or the intersection with DEFI platforms over time? There's some that we just, it's kind of mind blowing and we haven't yet put into our own financial models. And so I'm not going to try to convince you to do it. In yours. Yeah. And Joe, just highlight again, right. We stick by the guide or for the medium term outlook period of approximately 6 to 8%. But as Tom mentioned, a lot of these things are unfolding in real time. The existing transfer agent service, as I mentioned previously, is essentially a tax without any value add. It's a fairly low cost to a public company issuer. We believe that there's substantial value that will be provided via tokenization and we can substantially increase the cost of the service without actually having it be terribly expensive at all for the issuer and still being very good value for money when it comes to the larger parts of our business away from just the specific TA revenue stream from the issuer for tokenizing their shares. Tom mentioned a lot of different angles that could flourish. I would just say that we see new opportunities with blockchain networks, stablecoin issuers, tokenized treasury issuers and even retail distribution partners similar to what we pursued on the spot trading side to enhance the revenue growth over time. We're working through all of those frankly in real time and when we get back to the desk that's what we're going to spend all of our time doing and we look forward to keeping everyone updated as we move through the year on our progress. Again, if you would like to ask a question, press star then one on your telephone keypad and your next question comes from the line of Ed Engel with Compass Point. Please go ahead. Ed Engel (Analyst) Hi, thanks for taking my question. Just trying to expand on that last question. Do you have any information on revenue per institutional customer for your existing SSNO business or potentially range of that that we could potentially kind of use as a guidepost as a long term target for cross selling some of the issuer liquidity. David Bonanno (Chief Financial Officer) Hey Ed, good morning. Thanks for the question. We haven't provided any specific disclosure on the exact number and average price cost of the liquidity services offering. I would note that there's a bit of a range including larger scale industrial relationships such as our Solana collaboration. Back to our regular way on exchange liquidity services, which would be kind of a fraction of the revenue we generate from some of the more larger industrial partnerships with stablecoin issuers for our Treasury Solana Network partners and others. We do see a large opportunity for liquidity services to be applied to the 3,000 public company issuers that liquidity has and the additional ones that we intend to win over time. We're too early to begin sizing that opportunity, but as we mentioned and what we want to convey generally is we see the surface area for incremental revenue growth to be extremely large. And we plan on working through that over the course of the back half of this year. We look forward to updating everyone and we have a clear line of sight into where we think the plan will land and more context and visibility that we can provide. We will do so. Ed Engel (Analyst) Yeah, and I would just. In terms of context. Yeah, go ahead. No, I was gonna let you go, sorry. Yeah, I mean, we're a customer of Equinity and so we know what we pay and we know what our liquidity services customers pay. And you're talking about like just two different, we're just playing two different games. So our liquidity services deals often are seven figures, whereas we're in the relatively low five figures for what we're currently paying for. Just kind of straight transfer agent. So that's one of the beauties of this transaction is the ability to provide much, much higher value services such as our liquidity services to really ensure and enable that as these companies make this leap to the tokenized world and they take advantage of these real benefits, we're going to be able to provide this much higher value service to them which they love. As you know, as we've talked about, our liquidity services customers are our happiest customers because the service is really quite valuable. So they will benefit from it, we will benefit from it. In terms of a financial model. That's great, caller, thank you. And then on the operational expenditure (OPEX) pull forward for some of the tokenization investments. How do you think about building versus buying here? Especially just given how many startups are in the space or is it too early to really, I mean, I hear focused on doing this internally. OPERATOR Yeah, it's kind of the way we look at everything. I'm sitting in a room here with Liam and Mike. We probably looked at 250 companies. You know, the problem we have, the darn problem we have. We are very disciplined buyers and we have a great team of native blockchain, PhD engineers par excellence, second to none in the world. So we can just do it ourselves. And so we never say, oh, we're going to go buy in this area and we'll just put the product roadmap on hold. That's just not how we roll. We'd much rather build it ourselves and create an organic solution, but at the same time we talk to everybody and if somebody wants to, you know, believe in the vision and buy into the vision and be reasonable about the value of their own business. We're open to having the conversation. It's no different here. But the nice thing is we've already been building essentially a transfer agent. We got the, as we told you back in Q3, we got our own regulatory license. We weren't waiting for an equity to come along. We already had the smart contract engineers and in fact have had them from our founding. We are already building smart contracts. We're already bringing bridging layer 1s to layer 2s. We are already doing tokenization services to stablecoins as we talked about many, many times with you in the past. And so we don't have to go buy anything. We're already a leader and in the lead transaction, but we're open to it and we will continue to have those conversations. Yeah. Just to reiterate as we go through time here, pursue our goals and our strategic ambitions, we will never be put in a position where we have to buy. That is what I reiterate time and time again around here. We will build and then you're not forced to buy and you're in a better position to buy when you want to. So we'll continue to pursue our ambitions through that lens. We will build and if we want to buy, we'll be in a strong position to do it because we won't be beholden to any seller in an event that we have to buy. That will never happen to Bullish. So I just want to. Sorry about that, Stephanie. Appreciate you. Appreciate you asking those great questions. I just want to once again say thank you to all of you. We'll be back next quarter sharing a lot more information as Dave described, not just on Bullish, but also on the pro forma company, including the asset, the strategic assets that we acquired last week really give you a sense of where all that's headed both in 2026, actual results, but also kind of into the future. Thank you so much for being here. This is going to be super exciting. It's the most fired up I've ever been in my career. This opportunity to take the global securities market and put it onto a new programmable, customizable technology platform with tons and tons of benefits for issuers and investors is going to be a blast. Go Bullish. Ladies and gentlemen, that concludes today's call. Thank you all for joining. You may now disconnect. Disclaimer: This transcript is provided for informational purposes only. While we strive for accuracy, there may be errors or omissions in this automated transcription. For official company statements and financial information, please refer to the company's SEC filings and official press releases. Corporate participants' and analysts' statements reflect their views as of the date of this call and are subject to change without notice.