Fold (NASDAQ:FLD) reported a 44% decline in third-quarter revenue as transaction activity and merchant offers weakened, while growth in its Bitcoin gift card business and newly launched deposit products offered potential sources of revenue beyond transactions.
Revenue fell to $4.2 million in the third quarter of 2026, and the company posted a net loss of $2.6 million, compared with net income of $600,000 a year earlier. CFO Wolfe Repass said average monthly transaction volume was approximately $53 million, down from $78 million in the prior-year quarter, as retail Bitcoin engagement remained subdued despite a recovery in the cryptocurrency’s price.
CEO Will Reeves said Fold is shifting its focus toward customer balances and deposits, which the company can monetize while using the resulting yield to support rewards. “We will deliberately prioritize balance growth over transaction growth,” he said.
Merchant offers decline, but gift card revenue grows
Merchant offers accounted for most of the revenue decline, falling to $2.4 million from $6.6 million a year earlier. Repass attributed the drop to lower customer volumes and a shift toward higher-margin offers.
He said Fold records merchant-offer revenue and related costs on a gross basis, and that the associated cost of sales declined by nearly as much as revenue. As a result, he said, the impact on the bottom line was substantially smaller than the revenue decline suggested.
Custody and trading revenue, meanwhile, nearly quadrupled to $1.3 million. The Bitcoin gift card generated $1.2 million of revenue, up from $200,000 a year earlier, Repass said.
Reeves said TikTok became Fold’s largest gift card and customer acquisition channel during the quarter. He said early activity showed follow-on gift card purchases and Bitcoin buying, although the company needs more months of data to assess customer behavior over time. Fold is seeking additional digital distribution partners, he said.
Adjusted EBITDA, a non-GAAP measure, was a loss of $4.5 million, compared with a $4.2 million loss a year earlier. It improved from losses of $5.8 million in the first quarter and $5.5 million in the second quarter. GAAP operating expenses fell 21% year over year to $10.5 million.
Fold targets deposits and credit card growth
Fold recently launched Reserve and spending accounts through its partnership with Lead Bank. Reeves said thousands of customers activated Lead accounts in the first couple of weeks after launch, and Reserve customers held balances several times larger than those of a typical Fold customer. He said Reserve tiers range from $5,000 to $100,000 and have attracted users at every level.
Lead Bank, an FDIC-insured institution, holds the deposits, while Fold provides the app, servicing and customer experience, Reeves said. The company expects its Lead partnership to support direct deposit and expanded payment options over time.
Fold also reached about 2,500 credit cardholders, its target for the current phase. The company is self-financing the program and had $4 million in net card receivables at quarter-end. Reeves said Fold is seeking a credit facility that would allow it to issue more cards without tying growth to its own balance sheet.
Reeves said the company has taken time to gather data on cardholder behavior and assess competing financing options. He said Fold hopes to announce a partner soon, but did not provide a firm timeline. Repass said the company expects increased revenue contributions from Reserve and the credit card beginning in the fourth quarter.
Cash and financing
Fold ended the quarter with $21.7 million in cash and cash equivalents, $13.8 million in positive working capital and 171 Bitcoin in its investment treasury, valued at $14.3 million. Repass said none of the Bitcoin was pledged as collateral.
In September, Fold replaced a $250 million equity line with a $25 million committed equity facility through Roth and began using it in October, Repass said. The company also extended the maturity of its $13 million SATS Credit Fund note to November 2027, with an option to extend for another year. The amendment added up to $12 million in uncommitted capacity, though Repass said Fold had no immediate plans to draw it.
About Fold (NASDAQ:FLD)
Fold Holdings, Inc. (NASDAQ: FLD) is a financial technology company focused on making bitcoin more accessible through everyday financial products and services. Its platform is designed to allow consumers to earn, buy, sell, hold and use bitcoin alongside traditional financial tools. The company’s offerings have included a bitcoin rewards card, a mobile application and related services that enable users to receive bitcoin rewards from eligible purchases and manage their digital assets. Fold has also provided mechanisms for customers to purchase and transact in bitcoin, with products aimed primarily at individual consumers in the United States.
