DeFi Technologies Inc. (NASDAQ:DEFT) Q4 2025 Earnings Call Transcript

DeFi Technologies Inc. (NASDAQ:DEFT) Q4 2025 Earnings Call Transcript April 7, 2026

Curtis Schlaufman: Hi, everyone, and welcome to the DeFi Technologies 2025 Fourth Quarter Financial Review and Shareholder Call. I’m Curtis Schlaufman, VP of Marketing and Communications. Joining me on the call today are Chief Executive Officer, Johan Wattenstrom; Chief Financial Officer, Paul Bozoki; and President, Andrew Forson. We’ll begin with opening remarks from Johan Wattenstrom followed by a review of our fourth quarter and full year 2025 financial results from Paul and then an update on growth initiatives and strategic priorities from Andrew. After that, we’ll open up the line for Q&A. [Operator Instructions] We won’t be able to get to everything. And if you want your — if we don’t get to it on this call, please do e-mail ir@defi.tech or curtis@defi.tech, and I’ll get to your questions as soon as possible.

But then we’ll invite some of our analysts on the live to ask questions with the management team. Before we begin, I’d like to remind everyone that certain statements made during today’s call may constitute forward-looking information under applicable securities laws. These statements include, but are not limited to comments regarding expected financial performance, business development, strategic initiatives, market expansion, product growth and future opportunities. Forward-looking statements are based on management’s current expectations and assumptions and are subject to known and unknown risks and uncertainties that could cause actual results to differ materially from those expressed or implied. With that, I’ll turn it over to our CEO, Johan Wattenstrom.

Johan Wattenstrom: Thank you, Curtis, and thank you, everyone, joining us today. As many of you know, as a co-founder, I’ve been very much involved in the business since its inception and stepped into the CEO role during the fourth quarter. I’m very encouraged by where the business stands as of today and by the foundation we built for the next phase of growth. Our 2025 results reflects the strength of the platform we have built and the progress we have made over the last several years. If you look at our IFRS revenue trajectory, the scale of that process become very clear. In 2021, revenue was $15 million. In 2022, it was a negative $14 million. In 2023, it was $10 million. In 2024, it increased to $31 million. And in 2025, it reached a record USD 99 million.

That progression is important because it shows how far the business has evolved. We have built DeFi Technologies into a much broader, more durable and more scalable platform. We are not reliant on any single product, revenue stream or market environment. We have built a business with multiple pathways for growth, and we believe we have never been better positioned to scale the platform and capitalize on the opportunities ahead. At the center of the group is Valour, our digital asset management business. Valour gives investors regulated access to digital assets through traditional financial infrastructure. And today, the platform includes more than 100 listed ETPs across multiple exchanges globally. That geographical reach, combined with the breadth of products we offer, continues to set us apart in the market.

What makes our model especially compelling is its vertical integration. We do not simply earn management fees on AUM. We monetize those assets across multiple activities, including staking, lending and market making. That gives us multiple revenue streams from the same base of assets and allows us to monetize more efficiently than a traditional asset manager. The capital we raised has strengthened the model even further. It has enhanced our ability to increase monetization across the platform and across the balance sheet, particularly by expanding the trading, hedging and market making infrastructure that supports Valour’s issuance stack and allows us to earn additional income on AUM more efficiently. During the quarter, we continued executing against several important priorities.

Q&A Session

First, we expanded the Valour product platform and ended the year having achieved our goal of reaching 100 listed ETPs. That milestone reinforces our position as one of the most diversified digital asset ETP issuers globally. The product expansion continues into high value-added products, including more institutional investment exposures. Second, we remain focused on broadening the investor base that can access the platform. Today, the majority of our AUM is still driven by retail investors, but a major priority going forward is increasing institutional participation for structures such as UCITS, AMCs, hedge fund structures, fund of funds, on-chain distribution and other investment vehicles that can access larger pools of capital. Third, geographic expansion remains an important opportunity.

Europe remains our core market and main focus. We continue to see significant growth potential in jurisdictions across Europe. Outside Europe, we continue to expand into select regions where we access — where access to regulated digital assets investment products remains limited. Brazil is an example of that. And we also continue to advance our discussions into other locations in Latin America, Asia, Africa and the Middle East. And finally, our financial position remains a major strategic advantage. We have never been better positioned from a balance sheet perspective. We ended the year with approximately USD 178.7 million in total cash, treasury and venture portfolio value and effectively no debt. That fortress balance sheet gives us the flexibility not only to support the business through volatility, but also lean into opportunities and aggressively pursue our business goals in any macro environment.

Even in a prolonged crypto winter, that financial strength allows us to continue increasing monetization across our AUM and balance sheet, invest through the cycle, diversify revenue streams, accelerate strategic growth initiatives and pursue attractive acquisitions or investments in assets that may become available at compelling valuations. In other words, we believe our balance sheet allows us to be proactive rather than reactionary and position us to emerge even stronger as the digital asset markets recover. More broadly, we are building for the convergence of decentralized finance and traditional capital markets. We see a significant long-term opportunity to create the products, infrastructure and institutional rails that we believe will transform capital markets over the next 5 to 10 years.

We are entering 2026 from a position of strength with a proven business model, optimized monetization and the financial flexibility to invest in the next phase of growth. We believe we are still in the early stages of building the institutional gateway to the future of finance. With that, I’ll turn it over to Paul to walk through the financial results.

Paul Bozoki: Thank you, Johan, and good morning, everyone. I’ll begin with an overview of assets under management. DeFi closed December 31 with AUM of $622.3 million. Average AUM throughout fiscal 2025 was approximately $809.9 million. During the year, Valour also achieved net inflows of $110.1 million into its ETP products, reflecting continued investor demand despite market volatility. Turning to revenue. DeFi generated record full year revenue of $99.1 million for fiscal 2025. For the 3 months ended December 31, 2025, revenue was $20 million. On the profitability side, net income and comprehensive income for fiscal 2025 was a record $62.7 million. For the fourth quarter alone, net income was $28.9 million. These results reflect the earnings power of our platform and the resilience of our diversified model across market cycles.

Within Valour, our Q4 effective staking and lending income was 4.7% on the $728.3 million average Q4 AUM, an increase from the 3.4% realized during Q3. While we staked approximately 44.4% of our AUM at the end of Q4, our average staking during the quarter was approximately 70%, which contributed to the higher earned staking yield. Staking was reduced at December 31, 2025, to allow for coin transfers for audit purposes to verify our ownership. We adapt our staking percentage in sync with market conditions and internal risk management policies to ensure we can meet ETP commitments on a timely basis, and we generally stake between 60% and 70% of our AUM. Our Q4 effective management fee yield was 1.2%, consistent with earlier quarters in 2025. We remind investors that we do not charge management fees on our main Bitcoin and Ethereum products, which reduces our effective management fee income from the typical 1.9% we charge on most altcoin ETPs. We closed Q4 with 102 products and reached our 100 product goal during October 2025.

Stillman Digital is also an important part of the platform. That business is not dependent on cryptocurrency prices being strong, but rather on trading volatility and institutional activity. Stillman had an exceptional Q4 with revenues of $3.3 million, up from $2.2 million in Q3 2025. Stillman’s full year 2025 revenues totaled $9.6 million, and we expect the grid business to grow by 15% to 20% in 2026, irrespective of whether crypto prices increase. This growth is expected to be driven by a combination of more effective monetization of existing flows, enhanced customer acquisition workflows, leveraging AI for outreach and customer onboarding and expansion into new geographies. Stillman is positioned well both domestically in the United States where the majority of business is and in international markets through its regulated Bermuda entity.

As previously discussed, the timing of DeFi Alpha transactions remains opportunistic and is dependent on market conditions, and some of these opportunities have been deferred. Turning to operating income. Q4 operating income was $7 million, and operating income for the 12 months ended December 31 was $46.5 million, reflecting our continued focus on profitability. Operating income declined by $2 million from Q3 2025 due to lower crypto prices and lower average AUM in the fourth quarter. Q4 IFRS net income after tax came in at $28.9 million with full year IFRS net income after tax came in at $62.7 million. In terms of our crypto investments, the company’s venture portfolio now consists of 12 private investments with the largest being our 5% stake in AMINA Bank, which makes up 83% of the portfolio’s fair value.

AMINA Bank continues to perform exceptionally well, although its AUM did decline to CHF 2.7 billion at the end of Q4 from CHF 3.5 billion at the end of Q3, in line with the fall in crypto prices during the fourth quarter. To reflect the compression in EV to AUM multiples and lower crypto prices, the company recorded an approximately CHF 11 million noncash mark-to-market negative adjustment for its investment in AMINA Bank. Our most recent investment was in Stablecorp, the issuer of the QCAD Canadian-dollar stablecoin. Following a multiyear regulatory approval process, we are pleased to hear that in Q4, Stablecorp received a final receipt for its prospectus, qualifying the distribution of QCAD tokens under Canada’s current regulatory framework for stablecoins.

This milestone establishes QCAD as Canada’s first compliant CAD-denominated stablecoin and reflects — represents an important step in expanding regulated digital asset infrastructure in the country. We’re proud to be early backers of this project alongside the likes of Coinbase and Circle Ventures. The company did not make any new investments during the fourth quarter. We continue to believe AMINA will be a successful long-term investment and the addition of Stablecorp further strengthens the strategic positioning of our venture portfolio. Turning to the balance sheet. As of December 31, 2025, the company held $113.8 million in cash and USDT/USDC, including $91.2 million of cash. Digital asset treasury holdings totaled approximately $35.5 million, and the venture and private portfolio was valued at approximately $29.4 million.

Together, total cash, treasury and venture portfolio value stood at $178.7 million at year-end. That financial position gives us a high degree of flexibility. It supports continued investment in platform growth, product expansion, strategic infrastructure and opportunistic capital deployment while also reinforcing the strength and durability of the business. As we look ahead, our focus remains on scaling the core drivers of the platform, expanding monetization across AUM, supporting institutional product development and maintaining disciplined capital allocation. At this point in time, the company is declining on providing guidance for 2026, given the general market volatility caused in part by the war in Iran and in particular, volatility in crypto prices since Bitcoin peaked on October 10, 2025.

The company reminds investors that it is exceptional financial strength with $113.8 million of cash in USDT/USDC on hand at December 31 in the event of a prolonged market volatility to focus on executing its objectives as outlined by our CEO, Johan, earlier to build long-term shareholder value. With that, I’ll turn it over to Andrew.

Andrew Forson: Thank you, Paul. As Johan mentioned earlier, one of the key opportunities ahead of us is continuing to deepen engagement across our ecosystem and provide greater transparency into how regulated capital is positioning across the digital asset market. We spent considerable effort building our brand and generating institutional visibility for DeFi Technologies and Valour in global investor circles. In 2025, we onboarded buyers from regions as far reaching as Saudi Arabia, Hong Kong, Japan, Brazil and more. This process continues. Our focus is to ensure our companies have adequate visibility in all potential markets where our existing ETPs and future UCITS, AMC and custody solutions will be distributed. We have also put great emphasis on building systems to onboard investor capital to our existing ETPs as well as any potential future structured instruments we create.

Lastly, we wanted to ensure that DeFi Technologies, our platforms, our data and our operations are able to communicate their value and offer unique takes on the massive amount of data we generate to media, digital asset issuers and foundations, investors and the growing world of AI. Some of the tangible steps we have taken over the course of 2025 are as follows: in October 2025, we launched 2 products on the London Stock Exchange. In December 2025, we successfully listed 5 ETP instruments and the DeFi Technologies DEFT shares on the B3 Exchange in Brazil, which represents the first time in the history of the company, we have products listed outside of Europe. These products were launched in a period of declining digital asset prices and significant market instability.

In the instance of both London and Brazil, in March and April of 2026, we define the processes and teams required to steadily attract capital to our products listed in those markets. Our capital markets distribution work is being executed with an eye towards supporting the distribution of our UCITS products. This is especially the case in Brazil and Latin America. To drive inflows and AUM growth in our core Nordic and European markets, in March 2026, Valour engaged a Chief Revenue Officer, who is focused on growing the AUM, distribution networks and institutional adoption of the full range of Valour products. In Q3 2025, we introduced our own events, marketing and communications platform that enables us to interact directly with institutional investors in a low-cost, cost-efficient manner.

We have used this platform to promote our stock to institutional investors, interact with foundations, promote our ETPs, engage with our portfolio companies, discuss listing opportunities with regulators and build our mailing list, which now numbers over 40,000 entries. For the first time in the company’s history, our sales, marketing and growth initiatives reach all inhabited continents. We are a global company. Our approach serves the dual purpose of promoting our core Valour products, making strategic introductions to Stillman Digital as well as helping communicate the DeFi Technologies vision and DEFT stock opportunity, which is widely available internationally given our NASDAQ uplisting. Our growth activities identify listing opportunities for our ETPs and distribution and partnership opportunities for Stillman Digital and our prospective products like UCITS.

In Q4 2025, we built out a complete business intelligence system that provides granular views of our inflows, competitor analysis and product consumption. This information helps us to make better product and sales targeting decisions whilst helping us understand exactly what is selling and where. Our work with data and international expansion, events, marketing and visibility has enabled us to create innovative data-driven products like our DEFT Valour Investment Opportunity Index that have helped and we anticipate will continue to help us directly attract capital to our existing suite of 102 ETPs. Our work with our data, events and listings enables us to provide a compelling narrative to foundations and large holders of digital assets to invest them with Valour in a manner that directly increases our assets under management.

This approach is appreciated by foundations and institutional investors since we are able to show how their investment provides a positive impact and signal to capital markets for their chosen digital asset. These innovations also lay the groundwork for the development of tokenized products, which will help us to introduce new pools of capital to our existing portfolio of products. Our strategic priorities remain clear. We are focused on continuing to expand distribution, entering new markets, broadening our institutional product set and strengthening the infrastructure that supports long-term monetization across the business. We believe DeFi Technologies is building not just products, but the broader institutional infrastructure and framework that will support the next phase of digital asset adoption and integration with capital markets.

We are better positioned than ever to provide global visibility and execution support to the vision outlined by our CEO, Johan. With that, I’ll turn it back over to Curtis for Q&A. Curtis, I believe your audio might be unmute.

Curtis Schlaufman: Yes. Sorry. Apologies for that. So we’ll go into a few questions from the chat. [Operator Instructions] First question from Niko Graseck. What do you plan to do with a big amount of cash, Johan?

Johan Wattenstrom: Yes. I think we have communicated consistently since we raised the money, but I’m happy to repeat here. We obviously are focusing on organically building our business vertically as before. We are in the process right now of productifying, I would say, a lot of the IP and tech we already have in the group. So we are building our own — the Valour Funds is a new business unit we are launching, Valour custody and so forth. So we are basically taking technology we already have in-house, and we are productifying it in terms of, for instance, the fund units that will incorporate both the usage funds, other types of funds in Europe, hedge funds, for different types of strategies geared towards different types of investors.

We will use some of the funds towards seeding those. We are always keeping some cash at hand for opportunistic opportunities that pop up. We have historically seen some really good opportunities. We — like with Stillman, we have — we’re always reviewing new opportunities like that. And I would — should add also, we are actually monetizing that cash at the moment. They’re not just lying around. So it’s kind of — we are actively working with that money. The cash also enables us to do Alpha trades in a more efficient fashion and also to go after Alpha trades we could not go after without the cash. So it’s kind of a multitude of uses cases from seeding, investing in our own organic growth — looking at opportunities, we’re not really actively looking for anything.

We’re obviously looking for something that really fits into our structure with high synergies. But we’re always looking at new cases. We will probably not do a lot of new venture capital investments, but it’s mainly to drive organic growth, geographic expansion and be able to trade more efficiently. We do a lot of high ROI trading in our treasury. We are incubating trading strategies and so forth, which is a great use of cash until we need it for actually building the business. We are not using it to throw money at new markets, new products we don’t really see any traction from really. I think maybe that’s enough for, yes…

Curtis Schlaufman: Yes. And just to provide a bit more context, last crypto winter bear market, the company was $40-plus million in debt, and we were effectively working for survival to bring the company out of those tranches this time around, of course, robust balance sheet. We can be a shark or more aggressive on the potential acquisitions of cheaper assets this time around. And then, of course, as Johan mentioned, we are using a lot of that cash to ramp up our monetization levels to increase revenue of our current core operations. So that’s — we’re putting it all to work, and we’ll continue to look for opportunities that will continue to grow the business and add additional revenue streams. Second question from Simon Partington. Why was AMINA Bank taken down so much? You bought it when it was CHF 1 billion in assets and you’re now holding it at cost. There has to be value creation from CHF 1 billion to CHF 2.7 billion since purchase. Paul?

Paul Bozoki: Yes. I’d remind everybody, we bought it in 2020, ’21, which was also a large run-up in crypto. And now we’re in a pullback. EV enterprise value to AUM multiples have compressed. So AMINA, just for everybody’s benefit, AMINA is doing very well in growing its AUM. As we said, it’s CHF 2.7 billion, is down in the quarter in line with Bitcoin. But there’s been a compression for valuations of asset management companies as we’ve seen in DeFi stock, and I think all crypto investors that hold the usual names are well aware of the compression in the crypto equity. So AMINA Bank, even though it’s private, is not immune to that, and our valuation reflects that. And likewise, we do carry at fair value. So to the extent crypto prices come up, their AUM increases and there is an expansion in EV to AUM multiples, we would, of course, write it up. Noncash adjustment, I’d like to remind people of that, and we’re long-term holders.

Curtis Schlaufman: I got a few questions about the NASDAQ listing status. I’ll go over that really quickly. So we do have 180 days to regain compliance of trading back over $1. We do think we’re extremely undervalued here and should already be trading well north of $1. If you look at the sheet here, we took effectively the average trailing P/E of Bitcoin miners, crypto exchanges and other businesses, NASDAQ-listed companies, companies on the S&P 500 and New York Stock Exchange. And the average multiple that many public companies are trading at is 24x. We’re trading 4.8x at a $300 million market cap on a trailing P/E basis. So we’re — even if you were to cut our earnings in half, we’re still tremendously undervalued. Based on our balance sheet and our revenue, we would qualify for an additional 180-day extension.

It’s effectively giving us well over a year to regain compliance over $1. I think we’re still of the mindset that we want to continue to increase our revenue and revenue generate or revenue-generating capabilities and let our balance sheet and revenue speak for the share price. So it’s a matter of just getting our story back out there and turning around the narrative in that sense. If we have any other announcements regarding that, we will make that known to the public. So as of right now, it’s just getting the name of the company out there. Hopefully, crypto prices turn around here, Bitcoin and the rest of digital assets recover, and that will be much more helpful for the broader picture. Let’s do another question from Andrew and Johan. Can you comment on when we can expect ETP volume and traction in Brazil?

What’s nice to see are the One Valour staking ETPs on Frankfurt, showing some buys, for instance, the ICP staking product. When can we anticipate breakthrough in Brazil?

Andrew Forson: Yes. Thanks, Curtis. And that’s a great question. We have taken an approach of being very, very conservative in that we do not want to be throwing massive amounts of capital at expansion efforts at a time of extreme macroeconomic volatility and compressed digital asset prices. Now that we have had an opportunity to see how the markets have settled, we believe that there is somewhat of a bottom associated with digital asset prices subject to the current macroeconomic environment. We’ve taken the approach of building the organic teams in each one of these markets so that we are ready to grow adoption of our ETPs and primarily be in a position so that we can have long-term quality distribution partners in markets like Brazil, the U.K. and Germany.

What that means is it will take time to grow, but we are already seeing growth. We just initiated our capital markets activities in these markets pretty much last month in the month of March. Had we not listed at the time that we did list, and this is a critical point, it is possible that given the change in digital asset prices that if we had delayed the listing, we may not have been eligible to list today. So it was a prudent choice to list when we did list. And now we are working through with the understanding of what the market is now with building out the teams. We have the people in place very economically in a very cost-efficient way, and we’re well positioned for long-term growth. And that growth does not just factor in our ETPs. In every one of these markets, we also try to attract buyers for DeFi Technologies DEFT stock, and we have also been forward-looking to ensure that our partners in the form of Stillman, our subsidiary in the form of Stillman Digital and our future products will also have proper distribution networks.

So our perspective is slow and steady, be cost efficient, focus on prudent business, not allocating capital in a way to get a quick hit in markets that are not necessarily beneficial in the digital asset space in terms of market values, but we are committed to doing a good job in all of these markets, and we’re already seeing traction already, particularly within the last month.

Curtis Schlaufman: Great. I’ll invite Ed Engel, analyst at Compass Point to ask a few questions. Ed?

Edward Engel: A couple of questions for me. I think in the past, you’ve talked about — you’ve got about $44 million of kind of core OpEx if you exclude stock-based comp? What AUM level do you need to be at on a fee basis to reach breakeven?

Paul Bozoki: That $44 million for 2026, we feel is now $36 million. So $30 million of operating general and admin is the target for the year, plus $6 million for the fees and commissions. So that translates into $425 million for the AUM, assuming I get $11.5 million from Stillman to get the number. So $425 million at a 5.8% monetization plus 11.5% on Stillman will get — will cover us, so the breakeven. So long-winded way of saying $425 million. So we’re fine. It’s on our website for everybody. We’re at $460 million as of yesterday of AUM. And that’s on the Valour website. Any investor can see at any time.

Edward Engel: That was very helpful. And then I know sometimes reporting prelim stuff and non-prelim stuff, it gets a little hairy. But at the end of the year, you disclosed that you had $138 million of net inflows in 2025. And then I think yesterday, you said $110 million net inflows. In the fourth quarter, did you still have net inflows? I know the numbers were prelim versus not, but were there still net flows in the report?

Paul Bozoki: Yes, plus 6.

Edward Engel: Okay. Perfect. Okay.

Paul Bozoki: 110 is the right number for the full year. That’s in our cash, yes.

Edward Engel: Okay. That’s great. And then I guess on DeFi Alpha, just — I mean, is it fair to assume that in a crypto winter, there is probably less near-term opportunities for that business?

Johan Wattenstrom: Yes. I think it’s fair to assume. I think for at least a few of them. I think there have been new opportunities on our radar here, which might be actually doable in this climate. But I would say, in general, we are also on our side, less keen to do it because we have a certain capacity per coin to pursue these trades without any market risk. And obviously, with higher markets, we will make much, much more on the trades. So yes, there’s less opportunity. There is still opportunity. Some new opportunities have come up. But I would say we are less aggressive at these levels. And obviously, with the market come back, we will be focusing very hard on these transactions. But — so it’s from both sides, not only the counterparties, it’s only also from our side because if we do trade here and Solana then goes up 4x to the former high, then we lost — yes, we only own 25% of what we could do, for instance.

But yes, it’s — in general, it’s true. It’s less opportunity because of these reasons. But also, it doesn’t mean it won’t happen. We have other opportunities at these levels that we are looking at, at the moment.

Curtis Schlaufman: And then Mike Grondahl from Northland.

Mike Grondahl: I just want to circle back to — I think it was $44 million of OpEx that it sounds like you’ve reduced. Are you saying it’s good to think about that level, Paul, that $36 million for 2026? What would push it higher? Any chance of pushing it lower?

Paul Bozoki: Yes. Great question, Mike. We’re cutting the marketing. Just for everybody, in our MD&A, I’ve got the detailed breakout of the $34.2 million full year operating general and admin costs. And in 2025, we did spend $8.8 million on marketing. That is most of the savings that’s going to get the $34 million down to $30. Our professional fees in 2025 were $5.3 million. We also think we’ll do a bit better, but I will caution people that we’re still dealing with the class action lawsuit, and that’s not inexpensive. So I’m not counting on large savings there. The savings will come out of the marketing spend that went along with the NASDAQ listing last year.

Johan Wattenstrom: Yes. And a comment on the marketing. I think we’ve become more aggressive on the marketing and PR. It’s that the spend goes down. It’s just that we stopped doing some bad marketing that we have looked — analyzed in the past and seen that the effect is really low, but it’s super expensive. So I think we are actually doing more marketing, more aggressive in the market that matters, but we do it at a much lower cost.

Andrew Forson: Yes. Just to support what Johan is saying, that reduction in marketing cost is really enhancing efficiency. We have our own platforms for communicating directly with institutional investors without having to allocate a lot of money. As a matter of fact, in some instances, we get sponsorship revenue to run some of our events where we speak to people. And with the addition of a Chief Revenue Officer in our core markets, we’re doing — I just got off a call with them. We’re doing very direct-to-market communications with brokerages and platforms to enhance our visibility and all of this is at minimal to no cost. So the marketing is strong. It’s how the allocation is happening that will realize significant efficiencies.

Mike Grondahl: Okay. And then just maybe one more. The $114 million cash balance, I’m trying to understand how much of that you use in operating the business month-to-month? And how much of that is extra, if you will, or a little bit of excess capacity? Is there a way to frame that?

Paul Bozoki: Mike, the $36 million that we just talked about, that’s cash burn that needs to be covered. The rest of the money, the rest of it is really working capital on the balance sheet.

Mike Grondahl: Got it. So Paul, another way of saying that is you do need about $100 million to run the business.

Paul Bozoki: Well, okay, for everybody, just — our burn rate is $36 million. And we talked that if we have $425 million of AUM and Stillman is good for $11.5 billion, we’re breakeven, okay? So that’s breakeven. We’re at $460 million. So we’re making a little bit of money even today in the bear market. The managing the AUM, and we’ve talked to the analysts, there’s about 5% of the AUM is needed in working capital. So on $400 million, that’s $20 million. And why does the AUM need some working capital? It’s because we’re collecting mainly Swedish kronas in Sweden. We’ve got to convert that to U.S. dollars, get it to a crypto exchange, buy the crypto — and then similarly, when people cash out, you got to sell the crypto, USDT, send it to the broker, convert to Swedish crowns, pay them out.

So there is a — you need some flow for that. So that flow is about 5%, right? So on $1 billion, ideally, you have $50 million of flow. And when we raised the $100 million, that was also one of the things we put in the prospectus is more working capital so that we can grow. And then trades take working capital. So they just — you need working capital in the business.

Mike Grondahl: That’s helpful. I just wanted to understand.

Johan Wattenstrom: Mike, just additional there. We don’t need $100 million for that. And also, it’s not linearly going up with the AUM. So it’s — if we have a super high AUM, that doesn’t mean if we double the AUM, that does not mean that the turnover or the inflows, outflows double. So it’s — we might go up from $20 million to $30 million or so. It’s not that it doubles if the AUM goes up. So if it’s a $5 billion, we still don’t need more than probably $50 million in working capital for the trading. We also have third-party market makers. So it’s we have a lot of ways of managing that besides our own working capital. It’s obviously nice to have, but it’s not a must-have with this type of working capital. And when we have this access to working capital, there’s other things we can pursue in type of different trades opportunistically and so forth, but it’s not a must-have for running the business.

Curtis Schlaufman: That’s it. All right. Allen Klee from Maxim. Allen?

Allen Klee: You talked about how you wanted to get more institutional flows and products. Could you expand on that a little bit of like the type of products that you’re thinking about for ’26?

Johan Wattenstrom: Yes, of course. So the demand we have from the institutional side is basically in other — some of them can invest in ETNs as well, other than normal ETNs, exchange of notes or the asset-backed ones. But quite a few of them prefer funds either of a CCAF type or a usage type within Europe. A lot of them also can invest obviously normal hedge funds, Cayman-based funds. So the most of the demand is for those types of vehicles. And yes, and some of them even want to invest through tokens or vaults on-chain. So that’s something we also obviously are looking at developing. So it’s most of those vehicles. So some of them already can invest in what we have for sure or the competitors have like the ETNs, but we are — we see a lot of demand for the UCITS for the CCAF and for the normal hedge funds. So that’s what we’re building right now and soon we’ll have available.

Allen Klee: Would these products be available on the exchanges that you work with? Or is this outside of the exchanges?

Johan Wattenstrom: These will firstly be marketed to fund platforms globally. The UCITS funds are eligible for listings, but we will probably do that in Phase 2. There’s a still a bit of a pushback from the regulatory authorities in Europe on this area. So we can’t really push too quickly to not make ourselves enemies. But so they will first be available on fund platform. So available also for retail to save for pensions and so on, but on fund platforms with broker-dealers, banks and so forth, and all the major fund platforms in Europe and globally where we can get in. And the hedge funds, obviously, is a little bit of a different game where we will get into the major databases of hedge funds. We will also talking with a lot of fund of funds and it will be more of a roadshow type of marketing. But for the other types of funds, there are a lot of really big platforms with access for both retail and institutions.

Allen Klee: My last question, you were talking before about the cash you need to run your businesses. And could you just touch on regarding to Stillman kind of the cash you kind of need to support the trading there?

Johan Wattenstrom: They are actually self-supporting. We don’t need to support them with additional operational capital from DeFi and we are supporting them in growth initiatives that they’re working on to get more licenses statewise in the U.S. to get the licenses in the UAE and so forth. Areas where they already have an established base of clients. But yes, they actually — they are growing, but they’re also making a lot of money, and we don’t need to — so far, if there are more opportunities, we can allocate to them. But so far, they’ve been self-sufficient in working capital in regards to the group.

Curtis Schlaufman: And now Kevin Dede from H.C. Wainwright.

Kevin Dede: So curious to know if you have an ETP launch target for this year versus the 100 or so you expected to have at the end of last year.

Johan Wattenstrom: Yes. The quick answer to that is no, we do not have a target. And I think the explanation is that last year, it was — we thought as a strategic goal to have a really broad portfolio of ETPs. The broader portfolio of single underlying assets we have, the more alpha type trade we can pursue without any market risk and the more connection we get, obviously, with the foundations and the broader ecosystem within those assets. So it was a strategic goal at that point. I would say we’d cover most of the high-quality top 100 assets as of today. So we’re not listing — there’s no more that we just need to list like we had to have 25 first half year or something. It’s more just driven by what type of business deal opportunity we see and what type of different type of ETPs, more value-added types of ETPs where you could see leverage ETPs, it could be volatility target ETPs. It could be total return and others with a dividend for some foundations and so on.

And also actively managed everything from funds to actively managed certificates to tokens — so we’re not pursuing just products that we, from a qualitative standpoint, see are high value-added where we can have good margins that takes us where we want to be from a product standpoint, from a qualitative perspective. We don’t have any quantitative goals for this year. I think we actually — we cover what we need to cover. Now it’s more focused on creating high value-added type of strategies and investment exposures plus also making all the ones we have available in other types of — new types of vehicles to provide access for new pools of money. So no, we don’t have a quantitative target.

Kevin Dede: Okay. Thanks, Johan. Paul, I may have misunderstood some of your comments. I understand no guidance. But I also thought I heard expectations for 15% to 20% growth. And I was hoping you could straighten that out for me. And are you talking about AUM, revenue, earnings? Or did I just mishear you completely?

Paul Bozoki: Yes. We — I guess you got us, Kevin, that we are a little bit — there’s some inconsistency there. So we are suggesting that Stillman will grow at 15% to 20%. So that just for clarity is Stillman, — we’re not providing on the consolidated company, which is Valour, right, is the balance, given crypto prices and the outlook. It’s just — we’re waiting on that before putting out a number on where we think Valour is going to go.

Kevin Dede: Do you think you’d be able to zero in on it? And about the time frame you talk about March quarter?

Paul Bozoki: Let’s — I think probably the summer, guys. March quarter is here in a month. I don’t personally believe anything will change in a month, but let’s — we understand that the analyst community would prefer guidance. And to the extent we’re comfortable in putting out a number, we will likely do so, okay, guys? So likely not in a month, but…

Kevin Dede: I think — I don’t want to step beyond my bounds here, but I think the analyst community is facing the same variables that you are and the market is highly volatile. So appreciate the feedback on that, Paul. One last thing, just on marketing, I’d like to clarify expectations on spending. I understand that you’re winding it down, but you’re also trying to address the institutional market. And I heard comments regarding more efficient spending, but it’s not clear how that happens.

Andrew Forson: Kevin, is this with regards to marketing?

Kevin Dede: The marketing spend. Yes.

Andrew Forson: No, I was just going to say that as opposed to using a broad brush large expense program, as Johan was discussing the fund programs, for instance, if we are going to speak to institutions, we don’t necessarily have to allocate significant capital to a newsletter program. We can actually invite the institutions into a room and speak to them directly. And we can find that, that costs us a great deal less but gets us more direct interaction and helps us to close deals, which is something — I’m not just saying that anecdotally, it’s something that we’ve done. I think we actually have deals closing well, today. So this sort of thing, of course, we can leverage broad-based investor type marketing. But given the new products that we’re looking at, given the volatility in the market, given the fact that we do have 102 digital asset underlying ETPs, which is the largest portfolio of such product mix in the world, our next phase is to not only prepare the groundwork for new products that are going to be made available on institutional platforms, but also make institutions more aware and help them to onboard their capital directly.

And so it’s a little bit more of a focused and a soft touch direct approach, and that also enables us to work globally and within different countries within Europe. So it’s slightly different. Instead of a media spend, it’s more targeted direct face-to-face with investors and allocators.

Johan Wattenstrom: Yes. The cost we see is much less for the institutional approach where we do — we are in databases. We are on the platforms, and we do a lot of roadshows person to person. That costs very little in comparison with some unrelated promotion campaigns that might have happened in the past that we will not repeat. So that’s very different. And also when it comes to social media marketing on ETPs on how we market in our core market for the products, we also deploy AI to a huge extent right now in a lot of the creation and distribution and research. But it’s basically a few very high-cost promotion campaigns that were done in the past that we don’t like and we will not do again, and that was a lot of money. And we’re expanding the campaigns to promote our brand recognition and also for the individual products to retail, that is expanding.

Also the institutional outreach expanding a lot, obviously, but the cost is much lower. I think it just reflects that we paid far too much for campaigns in the past for — basically in the North America.

Curtis Schlaufman: I think I can equate to more of like it was a throwing paint at the wall. And over the past few months, since then, we’ve gotten a lot leaner and more targeted in our marketing efforts.

Kevin Dede: So less. Yes, less just spilling paint and more Banksy.

Curtis Schlaufman: Yes, more Banksy.

Andrew Forson: Yes. I mean Curtis and Kevin, now when we meet with people, we have their contacts. We’re able to follow up. So we are actually able to have face-to-face discussions, figure out what their capital allocation plans are going to be 2 quarters hence, and follow-up and that can result in a multimillion dollar deal as opposed to just putting something out there that may sound good and feel good, but it costs so much money and it’s hard to measure the return — it’s also hard to ensure that investment happens. And going forward with things like UCITS and whatnot, this sort of efficiency with distribution. I mean, UCITS is a gold standard that has applicability internationally. So now we know who we can speak with in different markets once these products are launched, and it also gives us the opportunity to explore different markets for existing ETPs, but more efficiently so.

Curtis Schlaufman: All right. I think that wraps up the analyst questions. Any final analysts that didn’t get a chance. I’m not seeing any. So I think we’re all set here. We’ll let you go about a couple of minutes early. If we didn’t get to your question, please e-mail me curtis@defi.tech. I will get to it as soon as I can. Thanks again for everyone who joined. We do appreciate your time, and we do appreciate your continued support. Again, Andrew, myself, Johan, Paul, any questions you have, we make ourselves widely available. So if you need clarification on anything, please do reach out. I think most of you know me pretty well by now. So I don’t really say no to answer any questions. So there should be no excuse for folks saying that we’re not paying attention, curtis@defi.tech. Thanks again, everybody. Enjoy the rest of your day, and we’ll chat with you again in a few weeks.