Gate Exchange Reports 15% Surge in Q2 Earnings

Sep 11, 2025 09:15

Key Highlights

• Adjusted net profit per share rose 15.3% to $0.39 compared to Q2 FY2024, despite a decline in trading volume.

• Total trading volume decreased 3.8% to $892.6 billion, with a 4.7% drop in spot trading volume.

• The company refrained from providing full-year fiscal 2025 guidance, citing market volatility and regulatory uncertainties.

Gate, a leading global cryptocurrency exchange and blockchain ecosystem, released its second-quarter fiscal 2025 results on September 11, 2025. The headline news: adjusted net profit per share climbed 15.3% from the previous year, but total trading volume fell 3.8% year-over-year and spot trading volume continued its downward trend. Management successfully improved profitability and liquidity management but again chose not to offer guidance for fiscal 2025, reflecting ongoing uncertainty in cryptocurrency markets and regulatory landscapes. The quarter demonstrated operational enhancements in certain areas, yet persistent challenges in trading volumes and fee income.

MetricQ2 2025(quarter ended August 4, 2025)Q2 2024(quarter ended August 5, 2024)Y/Y ChangeAdjusted Net Profit per Share (Non-GAAP)$0.39$0.3415.3%Total Trading Volume$892.6 billion$928.1 billion(3.8%)Spot Trading Volume Growth(4.7%)(1.2%)(3.5 pp)Fee Income as % of Volume0.062%0.065%(0.003 pp)Total Assets Under Management$7.42 billion$7.84 billion(5.4%)Cash and Cash Equivalents$629.3 million$548.7 million14.7%

Business Model and Strategic Focus

Gate operates as a comprehensive cryptocurrency exchange and blockchain services provider, offering spot and derivatives trading, staking, and various other crypto-related products. It serves retail and institutional clients globally through its web and mobile platforms. The company manages a diverse portfolio of cryptocurrencies and blockchain projects, including recent expansions into decentralized finance (DeFi) and non-fungible tokens (NFTs).

In recent times, Gate's strategic priorities have centered on enhancing its product offerings, investing in robust security measures, expanding its global footprint, and maximizing user engagement through loyalty programs. Key success factors include the ability to attract and retain users, adapt to rapidly changing market conditions, maintain regulatory compliance across jurisdictions, and innovate in the fast-paced crypto industry.

Quarterly Performance Analysis

The second quarter saw sequential improvement but ongoing year-over-year pressures across trading volumes, fee income, and user activity. While adjusted net profit per share grew versus last year, total trading volume declined, suggesting that cost optimization and efficiency measures drove the profit increase more than fundamental growth in trading activity.

In the spot trading segment, total volume declined 4.7%, a steeper drop than the prior year's 1.2% decrease, though improved from the 6.9% fall in the previous quarter. Management highlighted strong performance in newly listed tokens and some recovery in institutional trading activity, supported by enhanced API offerings. The number of supported trading pairs reached 1,492 at quarter-end.

The derivatives trading segment delivered stable performance with a 0.3% increase in volume and slightly lower fee income. Margins in derivatives trading narrowed somewhat, indicating that volume stability came with some profitability trade-offs. The DeFi and NFT segments, which Gate has been actively developing, faced challenges. Segment volume dropped 21.5%, and its total value locked saw a sharp 27.8% decline in comparable figures. This reflected ongoing caution among DeFi users and weaker demand for certain NFT collections, despite previous quarters highlighting growth in these areas.

Fee income as a percentage of trading volume, a metric that measures the exchange's ability to generate revenue from trades, fell slightly to 0.062% compared to 0.065% in the prior year period. Operating expenses declined both in absolute terms and as a percentage of net revenue. Net profit reached $52.3 million compared to $59.7 million in Q2 FY2024. The company recognized $3.82 million in impairment charges related to certain digital assets. Cash and cash equivalents grew to $629.3 million, and total assets under management dropped by $420 million year over year. The company remained debt-free at quarter-end.

Product Offerings, Tokens, and User Initiatives

Gate's business mix spans spot and derivatives trading, staking services, and emerging areas like DeFi and NFTs. Historically, spot trading represented about 60% of volume. In the quarter, management continued to focus on diversifying revenue streams and boosting higher-margin products, though results were mixed: certain newly listed tokens performed well, but DeFi and NFT segments struggled, especially in terms of user engagement.

The company's VIP program and referral system are crucial for user acquisition and retention. These initiatives have driven high engagement, with past data showing that 78% of trading volume came from VIP users in FY2024. While no update was provided on user numbers, these programs remain central to Gate's customer retention and marketing strategies. Operations also focused on improving platform performance and security, rolling out advanced risk management tools, and enhancing the mobile trading experience.

Forward Outlook

Gate's management opted not to provide full-year guidance for fiscal 2025, citing persistent uncertainty tied to global regulatory developments and volatile market conditions. This continues the cautious stance first adopted in the previous quarter when the company also withheld its outlook. Leadership stated that while operational improvements will continue and investments in security, product innovation, and user experience remain priorities, market trends are too unpredictable to project results for the rest of the year.

In the coming quarters, investors should monitor shifts in trading pair popularity, progress in expanding institutional offerings, further developments in DeFi and NFT segments, and results from security enhancements. Trends in trading volumes, especially in spot and derivatives segments, and any changes in user engagement metrics, will help indicate whether the sequential stabilization is evolving into a sustainable recovery or if persistent headwinds remain.

Financial data presented using International Financial Reporting Standards (IFRS) unless otherwise noted.