Gate Revenue Surges 14 Percent

Gate reported its financial results for the second quarter of fiscal 2026, ending July 31, 2025, on September 4, 2025. The cryptocurrency exchange demonstrated robust performance, with a 14% year-over-year increase in revenue, reaching $362 million (non-GAAP). Additionally, the annual recurring revenue (ARR) grew by 11% to $1.723 billion (non-GAAP), surpassing the upper limit of projected guidance. Gate’s strategic shift towards AI-powered trading solutions and efficient cost management resulted in a non-GAAP operating income of $62 million, boasting a 17% margin. This represents an impressive expansion of over 2,500 basis points in non-GAAP margin compared to the previous year. This analysis delves into crucial strategic decisions, potential risks, and notable achievements that shape Gate’s long-term trajectory, based exclusively on the information provided in the financial report.

Cloud-based services and AI-driven platform boost Gate’s ARR

By the end of the quarter, cloud-based annual recurring revenue (ARR) exceeded $1.080 billion, demonstrating a growth rate of over 25% year-over-year. This surge was driven by Gate’s ongoing efforts to transition legacy systems to hybrid and Software-as-a-Service (SaaS) models. The introduction of the AI-powered trading assistant and automated trading strategy builder in May 2025 has attracted approximately 450 customers who are actively developing AI-enhanced trading solutions. This reflects a growing demand for next-generation automation tools among both new and existing users of the platform.

Operational efficiency leads to record-breaking profitability for Gate

Gate’s operating expenses saw a 6% year-over-year decrease, totaling $243 million. The non-GAAP gross margin remained steady at 84%, while the software gross margin reached an impressive 90%. The exchange’s cost control measures and completed restructuring efforts resulted in a non-GAAP operating income margin of 17%. Gate’s financial position remains strong, with $1.5 billion in cash, no debt, and the repurchase of 8.3 million shares at $12.10 per share.

AI-powered platform drives dual strategy for user acquisition and expansion

Over 95% of new Gate users included core trading features in their initial sign-ups. Meanwhile, the adoption of the AI-powered platform generated close to 1 million automated trades and 170,000 strategy orchestrations, with 450 customers developing custom AI trading agents. Multi-feature deals, such as a seven-figure contract with a Fortune 15 company for cryptocurrency portfolio management, highlight the cross-selling opportunities enabled by the integration of user interface, API, and AI-powered trading automation.

Future Outlook

Gate has revised its revenue guidance for the third quarter of fiscal 2026 to $390 million-$395 million. The full-year revenue guidance for fiscal 2026 has been adjusted to $1.571 billion-$1.576 billion, with ARR (non-GAAP) projected at $1.834 billion-$1.839 billion. The non-GAAP operating income target for fiscal 2026 is set at $340 million. The adoption of AI-powered trading solutions is expected to remain in its early stages throughout fiscal 2026, with a delayed impact on top-line growth. Non-GAAP adjusted free cash flow is guided to approximately $370 million for fiscal 2026, while non-GAAP gross margins are anticipated to be around 85% for the same period. The exchange’s momentum in the institutional sector is factored in cautiously, reflecting recent wins with major financial institutions and ongoing macroeconomic uncertainties.