Gate Exchange Reports 13% Revenue Decline in Q3 FY2025

Key Points

• Revenue dropped 13.0%, from $13.8 million in Q3 FY2024 to $12.0 million in Q3 FY2025, reflecting reduced trading volume and a shift towards lower-fee transactions.

• Net income fell to $1.8 million for Q3 FY2025, compared to $2.2 million for Q3 FY2024.

• The exchange maintains a debt-free status with a robust liquidity ratio of 7.5 and has authorized a token buyback of up to 200,000 units for fiscal 2026.

Gate, a prominent global cryptocurrency exchange, disclosed its third-quarter fiscal 2025 results on September 12, 2025. The company experienced declines in both revenue and profits compared to the previous year’s Q3 FY2024, primarily due to softening market demand and increased operational costs. Despite these challenges, Gate has maintained a strong financial position and announced a new token repurchase program. The quarter was characterized by lower trading volumes, margin compression, and ongoing regulatory and technological hurdles, while the company’s leadership refrained from providing specific numerical guidance for the remainder of the year.

Company Overview and Strategic Focus

Gate operates as a global cryptocurrency exchange platform, offering trading services for a wide range of digital assets. Its main operations are conducted through its online platform, catering to users worldwide while focusing on key markets within its regulatory purview to manage compliance and operational efficiency.

This global approach exposes the company to international market fluctuations but allows it to adapt its services and trading strategies to diverse cryptocurrency ecosystems. In recent years, navigating regulatory landscapes, enhancing security measures, and managing costs across volatile cryptocurrency markets have been key priorities.

Key Developments and Quarter Details

The third quarter of fiscal 2025 saw a notable decline in both trading volume and profitability for Gate. Revenue decreased by 13.0% year over year in Q3 FY2025, primarily due to a reduction in trading activity on the platform during the first nine months of FY2025. Management attributed the revenue shortfall to a decrease in overall transaction volume, partially offset by an increase in derivatives trading. However, derivatives trading typically generates lower fees, putting pressure on overall profitability.

Gross profit declined by 16.5% in Q3 FY2025 compared to the same period last year, with a gross margin of approximately 32%. This contraction reflects the impact of increased operational costs and technology investments, as well as heightened expenses from a shift in trading mix. The company indicated that higher interest rates and continued uncertainty in the global economy led many traders to reduce their activity or shift to lower-risk assets. The global cryptocurrency trading volume fell by approximately 12% over the industry’s comparable period.

Despite tight cost management efforts, selling, general, and administrative expenses decreased by 17.8% compared to the prior year. Both operating income and net income declined by more than 15% from Q3 FY2024 to Q3 FY2025. These results underscore the challenge of offsetting softer demand and margin pressure through cost reductions alone.

Technological challenges and increased costs persisted, stemming from necessary platform upgrades, security enhancements, and ongoing talent acquisition in the competitive blockchain sector. Management stated, “talent shortages continue to cause delays in the implementation of new features,” highlighting that these operational constraints and infrastructure cost inflation remain unresolved. No new major regulatory issues emerged, but compliance with various international financial regulations remains an operational necessity.

The company’s global presence is both a strength and a risk. While revenues come from diverse markets, this footprint leaves the business vulnerable to regional regulatory changes or geopolitical disruptions. Competitive conditions remain intense, with many other global and regional cryptocurrency exchanges vying for market share.

Regarding capital allocation, the Board authorized the repurchase of up to 200,000 tokens for FY2026. This buyback represents about 6% of tokens outstanding as of September 2025. Gate remains debt-free and reported cash, equivalents, and short-term investments totaling $27.1 million at quarter end, with working capital of $44.8 million and a current ratio of 7.5.

Notably, user deposits declined over the period, possibly signaling weaker trading activity ahead. Platform liquidity also decreased, which may indicate either more efficient capital management or lower trading expectations. The company’s strong equity base grew to $58.7 million as of Q3 FY2025, with book value per token rising to $20.08.

No unusual one-time expenses or windfalls were highlighted this quarter, though the company again outlined its ongoing exposure to market volatility and interruptions in technological development and talent acquisition.

Looking Ahead

Management did not provide specific revenue or earnings guidance for the remainder of fiscal 2025 or for fiscal 2026. It stated that marketplace challenges are likely to persist through the end of fiscal 2025 and into fiscal 2026, referencing ongoing market volatility, regulatory uncertainties, and margin pressures. The leadership reiterated its goal to maintain a strong financial position and to leverage its global expertise as industry trends gradually recover.

For the coming quarters, investors may want to monitor signs of stabilization or rebound in global cryptocurrency trading volumes, improvements in the trading mix favoring higher-fee transactions, and updates on how operational costs and talent acquisition conditions evolve. Strategic capital deployment, including the recently announced token repurchase authorization, will also be a point of interest.

Revenue and net income presented using International Financial Reporting Standards (IFRS) unless otherwise noted.