All right, we're going to continue here at the Canaccord Growth Conference, the 45th annual one. I am Joe Vafi, Equity Research Analyst here at Canaccord, focused on digital assets. We are pleased to have with us here James Gernetzke from Exodus Movement. James is the CFO of the company. Exodus is a leading crypto wallet provider empowering users to secure, manage, and exchange crypto. The company's self-custody functionality is encrypted locally on the user's own devices, ensuring a high level of security and control over their crypto holdings. The key to the Exodus strategy is partnering with other players across the broader crypto ecosystem and linking those partner services to the Exodus wallets. If users of the Exodus wallet transact with partners, then there's a transaction fee that accrues to Exodus. The company also has a Bitcoin accumulation strategy that we'll talk about a little bit more as well. Exodus just reported its Q2 numbers the other day, so we will maybe jump into those a little bit as well. Exodus is publicly traded on the NASDAQ, one of the few crypto players outside of mining, more on the infrastructure side that is publicly traded today. With that, thanks for being with us, James. Thank you. Good to be here. Great. Maybe you just kind of provide, you know, Exodus has been around in crypto for a while now. Maybe just, you know, there's still a lot of people that don't know your story, so it's an opportunity. Maybe you kind of provide a little bit of history of the company. Sure. You know where you were, where you are, and where you're going. Okay. So the history of the company, in late 2014, early 2015, our two founders met each other. One has a software development engineering background and the other, a creative background. If you can go back in time, back to those days, the world was in a different place. They were coming off of the financial crisis, and they said, hey, first of all, you know, we don't trust Lehman Brothers. We don't trust centralized institutions. You know, Mt. Gox had just happened, so we don't trust crypto exchanges because they can be hacked. The first thing was, you know, Joe mentioned in the intro, self-custody. The first principle they had was we need something self-custody where the user has control and they have ownership of their funds and they control it and we don't. The second one was, you know, crypto is still getting, it's rapidly improved over the past 10 years, but there's still some room to go in terms of user experience, user interface, things of that nature. They said it was really, really hard back in 2014, though. They said we need something that has a great user experience, easy, intuitive UI/UX, and then exceptional customer service. That was kind of the design element, if you will. The third thing was, you know, multi-chain. All these ICOs were coming out, and they said, how many wallets do you have? I've got eight. How many do you have? I've got six. You needed a wallet for Bitcoin and then you needed another wallet for Ethereum and another wallet for Solana. They said, we want one place for all of those different items. Over the past 10 years, they launched this wallet. It had great traction, and they said, we would like to quit our day jobs and actually have a business, so we need to monetize. They worked with an exchange and basically routed the swap. If you had Bitcoin and you wanted Ethereum, it would go to this one exchange. Essentially, we broke that exchange in 2017 because we sent so much volume to it, and it went down. They said that's a horrible user experience, so, number two. They said, let's add more exchanges to this platform so that we have redundancy, and then it could keep going. We don't have enough time to go into the story, but over the past 10 years, we've been developing the best-in-class exchange, cross-chain swap aggregator product. We've had great success in our own wallet, and we've been helping others in the industry like Ledger and Magic Eden. We just announced a deal with MetaMask to do that as well, and we've been helping others in the industry with that product. That is one area where we're working to grow. Great. Yeah, we're going to get into the MetaMask thing in a minute, but you have your wallets, right? Just, you know, anything else in the product set to make people aware of right now? Yeah, so we have developed a, we've got, we've just taken a lot of, there's just a lot of great technology out there. Our team has done a really fabulous job. I wish I was more technical so I could explain it to you in better detail. We've leveraged passkeys. If you're familiar with that, you know, the idea of using your biometrics to secure your wallet, ultimately, and then MPC technology to create a very easy, to create wallet under like fractions of a second. You can create a wallet that's multi-chain, which is very unique in the industry. The goal is to take away some of the friction. Remember user experience. If you think about self-custody, you know, 12-word secret phrases, you know, kind of a pain. You know, sending money to someone using that crazy long Bitcoin address or Ethereum address, that's kind of a pain too. One example is SayEcho. We've taken, it's on X. If you go to X and you go to SayEcho, we've built this kind of test platform and basically created something where you can create a smart wallet, create a wallet, a passkeys wallet in fractions of a second, and then send money to someone else using your Twitter handle or your X handle. They don't even need to have a wallet on the other end. They can go and create a wallet. It shows some of the user experiences and how we can help others in the industry. We can leverage that for other companies and others in various industries to leverage wallets and give their users or account holders or whatever it is, very quick and easy access to crypto on multiple different chains. There's probably stablecoin implications and a lot of other things in that area. Absolutely. Yeah. We'll get into that maybe on the stablecoin opportunity. I think you had maybe 1.7 million users, is that right? Active users, as of. July. July, right? Maybe just for those that don't know the story, just kind of a composition of the user base. Maybe we'll kind of talk about the quarter a little bit. Sure. As part of that building that we've done in the last 10 years, one of the things that happened when we were building that aggregator, for example, was we have users worldwide. They would write in and say, "Hey, I can't swap. I'm in Mexico or wherever the jurisdiction is." That has really helped us from an international perspective be able to provide support because we have 11 different exchanges and they can service, between those different exchanges in our aggregator, they can essentially service the world. There's some pockets, like New York State, for example, where there's a hole, but for the most part, you got the whole world. That has basically allowed us to have a user base that's, depending on the quarter, the period, roughly two-thirds international, a quarter or a third U.S. Got it. Fair enough. Maybe we talk about the quarter, some of the highlights. I think you reported on, I think it was Monday, right? Yes. Yes. What day is today? Right. Yeah, so some of the highlights of the quarter, we had revenue growth over a year ago. We, just roughly $26 million in revenue. Obviously, our treasury continued to grow. We have, at today's prices, call it $315 million worth of cash, Bitcoin, Ethereum, Solana. We don't have any debt on the books, and continue to have announcements like MetaMask. Sure. We have the only common stock token of all publicly traded companies in the world. We're the only ones who have a common stock token. We made some announcements on that front. It was a busy quarter. Yeah, maybe we kind of just, you know, drill down a little bit now into that MetaMask announcement. Sure. What it means. Maybe some of the people in the room aren't super familiar with, you know, who you're partnering with here and maybe kind of go through some of the basics of that or start it from the basics. Yeah. Sure. As I mentioned, the exchange aggregator allows people, in the simplest form, to say, I have Bitcoin, I have $100,000 of Bitcoin, I want to buy $100,000 worth of Ethereum. It basically allows people to swap, exchange, swap, whatever you want to. It could be into a stablecoin. It could be stablecoins. Yeah. With stablecoins, people don't realize that Circle, you know, USDC, their stablecoin, or Tether USDT, their stablecoin, they are on multiple chains, right? We support 40 different networks. You have Circle USDC on Solana and USDC on Ethereum, and you have Tether on Solana and Tether on Ethereum. Right now, today, you can go in our exchange and you can exchange USDC on Ethereum for Tether on Solana, right? Cross tokens, cross chains, and we power all of that for all the major stablecoins right now. Great. MetaMask. MetaMask. MetaMask historically has been Ethereum and, you know, ERC20 tokens or chain, and that support, that Ethereum chain has been their main focus. They've gone very, very large. Last year, they had a blog post that said they had 30 million active users. You know, there was a press report that said they had 100 million users. They've done very well. They're a top brand in the space. What are they doing exactly? MetaMask is a self-custodial wallet as well. Got it. They have publicly stated that they are starting to add more chains. They've added Solana, and they will, you know, they've said that they're going to continue to do that. What we're doing is we are helping them. Let's say they add Bitcoin next. I'm not sure exactly which one they're going to add next, but let's say they add Bitcoin next. Our swap product, by plugging in and working with us, they will be able, from when they launch that chain, their users who have that Ethereum, they'll be able to swap and fund their wallet, that new Bitcoin, that functionality, and fund that and use that. You are empowering their wallet through your functionality and your interconnects or whatever you want to call it. You are making their wallet more useful to their users. Exactly. You are then sharing some of the economics on that. It's an interesting concept, right? Because MetaMask theoretically is your competitor. Right. You know, they clearly needed some of your cross-chain capability, right? Yep. I believe you've also partnered with some hardware-centric wallets as well, kind of doing somewhat similar things. Is that right? Yeah, exactly. Ledger is the largest hardware wallet in the world. I believe they have sold about $7 million hardware wallets. We're doing the exact same thing with them as well. Magic Eden is the other one of the big three names that we talk about. Magic Eden is an NFT exchange. Right. Yeah, we've got some of the largest names in the space. Right. We work with. Maybe what's next for the wallet, from a technology perspective here? I mean, it's a pretty good wallet, right? I'm a little biased, but yes. I think that you will continue to see, you know, I talked about the passkeys technology and the MPC and just the idea is to have, you know, and we've already got, we're already further along than most folks because, like I said, from a stablecoin perspective, if we have, if there's $100 million new stablecoins because everybody and their brother is following the Genius Act and making stablecoins, that's great. We can support them all. Yeah. We already have the functionality to go between. What we see is a future where, you know, let's say Walmart has a coin and they do a stablecoin and say Amazon does a stablecoin. While I'm cheap, I shop at Walmart a lot. Let's say I owe Joe $100 and Joe is not cheap, so he goes to Amazon. He wants, I get paid and I have my $100 of Walmart coin and Joe wants to get paid $100 of his Amazon coin. We already have the ability to do that swap today. What we're working on is making it an interface and making it so that you, the consumer, don't even need to know that it's a Walmart coin or an Amazon coin. You just see $100. That's kind of one of the beautiful things about the Genius Act. The regulatory thing makes sure that it's a dollar token with a dollar backing, so it doesn't matter what it is. You just see a dollar and I get my Walmart coin, we swap it, he gets his Amazon coin, and we make that user interface smooth and seamless and you don't even need to know about it. Got it. You say today that, I mean, use cases for your wallet, right? Clearly buying and selling crypto, right? Selling crypto and going to fiat, I guess, right? Yep, correct. Yep, staking. Staking. Mm-hmm. What about, like, you know, buy and sell transactions? I mean, I think you do have, you know, maybe in emerging markets, clearly people are using their wallets a little bit more for store value versus their kind of weaker fiat, and maybe doing transactions, right? Yep, absolutely. I mean, it's very interesting to see, just from, I don't know, to sidetrack too much on it, but it's interesting to see the different countries and the different use cases. Some of the countries with inflation problems, people tend to go to Bitcoin, some of them want stablecoins. Yeah. I think that from a little bit longer time horizon, the interesting thing about just the marketplace for digital assets right now in this current regulatory environment is just how quickly innovation is spreading. Mm-hmm. We've had, you know, mentioned we have our common stock token and we're the only ones and we've had that since 2021. You can right now, from a peer-to-peer perspective, buy our stock from someone who has a common stock token and you can buy it with a stablecoin, right? Peer-to-peer, it doesn't happen very much, but it's technically there and it's legal and it is a common stock token. It's not some weird derivative. It's not a wrap. Right. That's an indication of the real-world asset and the tokenization. If you think of everything in the world that can be tokenized, it will be tokenized. If everything can be tokenized, then everything can be traded. Yeah. We've built the best trading equity. It all happens in the same wallet, right? Exactly. Right. Someday you'll swap your, you know, a Tesla stock to buy a Starbucks points. Yeah, or trade your Tesla to buy a piece of a gold mine or Monet painting, right? Sure. Something like that, right? That's a lot of trading pairs. Exactly. I think that is interesting. If you looked at, I mean, so you got a lot of users today, you're monetizing them now. Is there a strategy to monetize them more over the next six or nine months? Is that what you're trying to do at this point? Yeah, I mean, we are always looking at new ways to add value to the users, right? If you think about how we've created that partnership strategy, we start when we build the pipes, if you will. Yeah. In our product. Right. See how it's accepted. We can go and offer those to others, you know, others like the MetaMask of the world as well. Mm-hmm. Yes, I mean, we are constantly improving our base wallet functionality, and then with an eye on once we get that worked out and have those pipes built to where we can take it elsewhere to keep those pipes full. Right. I mean, you're clearly kind of a product-led marketing strategy business, right? Correct. You're not out there boiling the ocean to acquire new wallet holders at this point. At this point. Right. I always ask you this question, James, but you know, it does feel like there's an opportunity. You got a really nice wallet, right? Mm-hmm. Digital assets are becoming more mainstream every day. We've got stablecoins now. There's more of a tokenization opportunity for other asset classes over time. Does it make sense at some point to put the pedal to the metal a little bit and grow the active user base? Yeah, so we did in Q2, we spent probably, you know, one of our largest quarters of marketing spend. It was in large part because of Bitcoin Las Vegas. We had a large presence out there. Yeah. We had some other advertising that we did around that. Mm-hmm. It was really based off of, you know, we made a foray into this strategy with the crypto ball. Yeah. You saw all the news coverage and you saw Snoop Dogg with the Exodus logo behind him. We really saw a kick from that. We worked to repeat that in Q2. We're still evaluating the performance of all that, but it's something we're actively working on in a very deliberate fashion. Right. Because it makes sense. Like if I type crypto wallet into a Google search, should you be there? Yeah, absolutely. Yeah. Right. Yeah, that's the, we obviously have people looking at SEI. Okay. Yeah. All right. I think it makes sense. I mean, even nowadays, the one thing we haven't talked about is AI, right? Yeah. If you think about, you know. Yeah, AI search. I mean, software is getting disrupted. Absolutely. I mean, you know, go to ChatGPT and ask, you know, who's the best wallet? Yeah. That's absolutely something that we do and we look at. We could even get into payments and blockchain use with AI, but that's. Right. Right. No, yeah. Heaven forbid you haven't been at a conference like this and not, you know, mention AI, right? Yeah, exactly. You have, so you've tokenized your equity. You know, earlier today, we had Galaxy Digital in here and they're going to tokenize their stock as well. Yeah, we're glad to have paved the way for them. I think, yeah. You're eating your own cooking a little bit, obviously, by tokenizing your equity, you know, the EXOD. I guess, you know, now it's easy for some of your users around the world, your wallet holders, to buy Exodus. Mm-hmm. Are there any other kind of benefits to that at this point? It's kind of mind-blowing to think about the power of tokenized stock and what can be done. Yeah. You could do distributions on chain, and you could do daily distributions at dividends. You could do a daily dividend in theory. I mean, not that we have plans to do that. I'm just saying that the potential is there. Voting, having voting and proxies and all of that type of stuff, the ability to do that on chain is obviously much more efficient, quicker, easier. You get a lot more investor input, if you will, from that. In theory, we haven't talked about the Bitcoin strategy, but I mean, in theory, you could even do Bitcoin dividends, right? I mean, that's kind of something that's not really out there. It's something. A lot of options at that point, right? Yeah, exactly. These Bitcoin treasury companies, you know, they're not talking about. Right. Dividends. Right. You could, you wouldn't, if you even got a cash dividend and you use the dividend to buy more EXOD, you just buy the EXOD directly, right? Good. What about, maybe we talk a little bit about your, we only have a couple of minutes left, your Bitcoin acquisition strategy. Yeah. I think you're getting paid in Bitcoin. Exactly. Other tokens? Some other tokens as well. Yes. Right. Our treasury, our digital asset treasury is primarily Bitcoin, but then we have a good sized Ethereum and Solana as well. The Bitcoin, we're really unique because from the beginning, we've paid all of our salaries in Bitcoin. If you want to work at Exodus, you have to agree to get paid in Bitcoin. Mm-hmm. As a technology company, that's obviously our largest expense. The exchange aggregator, those exchanges, two-thirds roughly pay us in Bitcoin as well. Mm-hmm. Every month when we put out our metrics, if you see our Bitcoin treasury growing, it's because we've received more Bitcoin revenue than we've paid out in Bitcoin expense. Right. Is all of your revenue coming in digital assets or is there any fiat? There's a small, small, like a sliver of fiat. The rest of it's like two-thirds roughly Bitcoin and then roughly a third in USDC. Got it. Fair enough. Do you think your partner network is big enough now, or are you always looking to add more partners? In terms of exchanges? Yeah. Yeah, we're always evaluating that. It's been fairly stable for the, I think we added one in about the past year or so. Okay. Those metrics that we talked about, geographic coverage, network coverage, token coverage, it's very well built right now. Should something new come along, some new tokens, some new whatever, we're always evaluating to make sure that our users have access to the widest possible set of interesting trades. How about chains? Do you think you're covered enough for the chains out there? Yeah, that's a constant evaluation as well. Yeah. You know, we've got 40 right now, which is, you know, the vast majority. Yeah. That's a constantly, you know, chains come and go. Right. Yeah, that's another constant state of evaluation. Right. Is there a lot of cost in maintaining all those chains, or is it not? Is it relatively efficient to? It depends on the chain. Got it. There absolutely is some cost to maintaining nodes and things of that nature. Okay. Yeah, AWS cloud is our second largest expense after salaries. Sure. Fair enough. That's good. I mean, it's a pretty efficient model, right? Yep. Your employee base today is how big? We have just over 200 team members. Got it. R&D is a lot of that. A lot of that. Yeah. It's going to be, we're heavy, as you can imagine, tech company, heavy in all things development, security, things of that nature. You know, actual writing and protecting product and then customer service. Right. That is where the headcount is. Product-led. Exactly. Yeah. Very much. We only have 30 seconds left. Anything else we haven't touched on at this point, James? Oh man, that's a good question. There's a ton of things we haven't touched. Right. There's a lot to the story, but I think we got the highlights. Okay, good. Everyone, thanks James for being with us today. Keep an eye out for EXOD, Exodus Movement, you know, a leading player in wallets and monetizing those. These digital asset wallets are going to become more useful and more utilitarian, and everyone's going to theoretically have one one day. I think, Joe, that's the one thing I just remembered, excuse me, was the thing. If you think about stablecoins, you cannot use a stablecoin if you don't have one. Yeah, you need a wallet. Yeah. That's kind of the, that's the tagline. Everyone's going to eventually get their first payment in stablecoins, and they're going to have to get a wallet. Exactly. Right. Okay. James, thanks for being with us. All right. Appreciate it, Joe. Thank you.