SECZ earnings call transcript, November 9, 2026

Good evening, and thank you all for joining Securitizer's third quarter 2026 earnings call. For today's call, I am joined by our Chairman and Chief Executive Officer, Carlos Domingo, our Chief Financial Officer, Francisco Flores. and our President, Red Redfern, who will be joining us for the Q&A portion of the call. I'd like to remind you that today's presentation, which is available for download on our Investor Relations website, investors.securitize.io, may contain forward-looking statements which are based on management's current expectations and are subject to risks, uncertainties, and changes in circumstances. Actual results may differ materially from these statements due to a variety of factors. including those described in our earnings materials, as well as in our SEC filings. And with that, I'll turn the call over to Carlos.

And thank you, everybody, for joining us today. It's great to be with you as we report our third-quarter results. This was our first quarter as a publicly traded company, and we made significant progress both financially and strategically. We deliver strong recovery in revenue, continue to build and scale our platform, and advance several initiatives that we believe will shape the next phase of tokenized capital. So our mission, as you know, is tokenize the world, and it remains very simple. It means bringing real financial assets on chain with the rights, protections, and infrastructure that institutions and investors expect from traditional capital markets, but with all deficiencies provided by blockchains. I'll begin with the financial and business highlights for the quarter, then spend some time in our progress in tokenized equities, fund tokenization, and strategic partnerships. I'll also discuss our acquisition of RiverOne, which represents an important expansion to create origination and asset. like financing, and our additional regulatory capabilities. After that, our CFO, Francisco, will walk you through the financial results and our outlook in more detail. Let me start with the highlights of the quarter. As many of you know, our second quarter revenue came below where we wanted. This quarter, we delivered a very strong $18.6 million of revenue, up 29% sequentially and 13% year-over-year.

That makes Q3 our second highest revenue quarter on record. And through the first nine months of the year, we've generated a record 50% to $2.5 million in revenue. We also narrow significantly our adjusted EBITDA loss to approximately $2 million, an improvement of about $3.5 million compared to the prior quarter. Our gap results reflect accounting items, which Francisco will explain in detail shortly after me. We achieved a record $5 billion in average tokenized assets in our platform. Securitized fund services reached $25.2 billion in assets under administrations, and we ended up the quarter servicing 669 active funds. Aggregate transaction volume was $4.3 billion. Up 20% year-over-year. Taking together these results should both improve quarterly execution and the growing scale of our platform. Beyond the financial results, we continue to expand the business in several important areas that will go in detail later. In public equities, we tokenized our own stock, SECZ, when we listed in July at the New York Stock Exchange, and following the quarter end, we launched Securitized Stocks, which already has expanded to 25 U.S. equities. In funds, we were in our institutional offerings with Nürburgring Bermans. High Income Fund, the ARK Venture Fund, and additional work with Blackboard. We expanded integration and distribution opportunities across decentralized finance, stable coins, global markets, and institutional partners.

And Securitized Capital became an SEC registered investor advisor, and adding to our regulated capabilities. The common thread is that we're building much more than a token-ish own service. We're building a regular infrastructure that can support the ownership, trading, servicing, and increasing the financing of financial assets. Let's go over with tokenized equities, which we believe represents. One of the largest opportunities for being in regulated financial markets on-chain. As we've mentioned before, the global equities market is enormous. It's estimated to be $169 trillion, and a very, very small portion is today represented on-chain. That tells us just how early this market remains. It's also important to recognize that not all tokenized equities are created equal. There are three fundamental different approaches. The first one is issue-responsored tokenization, where the token represents the actual share and ownership. Reflected in the issuers of holder register. Second is what are called custodial security entitlements, where tokens that are back to one by underlying shares and holder have legally recognized entitlements. These are regulated on the Article 8 of the UCC and fully legal and compliant in the U.S. And third, they are synthetic products that provide exposure to a set price without the same ownership structure. These are mostly offered offshore and in the current structure do not comply with U.S. regulations.

Our strategy focuses on the first two approaches. Issuer sponsored shares and back security entitlements. The differentiation is not just the blockchain technology. It's the legal rights and regulated infrastructure underneath. We bring together transfer agency, broker-dealer capabilities, trading infrastructure, and access to issuer relationships. That's why we believe we're particularly well positioned as this market develops. As we mentioned before, token access stocks are at a very, very early stage. There's about $4.6 billion in the market represented by this chart. We'll go about the breakdown a little bit in a second. That's October 27th. That is roughly. The level of stablecoins reached in March 2020. Since then, stablecoins grew substantially 64 times as the utility increase. This analogy shows what early stage adoption can look like. We're not predicting that tokenized stocks will follow the same path or growth at the same rate. The opportunity depends on real investor rights, trading access, liquidity, and practical use cases with tokenized. When we went public in New York Stock Exchange on July 2nd, we decided to list our own shares on the Solana and Avalanche blockchain from Day 1. We'll see you next time. We were the first company doing this to showcase how tokenization is possible in the U.S. in a regulated manner. As of September 30th, at the end of the quarter, and during most of the Q3, SECZ was the largest individual tokenized stock, with approximately $278 million in value.

Roughly 2.6 times the next largest stock represented on discharge, which is synthetic representation of another company. In our case, Continental, who is our transfer agent, provides the shareholder record infrastructure, and we provide the tokenization capabilities. The trading portion of it, Jam helps provide the liquidity and extended our tradings in the Solana ecosystem. We follow regulations related to pricing for trading, providing always prices that are within the NBBO or national best bid and offer, therefore providing on-chain the same pricing that you can have trading on a traditional broker-dealer, but on a blockchain. SECZ is also accepted as collateral in the on-chain lending market, and we will be expanding that lending utility over time. We demonstrated that issue a sponsored model with our own public click shares from- first day of trading is possible in the U.S. in a regulated way. Subsequently, right after quarter-end, we launched securitized stocks on October 8th with 12 U.S. equities on Solana, another 13 more on November 2nd, bringing the offering to 25 of the top and most traded U.S. stocks on-chain. Each token is fully packed one by one by underlying share, health law security entitlement and their existing law, not a synthetic instrument. The structure is designed to preserve the applicable dividends, voting rights, and economic benefits of the underlying share.

We also do not lend out the backing shares and we allow investors to tokenize shares to lend themselves their shares retaining most of the economics as opposed to what happens to the international markets where your shares are being lent out with broker-dealers retaining most of the economics. We also think that for retail investors being able to borrow against their shares is very important and something not easily available in today's markets that DeFi markets and blockchain infrastructure can bring to market. Our convertible entitlement token model also creates a pattern. It's a good way for holders to convert into issuer record shares when an issuer adopts a compatible structure in a seamless way without having to reissue the tokens or change anything on the investor end. So let us summarize where we are in terms of 24-7. First, we already have a live US broker-dealer model for securitized stocks on Solana with USDC instant settlement and extended trading hours. JA is the liquidity partner alongside infrastructure partners that support trading, clearing, custody and collateral opportunities. Our object. The objective is to expand distribution through additional venues, including the proposed New York Stock Exchange Digital ATS that is launching in Q4 and the OKX-ICE-JV tokenized securities venue, or TSB, that is launching in the coming days. Pool 24-7 trading remains a goal and the additional venues are subject to the respective launch and regulatory milestones. It's important to distinguish what is live from what is planned.

As trading moves on-chain, there might be multiple regulatory routes and our existing business is built to work within today's roles. Another important question. The important regulatory milestone in this quarter was the long-awaited SEC innovation exemption that was published in September 17th and that provides conditional relief for trading stocks on-chain using permission-automated market-making tools. It includes safeguards around equivalent rights, issuer notice and objections, and limits on eligible securities and trading moves. We welcome responsible innovation in market structure. Just as important, securities existing regulated broker-dealer approach does not depend on this exemption, but we will be supporting multiple venues, including multiple TSVs. Given the bit of the confusion in the market between the two models, we wanted to bring here a table to just explain how the regulated venues, like the one we run, differ from the innovation TSVs under the innovation exemption. First, from a regulatory perspective, we operate with a fully registered broker-dealer, an ATS, and the licenses are permanent to be able to operate without any expiration date. The innovation exemption, it's an exchange exemption. It allows people to operate without an exchange license and expires in September, 2031. More important, what we do is fully regulated and therefore does not require issuer consent.

It's not required for convertible entitlement tokens and only for issuer-sponsored tokens that will require collaboration with the issuer and they're transferred. However, the innovation exemption requires a 30-day issuer opt-out and given the exact nature of... the trading menu. You can see also here that there's another important thing in terms of the different execution paths that you can choose under a fully regulated broker-dealer or the innovation exemption, as well as how pricing works. In our case, we have to follow the national best bid and offer pricing and the innovation exemption PSVs are exempt from the order protection rule. We welcome additional innovation and we will continue to build within the existing regulatory framework. Let's move to fund tokenization, which remains a problem. to our institutional business. As we mentioned in the previous earnings announcement, we continue working on unlocking opportunities across the yield curve. This creates new types of opportunity to generate yield and also introduces underwriting credit and liquidity consideration that tokenization itself does not eliminate. What is especially exciting is the utility of the issuance. How eligible holders can use tokenized assets as collateral or connect them with other on-chain services. In Q3, in August, we released a new fund with Neuberger Berman, for high-income. That is an illustration of this progression along the yield part. Let's review the fund.

So, this fund offers tokenized access to actively manage high-income credit schedules. The fund is launched on Avalanche, Ethereum, Solana, and SWE, supported by securitized, broader-regulated, and servicing infrastructure. Eligible holders can use HINC as collateral in the loop-scale USDG lending market, and soon in the Aave market, where we have submitted for a government proposal, which has already been approved. They're, they're... The fund has a 30-day yield of 7.13%, making it as a very attractive asset as for DeFi collateral markets. Subsequently, we launched a new fund with ARK. It's the ARK Venture Fund with ARK Invest, which is an existing registered crossover investment product that we've put on-chain with a $500 minimum for eligible investors. This is a retail product, essentially. The fund provides a mix of private and public companies. And contains a lot of the most desirable companies, both public and private out there, like SpaceX, Kalshi, OpenAI, Anthropic, Stripe, and very probably it also includes equity and Securitize. Let's move into tokenized treasuries. As you know, and as we mentioned last quarter, tokenized treasuries have grown dramatically since we launched BlackRock's Biddle in March 2024. The market is approximately 14 times larger than it was at that level. Securitize accounted for approximately 14% of the tokenized U.S. treasury. funds as of September 30 and we are reflecting the position we build in the category alongside major institutional. What matters most is that institutional cash and treasury products have demonstrated real demand for tokenized infrastructure.

And we continue working to make those assets more useful for liquidity settlement and collateral. In Q3, we also deepened our partnership with BlackRock and continue expanding both beyond the initial Biddle launch in March 2024. During the quarter, we supported the launch of Bid Reserve, BlackRock's new Registered Money Market Fund designed to serve as a genius compliant reserve assets for a legible stable fund. Securitize provides the tokenization and transfer engine infrastructure. We also expanded Biddle to Tempo, connecting an established institutional cash product with another blockchain ecosystem. We think Tempo is going to be one of the important players there, given the support from Stripe, which is one of the largest fintechs in the world. We're also adding liquidity capabilities through Atomic On-Off RAMs designed to allow eligible investors to move instantly between and maintain. Institutional Shared Class of BDEL and USD-SIM, with Athena as the liquidity provider. These initiatives show how tokenized funds and stablecoin infrastructure are becoming more closely connected, creating opportunities for greater liquidity and utility. All right, let's move into partnerships and how we connect regulated securities infrastructure with distribution of payments and utility. In Q3, we announced a very exciting partnership with a company called Socios.com, where we are exploring how regulated tokenized equity could open a new ownership opportunities around professional equity.

Socios.com is the largest fan engagement company where they issue fan tokens for funds of multiple professional sport teams, and they have not recognized that the fans want to move your owning fan tokens into owning ownership on the clubs that they support. So, given that providing equity ownership is a regulated manner, Socios.com has partnered with Securitize to bring securities issuance, onboarding, and investing infrastructure.

It's an example of how the addressable market beyond conventional funds and public equity. Also, stablecoins are one of the most important infrastructures for our products to be successful. You want to have on-chain, not just tokenized securities, but also tokenized dollars. So, things like redemptions, gain and settlement, trading, et cetera, can become more efficient. This quarter, we joined two partner networks supporting USDG and OUSD, bringing stablecoin inflation. It's a structure closer to our tokenized funds and securities. USDG is already integrated in our platform and is using the Hink collateral market on the scale. These stablecoin rails can support more efficient funding, settlement, and on-chain lending for eligible investors. Beyond the operational benefits, the most important thing is that network participation can also create additional economics for security ties when we mint and distribute a stablecoin, rather than simply relying on third-party stable liquidity. By being a member of the network, we retain some of the economics of the underlying. assets in the stablecoin. The next area where we have signed two important partnerships is Korea. We're working with major Korean institutions to develop tokenized securities as the local regulatory framework evolves. We think in the future, Korea can become a very important market for us, so we're setting the foundations and preparing for the upcoming regulatory changes. Our first collaboration is with KB Securities, one of the largest securities firms in Korea. It combines institutional distribution of REITs with security as regular infrastructure. The initial focus is at

tokenized money market fund for institutions and optimism with potential to expand in other investment strategies as securities rules permitting the country. We also announced a memorandum of understanding with LGCNS, a very large Korean system integrator to explore tokenized assets, stable coins, and market infrastructure for financial institutions in Korea and across A. All right, so let's move to the REIT 1 acquisition. As we mentioned when we were public, one of the reasons we wanted to go public is because we think the market is going to consolidate. And we wanted to be in a position of being able to acquire companies, both with our cash in our balance sheet, as well as our liquidity. So today we're announcing the first plan acquisition of a company called REIT 1 that represents our entry into trade and asset origination, creating opportunities beyond the tokenization and servicing business we've already built today. We spent years building the infrastructure to bring traditional finance assets on chain, first through funds and more recently through public equities. We will leave the next big opportunity. With our plan acquisition of River One, we're expanding into asset-backed finance, a large market where stablecoin capital and blockchain infrastructure will create meaningful new opportunities. This is not simply about financing assets we already tokenized. It's about expanding into a new asset class and participating in a new part of the value chain with a potential for additional revenue streams.

Today, there are approximately $200 billion in stablecoin supply, but very little of it is actually used to finance activity in the real economy. At the same time, the U.S. asset-backed finance... approximately $6 trillion market projected to grow to $9 trillion in 2030. We see an opportunity to connect these two markets by directing capital towards appropriately underwriting credit assets that finance business and real economy activity. This is a natural next market for security stupers. Tokenization doesn't eliminate trade risk, but we believe it can help connect investors, originators, and funding sources in more efficient ways. RiverOne is a structured credit and asset-backed finance business that works with fintechs, originators, and other capital-intensive companies, driving capital from the stablecoin. Its team brings specialized expertise in origination, structuring, underwriting, using an AI engine, and managing credit facilities, including finances secured by receivables and other underlying assets in a programmatic way. That's compelling for us because RiverOne adds both a new capability and an experienced team that will otherwise take significant time to build internally. What makes RiverOne especially interesting is the combination of its credit expertise and its proprietary technology. They have three modules in their platform. The first one, called Argo, supports underwriting and credit analysis using an in-house AI.

And the writing platform that the credit team uses. The second one helps manage the financing facilities, monitor governance, and track performance in a more efficient way. And replaces two to three days of spreadsheet reviews with on-chain infrastructure that is much more efficient and instant. Finally, Harbor provides a path to tokenize and distribute credit structures through security as existing infrastructure capabilities. Together, these capabilities could allow us to participate early in the lifecycle of credit assets from origination and structuring through financing with stable coins and on-chain distribution of the tokenized credit products. That creates opportunities for origination fees and participation in financing economics with the potential for higher value monetization as the business develops. Just as important, we're getting a team with deep expertise in asset-backed finance and crypto technology. The strategic rationale is very straightforward. We're building infrastructure to tokenize service and distribute assets. We were one who will expand our business into credit origination itself. This acquisition remains subject to closing and we're excited about the opportunity we could create for security ties in the coming days when closing happens. Finally, let's talk a little bit about new reg- regulatory capabilities. Regulation has been central to our strategy from the beginning. In Q3, Securitize Capital became an SEC registered investor advisor, another important milestone in the development of our regulator platform. As of September 30, Securitize Capital had approximately 439 million assets in assets under management, exceeding the 150 million allowed for XMAD advisors to operate. This registration gave us greater flexibility to secure our advisory business, develop additional institutional strategies, and pursue management fee

opportunities. It reinforces something that has differentiated Securitize from the very beginning. We're not simply a technology provider using tokenization. We bring together a transfer agent, a broker-dealer, an alternative chain system, investment advisory, and fund admin capabilities with operations both in the U.S. and U.S. That the infrastructure institutions need as tokenization becomes an increasingly important part of our capital markets. With this, I'd like to conclude my overview of our strategic progress, and I will turn over to Francisco for the financial results and outlook. Thank you.

Good evening.

For my prepared remarks today, all reference growth rates are on a year-over-year basis, unless I indicate other ones. Total revenue was $18.6 million in the quarter, up 13% versus the prior year period, driven by higher tokenization revenue, partially offset by modestly lower asset servicing revenue. On a sequential quarter basis, total revenue was up 29%. As Carlos mentioned, this was the second... Highest order for total revenue in the company's history. Total revenue for the first nine months of 2026 was $52.5 million, an increase of 15% versus the prior year period, and a record nine-month period for the company. Tokenization revenue was $11.5 million, an increase of 29% versus the prior year period, largely due to the integration of new protocol, as well as higher distribution fees in the current period. Asset servicing revenue was $7.2 million, a decrease of 6% versus the prior year period, primarily driven by lower fund administration and accounting fees in the securitized fund services business, given the decline in assets under administration, partially upset by higher service fees in our transfer agent business. Turning to expenses. Total operating costs and expenses were $42.2 million, an increase of $27.3 million or $100. 183%. Predominantly driven by higher SG&A and higher compensation benefits. Including expenses associated with the completion of our business combination. While I'll discuss each one in greater detail momentarily, our total expenses this quarter included approximately $21 million of expenses, which we would generally consider to be non-recurring in nature. Core operating expenses, excluding these items, was approximately $21 million.

Cost of revenue. The third quarter was $4.5 million, an increase of $1 million, or 29%, primarily due to higher software, systems, and market data costs, and higher cost of revenue-generating employees and contractors. As mentioned last quarter, cost of revenue consists largely of direct labor in our blockchain engineering and integration divisions, phone accounting and client-facing personnel, and capitalized software amortization. SG&A expenses were $20. million, an increase of $14.1 million versus the prior year period. The increase was primarily driven by share-based expenses related to warrant obligations, higher legal, accounting, and consulting fees, including costs associated with operating as a public company, higher advertising, promotion, and public relations costs, and higher insurance costs. These were partially upset by lower software and subscription expenses in the quarter. Compensation and benefits were $16.5 million, an increase of $12 million versus the prior year period. The increase was primarily driven by higher share-based compensation expense, including $5.3 million of non-cash earn-out-related expenses in connection with the closing of the business combination, and higher headcount, including the hiring of corporate roles necessary to becoming a public company. Provision for credit losses was approximately $300,000 versus approximately $100,000. The prior year period. Turning to non-operating income and expenses in the third quarter. Total other expense net was $42.6 million, driven by two notable items related to the business combination, partially upset by higher dividend income.

Looking at these two notable non-operating items, they combined for $43.9 million of expenses in the quarter. Before I get into the specifics of each, and importantly... We expressed that both of these expenses were non-cash charges. First, we recognized a $20.6 million loss associated with the settlement of convertible instruments. This was a one-time non-cash charge from converting our pre-closing convertible notes, saves, and preferred stock option into equity at the close of the transaction, reflecting the difference between the value of the shares issued and the carrying value of those instruments. Given that this was... related to finalizing the business combination, we do not anticipate any impact for these instruments in future periods. Additionally, we recognized a $23.2 million charge for the change in fair value of earn-out liabilities. If you recall, both securitized and sponsored earn-out shares were granted as part of the business combination. Given that SECZ share price at September 30, 2026 was $14.59 versus $11.78 at the time... Closing, accounting rules required us to recognize a corresponding expense. We'd note that this line item will fluctuate quarterly as it's entirely non-cash. For example, if our share price at the year-end were at today's level, we would expect to report a meaningful non-cash gain in the fourth quarter. Separately, with other non-operating income and expenses, dividend income was $2 million, driven by the higher average balance.

of dividend-bearing investments, reflecting the investment of cash received in connection with the business combination. However, given our intention to strategically leverage our balance sheet in a dynamic way, we would caution against assuming that we will generate this type of dividend income on a quarterly basis going forward. Looking at adjusted EBITDA. Adjusted EBITDA was negative $2 million, compared to negative $5.5 million in the price. Representing a sequential improvement of $3.5 million. Compared to positive adjusted EBITDA of $3.6 million in the prior year period, this represents a decrease of $5.6 million. Driven by higher compensation and benefits, as we continue to scale the business, higher SG&A expenses, including professional and consulting costs associated with becoming a public company, partially upset by the higher total revenue. For the third quarter of 2026, Securitize reported a gap net loss of $66.3 million compared to net income of $4 million in the prior year period, a decrease of $70.3 million. The higher year-over-year net loss was driven by higher expenses, including headcount growth to support the expansion of our business and prepare for being a publicly traded company, and stock-based compensation, along with non-recurring costs. associated with the company's business combination. The higher net loss also reflected losses on convertible instruments and change in fair value of earned liabilities, both of which were related to the closing of our business combination in July 2026.

Net loss per diluted share in the third quarter was $0.41. I would note that given the accounting rules around share count as a private company, there's no real meaningful earnings per share comparison to the prior. year period to highlight. Again, I think it's important to put our results into context. While our reported gap net loss appears significant, approximately 90% of it, or roughly $60 million, was attributable to charges that were mostly non-cash in nature, including those associated with closing the business combination and the warrant-related expenses. From a capital and balance sheet perspective, Securitize remains in a very strong position with roughly $300 million. $300 million in net cash and liquid securities on our balance sheet, with zero debt, a little bit less than $2 in net cash per share as of September 30, 2026. We will continue to leverage this balance sheet strength to grow our businesses, both organically and inorganically, so we'll be disciplined around financial returns for this investment. And as you likely saw in our press release, our Board of Directors has approved a shared repurchase program to repurchase up to $50 million. of our common shares through the end of 2027. Given the volatility in our shares since being a public company, this authorization provides us the flexibility to be opportunistic when we see significant market dislocations. This is just another tool in the toolkit that our strong balance sheet allows us to pursue.

Now, before I turn to our outlook for 2026, I wanted to cover one small housekeeping item, as it pertains to the river acquisition. The acquisition that Carlos discussed, we're not disclosing financial terms for that transaction today, so to note, the deal was attractive to us from both a strategic and financial point of view. We also do not expect the acquisition to have a material financial impact on our fourth quarter 2026 results. Now, onto our financial outlook for the full year 2026. We're quite pleased with the strong third quarter and the momentum we're seeing in our businesses. However, as previously discussed, the timing of revenue recognition for certain tokenization initiatives and on-chain integrations is influenced by project milestones and execution schedules, which can result in some variability between quarters. As a result, we continue to expect total revenue to be in a range of $70 to $80 million for the full year 2026. Looking ahead to the fourth quarter, we expect improved poor operating results supported by continued revenue momentum. and disciplined cost management. As we move beyond the significant transaction related impacts of the business combination in Q3. So I'll just wrap up my remarks by saying how proud I am of our team and financial results for our initial quarter as a public company. We posted the second best revenue quarter in our history today. And while there was some expected expense noise in the quarter from the closing of our business combination, we managed the business tightly and saw a modest $2 million.