Tokenization revenue dropped 12% and operating costs jumped 56%, showing that higher onchain assets have yet to produce steadier earnings.
Securitize reported record average tokenized assets under management of $4.3 billion for the second quarter, up 16% from a year earlier, but revenue fell 5% to $14.4 million and its net loss widened to $21.7 million in its first results released after it began trading publicly.
Tokenization revenue dropped even as assets and transaction activity rose. The divergence gives investors an early measure of whether growth in tokenized funds can translate into revenue at Securitize.
Shares dropped about 16% in after-hours trading to $6.61 at 8 p.m. ET after closing Wednesday at $7.86, according to Yahoo Finance market data.
Tokenization Revenue Trails Asset Growth
The revenue decline came from Securitize’s tokenization business, where quarterly revenue fell 12% to $7.8 million. Asset-servicing revenue rose 3% to $6.6 million, leaving total revenue below the prior-year quarter.
Securitize said it added about $1 billion of tokenized assets during the quarter after declines in the previous two quarters. Aggregate transaction volume reached $5.3 billion, up 147% year over year.
The company’s fund-services business moved in the opposite direction. Assets under administration fell by about 20% to $24.3 billion as of June 30. Securitize was servicing 663 active funds.
Total operating costs rose 56% to $24.1 million, including a 133% increase in selling, general and administrative expenses to $8.2 million and a 31% rise in compensation and benefits to $10.5 million. The operating loss expanded to $9.7 million from about $198,000 a year earlier.
Adjusted EBITDA, which excludes several non-cash and other items, swung to a $5.5 million loss from a $1.8 million profit. The GAAP net loss also reflected changes in the fair value of option, derivative and future-equity liabilities.
Results Pre-Date the Cantor Combination
The quarter ended before Securitize completed its combination with Cantor Equity Partners II on July 1. The company’s Form 8-K states that the results belong to Securitize I, the operating business before the transaction, rather than the post-combination public company.
Securitize began trading on the New York Stock Exchange under the SECZ ticker on July 2. Chief Financial Officer Francisco Flores said the combination left the company entering the third quarter with about $350 million in cash and no debt.
The company is scheduled to discuss the results on an earnings call at 8:30 a.m. ET on Aug. 13.
