Fold Holdings (FLD) posted a 44% year-over-year decline in third-quarter revenue, but the Phoenix-based bitcoin financial services company told investors that a new distribution deal with TikTok Shop has turned into its single largest source of new customers.
Revenue for the quarter ended Sept. 30 came in at $4.16 million, down from $7.40 million a year earlier, according to the company's earnings release and call on Nov. 10. The net loss was $2.65 million, or 5 cents a share, compared with net income of $554,242 in the prior-year period.
The top-line drop was concentrated in merchant offers, where revenue fell to $2.4 million from $6.6 million. Chief Financial Officer Wolfe Repass said on the call that the decline reflected both softer customer volumes and a deliberate push toward higher-margin offers, and that because offer revenue and costs are booked on a gross basis, the hit to the bottom line was far smaller than the headline figure suggests.
Custody and trading revenue moved the other way, nearly quadrupling to $1.3 million. The bitcoin gift card alone generated $1.2 million, up from $200,000 a year earlier.
Fold put its bitcoin gift card on TikTok Shop in July, becoming the first and only such product sold on the platform. Chairman and CEO Will Reeves said the channel quickly became the company's biggest gift card outlet and its top customer acquisition channel, helping lift custody and trading revenue by roughly 270%. September was a record month for gift card sales, and the card carries a 4.7-star rating on the marketplace, the company said. Kroger also renewed its commitment to the program.
Reeves argued that the economics of social distribution differ from brick-and-mortar retail because buying activity tracks the bitcoin commentary that circulates on the platform. "As Bitcoin has moments of volatility spiking up or down, there's ultimately content created about that and Fold is the only place where you can go act upon that within the TikTok ecosystem," he said.
He added that the gift card program is designed to be close to cost-neutral, letting Fold bring in customers who complete identity verification for as little as nothing, a fraction of what banks typically spend to acquire an account.
A pivot from transactions to balances
Management framed the quarter as a shift away from a business that earns on activity toward one that earns on the money customers leave on the platform. Fold launched Fold Reserve, a stored-value product that unlocks higher rewards tiers, alongside spending accounts held at Lead Bank, an FDIC-insured institution, and enabled bitcoin purchases directly from any linked bank account.
The company said thousands of customers have activated the new balance products, bringing millions of dollars onto the platform, and that these users hold balances several times larger than the average Fold customer. Reserve tiers start at $5,000 and run to $100,000, with users present at every level.
"A transaction pays us once. A customer balance earns for us every month it stays on the platform, and it ties that customer more closely to everything else we offer," Reeves said.
Operating expenses fell 21% to $10.5 million, and interest expense dropped 54% to $500,000. The adjusted EBITDA loss of $4.5 million was essentially flat with a year earlier and the best showing of the year, improving from $5.8 million in the first quarter and $5.5 million in the second.
Total transaction volume reached $159 million for the quarter, or roughly $53 million a month, against $78 million a month a year earlier. Verified accounts rose by 1,500 to more than 88,500.
Credit card held back by financing gap
The Fold Credit Card expanded early access to about 2,500 cardholders and moved from a waitlist to an invitation system, with a pre-approval process launching outside the app. Reeves said a financing partner is expected to be announced shortly, though no agreement has been signed. Until a facility is in place, the number of cards Fold can issue remains tied to its own balance sheet.
"A bad credit facility deal can really turn your economics upside down," Reeves said, describing the search as an effort to play traditional lenders against newer entrants, including firms looking to lend against receivables rather than bitcoin.
Fold ended the quarter with $21.7 million in cash and cash equivalents, positive working capital of $13.8 million and 171 bitcoin in its investment treasury valued at $14.3 million, none of it pledged as collateral. The company also carries $4 million in net card receivables.
On the capital side, Fold replaced a $250 million equity line with a $25 million committed equity facility through Roth, which it began drawing on in October, and amended its only debt obligation, a $13 million note with SATS Credit Fund, extending maturity to November 2027 with an option for one more year and up to $12 million in additional uncommitted capacity.
Stockholders on Oct. 22 approved a reverse stock split authorization by a wide margin. The company faces a Jan. 11, 2027 deadline to regain compliance with Nasdaq listing rules.
The soft retail backdrop for bitcoin has weighed on trading-oriented crypto businesses even as the token's price recovered during the quarter. Fold's management said it is building distribution now in anticipation of a stronger market later, and expects the credit card and Reserve to begin contributing revenue in the fourth quarter.
Note: Figures are for the quarter ended Sept. 30, 2026, as reported by the company. Share counts and per-share amounts are as disclosed and do not reflect the authorized reverse split.
