Payward, the parent of crypto exchange Kraken and futures broker NinjaTrader, reported third-quarter adjusted EBITDA of $60 million, up from $23 million in the second quarter, in a financial-highlights post on Friday. Adjusted EBITDA was 67% lower than a year earlier, Bloomberg reported from the company’s shareholder letter; the post itself does not print the year-ago figure.
The company also changed its yardstick. It now reports Total Platform Margin, which it says replaces adjusted revenue and also deducts the staking rewards it pays clients. That measure was $487 million, up 12% from $436 million in the second quarter and down 12% on the year.
The business model, in one line: Payward earns when clients trade, when they hold assets with it, and when they pay for access to products, data or services.
The numbers that matter
Trading is no longer the biggest lever. Payward says asset-based and access-based income made up 52% of the margin, up from 50% in the second quarter and 46% a year ago. Transaction-based margin rose 7% from the second quarter to $234 million, asset-based 26% to $128 million and access-based 7% to $125 million.
Volume told the same story as the rest of the industry, only less so. Total platform transaction volume was $353 billion, up 22% from the second quarter and down 30% on the year. Payward says industry spot volume fell 7% from the second quarter, and that its share of it rose to 6.5% in September from 3.3% a year earlier.
Derivatives are growing. Contracts traded rose to 66 million, up 10% from the second quarter and 84% from a year ago. Adjusted EBITDA was 12% of platform margin, against 5% in the second quarter.
Funded accounts, those holding any balance, reached 7.1 million, up 37% on the year. Billable accounts, which pay for access, reached 1.5 million, up 74%.
The skeptics’ reading
Three things in the post deserve a second look.
First, the yardstick moved. The new margin deducts staking rewards, so it cannot be set against the adjusted revenue Payward reported before, still less against rivals’ revenue. The post says management no longer uses adjusted revenue, and that other firms may define similarly named measures differently. CoinDesk noted that Coinbase’s revenue fell 35% in the quarter and Gemini’s volume fell 73%.
Second, the post gives non-GAAP figures only. It prints no net income and no GAAP revenue. Adjusted EBITDA leaves out stock-based pay, restructuring costs, legal settlements and losses on digital assets, among other items.
Third, assets. Average assets on the platform were $43 billion, up 4% from the second quarter and down 21% on the year. The $71 billion figure, up 29%, holds asset prices constant. Funded accounts are not unique clients: one client may hold several.
What’s next
Much of the plan is conditional. Payward says it intends to bring US clients prediction markets and equity perpetual futures under its own exchange, clearinghouse and broker licences, and to offer a primary share-issuance product called the xPO, “subject to regulatory approval”. Its agreement to buy EU-licensed Saldo Bank, covered in October, still needs approval to close.
The fifth pillar is artificial intelligence. Payward says each of its apps will get an “agent harness”, the first available early next year, and that it plans to train its own models on its trading, payments and identity data. “Where a language model predicts the next word, ours will predict the next transaction,” the post says.
It also says Kraken plans to launch in the UAE following full market approval from Dubai’s regulator, VARA, and that Payward has in-principle approval from Kazakhstan’s AFSA. For the tokenised-equities side of the business, see xStocks’ UK and EU listings; for another exchange’s quarter, Gemini’s third quarter.
This article is for information only and is not investment advice.