Karla Barker 
Shares of Gemini Space Station Inc (GEMI) surged over 25% in pre-market trading on Tuesday, even as the crypto exchange reported a net loss of $109 million for the first quarter of 2026.
The earnings report, released by the company founded by the Winklevoss twins, showed revenue improved by 42% year-over-year to $50.3 million. This helped narrow the net loss by 27% from $149.3 million in the same period last year. However, the loss of 93 cents per share still missed analysts’ estimates of a 61-cent loss.
Ongoing Profitability Struggles
Gemini has been on a long streak of unprofitable quarters as it spends heavily to transform its business model. Operating expenses ballooned 73% year-over-year to $144.5 million. The surge was led by a 91% rise in compensation costs, which included $6.5 million in severance from a recent round of layoffs. Sales and marketing outlays also doubled to $19.1 million.
Earlier, the company reported a net loss of $159.5 million in the third quarter of last year. In September, Gemini disclosed a net loss of $283 million for the first half of the year.
Strategic Shifts and Market Moves
The firm is betting that a leaner workforce and a $100 million bitcoin-funded investment from Winklevoss Capital Fund will provide the runway it needs to achieve profitability. In February, Gemini shuttered operations in the U.K., the European Union, and Australia. It reduced its workforce by 25%, a move it said was aimed at focusing on U.S. markets and prediction markets. Shares initially fell from $6.19 in late February to a low of $4.04 on March 30.
In April, the company secured a derivatives clearinghouse (DCO) license from the Commodity Futures Trading Commission. This approval allows Gemini to enter the regulated derivatives space and prediction markets, which is arguably one of crypto’s fastest-growing sectors. Since then, shares have gradually climbed to around $6.60, before the latest pre-market surge pushed them above that level.