DeFi Technologies (DEFI) 2024 Annual Gateway Conference summary

Business overview and strategy

• Operates 25 crypto ETFs in Europe, generating high yields and strong margins from AUM and trading desk activities.

• AUM grew from $100M to $700M in three years, with 10% yield on AUM and only $10M in annual operating costs.

• Q2 revenue reached CAD 133M, with $90M EBITDA and net income, and a significant cash position improvement.

• Management and insiders own 120M of 300M fully diluted shares, aligning interests with shareholders.

• Plans to double product offerings to 70 by end of 2025, expanding into Africa, Middle East, and London Stock Exchange.

Financial performance and valuation

• Q2 net income was $90M, with projections of $50–60M for Q3 and 55–70 cents EPS for the year.

• Currently trades at 3–4x earnings, significantly lower than industry peers, making it a potential acquisition target.

• Profits have outpaced share price growth, with no net client outflows and consistent AUM growth.

• DeFi Alpha trading desk expected to contribute $60–80M annually, focusing on market-neutral, automated strategies.

• Owns a 5% stake in Amina Bank, whose AUM quadrupled, with potential for a significant balance sheet gain upon sale.

Product innovation and market expansion

• Offers unique products like carbon-neutral Bitcoin and Ethereum staking ETFs, with proprietary staking and validator node strategies.

• Pays 5.65% on Bitcoin staking ETF, leveraging Core protocol for up to 15% yield, attracting strong inflows.

• Actively launching products in Africa and Middle East, targeting fastest-growing crypto adoption regions.

• Plans to passport products to London and expand into Asia and Latin America, aiming for market leadership.

• Exploring AI-driven trading strategies and joint ventures to further diversify revenue streams.