Kraken’s Q3 shareholder letter is getting clickbaited by headlines shouting "EBITDA +163% QoQ," but I’m looking at the margin, and that’s the ugly part.
The numbers come from the shareholder letter Bloomberg saw (the Payward website currently only has Q2 up; the original Q3 text hasn’t been published yet): adjusted EBITDA was $60 million, down 67% year over year; the new metric, "Total Platform Margin," was $487 million, down 12%; platform trading volume was $353 billion, down 30%; and funded accounts were 7.1 million, up 37%.
If you reverse it using the company’s own year-over-year figures (the percentages are rounded, so these are all approximate): last Q3 EBITDA was about $180 million, TPM was about $550 million, and EBITDA as a share of TPM was close to 33%. This Q3 it’s 60/487, a little over 12%. Revenue fell only a bit more than 10%, but profit dropped by two-thirds. The money wasn’t not coming in; it was being spent. Co-CEO Sethi wrote in the Q2 letter that "2026 is the biggest year of trading investment in our history," and they also did a round of cost adjustments in May. The +163% quarter-over-quarter jump is just rebounding off Q2’s $23 million floor; from such a low base, any bounce like that isn’t surprising.
The user side makes the issue even clearer. Accounts were up 37%, while trading volume fell 30%, so the average trading volume per account was nearly cut in half (0.70/1.37≈0.51). TPM generated per account fell from about $107 to about $69. Payward defines a "funded account" as any account with a balance above zero at quarter-end, counting sub-accounts separately. Acquisition is indeed strong, but the new users are not trading much.
I originally wanted to criticize the metric change, but after running the numbers I don’t. The "adjusted revenue" used in Q2 was $508 million; back-solving from this quarter’s +12% QoQ TPM suggests Q2 TPM was only about $435 million, which is materially lower than the old metric. The new metric is more conservative, not flattering; it probably excludes some costs, but the original definition hasn’t been made public, so I won’t jump to conclusions.
What I really care about is Bloomberg’s mention that Payward is also planning to issue its own token, though no timing was given. When a company’s core business margin drops from 30% to 10% and it starts looking for the next growth engine through stock tokenization, on-chain perpetuals, and prediction markets, if it issues a token at that point, what are holders actually getting—fee sharing, buybacks, or just a loyalty points scheme? Until the tokenomics are out, don’t get too hyped about the whole "Kraken coin airdrop" narrative.
#Kraken
The numbers come from the shareholder letter Bloomberg saw (the Payward website currently only has Q2 up; the original Q3 text hasn’t been published yet): adjusted EBITDA was $60 million, down 67% year over year; the new metric, "Total Platform Margin," was $487 million, down 12%; platform trading volume was $353 billion, down 30%; and funded accounts were 7.1 million, up 37%.
If you reverse it using the company’s own year-over-year figures (the percentages are rounded, so these are all approximate): last Q3 EBITDA was about $180 million, TPM was about $550 million, and EBITDA as a share of TPM was close to 33%. This Q3 it’s 60/487, a little over 12%. Revenue fell only a bit more than 10%, but profit dropped by two-thirds. The money wasn’t not coming in; it was being spent. Co-CEO Sethi wrote in the Q2 letter that "2026 is the biggest year of trading investment in our history," and they also did a round of cost adjustments in May. The +163% quarter-over-quarter jump is just rebounding off Q2’s $23 million floor; from such a low base, any bounce like that isn’t surprising.
The user side makes the issue even clearer. Accounts were up 37%, while trading volume fell 30%, so the average trading volume per account was nearly cut in half (0.70/1.37≈0.51). TPM generated per account fell from about $107 to about $69. Payward defines a "funded account" as any account with a balance above zero at quarter-end, counting sub-accounts separately. Acquisition is indeed strong, but the new users are not trading much.
I originally wanted to criticize the metric change, but after running the numbers I don’t. The "adjusted revenue" used in Q2 was $508 million; back-solving from this quarter’s +12% QoQ TPM suggests Q2 TPM was only about $435 million, which is materially lower than the old metric. The new metric is more conservative, not flattering; it probably excludes some costs, but the original definition hasn’t been made public, so I won’t jump to conclusions.
What I really care about is Bloomberg’s mention that Payward is also planning to issue its own token, though no timing was given. When a company’s core business margin drops from 30% to 10% and it starts looking for the next growth engine through stock tokenization, on-chain perpetuals, and prediction markets, if it issues a token at that point, what are holders actually getting—fee sharing, buybacks, or just a loyalty points scheme? Until the tokenomics are out, don’t get too hyped about the whole "Kraken coin airdrop" narrative.
#Kraken