DeFi Technologies Inc.'s (DEFT:NASDAQ; DEFI:CBOE; R9B:FSE) Q1/25 was "noisy, but outlook is good," reported Mike Grondahl, Northland Capital Markets analyst, in a May 15 research note.
"[The company] continues to deliver assets under management (AUM) growth, acquisitions, progress on international expansion efforts, new product launches, inclusion to prominent indices and institutional investment vehicles," Grondahl wrote.
32% Implied Return
Northland reiterated its CA$7 per share target price on the digital assets firm, trading at the time of Grondahl's report at CA$5.30 per share. From this price, the return to target is 32%.
DeFi is rated Outperform.
Financial Results Recap
The analyst reported that DeFi's Q1/25 revenue was CA$62.7 million (CA$62.7M), including a CA$45M DLOM (discount for lack of marketability) benefit. Revenue was in line with Northland's CA$42.8M. DLOM is an accounting approach that reduces the value of an asset that cannot be easily sold or traded, such as the tokens in crypto projects like the Solana (SOL) and Avalanche (AVAX) that DeFi owns. These are locked for a period of time, during which they cannot be sold. They can be sold once they are unlocked. When crypto prices go down, as they did in Q1/25, DeFi benefits from DLOM and vice versa.
DeFi's adjusted EBITDA in Q1/25 was CA$44.8M, more than double Northland's CA$17M estimate.
In Q1/25, DeFi's subsidiary Valour had AUM inflows of CA$72.4M and ended the quarter with total AUM of CA$921M.
"Geographic expansion of exchange-traded products (ETPs) continues to be a focus for driving AUM growth," wrote Grondahl.
Stillman Digital, the digital asset liquidity provider that DeFi acquired, generated CA$2.9M in trading commissions in Q1/25.
Also during the quarter, DeFi was added to the MSCI Canada Small Cap Index, the VanEck Digital Transformation Exchange Traded Fund, the MVIS Global Digital Assets Equity Index, Bitwise Asset Management, The Vanguard Group and Melanion Capital.
DeFi appointed to its board Chase Ergen, an expert in decentralized finance and emerging technologies.
It increased its stake in Neuronomics AG, asset management and fintech firm, to 52.5%, further bolstering its quantitative trading capabilities.
On the product side, DeFi's Valour launched four new ETPs on the Frankfurt Stock Exchange, broadening investor access to emerging blockchain ecosystems such as Dogecoin, Aptos, Sui and Render.
"[DeFi] continues to gain traction across both institutional and retail channels," Grondahl wrote.
Entering New Markets
Grondahl reported that DeFi continues its progress in expanding geographically. In Europe, the company aims to add another 40 ETPs by year-end 2025 to its current 60, to reach 100 in all. DeFi also is working on on launching its ETPs in Africa, Asia and the Middle East before moving into Canada and the U.S.
"Recall [DeFi] plans to launch 50 products in each region that could unlock an incremental US$3 billion (US$3B) AUM (3 markets x 50 products x US$20M AUM per product) and US$300M of revenue at current yields/fees," the analyst wrote.
As for Africa, DeFi expects to launch ETPs on the Nairobi Stock Exchange (NSE) by the end of Q3/25. Recently, the company partnered with the NSE to design and launch the Kenya Digital Exchange (KDX), a regulated platform for tokenizing real world assets and facilitating primary issuance, trading and liquidity options. The new exchange, of which DeFi will own 80%, will be deployed in phases until completion by Q2/26.
In Asia, DeFi is to be listed on AsiaNext's Singapore licensed exchange, as outlined in a signed memorandum of understanding with AsiaNext and SovFi. The timeline for this is unknown.
In the Middle East, DeFi applied to list its ETPs on the Dubai Financial Market and aims eventually to list on the Abu Dhabi, Riyadh and Qatar exchanges.
Post Q1/25 Activity
In April, Valour's AUM saw CA$10.8M in net inflows, reflecting a 30% month-over-month (MOM) increase. As of April 30, the division's total AUM was CA$988M, up 12% MOM. Its cash/USDT was CA$15.4M. Its treasury balance was CA$46.5M.
The latter consisted of CA$26.7M Bitcoin, CA$13.3M AVAX, CA$3M SOL, CA$1.6M Core, C$1.3M Cardano, CA$294,000 (CA$294K) Ethereum and CA$4K Uniswap.
Year-to-date AUM inflow was CA$81.1M. Loans payable remained the same at CA$8.6M.
On May 5, DeFi Alpha executed a CA$30.3M trade. DeFi's specialized arbitrage trading desk has generated CA$132.1M in revenue since its inception in Q2/24.
"Additionally, it sounds like there is a growing pipeline of opportunities for these kinds of transactions," wrote Grondahl.
On May 12, DeFi Technologies began trading on the NASDAQ. This, noted the analyst, validates its strategy, boosts credibility with institutional investors and opens additional growth avenues.
Outlook Favorable
DeFi's near-term product launches include Smart Crypto AI and TechEquity AI in Q3/25 and Crypto Alpha AI in Q4/25.
Grondahl purported that with higher digital asset prices in Q2/25, DeFi's results should be stronger. Its Q1/25 results were soft, as expected, due to the crypto selloff during the period.
The company raised its 2025 revenue guidance to CA$285.6M from CA$227.2M based on Q1/25 outperformance, higher digital asset prices, the recent DeFi Alpha trade and pipeline, and market trends. Stillman Digital expects 2025 revenue between CA$12M and CA$16M.
Northland revised its key financial estimates on DeFi for this year and next, noted Grondahl. New projections for 2025, all higher, are revenue US$223.8M, previously US$215.3M; EBITDA US$124.7M, previously US$102.5M; and earnings per share (EPS) US$0.30, previously US$0.25.
Northland's new 2026 estimates, all lower, are revenue US$226.9M, previously US$242.6M; EBITDA US$122.1M, previously US$130.6M; and EPS US$0.29, previously US$0.32.
More Stock Details
Grondahl reported that at the time of his report, DeFi had 327.1 million shares outstanding, a market cap of CA$1.7B and a 52-week range of CA$0.83–6.93 per share.
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