Benchmark maintained its Buy rating on Exodus Movement after the crypto wallet provider announced Friday it would lay off 25% of its workforce. Analyst Mark Palmer lowered his price target to $12 from $23 while keeping the Buy rating, citing a weaker crypto market but noting investors are underappreciating the optionality in Exodus' payments infrastructure following its May acquisitions of Monavate and Baanx. The restructuring represents operational follow-through on Exodus' strategic pivot from a self-custody wallet provider into a crypto payments company, with the workforce cuts expected to save roughly $10 million to $13 million in annualized cash expenses starting next year.
Benchmark Lowers Price Target to $12 While Maintaining Buy Rating
Analyst Mark Palmer lowered his target to $12 from $23 while maintaining Benchmark's Buy rating on Exodus Movement. Palmer stated investors are underappreciating the optionality embedded in the payments infrastructure that Exodus has after acquiring Monavate and Baanx in May. The brokerage sees the restructuring as a way to free up resources to build Exodus' stablecoin payments business.
Workforce Reduction Expected to Save $10M-$13M Annually
The workforce cuts are expected to save Exodus roughly $10 million to $13 million in annualized cash expenses starting next year. Palmer called the move operational follow-through on its pivot from a self-custody wallet provider into a crypto payments company. About 90% of Exodus' past revenue has come from crypto swap fees, leaving the business heavily tied to trading activity.
Monavate and Baanx Acquisitions Provide New Revenue Streams
Palmer said the Monavate and Baanx acquisitions give the company new revenue opportunities through card issuance, stablecoin settlement and enterprise payments. These new revenue streams should reduce Exodus' reliance on cyclical crypto market phases, according to the analyst.
Analyst Cuts Q2 and Full-Year Revenue Forecasts
Palmer trimmed his second-quarter and full-year forecasts mostly due to the bear market conditions seen in crypto over the past nine months. He lowered his estimates for second-quarter revenue to $30.2 million from $34.2 million and cut his full-year revenue forecast to $134.7 million from $151.7 million.
Exodus Reported $22.7M Q1 Revenue and $32.1M Net Loss
Exodus reported first-quarter revenue of $22.7 million in May, down 37% from a year earlier. The company's net loss widened to $32.1 million in the first quarter.
Stock Down 68% Year-to-Date
Shares of Exodus were down nearly 3% to $4.91 on Monday. The stock has fallen roughly 68% year to date and 85% over the past 12 months, according to The Block's crypto equities data.
FAQ
What did Benchmark do after Exodus announced workforce cuts?
Benchmark maintained its Buy rating on Exodus Movement after the company announced Friday it would lay off 25% of its workforce. Analyst Mark Palmer lowered his price target to $12 from $23 while keeping the Buy rating.
How much will Exodus save from the workforce reduction?
The workforce cuts are expected to save Exodus roughly $10 million to $13 million in annualized cash expenses starting next year.
What was Exodus' first-quarter financial performance?
Exodus reported first-quarter revenue of $22.7 million in May, down 37% from a year earlier, while its net loss widened to $32.1 million.
