Payward expands market dominance while reduced trading activity impacts profitability
Despite achieving nearly double its share of worldwide spot trading and growing fee-based offerings, Payward experienced a 66% year-over-year decline in adjusted EBITDA to $60 million.
Payward, the entity behind Kraken, saw its portion of worldwide cryptocurrency spot trading climb to 6.5% in September, up from 3.3% during the same period the previous year, despite facing headwinds from diminished trading volumes that pressured financial performance.
This expansion in market share indicates that Payward secured a bigger slice of spot trading compared to its rivals, as opposed to seeing growth in overall trading volumes on its own platforms. During the third quarter, the firm processed $353 billion worth of transactions, representing a 30% decline compared to the same period last year, as detailed in the financial disclosures made public on Friday.
These two metrics represent distinct measurements. Market share reflects its percentage of worldwide spot trading conducted through its platforms during September versus the prior year, whereas Payward's transaction volume for the quarter encompasses operations across various products, such as spot trading, margin services, equities, payment solutions and select derivatives offerings.
The company's adjusted EBITDA dropped to $60 million, down from the $178.6 million figure recorded during the comparable period last year. Total platform margin decreased by 12% to $487 million. Payward rolled out this metric during the current quarter as a replacement for adjusted revenue, incorporating a subtraction for staking rewards distributed to clients.
Acquisitions expand Payward beyond spot trading
Over the last two years, Payward has pursued expansion beyond its primary cryptocurrency exchange operations by executing strategic acquisitions spanning derivatives trading, proprietary trading operations, tokenized assets and payment processing. This approach is designed to create revenue diversification away from transaction-based fees, which experience volatility tied to market conditions.
The company's acquisition portfolio encompasses futures brokerage firm NinjaTrader and proprietary trading operation Breakout during 2025, with the subsequent purchase of Bitnomial, a US-regulated derivatives trading platform, completed in May 2026. Additionally, the firm entered the stablecoin payment sector through its July acquisition of Reap.
These newly acquired operations played a role in creating a more varied composition of trading and service-oriented revenue during the third quarter. Derivatives contracts subject to Payward's per-contract fee structure increased by 84% to reach 66 million. Revenue margin generated from subscription services, trader evaluation programs and additional paid offerings grew by 59% to $125 million.
Breakout, which generates revenue by charging traders for evaluation programs that can lead to qualification for funded trading accounts, was reflected in results for the complete quarter following its integration in September 2025. The acquisition of Reap in July brought stablecoin payment capabilities and card-issuing operations into the portfolio. The organization did not break out specific revenue contributions from either transaction for the quarter.
Earnings recover from second-quarter lows
Financial performance showed improvement compared to the second quarter, though it continued to trail year-ago performance levels. Overall transaction volume grew by 22%, while total platform margin expanded by 12% to reach $487 million, up from $436 million.
Trading activity alone did not fuel this improvement. Revenue margin derived from customer assets held on Payward's infrastructure, which includes staking-related offerings, jumped by 26% to $128 million. This represented approximately half of the $51 million sequential quarterly gain in total platform margin.
Adjusted EBITDA increased to $60 million from $23 million, while the margin measured against total platform margin expanded to 12% from 5%. When measured against the prior year period, however, adjusted EBITDA declined by 66%, highlighting continued profitability challenges even as revenue from services with less direct correlation to trading volumes continued to grow. Services based on assets and access represented 52% of total platform margin, rising from 46% in the year-ago period.
This transition in revenue composition could prove significant for a future public market debut. Payward submitted confidential paperwork for a US IPO in November 2025 but hit pause on those plans during March amid deteriorating market conditions. By September, the company was considering the second quarter of 2027 as the earliest viable timeframe for a potential public offering.