StartEngine Swings to Profit on Soaring Revenue, Reduced Costs

TL;DR

**StartEngine's Q3 results show a massive turnaround, making it a strong buy as it capitalizes on private market demand and cuts costs.**

AI Summary

StartEngine Crowdfunding, Inc. reported a significant financial turnaround for the nine months ended September 30, 2025, achieving a net income of $6,156,411, a substantial improvement from a net loss of $13,828,694 in the same period of 2024. Revenue surged to $92,775,877 for the nine-month period, up from $31,203,200 year-over-year, driven primarily by its StartEngine Private product offering. The company's cash position dramatically increased to $31,302,604 as of September 30, 2025, compared to $10,842,297 at December 31, 2024. Operating expenses decreased across the board, with sales and marketing falling from $11,904,156 to $8,892,754 and research and development from $5,695,599 to $3,906,964 for the nine-month periods. This reduction in expenses is partly attributed to a headcount reduction implemented at the end of 2024. Strategic developments include the formation of StartEngine Canada LLC on August 6, 2025, to expand operations into Canada, and the effectiveness of the 2025 Equity Incentive Plan authorizing 80,000,000 additional shares of Common Stock.

Why It Matters

This strong financial performance signals a potential turning point for StartEngine, demonstrating its ability to generate significant revenue and achieve profitability in the competitive crowdfunding and private investment space. For investors, the shift from a substantial loss to a $6.16 million net income, coupled with a robust cash increase to over $31 million, suggests improved operational efficiency and market traction, particularly with its StartEngine Private offering. Employees benefit from a more stable and growing company, while customers gain access to a platform with increased resources and expanding international reach into Canada. In the broader market, StartEngine's success could further validate the crowdfunding model and intensify competition among alternative investment platforms.

Risk Assessment

Risk Level: medium — While StartEngine reported a net income of $6,156,411 for the nine months ended September 30, 2025, and a significant increase in cash to $31,302,604, the company's business model relies heavily on the volatile private investment market. Furthermore, the company's accumulated deficit remains substantial at $(55,017,677) as of September 30, 2025, indicating historical losses that could resurface if market conditions or operational efficiencies falter.

Analyst Insight

Investors should consider StartEngine's strong revenue growth and return to profitability as a positive indicator, but remain mindful of the inherent risks in the private investment sector. Monitor the continued performance of the StartEngine Private offering and the company's ability to sustain reduced operating expenses. A deeper dive into the specific drivers of the StartEngine Private revenue and its long-term sustainability is warranted.

Financial Highlights

debt To Equity

0.19

revenue

$92,775,877

operating Margin

N/A

total Assets

$71,014,725

total Debt

$11,187,828

net Income

$6,156,411

eps

N/A

gross Margin

N/A

cash Position

$31,302,604

revenue Growth

+197.3%

Revenue Breakdown

Key Numbers

• $92.78M — Revenue (Increased from $31.20M in 2024 for the nine months ended September 30, 2025)
• $6.16M — Net Income (Shifted from a net loss of $(13.83M) in 2024 for the nine months ended September 30, 2025)
• $31.30M — Cash (Increased from $10.84M at December 31, 2024)
• $8.89M — Sales and Marketing Expenses (Decreased from $11.90M in 2024 for the nine months ended September 30, 2025)
• $3.91M — Research and Development Expenses (Decreased from $5.70M in 2024 for the nine months ended September 30, 2025)
• $55.02M — Accumulated Deficit (Reduced from $(61.17M) at December 31, 2024)
• 743,042,911 — Common Stock Shares Outstanding (As of October 31, 2025, following a 20-for-1 stock split on May 6, 2024)
• 80,000,000 — Additional Common Stock Shares (Authorized for issuance under the 2025 Equity Incentive Plan)

Key Players & Entities

• STARTENGINE CROWDFUNDING, INC. (company) — Registrant
• StartEngine Capital LLC (company) — wholly-owned subsidiary, funding portal
• StartEngine Secure LLC (company) — wholly-owned subsidiary, transfer agent
• StartEngine Primary LLC (company) — wholly-owned subsidiary, broker-dealer and alternative trading system
• StartEngine Private LLC (company) — product offering for accredited investors
• StartEngine Canada LLC (company) — newly formed subsidiary for Canadian expansion
• US Securities and Exchange Commission (regulator) — regulates funding portals and transfer agents
• Financial Industry Regulatory Authority (regulator) — regulates funding portals
• Delaware (regulator) — state of incorporation
• Bloomberg (company) — publisher

FAQ

Risk Factors

• Dependence on Key Personnel and Talent [medium — operational]: The company's success is significantly reliant on its ability to attract and retain key management and technical personnel. A reduction in headcount at the end of 2024 indicates potential challenges in this area. Loss of key employees could disrupt operations and hinder growth, especially with the expansion into Canada.
• Evolving Crowdfunding Regulations [medium — regulatory]: As a crowdfunding platform, StartEngine operates in a highly regulated environment. Changes in securities laws and regulations, both domestically and internationally (e.g., with the expansion into Canada), could impact the company's business model, compliance costs, and ability to operate.
• Competition in the Crowdfunding Space [medium — market]: The crowdfunding industry is competitive, with various platforms vying for issuers and investors. StartEngine faces competition from established players and new entrants, which could pressure its market share and revenue growth. The success of its StartEngine Private offering highlights a competitive advantage, but sustained growth requires continuous innovation.
• Reliance on Investment Income and Platform Fees [low — financial]: While revenue has surged, the company's profitability is still influenced by its investment portfolio and the fees generated from crowdfunding campaigns. Fluctuations in market conditions or a slowdown in deal flow could impact these revenue streams.
• Scalability of Operations [medium — operational]: The substantial increase in revenue and the expansion into Canada necessitate the ability to scale operations effectively. Failure to manage growth efficiently could lead to operational inefficiencies, increased costs, and a decline in customer satisfaction.

Industry Context

StartEngine operates within the rapidly evolving fintech and crowdfunding industry. The sector is characterized by increasing investor appetite for alternative investments and a growing number of platforms facilitating capital raises for both private and public companies. Regulatory frameworks are continuously adapting to this growth, creating both opportunities and compliance challenges.

Regulatory Implications

The company's expansion into Canada (StartEngine Canada LLC) introduces new regulatory landscapes to navigate. Compliance with Canadian securities laws will be crucial for successful market entry and sustained operations. Furthermore, ongoing adherence to U.S. crowdfunding regulations remains paramount.

What Investors Should Do

1. Monitor the performance of StartEngine Private
2. Evaluate the impact of the 2025 Equity Incentive Plan
3. Assess the success of the Canadian expansion
4. Analyze operating expense trends

Key Dates

• 2024-12-31: Headcount reduction implemented — Contributed to the decrease in operating expenses, particularly sales and marketing and R&D, in the nine months ended September 30, 2025.
• 2025-05-06: 20-for-1 stock split — Increased the number of common shares outstanding, potentially improving liquidity and making shares more accessible to a wider range of investors.
• 2025-08-06: Formation of StartEngine Canada LLC — Marks the company's strategic expansion into the Canadian market, opening new avenues for growth and revenue generation.
• 2025-09-30: End of the nine-month reporting period — Period during which the company achieved significant revenue growth and a net income turnaround, demonstrating strong operational performance.

Glossary

Accumulated Deficit

The total cumulative net losses of a company since its inception, minus any cumulative net income. (StartEngine has significantly reduced its accumulated deficit from $(61.17M) at December 31, 2024, to $(55.02M) at September 30, 2025, reflecting its recent profitability.)

StartEngine Private

A product offering by StartEngine that likely facilitates private company funding rounds or secondary market transactions. (This segment was the primary driver of the company's substantial revenue increase in the nine months ended September 30, 2025.)

2025 Equity Incentive Plan

A plan established by the company to grant equity awards (like stock options or restricted stock) to employees, directors, or consultants. (The plan authorizes 80,000,000 additional shares of Common Stock, providing a mechanism for future employee compensation and retention.)

Noncontrolling interest

The portion of equity of a subsidiary that is not attributable to the parent company. (A small negative noncontrolling interest of $(13,251) is noted, indicating a minor ownership stake in subsidiaries not held by StartEngine.)

Deferred revenue

Revenue that has been received by a company for goods or services that have not yet been delivered or rendered. (Deferred revenue increased to $3,905,067 from $2,880,316, suggesting an increase in future service obligations or unearned income.)

Year-Over-Year Comparison

StartEngine Crowdfunding, Inc. has demonstrated a remarkable financial turnaround compared to the prior year. Revenue for the nine months ended September 30, 2025, surged by approximately 197.3% to $92.78 million, a significant increase from $31.20 million in the same period of 2024. This top-line growth has translated into profitability, with a net income of $6.16 million, a substantial improvement from a net loss of $13.83 million. Operating expenses have been managed effectively, with notable decreases in sales and marketing and R&D, contributing to the improved bottom line. The company's cash position has also strengthened considerably, more than doubling from $10.84 million to $31.30 million.

Key Financial Figures

• $0.00001 — ction 12(g) of the Act: Common Stock, $0.00001 par value (Title of Class) Indicate

Filing Documents

• stgc-20250930x10q.htm (10-Q) — 1975KB
• stgc-20250930xex31d1.htm (EX-31.1) — 13KB
• stgc-20250930xex31d2.htm (EX-31.2) — 14KB
• stgc-20250930xex32d1.htm (EX-32.1) — 7KB
• stgc-20250930xex32d2.htm (EX-32.2) — 7KB
• 0001104659-25-104929.txt ( ) — 7617KB
• stgc-20250930.xsd (EX-101.SCH) — 46KB
• stgc-20250930_cal.xml (EX-101.CAL) — 41KB
• stgc-20250930_def.xml (EX-101.DEF) — 171KB
• stgc-20250930_lab.xml (EX-101.LAB) — 395KB
• stgc-20250930_pre.xml (EX-101.PRE) — 295KB
• stgc-20250930x10q_htm.xml (XML) — 1390KB

Financial Statements

Financial Statements 3 Condensed Consolidated Balance Sheets at December 31, 2024 and September 30, 2025 (unaudited) 3 Condensed Consolidated Statements of Operations for the Three and Nine months Ended September 30, 2025 and 2024 (unaudited) 4 Condensed Consolidated Statements of Stockholders' Equity for the Three and Nine months Ended September 30, 2025 and 2024 (unaudited) 5 Condensed Consolidated Statements of Cash Flows for the Nine months Ended September 30, 2025 and 2024 (unaudited) 6 Notes to Condensed Consolidated Financial Statements 7 Item 2

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 23 Item 3

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 36 Item 4

Controls and Procedures

Controls and Procedures 36 PART II OTHER INFORMATION 38 Item 1

Legal Proceedings

Legal Proceedings 38 Item 1A

Risk Factors

Risk Factors 38 Item 2 Unregistered Sales of Equity Securities and Use of Proceeds 45 Item 3 Defaults Upon Senior Securities 45 Item 4 Mine Safety Disclosures 45 Item 5 Other Information 45 Item 6 Exhibits 46

Signatures

Signatures 47 In this Form 10-Q, the term "StartEngine", "we", "us", "our", or "the Company" refers to StartEngine Crowdfunding, Inc. and our subsidiaries on a consolidated basis. The terms "StartEngine Capital" or "our funding portal" refers to StartEngine Capital LLC, the terms "StartEngine Secure" or "our transfer agent" refer to StartEngine Secure LLC, the terms "StartEngine Primary" or "our broker-dealer" refer to StartEngine Primary LLC, the term "StartEngine Private" refers to StartEngine Private LLC, the term "StartEngine Private Manager" refers to StartEngine Private Manager LLC, the term "StartEngine Adviser" refers to StartEngine Adviser LLC and the term "StartEngine Assets" refers to StartEngine Assets LLC. THIS FILING MAY CONTAIN FORWARD-LOOKING STATEMENTS AND INFORMATION RELATING TO, AMONG OTHER THINGS, THE COMPANY, ITS BUSINESS PLAN AND STRATEGY, AND ITS INDUSTRY. THESE FORWARD-LOOKING STATEMENTS ARE BASED ON THE BELIEFS OF, ASSUMPTIONS MADE BY, AND INFORMATION CURRENTLY AVAILABLE TO THE COMPANY'S MANAGEMENT. WHEN USED IN THE OFFERING MATERIALS, THE WORDS "ESTIMATE," "PROJECT," "BELIEVE," "ANTICIPATE," "INTEND," "EXPECT" AND SIMILAR EXPRESSIONS ARE INTENDED TO IDENTIFY FORWARD-LOOKING STATEMENTS, WHICH CONSTITUTE FORWARD LOOKING STATEMENTS. THESE STATEMENTS REFLECT MANAGEMENT'S CURRENT VIEWS WITH RESPECT TO FUTURE EVENTS AND ARE SUBJECT TO RISKS AND UNCERTAINTIES THAT COULD CAUSE THE COMPANY'S ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE CONTAINED IN THE FORWARD-LOOKING STATEMENTS. INVESTORS ARE CAUTIONED NOT TO PLACE UNDUE RELIANCE ON THESE FORWARD-LOOKING STATEMENTS, WHICH SPEAK ONLY AS OF THE DATE ON WHICH THEY ARE MADE. THE COMPANY DOES NOT UNDERTAKE ANY OBLIGATION TO REVISE OR UPDATE THESE FORWARD-LOOKING STATEMENTS TO REFLECT EVENTS OR CIRCUMSTANCES AFTER SUCH DATE OR TO REFLECT THE OCCURRENCE OF UNANTICIPATED EVENTS. 2 Table of Contents

FINANCIAL INFORMATION

PART I FINANCIAL INFORMATION

Financial Statements

Item 1. Financial Statements STARTENGINE CROWDFUNDING, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) September 30, December 31, 2025 2024 Assets Current assets: Cash $ 31,302,604 $ 10,842,297 Marketable securities 1,856 1,856 Accounts receivable, net of allowance 851,540 2,848,880 Other current assets 1,165,603 1,032,932 Total current assets 33,321,603 14,725,965 Property and equipment, net 126,947 126,698 Investments - warrants 60,103 60,103 Investments - stock 10,112,628 10,327,834 Investments - Private 8,895,962 4,701,010 Investments - Collectibles 2,362,083 2,361,996 Investments - Real Estate — 1,479,310 Due from related party 209,360 209,360 Intangible assets, net 15,892,192 18,463,620 Other assets 33,847 33,847 Total assets $ 71,014,725 $ 52,489,743 Liabilities and Stockholders' Equity Current liabilities: Accounts payable $ 329,281 $ 542,903 Accrued liabilities 6,953,480 6,725,780 Deferred revenue 3,905,067 2,880,316 Total current liabilities 11,187,828 10,148,999 Total liabilities $ 11,187,828 $ 10,148,999 Commitments and contingencies Stockholders' equity: Series A Preferred Stock, par value $ 0.00001 , 207,000,000 shares authorized, 185,440,880 and 185,440,880 shares issued and outstanding at September 30, 2025 and December 31, 2024, respectfully, liquidation preference of $ 5,310,409 and $ 5,310,409 at September 30, 2025 and December 31, 2024, respectively. 5,286,667 5,286,667 Series T Preferred Stock, par value $ 0.00001 , 99,000,000 shares authorized, 9,642,080 and 9,642,080 shares issued and outstanding at September 30, 2025 and December 31, 2024, respectively, liquidation preference of $ 1,414,486 and $ 1,414,486 at September 30, 2025 and December 31, 2024, respectively. 983,634 983,634 Series Seed Preferred Stock, par value $ 0.00001 , 213,000,000 shares authorized, 204,772,940 and 204,810,720 and shares i

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