BitGo, the custody and digital asset infrastructure company listed on the New York Stock Exchange as BTGO, said third-quarter revenue fell 50.9% from a year earlier to $2.85 billion, its results release shows, as softer crypto trading cut the volume of digital assets it sells on behalf of clients. Revenue was down 34.1% from the second quarter.
Net income nevertheless rose to $44.1 million, from $22.7 million a year earlier and a $19.0 million loss in the second quarter. The company attributes the swing mainly to a $71.5 million unrealised gain on its own digital asset treasury, which held 2,399 bitcoin worth $200.4 million on 30 September.
The business model is easy to miss behind the headline number: BitGo books the full value of the crypto it sells for clients as revenue, keeps a sliver of it, and earns its real margin from custody, staking and stablecoin services.
That sliver is getting thinner. Digital asset sales brought in $2.72 billion of revenue but only $4.2 million after costs, a margin of 15 basis points, down from 17 in the second quarter and 20 a year ago. BitGo blamed softer trading and a higher share of lower-margin stablecoin transactions.
The numbers that matter
Strip out the pass-through and BitGo’s revenue after direct costs was $37.3 million, 32.1% lower than a year before. Operating expenses, excluding direct costs, were $56.6 million, which leaves an operating loss of about $19 million. Adjusted EBITDA was a $4.3 million loss, against a $13.5 million profit a year earlier.
The fee lines held up better.
Staking revenue was $68.2 million, with BitGo keeping 5.9% of rewards. Stablecoin-as-a-service revenue rose 52.5% from a year earlier to $37.4 million, with a 7.7% take rate. Client numbers rose 33% to 6,640, though the company notes the quarter-on-quarter rise did not come from acquisitions or new asset inflows.
Belshe pointed to the Go Network, BitGo’s settlement and trading network, and to tokenized equities as the growth story. During the quarter BitGo completed its purchase of NYDIG’s institutional trading business.
Why investors are paying
BitGo’s shares closed Monday at $5.10, up 4.94%, and gained a further 2.9% in extended trading after the release, The Block reported. The release gives two reasons the market might look past the revenue drop: a $24.7 million share buyback in the quarter, under a $50 million authorisation, and $143.2 million of cash with no corporate debt beyond borrowings that fund its lending.
BitGo is not alone this season. Coinbase’s third-quarter revenue fell 35% while crypto gains lifted net income; on Monday MARA sold 13,597 bitcoin to repay loans after booking a fair-value gain, and Securitize agreed to buy River One alongside a quarterly loss.
The skeptics’ reading
A profit built on an unrealised gain reverses when the price does. Bitcoin was about $74,100 on Tuesday, well below the level implied by BitGo’s 30 September valuation of roughly $83,500 per coin, our arithmetic on the company’s figures.
Reported assets on the platform fell 42% from a year earlier to $59.9 billion. BitGo says that on a normalised basis, which reprices past balances at current median prices, assets rose 32%. The reported figure uses the quarter’s median prices; at 30 September prices, the company says, assets on the platform were $83.0 billion.
What’s next
The fourth quarter closes on 31 December, and with it the next mark on that 2,399-bitcoin treasury.
Related: EToro said its third-quarter profit fell 74% to $15 million as crypto trading slowed
Related: Ether treasury company Bitmine reported a $6.31 billion annual loss as the ether price fell
Related: Indian exchange Unocoin said on 12 Nov that ether left one of its BitGo wallets despite a freeze
This article is for information only and is not investment advice.