BitGo profit rises on crypto gains as third-quarter revenue drops
BitGo is posting sharply higher third-quarter profit even as its top line contracts, highlighting how balance-sheet crypto gains are cushioning weaker operating performance. The U.S.-listed digital asset infrastructure company reports a net loss from operations and misses Wall Street estimates for both revenue and earnings.
Highlights
- BitGo reports third-quarter net income of $44.1 million, nearly doubling from a year ago, driven by a $71.5 million unrealized digital asset gain despite $19.2 million operating loss.
- Revenue falls 51% year-on-year to $2.85 billion and misses Zacks consensus by 32%, while revenue after direct costs drops 32% to $37.3 million.
- Shares rise 4.9% to $5.10 as BitGo holds $143 million in cash and 2,399 Bitcoin worth $200 million, following a 15% workforce cut and operational refocus.
Quarter results and balance-sheet effects
As reported by Cointelegraph, BitGo says third-quarter net income reaches $44.1 million, nearly double from a year earlier, after a $71.5 million unrealized gain on digital assets offsets a $19.2 million operating loss in the quarter ended Sept. 30.The company says revenue falls 51% year on year to $2.85 billion as digital asset sales slow. Because BitGo generally records the full proceeds from those sales as revenue and books costs separately, revenue after direct costs declines 32% to $37.3 million.
A year earlier, the crypto custodian reports operating income of $3.9 million. The latest quarter also comes in below Wall Street expectations, with Zacks Investment Research consensus pointing to $4.2 billion in revenue, leaving the reported figure 32% under that estimate.
Market reaction and operational refocus
Investors send BitGo shares up 4.9% on Monday to $5.10, trimming part of the stock's roughly 60% decline since early in the year, according to Yahoo Finance. The company also reports $143 million in cash and cash equivalents, along with 2,399 Bitcoin in corporate treasury holdings valued at $200 million as of Sept. 30.The results come after BitGo cuts about 15% of its workforce in June as it refocuses on trading, stablecoins and artificial intelligence. That repositioning suggests the company is trying to strengthen higher-priority business lines while crypto market activity remains uneven.
Earlier, we reported that global cybersecurity and privacy startups raised $6.8 billion in Q3, boosted by larger late-stage rounds.
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