BitGo Doubles Q3 Profit as Revenue Falls 51%

Crypto custodian BitGo posted third-quarter net income of $44.1 million, almost double a year earlier. Revenue fell 51% to $2.85 billion. The profit came from revaluing its own digital assets, not from the core business.

What the filing shows

In the quarter ended September 30, BitGo booked a $71.5 million unrealized gain on digital assets. The operating loss was $19.2 million, against operating income of $3.9 million a year ago.

Revenue dropped because digital asset sales slowed. BitGo records the full proceeds of those sales as revenue and shows the costs separately. That is why revenue after direct costs fell less, by 32% to $37.3 million.

A miss against estimates

The company missed Wall Street forecasts on both revenue and earnings. The Zacks Investment Research consensus put revenue at $4.2 billion, so the actual figure came in 32% lower.

BitGo shares rose 4.9% on Monday and closed at $5.10. They are still down about 60% this year, according to Yahoo Finance.

Balance sheet and layoffs

As of September 30, BitGo held $143 million in cash and equivalents. Its corporate treasury contained 2,399 Bitcoin with a fair value of $200 million.

In June the company cut about 15% of its staff to focus on trading, stablecoins and artificial intelligence.

What follows from it

BitGo's profit depends on the BTC price in its treasury, so in a quarter of falling markets it could turn into a loss. The operating business is still in the red.