BTGO Q2 Earnings Call Highlights

BTGO (NYSE:BTGO) reported higher second-quarter revenue and continued growth in assets on its platform, but lower trading margins and an unfavorable revenue mix weighed on profitability as digital asset markets weakened.

Co-founder and CEO Mike Belshe said the company expanded normalized assets on platform to approximately $65 billion and normalized assets staked to approximately $12 billion, with both measures rising sequentially and year over year. He said BitGo gained market share during a quarter in which total crypto market capitalization fell 13%, Bitcoin declined about 14%, industry trading volumes dropped more than 20%, and volatility remained at multiyear lows.

“While revenue grew, lower margins and unfavorable revenue mix pressured profitability,” Belshe said. He attributed the pressure in part to narrower spreads on certain spot transactions, lower derivatives contribution, and changes in staking-client activity.

Revenue Rises, but Adjusted EBITDA Turns More Negative

CFO Ed Reginelli said total revenue reached $4.3 billion, up 14.7% sequentially and 79.6% from a year earlier. Direct costs were also about $4.3 billion, increasing 15.1% from the first quarter and 80.8% year over year.

BitGo posted a GAAP net loss of $19 million, an improvement from a $60.7 million loss in the first quarter. The sequential improvement reflected a smaller unrealized mark-to-market loss on digital assets and lower compensation and benefits expense. The company recorded an $18.8 million unrealized loss on digital assets in the second quarter, compared with a $53.7 million loss in the prior quarter.

Adjusted EBITDA was a loss of $4.2 million, compared with a $1.7 million loss in the first quarter and adjusted EBITDA profit of $3 million a year earlier. Reginelli said the sequential decline was primarily driven by lower economic contribution from digital asset sales and staking, partly offset by lower cash compensation and professional fees.

• Digital asset sales revenue was $4.2 billion, up 14.7% sequentially and 84.3% year over year.
• Digital asset sales margin was about $7.1 million, with the overall margin declining to 17 basis points from 32 basis points in the first quarter.
• Staking revenue was $64.7 million, up 30.9% sequentially but down 28.8% year over year.
• Subscriptions and services revenue was $27.5 million, up 7.7% from the prior quarter.
• Stablecoin-as-a-service revenue was $38.8 million, up 1.7% sequentially and 148% year over year.

Reginelli said derivatives notional volume was roughly $1 billion in the second quarter, down from nearly $3 billion in the first quarter. He said the company had seen some margin recovery in July and expected digital asset sales margins to move back toward historical averages of roughly 20 to 25 basis points.

Cost Reductions Expected to Begin in Third Quarter

The company said it reduced its workforce in June and streamlined operations. It recorded a $1.3 million restructuring charge related to the reduction. BitGo expects the restructuring to produce $9 million in annualized savings, while other initiatives are expected to provide an additional $6 million of annualized savings, with the benefits beginning in the third quarter.

Belshe said the other initiatives include repatriating node infrastructure to reduce public cloud costs and wider use of artificial intelligence in engineering and operations. According to Belshe, autonomous AI agents are fully resolving about 20% of engineering issues each month, while AI provides the first response for roughly 17% of inbound support tickets. He added that more than 40% of the company’s code is AI-generated or AI-assisted, subject to human review and custody-grade controls.

Expenses excluding direct costs were $59.9 million, down 13% sequentially. Reginelli said the company’s goal was to bring the business closer to break-even or slightly profitable on an adjusted EBITDA basis in the third quarter, helped by revenue growth and cost reductions.

Tokenization, Stablecoins and Custody Expansion

Belshe highlighted BitGo’s efforts in tokenized securities, stablecoin infrastructure and quantum-risk management. He said the company provides wallet infrastructure for the Depository Trust Clearing Corp.’s tokenization initiative, with the first U.S. transactions using DTCC tokenized assets processed in July ahead of the platform’s full production launch.

The company also serves as the sole qualified custodian for the Canton Network and for Figure’s open-network tokenized equities platform, according to Belshe.

During the call, Belshe demonstrated what he described as a tokenized entitlement representing SpaceX shares held at BitGo Bank Trust, followed by a collateralized borrowing transaction using those tokens and SoFiUSD stablecoin. He said BitGo’s initial focus in tokenized equities is on building financial use cases such as borrowing against holdings rather than pursuing trading fees directly.

Belshe also discussed the company’s quantum-risk tools for Bitcoin wallets. He said BitGo’s quantum resistance score allows clients to measure potential exposure using public blockchain data and move assets to fresh addresses while retaining ownership policies and security controls. He characterized the capability as an industry-wide security approach rather than a product intended primarily as a competitive upsell.

Third-Quarter Outlook and CFO Transition

For the third quarter, BitGo expects digital asset sales revenue and staking revenue to remain broadly consistent with second-quarter levels, assuming digital asset prices and market activity remain near recent levels. The company expects sequential growth in subscriptions and services, modest stablecoin-as-a-service growth, and lower operating expenses excluding direct costs.

The company ended the quarter with $159 million in cash and cash equivalents, no corporate-level debt, and 2,523 company-owned Bitcoin valued at approximately $148 million at quarter-end. Its board authorized a share repurchase program of up to $50 million in June.

BitGo also announced that Reginelli will transition from his role as CFO during the coming quarter. He will remain with the company to support an orderly transition, while BitGo said it would provide an update on succession plans at the appropriate time.

About BTGO (NYSE:BTGO)

BitGo Holdings Inc is the digital asset infrastructure company delivering custody, wallets, staking, trading, financing, stablecoins and settlement services from regulated cold storage. BitGo Holdings Inc is based in NEW YORK.

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected].

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