Key Takeaways:
BitGo Holdings Inc. (NYSE: BTGO) reported first-quarter revenue of $3.8 billion, a 113% increase from the prior-year period, though a wider net loss and a sequential revenue decline masked what executives called strong underlying performance. The results are the company’s second since its January IPO.
"Delivered strong underlying business performance in Q1 despite continued softness across the broader digital asset market," Founder and CEO Mike Belshe said on the company's earnings call. He noted that while market activity created pressure on headline results, the company continued to gain market share across assets under custody and trading volume.
The digital asset infrastructure company’s results were heavily influenced by the launch of its derivatives business in January. The shift of some client activity from spot trading, which is reported on a gross basis, to derivatives, reported on a net basis, makes sequential comparisons difficult, executives said. The GAAP net loss of $60.7 million was primarily driven by non-cash mark-to-market impacts on the company’s Bitcoin holdings and IPO-related stock compensation.
Digital asset sales revenue was $3.7 billion, up 128% from a year earlier but down 39% sequentially. The new derivatives offering generated approximately $3 billion in notional trading volume during the quarter. CFO Ed Reginelli said this mix shift was the primary reason for the sequential decline and that overall margin in the segment improved to 32 basis points from 20 basis points a year earlier.
"The sequential decline in total revenue does not fully reflect the underlying platform economics," Belshe said, urging investors to evaluate the business on margins and take rates.
Stablecoin-as-a-Service was a standout performer, with revenue of $38.2 million, up 44% sequentially. The take rate for the service improved to 7.4% from 5.5% in the fourth quarter, driven by client adoption and new partnerships with firms like SoFi and The Better Money Company.
The company ended the quarter with 5,569 clients, a 42% year-over-year increase. Belshe noted that on a price-normalized basis, assets on the platform grew 29% year-over-year and 10% sequentially, showing continued client inflows independent of digital asset price movements.
For the second quarter, BitGo expects revenue to remain broadly consistent with the first quarter, while total expenses are expected to decline as IPO-related charges normalize. The results suggest the company is successfully expanding its institutional services, with the new derivatives offering improving profitability despite complicating headline revenue figures. Investors will watch the Q2 report for signs of continued client growth and margin expansion.
This article is for informational purposes only and does not constitute investment advice.
