BitGo net income nearly doubles as Q3 revenue falls 51%

BitGo shares closed Monday at $5.10, up 4.94%, before the earnings release. They fell 1.14% in after-hours trading to $5.04. The stock had opened at $4.80 and traded between $4.74 and $5.18 during the session, with about 915,000 shares changing hands. BitGo reported diluted earnings of $0.36 per share, compared with $0.15 a year earlier and a loss of $0.16 in the previous quarter.

For the three months ended September 30, digital-asset sales totaled $2.72 billion, down 52% year over year. After $2.72 billion in related costs, the business generated a $4.2 million contribution margin, or 15 basis points, below 17 basis points in the second quarter and 20 basis points a year earlier. Direct costs across the company were $2.81 billion, leaving $37.3 million in revenue after those costs, down 32.1% annually. Operating expenses excluding direct costs fell 5.5% sequentially to $56.6 million, but BitGo recorded an operating loss of about $19.2 million and an adjusted EBITDA loss of $4.3 million.

The company had 6,640 clients, up 33.1% from 4,988 a year earlier, and about 1.3 million platform users. Reported platform assets fell to $59.9 billion from $104 billion, while staked assets declined to $10.5 billion from $28.6 billion. Adjusted for current-quarter median cryptocurrency prices, however, platform assets increased 31.9% and staked assets 41.1% year over year. BitGo also completed its acquisition of NYDIG’s institutional trading business during the quarter.

Stablecoin-as-a-Service revenue rose 52.5% year over year to $37.4 million, while staking revenue fell 24.1% to $68.2 million. BitGo repurchased $24.7 million of shares under a $50 million authorization, leaving about $25.3 million unused. At September 30, it held 2,399 Bitcoin valued at $200.4 million and $143.2 million in cash and cash equivalents.