BitGo posts $4.33B revenue; direct costs ate 99.8%

BitGo reported $4.329 billion in revenue for the quarter while direct costs offset 99.83% of its Digital Asset Sales, resulting in a $19.0 million net loss and an adjusted EBITDA of negative $4.2 million.

Revenue rose 79.6% year over year. The Digital Asset Sales line produced $4.198 billion in sales and carried $4.190 billion in direct costs, leaving a $7.1 million spread, equal to 17 basis points of Digital Asset Sales revenue. BitGo records that segment gross when it acts as principal, making the gross presentation different from net-style software revenue.

On the income statement, the company recorded a $17.4 million operating loss and a $19.0 million net loss. The net result included an $18.8 million unrealized loss on company-owned digital assets and a $5.6 million disposal gain. The company-defined adjusted EBITDA for the quarter was negative $4.2 million.

Management announced cost actions it expects will yield about $15 million of annualized cash savings. The company carried out a reduction in force in June, recorded $1.3 million in restructuring charges and reported the restructuring plan as substantially complete. Those savings were projected rather than realized in the quarter.

Assets on Platform, measured as the median of daily client fiat and digital asset balances, stood at $65.2 billion. That was down 27.8% on a reported year-over-year basis but rose 31.4% when prior-period digital assets were repriced using current-quarter median prices. The repricing-adjusted balances reflect levels after removing the effect of asset-price changes.

BitGo disclosed a planned change in financial leadership. Chief Financial Officer Edward Reginelli notified the board on Aug. 10 that he will resign effective Sept. 15. The company said the decision did not result from a disagreement and that Reginelli will support the transition in an advisory role while a search for a successor is conducted.

A June shareholder authorization allows BitGo to repurchase up to $50 million of shares; the company made no repurchases during the three months ended June 30. Management and investors will monitor upcoming quarters for changes in operating results and margin retention as the company executes its cost plan.