BitGo Holdings, BTGO (NYSE:BTGO), reported a 50.9% year-over-year decline in third-quarter revenue as weaker digital asset trading and a shift toward lower-margin stablecoin transactions weighed on results. The company posted net income of $44.1 million, helped by an unrealized gain on digital assets.
Revenue fell to $2.9 billion, down 34.1% from the second quarter, while direct costs declined to approximately $2.8 billion. Adjusted EBITDA was a loss of $4.3 million, compared with a $4.2 million loss in the prior quarter and a $13.5 million profit a year earlier.
Co-Founder and CEO Mike Belshe said approximately two-thirds of clients who traded with BitGo in the second quarter traded less in the third quarter after digital asset prices increased in mid-August.
Trading Weakness and Lower Costs
Chief Accounting Officer Ali Vapra said the improvement in net income from a $19 million second-quarter loss reflected a $71.5 million unrealized mark-to-market gain on digital assets and lower operating expenses. Net income was $22.7 million in the year-earlier quarter.
Digital asset sales revenue fell 52% year over year to $2.7 billion. After related costs, the business generated approximately $4.2 million, a margin of 15 basis points, down from 17 basis points in the second quarter and 20 basis points a year earlier.
Vapra said trading improved near the end of August but did not fully offset earlier weakness, as some larger clients chose to hold positions after prices recovered. A greater share of lower-margin stablecoin transactions also hurt profitability.
Expenses excluding direct costs fell 5.5% sequentially to $56.6 million, as second-quarter cost reductions lowered compensation and administrative spending. That was partly offset by approximately one month of expenses from the acquisition of NYDIG’s institutional trading business.
Staking and Stablecoin Services
Staking revenue rose 5.4% sequentially to $68.2 million but fell 24.1% from a year earlier. Vapra said higher Ethereum balances and prices supported revenue, while lower protocol reward rates and price declines for other tokens were headwinds.
Stablecoin-as-a-Service revenue was $37.4 million, down 3.8% from the prior quarter but up 52.5% year over year. Average daily reserve balances fell approximately 6% sequentially. Vapra said the year-over-year increase was supported by higher balances and fixed monthly fees from newly supported programs.
Subscriptions and services revenue declined 7.2% sequentially to $25.6 million, primarily because of lower non-recurring engineering revenue. Belshe said such work, including projects associated with new coins, can be difficult to predict and that BitGo prefers projects that lead to recurring revenue.
At quarter-end prices, assets on BitGo’s platform exceeded $83 billion and assets staked were approximately $16 billion. On the company’s reported basis, which uses median digital asset prices in quarterly calculations, assets on platform fell to approximately $59.9 billion from $65.2 billion. Normalized assets on platform rose slightly from $59.6 billion in the second quarter, while normalized assets staked increased to $10.5 billion from $10.4 billion.
Expansion and Tokenized Assets
BitGo completed its acquisition of NYDIG’s institutional trading business on Aug. 27 and launched BitGo Global Markets, adding derivatives, structured products and financing capabilities. Belshe said the company had not provided financial guidance for the acquired business but expected significant contributions in 2027. Vapra said most of its revenue would be reflected in digital asset sales.
Belshe also highlighted an expanded off-exchange settlement integration with OKX, allowing eligible institutions to access the exchange’s trading liquidity while keeping assets in BitGo custody. He said the company is not currently expecting significant revenue from its Go Network, which supports the service, but expects that to change over time.
Chief Revenue Officer Chen Fang described tokenized equities as a commercial priority. BitGo is developing goStocks to bring traditional equities on-chain, initially holding them in qualified custody at BitGo Bank & Trust. Fang said broader access and transferability would be subject to regulatory approvals.
Fang also said the WisdomTree Treasury Money Market Digital Fund had been integrated into BitGo Mint, enabling institutional clients to convert idle cash into yield-generating assets that can serve as collateral for trading and financing solutions.
Capital and Client Growth
BitGo ended the quarter with $143.2 million in cash and cash equivalents and 2,399 company-owned Bitcoin valued at approximately $200 million. It had no corporate-level debt other than borrowings used to fund lending activities, Vapra said. The company repurchased approximately $25 million of stock, leaving about $25 million available under its authorization.
During the question-and-answer session, Belshe said BitGo had a little over 6,600 clients, while noting a discrepancy in how some clients had previously been counted. Vapra said third-quarter revenue was split roughly equally between U.S. and international customers based on their location.
About BTGO (NYSE:BTGO)
BitGo Holdings, Inc (NYSE: BTGO) is a financial technology company focused on digital asset infrastructure and services. The company provides institutional-grade solutions designed to help businesses securely custody, manage, trade and settle cryptocurrencies and other blockchain-based assets.
Its offerings include qualified digital asset custody, multi-signature wallets, portfolio and treasury management, trading and liquidity services, staking, lending and settlement solutions. BitGo also provides technology and infrastructure that supports cryptocurrency exchanges, financial institutions, investment firms, token issuers and other organizations participating in the digital asset ecosystem.
Founded in 2013, BitGo serves institutional clients in the United States and international markets.
