BitGo Holdings (NYSE:BTGO) released second-quarter financial results and hosted an earnings call on Wednesday. Read the complete transcript below.
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The full earnings call is available at https://events.q4inc.com/attendee/974937511
Summary
BitGo Holdings Inc reported a 113% year-over-year increase in total revenue to $3.8 billion, though sequentially it fell by 39% due to a shift in trading from spot to derivatives, impacting revenue reporting.
The company launched several strategic initiatives, including derivatives trading, which saw $3 billion in notional volume in Q1, and expanded partnerships with firms like 21Shares and OKEx to enhance institutional settlement infrastructure.
Future guidance suggests that digital asset sales revenue is expected to remain stable in Q2, with anticipated growth in stablecoin services and a continued focus on strategic growth areas like tokenized equities and stablecoin infrastructure.
Despite market headwinds, the company increased its client base by 42% year-over-year to 5,569 and reported a 29% year-over-year growth in normalized assets on platform.
Management emphasized that periods of market volatility are opportunities to strengthen the business, focusing on product development, regulatory capabilities, and expanding client engagement.
Full Transcript
OPERATOR
Hello everyone. Thank you for joining us and welcome to BitGo first quarter 2026 earnings call. After today’s prepared remarks, we will have a question and answer session. If you would like to ask a question at that time, please press star 1 on your telephone keypad. To withdraw your question, press star 1 again. I will now hand the call over to Rachel Dye, Head of Investor Relations. Please go ahead.
Rachel Dye (Head of Investor Relations)
Hello everyone. Good afternoon. Thank you for joining BitGo’s Q1 2026 earnings conference call. Our remarks today will include forward looking statements including those regarding our future operating results and financial condition, such as our business strategy, market growth and objectives for future operations. Actual results may vary materially from today’s statements. Information concerning risks, uncertainties and other factors that could cause these results to differ are included in our SEC filings, including those that are stated in the Risk Factors section of our annual report on Form 10-K for the year ended December 31, 2025 and in our other filings with the SEC. These forward looking statements represent our outlook only as of the date of this call. We undertake no obligation to revise or update any forward looking statements. Additionally, the matters we discussed today will include both GAAP and non-GAAP financial measures. Reconciliations of any non-GAAP financial measures to the most directly comparable GAAP measures are set forth in our earnings press release. Non GAAP financial measures should be considered in addition to, and not as a substitute for GAAP measures. Joining me today on the call are Mike Belshee, Founder and CEO, as well as Ed Reginelli, CFO. With that, I will now turn the call over to Mike.
Mike Belshee (Founder and CEO)
Thank you Rachel and thank you everyone for joining us. We delivered strong underlying business performance in Q1 despite continued softness across the broader digital asset market. While market activity created pressure on our headline financial results, underlying monetization across the businesses remained strong and we continued to gain market share across assets under custody, trading volume and several of our product verticals during the quarter. We also continue to invest across product platform and go-to-market capabilities while making meaningful progress across several strategic growth areas that we believe will matter over the long term. Before I go deeper into the quarter, I want to address an important point regarding the accounting presentation of our results as we expect this will be an area of investor focus. Bitgo today operates multiple businesses across trading, staking, financing, stablecoin, infrastructure, settlement and other related services under GAAP. Different parts of the platform are recognized differently for accounting purposes, with certain activities reflected on a gross basis and others reflected on a net basis. As the business continues to Scale and diversify. Reported revenue alone does not always capture the underlying economics or monetization profile of the platform. At the start of January, we launched derivatives within our digital asset sales. Business adoption has been encouraging with approximately 3 billion in notional derivatives trading volume in Q1 alone. As a result, a portion of our client activity shifted from spot trading to derivatives products. That mix shift matters when evaluating our reported revenue because spot trading activity is reflected on a gross basis while the derivatives are reported on a net basis. As a result, the sequential decline in total revenue does not fully reflect the underlying platform economics and reported revenue. Comparisons to prior periods are not directly comparable. More broadly, we believe investors should evaluate the business through the underlying margins, take rates and net economics after direct transaction related costs associated with each of our core revenue streams. We are building institutional grade digital asset infrastructure, the secure regulated control layer that institutions rely on to build within digital assets. Our clients increasingly want integrated workflows across regulated custody, trading, financing, settlement, stablecoin infrastructure and related services through a single trusted partner. We continue to strengthen that foundation throughout Q1 and we believe its importance will only increase as the market matures. We view custody as the entry point to the broader Bitgo platform and the foundation of our client relationships. Clients establish trust, bring assets onto the platform and increasingly expand into our other products and services with a single integrated framework. This land-and-expand strategy is central to how we deepen client engagement. It’s how we increase workflows across the platform and drive long term platform value. We also continue to see growing participation in the space from traditional financial institutions, including asset managers, issuers and other large counterparties. In our view, this remains one of the most important long term tailwinds for Bitgo. These institutions are generally not building infrastructure from scratch. They are looking for trusted partners that can support digital asset adoption in a regulated and scalable way. This is exactly where Bitgo is focused and where we believe we are differentiated. Our advantage is the combination of regulatory standing, security architecture and the breadth of capabilities we provide within a single integrated platform. Operationally, this was reflected in a continued deepening of client engagement across the platform, increasing our number of clients served to 5569, up 42% year over year and users to 1.2 million. Despite broader market headwinds, reported assets on platform at the end of Q1 were approximately 63 billion and reported assets staked were 11.8 billion, both down from prior periods in dollar terms, primarily as a result of lower digital asset prices during the quarter. Because digital asset prices can materially impact reported asset values. We also evaluate underlying asset growth on a price normalized basis. We believe this more accurately reflects the fundamental growth of the business, client inflows and Bitgo’s continued market share gains independent of the market price movement using current quarter digital asset prices. Across all periods, normalized assets on platform actually grew 29% year over year and 10% sequentially. Normalized stake balances grew 21% year over year and 27% sequentially. Bitcoin and Ethereum balances on the platform grew 131% year over year and 7% sequentially. Taken together, we believe these demonstrate continued underlying momentum across the business despite the broader market volatility. Let’s now dive into some key operational and commercial highlights from quarter one a key focus throughout Q1 was continuing to broaden the reach of our institutional platform through expanded commercial relationships and partnerships. For example, in Q1 we significantly expanded our partnership with 21 shares with one of the world’s largest issuers of cryptocurrency exchange traded products. This highlights the underlying demand for regulated crypto exposure in key markets around the world, including throughout Europe, and builds upon Bitco’s existing markets. Additionally, just a few weeks ago we announced plans with OKEx, a leading crypto exchange, to bring automated off exchange settlement infrastructure to institutional clients trading on OKEX in the US this is an example of Bitco helping solve structural challenges for institutional trading, which has historically required institutions to pre fund assets on exchanges and take counterparty risk against those exchanges. It addresses the growing demand from institutions to separate custody from trading risk. We believe this is a major milestone for the industry, clearly establishing Bitgo as the leader in institutional settlement. Beyond these announced partnerships, we also deepened relationships across a broader set of institutional clients, exchanges, asset managers and ecosystem partners during the quarter, including several strategic engagements that have not yet been publicly disclosed. These partnerships are important not simply because of their headline value, but because they reflect the increasingly strategic role Bitgo plays within the institutional digital asset workflows. They demonstrate that institutions are choosing Bitco not only for custody, but as a premier core infrastructure partner to support broader operational and financial activity. Throughout the quarter. We continue to extend our product capabilities into strategic growth areas. As I touched on earlier, we launched derivatives trading in January to support growing client demand for tools that help manage volatility, hedge exposure, generate yield and structure risk more efficiently. Adoption in the first quarter of launch has been encouraging and we have already seen meaningful engagement across the platform. Importantly, some existing spot clients are now incorporating derivatives into broader workflows within Bitco which is exactly the type of cross product adoption we want to drive over time. Stablecoins is another area where we made meaningful progress and where we continue to see significant long term opportunity. We have said consistently that stablecoin infrastructure can become one of the most important growth areas for Bitcoin over time and this quarter reinforced that view. Stablecoin infrastructure is one of the clearest examples of how Bitgo’s platform extends beyond trading into broader financial and payments workflows. During and shortly after quarter end, we launched Bitco Mint, a one stop portal where clients can mint burn and convert stablecoins from one type to another. We also continue to support clients and partners across reserve management, transaction processing and the broader operational stack around stablecoins. When we look at client conversations today, the range of stablecoin use cases is getting broader across payments, Treasury Management, settlement, tokenized asset infrastructure and embedded financial applications. We believe Bitco is well positioned to benefit from these trends and we’re pleased to announce several stablecoin related commercial partnerships and including with Stablec, SOFI and the Better Money Company on financing and broader institutional workflows. We launched our Unified Financing platform and further expanded Prime Services capabilities including additional Risk management, Structured products financing and treasury tools. These investments are strategically important. Each time we add a new capability that helps clients keep more workflows inside the Bitco ecosystem, we deepen client engagement and increase the overall utility of the platform and make Bitgo more central to how those clients operate. Geographic expansion has also remained an important priority this quarter. Bitco was named issuer and primary custodian for fyusd, a US dollar backed stablecoin designed for institutional adoption across Asian markets in Europe. Beyond the 21Shares partnership, we added new traders to Bitcoin Prime’s liquidity network in April, improving execution for our clients on our regulated infrastructure. I’d like to now provide some context on the financial results before I hand this over to Ed for a more detailed discussion. We were not insulated from the market environment, softer market conditions, reduced activities in parts of the business and the non cash markdown on our digital assets. Treasury weighed on GAAP earnings. However, despite this environment, the underlying economics of the business remained resilient while relative to broader market conditions as they were supported by continued market share gains, improved monetization across several of our core business lines and ongoing client engagement across the platform. At the same time, we continue to invest in the strategic areas we believe will drive durable long term growth such as product platform, regulatory capability and go-to-market execution. Having operated through multiple up and down cycles in our 13 year history. We believe periods like this often create the best opportunities to strengthen the business and deepen our long term competitive position. Looking ahead, some parts of the business remain sensitive to market activity and token prices, while other parts are benefiting from onboarding, product expansion and continued traction with clients and partners. Ed will take you through that in more detail, including the financial bridge for the quarter and the key drivers across each business line. Before I hand it over, I want to close with a broader perspective on where we see the industry heading Institutions continue to move into digital assets. Stablecoins continue to become more relevant to real world payments and financial workflows. Tokenization continues to create new infrastructure needs. At the same time, regulatory clarity continues to improve across key jurisdictions, including constructive momentum in the United States around market structure and digital asset legislation such as the Clarity Act. We believe greater regulatory clarity is one of the key factors that can further accelerate institutional adoption and BICO’s total addressable market over time, particularly as traditional financial institutions seek clearer regulatory frameworks before committing additional capital and resources into the digital asset market. As the market matures, clients increasingly want trusted regulated integrated partners rather than fragmented piecemeal solutions. We believe those structural trends continue to support the long term demand environment for Bitco. Periods like this often separate businesses that are simply exposed to market activity from businesses that are building durable value. Our role is not to call the market. Our job is to continue strengthening the platform and deepening the client relationships and positioning the business to emerge stronger as adoption expands. We did that in Q1. Now I’ll turn it over to Ed.
Ed Reginelli (Chief Financial Officer)
Thank you Mike and thank you everyone for joining us today. Let me start with the consolidated financial view and then walk through each of our major offerings. In the first quarter, total revenue was $3.8 billion, up 113% year over year and down 39% sequentially. The year over year increase reflects a larger digital asset sales business and a broader contribution from stablecoin as a service relative to prior year quarter. The sequential decline was primarily the result of lower digital asset sales activity in a soft crypto market environment. As Mike noted, the headline percentage change overstates the decline in trading revenue as a portion of spot trading activity has shifted to derivatives, which are reported on a net rather than gross basis. For that reason, we do not think that analyzing total revenue alone fully captures the underlying economics of the quarter. While total revenue declined 39% sequentially, direct costs also declined at a similar rate. At the same time, margins and take rates improved across digital asset sales staking and stablecoin as a service. As a result, the sequential decline in total revenue was more pronounced than the change in the underlying economics of the business. Adjusted EBITDA loss was $1.7 million in the quarter compared with a positive $3.9 million in Q1 of last year and a positive $12.1 million in Q4. The year over year and sequential change reflected weaker market conditions, lower subscriptions and services revenue and continued investment in the business. It also included approximately $3 million of one time legal, professional costs and other one time charges associated with the IPO process and other strategic initiatives. GAAP net loss was $60.7 million in the quarter compared with a net loss of $25.7 million in Q1 of last year and a net loss of $50 million in Q4. The primary driver of that result was negative mark to market adjustments on digital assets as well as elevated IPO-related stock based compensation expense which we expect to normalize from Q1 26 levels going forward. Let me now move to the offerings starting with digital asset sales. Revenue for digital asset sales was $3.7 billion, up 128% year over year and down 39% sequentially. While overall trading activity reflects a weaker market environment, the underlying economics of the business improved during the quarter on a normalized basis excluding the accounting impact of the derivatives mix shift. Our underlying trading economics outperformed the broader market sequentially and significantly outperformed on a year over year basis. We believe this reflects continued market share gains in institutional digital asset trading. Overall margin was 32 basis points compared with 20 basis points a year ago and 24 basis points in Q4, primarily driven by the contribution from derivatives activity following the launch of the offering on January 1st of this year. Strategically, we view derivatives as an important extension of Bitco’s platform. Clients increasingly want integrated workflows that include risk management, hedging, yield generation and structured solutions alongside spot execution. Expanding those capabilities strengthens client engagement and increases strategic relevance of our trading platform over time. Turning to staking revenue was $49.4 million, down 66% year over year and 15% sequentially, primarily reflecting lower token prices. Staking take rates increased 16.1% from 7.6% in Q4 and 12.5% in the prior year quarter driven by additional token onboarding and a more favorable validator mix including the contribution of the higher economics of the Canton related activity. While the current mix may vary over time, the broader takeaway is that we are improving the economic quality of this business line while continuing to expand token support, subscriptions and services. Revenue was $25.6 million up 11% year over year and down 35% sequentially. The sequential decline primarily reflected a lower level of one time ecosystem and implementation oriented projects compared with Q4 when activity in this area was elevated. While these projects are not recurring in nature, they remain strategically important because they often support token onboarding, client implementations and broader downstream revenue opportunities across the platform. As a result, we do not view the sequential revenue decline as representative of the underlying health of the recurring revenue base. Stablecoin as a service continued to be the bright spot during the quarter. Revenue was $38.2 million up 44% sequentially. Take rate improved to 7.4% from 5.5% in Q4. Growth was driven by continued client adoption, product enhancements and new partnerships. We view stablecoin infrastructure as a significant long term growth opportunity for Bitco supported by expanding adoption across payments, settlement, treasury management and broader financial applications. Finally, interest income was $0.9 million up 259% year over year and 89% sequentially. Turning now to expenses, the …
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