Why Did BitGo Swing To A Loss Despite Higher Revenue?
BitGo Holdings reported $4.33 billion in second-quarter revenue, up 79.6% from $2.41 billion a year earlier, but the digital asset infrastructure company remained in the red as crypto asset revaluations and weaker margins weighed on profitability.
Revenue increased 14.7% from the first quarter, driven mainly by higher digital asset sales and growth in BitGo’s stablecoin-as-a-service business. The company also reported a 26% increase in its number of clients, while normalized assets on the platform rose 31% to $65.2 billion.
Those operating gains did not translate into net income. BitGo posted a $19 million net loss, equal to $0.16 per share, compared with net income of $38.3 million in the second quarter of 2025. The loss nevertheless narrowed sharply from $60.7 million in the first quarter.
The year-over-year deterioration was heavily influenced by digital asset valuations. BitGo recorded an $18.8 million unrealized loss on digital assets during the quarter, compared with a $55.8 million unrealized gain in the same period last year.
Adjusted EBITDA also turned negative, with a $4.2 million loss compared with a $3 million gain a year earlier.
Are Lower Margins Becoming A Bigger Problem?
CEO Mike Belshe said second-quarter financial performance fell short of the company’s expectations despite the rapid increase in revenue.
“While we delivered revenue growth, profitability was impacted by lower margins and an unfavorable revenue mix,” Belshe said. He attributed the pressure partly to lower spreads on certain spot transactions and a smaller contribution from derivatives.
The results show why revenue growth alone may provide an incomplete picture of BitGo’s performance. Digital asset transaction businesses can generate large reported revenue figures while operating on relatively thin spreads, leaving earnings sensitive to changes in product mix, trading conditions and asset prices.
That makes margins an important measure for investors assessing whether higher activity can translate into sustainable earnings. If more revenue comes from lower-margin transactions while higher-margin businesses contribute less, top-line expansion may have only a limited effect on profitability.
Investor Takeaway
BitGo’s Q2 results show a widening gap between business growth and earnings. Client numbers, platform assets and revenue are rising, but investors will want to see higher margins and lower operating costs before that growth produces consistent profits.
How Is BitGo Cutting Costs?
BitGo has already taken steps to reduce expenses. The company cut about 15% of its workforce in June and expects its cost-reduction measures to generate roughly $15 million in annualized cash savings.
Management expects expenses to decline further in the third quarter. BitGo said it also expanded the use of artificial intelligence across engineering and operations to accelerate software development, automate manual tasks and improve operating efficiency.
Belshe said the company streamlined its cost structure during the second quarter, while Chief Financial Officer Ed Reginelli said the focus for the second half of the year is converting business growth into stronger earnings and more durable financial performance.
“We have the financial flexibility to invest behind our highest-priority opportunities while maintaining discipline around costs and capital allocation,” Reginelli said.
Reginelli is scheduled to step down as CFO effective Sept. 15, creating a management transition while the company works to improve margins and reduce expenses.
What Does The $50 Million Buyback Tell Investors?
BitGo also authorized a share repurchase program of up to $50 million. The company reported $159 million in cash and $147.7 million worth of Bitcoin at the end of the period, giving management resources to fund operations while repurchasing stock.
The buyback may provide support for shares after a difficult period for the stock, but it also puts greater focus on capital allocation while the company remains unprofitable. Investors will have to weigh the potential benefit of reducing the share count against the value of preserving cash for expansion, acquisitions or further operating losses.
BitGo shares closed Wednesday 0.6% higher at $4.99.
The next quarter will offer a clearer test of whether June’s workforce reduction and other expense cuts can improve the bottom line. With revenue, clients and assets on the platform all growing, the central question is no longer whether BitGo can expand its business. It is whether that expansion can produce margins strong enough to restore profitability.
