BTGO Posts $0.36 EPS, Beating Estimates by $0.40 as Revenue Halves

BTGO reported quarterly earnings per share of $0.36 on Monday, beating the consensus estimate of a $0.04 loss by $0.40, according to FiscalAI. The pleasant arithmetic deserves an asterisk: the company's GAAP net income of $44.1 million contained a $71.5 million unrealized gain on digital assets.

Quarterly revenue came in at $2.85 billion in the headline release, though the conference call told a grimmer tale of trend lines. Management said third-quarter revenue fell 34% sequentially and 51% year over year to $2.9 billion. Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) swung to a $4.3 million loss from a $13.5 million profit a year earlier.

What drove the decline?

Digital asset sales revenue and margins both contracted amid weaker trading activity. Management also flagged a greater mix of lower-margin stablecoin (a cryptocurrency pegged to a stable reference asset) transactions as a drag on profitability.

Cost discipline provided partial offset. Operating expenses fell 5.5% sequentially, helped by reductions across the business. Management said AI tools have increased engineering output 65% since the start of the year while simultaneously reducing engineering headcount and costs. One assumes the engineers who remain are both fewer and faster.

The balance sheet shows a company conserving powder. BitGo ended the quarter with $143.2 million in cash. It repurchased roughly $25 million of stock, with about $25 million remaining under its buyback authorization.

How do assets on platform look?

Reported assets on platform and staked assets declined, which management attributed primarily to lower digital-asset prices rather than client departures. On a normalized basis, assets edged up sequentially to $59.9 billion, with staked assets at $10.5 billion.

The company also expanded its Go Network integrations and international footprint, including the launch of BitGo Korea.

The NYDIG institutional trading acquisition added derivatives, structured products, financing capabilities and client relationships. Management expects the deal to make a significant contribution in 2027, though it offered no specific guidance. Patience, apparently, is a 2027 virtue.

BitGo also advanced its goStocks initiative and tokenized-asset programs. Their commercial prospects depend in part on adoption rates and regulatory approvals, which is to say: on factors outside the company's control.

How did the stock respond?

BTGO shares traded up $0.25 in midday trading Monday, reaching $5.11. Volume reached 910,561 shares against an average of 1,288,999.

The technical picture remains bruised. The stock's 50-day simple moving average sits at $6.73; the 200-day average at $7.83. The company has a market cap of $600.31 million and a price-to-earnings ratio of -3.52. The 52-week range runs from a low of $4.36 to a high of $24.50, a span that tells its own story about the past year.

What are institutions doing?

Several hedge funds opened new positions during recent quarters:

• Vontobel Holding Ltd. bought a new position in the third quarter worth $75,000.
• Vise Technologies Inc. initiated a third-quarter stake valued at about $83,000.
• Aspiriant LLC bought a new position in the third quarter worth about $135,000.
• Penn Capital Management Company LLC acquired a third-quarter stake worth about $976,000.
• State Street Corp acquired a new stake in the second quarter worth about $1,202,000.

These are modest sums by institutional standards. One might charitably call them exploratory.

What do analysts say?

Research firms have been revising targets downward while mostly maintaining positive ratings:

• Wedbush cut its price target from $15.00 to $8.00 with an "outperform" rating on August 13.
• Cantor Fitzgerald lowered its target from $15.00 to $13.00 with an "overweight" rating on August 17.
• Canaccord Genuity Group reiterated a "buy" rating and a $15.00 price objective on August 21.
• Wells Fargo & Company decreased its target from $13.00 to $11.00 with an "overweight" rating on August 13.
• Weiss Ratings restated a "sell (d)" rating on October 9.

The consensus picture: one Strong Buy, ten Buy ratings, three Hold ratings and one Sell. Per MarketBeat.com data, BTGO carries an average rating of "Moderate Buy" and an average target price of $12.77. That target sits well above the current $5.11 share price, a gap analysts appear content to explain rather than close.

BitGo Holdings, founded in 2013, provides institutional-grade digital asset custody, multi-signature wallets, trading, staking and settlement services to financial institutions and other clients in the United States and internationally. The verdict on this quarter: a headline beat built on unrealized gains, with the operating business still waiting for trading activity to return.