BitGo revenue surged 80% to $4.33B in Q2 2026, but trading margin halved to 17 bps, producing a $19M net loss. A large custodian's crypto move adds pressure.
Alpha Score of 40 reflects weak overall profile with moderate momentum, poor value, moderate quality, moderate sentiment.
BitGo Holdings (NYSE: BTGO) reported a net loss of $19.0 million for the second quarter of 2026, even as revenue jumped 79.6% year over year to $4.33 billion, according to the company's SEC filing on August 12. The loss contrasts with net income of $38.3 million in the same quarter last year, though it narrowed from the $60.7 million loss in Q1 2026.
The first quarter's loss came largely from a non-cash paper loss on the bitcoin BitGo holds on its balance sheet. The second quarter's loss is rooted in the business itself. The Digital Asset Sales unit, which produced $4.2 billion of quarterly revenue, saw its margin fall to 17 basis points from 32 basis points in Q1 and from 19 basis points a year earlier.
On the earnings call, BitGo executives blamed two shifts in product mix. Derivatives volume, which carries higher margins than spot trading, dropped to roughly $1 billion from about $3 billion in the previous quarter. A large staking client was also onboarded at lower contractual rates than the rest of the book. A separate $18.8 million unrealized loss on BitGo's digital assets weighed on the quarter, compared with a $55.8 million unrealized gain in the same period last year.
Under the margin pressure, the platform continued to grow. Clients on the platform rose 26.2% year over year to 5,833. Normalized assets on platform increased 31.4% to $65.2 billion, and normalized assets staked climbed 36.1% to $11.9 billion.
CEO Mike Belshe said the company grew assets on platform, deepened client relationships, and continued investing. The company cut about 15% of its workforce in late June, a move it framed as a pivot toward AI infrastructure and stablecoins. BitGo attributed $15 million in annualized cost savings to that reduction and cloud infrastructure changes. The board authorized a $50 million share buyback.
CFO Ed Reginelli is transitioning out of the role over the coming quarter. BitGo has not named a successor.
Analyst sentiment stayed bullish through both loss quarters. Ten of 13 covering analysts rated the stock a Strong Buy, with an average price target implying roughly 58% upside from BitGo's recent share price, built on expectations of a 2026 profitability path. The same week BitGo reported, BNY Mellon reported record quarterly revenue, raised its outlook, and added crypto staking to its own custody platform. That puts a much larger, already-profitable custodian on BitGo's turf just as its margin problem intensifies.
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