BitGo CFO to Exit as Q2 Net Loss Hits $19 Million

BitGo Chief Financial Officer Edward Reginelli will resign effective Sept. 15, the digital-asset infrastructure company disclosed on Aug. 12. In the same announcement, BitGo reported a $19.0 million second-quarter net loss, reversing a $38.3 million profit a year earlier even as revenue climbed 79.6% to $4.33 billion.

BitGo's Form 8-K says Reginelli notified the board on Aug. 10. The company said his resignation did not result from a disagreement over its operations, policies or practices, and that it had begun a formal search for a successor. Reginelli is expected to remain in an advisory role after his departure.

The net loss narrowed from $60.7 million in the first quarter. However, adjusted EBITDA swung to a $4.2 million loss from a $3.0 million gain a year earlier and deteriorated from a $1.7 million loss in the prior quarter, according to the earnings release.

Trading Volume Grows as Margins Narrow

Most of BitGo's revenue passed through as direct trading costs. Digital Asset Sales produced $4.20 billion of revenue and $4.19 billion of direct costs, leaving a company-stated quarterly margin of about $7.1 million. Its unit margin fell to 17 basis points from 32 basis points in the first quarter and 19 basis points a year earlier.

BitGo attributed the decline to lower spreads on some spot trades and a smaller mix of derivatives activity. The company recognizes spot trading revenue on a gross basis but derivatives revenue on a net basis, meaning shifts between the products can have a meaningful impact on reported Digital Asset Sales revenue and the associated margin.

Staking showed similar pressure. Revenue rose 30.9% from the first quarter to $64.7 million but fell 28.8% from a year earlier. BitGo's staking take rate dropped to 6.0% from 16.1% in the first quarter and 10.0% a year ago.

Stablecoin-as-a-Service was a faster-growing line, with revenue up 148% year over year to $38.8 million. Sponsor fees totaled $35.7 million, producing an 8.0% take rate, compared with 2.6% a year earlier.

Savings Target Follows June Layoffs

The results follow BitGo's June announcement that it would cut approximately 15% of its workforce. BitGo now says its broader changes to investment priorities and its operating model are expected to produce about $15 million in annualized cash savings. The quarter included a $1.3 million restructuring charge.

BitGo reported 5,833 clients, up 26.2% from a year earlier. Its unadjusted assets on platform fell 27.8% to $65.2 billion, while its price-normalized measure rose 31.4%. The company calculates the normalized figure by repricing prior-period digital-asset balances using median prices from the current quarter.

The company ended June with $159.0 million in cash and 2,523 company-owned Bitcoin valued at about $147.7 million, with no corporate-level debt. Its board had authorized a $50 million share-repurchase program on June 17, equal to about 8% of Class A shares at prices then. The authorization has no fixed expiration and does not require BitGo to purchase any shares.

Reginelli will support the transition while BitGo searches for his replacement. In the earnings release, he said the company's second-half focus was “translating continued business growth into stronger earnings.”