Bitgo Holdings, Inc. (BTGO) Q4 2025 Earnings Call Transcript

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Overview

The earnings call summary reveals strong financial performance with a focus on product development, strategic partnerships, and market expansion. The Q&A section highlights positive trends in client adoption, derivatives trading, and stablecoin projects, despite some uncertainties. The company's proactive approach to partnerships and regulatory alignment, along with optimistic guidance, suggests a positive outlook for the stock price. However, lack of clarity on some aspects may temper the overall impact.

Key Financial Performance

Full Year Revenue Growth 424% year-over-year increase, driven primarily by digital asset sales and gains in subscriptions and services, partially offset by a decline in staking revenue due to digital asset prices.

BTC on Platform 8% year-over-year growth, driven entirely by client inflows, not market price movement.

Top 5 Assets by Volume 3% year-over-year growth, driven entirely by client inflows, not market price movement.

Normalized Price Basis Assets on Platform 16% year-over-year growth, reflecting Bitgo's performance rather than market pricing.

Assets Staked 7% year-over-year decline on a normalized price basis, attributed to certain tokens unlocking over time.

Fourth Quarter Revenue $6.2 billion, a 440% year-over-year increase, driven by higher digital asset trading activity, increased subscription and service revenue, and the launch of Stablecoin as-a-Service.

Full Year Revenue $16.2 billion, a 424% year-over-year increase, driven by higher digital asset trading activity, increased subscription and service revenue, and the launch of Stablecoin as-a-Service.

Number of Clients 104% year-over-year growth to 5,322 clients, attributed to international expansion and deeper client engagement.

Number of Users 14% year-over-year growth to 1.2 million users.

Assets on Platform $81.6 billion, a 9% year-over-year decrease, driven by lower digital asset prices.

Assets Staked $15.6 billion, a 51% year-over-year decrease, driven by lower digital asset prices.

Digital Asset Sales (Q4) $6.0 billion, a 531% year-over-year increase, driven by higher trading activity, expansion of trading pairs, and increased client activity.

Digital Asset Sales (Full Year) $15.6 billion, a 513% year-over-year increase, driven by higher trading activity, expansion of trading pairs, and increased client activity.

Staking Revenue (Q4) $58.3 million, a 64% year-over-year decline, driven by volatility in digital asset prices.

Staking Revenue (Full Year) $385.0 million, a 16% year-over-year decrease, driven by volatility in digital asset prices.

Subscriptions and Services Revenue (Q4) $39.3 million, a 75% year-over-year increase, driven by an increase in the number of clients, growth in development fees, and higher lending activity.

Subscriptions and Services Revenue (Full Year) $121.5 million, a 57% year-over-year increase, driven by an increase in the number of clients, growth in development fees, and higher lending activity.

Stablecoin as a Service Revenue (Q4) $26.6 million, with a take rate of approximately 20 basis points on assets under management.

Stablecoin as a Service Revenue (Full Year) $66.7 million, with a take rate of approximately 16 basis points on assets under management.

Interest Income (Q4) $0.5 million, a 34% year-over-year increase, driven by increased fiat treasury investments.

Interest Income (Full Year) $1.5 million, a 63% year-over-year increase, driven by increased fiat treasury investments.

Adjusted EBITDA (Q4) $12.1 million, a 188% year-over-year increase.

Adjusted EBITDA (Full Year) $32.4 million, a 904% year-over-year increase.

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Operating Highlights

Stablecoin as a Service: Launched in 2025, this service allows institutional clients to issue U.S. dollar-backed stablecoins using Bitgo's regulated trust infrastructure. It has grown to over $5 billion in market cap since its launch, making it one of the fastest-growing stablecoins of all time. SoFi selected Bitgo's platform for their SoFi USD stablecoin.

Derivatives Business: Launched in early 2026, this business has seen roughly $3 billion in notional trading volume and over $3 million in revenue. It aims to improve trade offerings and cater to client interest in derivatives for yield generation and market downside protection.

Global Market Expansion: In 2025, Bitgo expanded its license in Germany and became a custody broker in Dubai. It also received a National Bank Charter under the OCC in the U.S., enabling operations across all 50 states. In 2026, Bitgo is targeting expansion in India, South Korea, the U.K., and the Cayman Islands, with a focus on the APAC region due to its significant share of global crypto liquidity.

Revenue Growth: Achieved 424% revenue growth for the full year 2025, driven by digital asset sales and gains in subscriptions and services, despite a decline in staking revenue due to digital asset prices.

Client and User Growth: Clients grew 104% year-over-year to 5,322, and users expanded 14% year-over-year to 1.2 million users by the end of 2025.

Regulatory Positioning: Bitgo's regulatory advancements, including the OCC license and compliance with stringent frameworks, position it as a leader in secure and compliant digital asset infrastructure. The company is also leveraging growing U.S. regulations to attract traditional firms.

Tokenized Equities: Bitgo is positioning itself to support tokenized traditional U.S. equities, a market surpassing $25 billion as of July 2025. It is already the custodian for the Figure platform, which issues equities on blockchain.

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Risk or Challenges

Market Volatility: The macro environment in the fourth quarter was challenging, and these conditions have carried into the first quarter of 2026. Digital asset prices have remained under pressure, and geopolitical tensions in the Middle East have added additional volatility. These factors directly impact revenue streams.

Decline in Digital Asset Prices: Lower digital asset prices have led to a decline in staking revenue and assets on the platform. This has also impacted the company's treasury strategy, resulting in unrealized losses on digital asset holdings.

Regulatory Challenges: While regulatory progress has been made, the company is still navigating evolving regulatory frameworks in various regions, including India, South Korea, the U.K., and the Cayman Islands. This could pose challenges to expansion and compliance.

Staking Revenue Decline: Staking revenue has significantly decreased due to lower digital asset prices, with a 64% year-over-year decline in Q4 2025 and a 16% decline for the full year.

Operational Costs: Increased general and administrative expenses, including higher legal costs and IPO-related expenses, have impacted profitability. Compensation and benefits expenses have also risen due to investments in engineering and commercial teams.

Transition to Derivatives: As spot trading volumes decline, there is a shift towards derivatives trading. However, derivatives are reported on a net basis, which could impact revenue visibility compared to gross reporting for spot trading.

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Guidance & Outlook

Market Expansion: Bitgo plans to expand into additional regions in 2026, with new licenses and registrations in India, South Korea, the U.K., and the Cayman Islands. The company sees significant growth opportunities in the APAC region, driven by increased engagement from banks, asset managers, and family offices exploring digital assets, stablecoins, and tokenized financial products.

Client Growth: In 2026, Bitgo aims to expand its role in institutional market infrastructure by increasing market share in OTC and derivatives. The company is also investing in agentic wallet infrastructure to support more sophisticated trading, settlement, and treasury use cases for institutional clients.

Product Expansion: Bitgo launched its derivatives business in early 2026, with $3 billion in notional trading volume and $3 million in revenue so far. The company plans to expand its lending and trading offerings and enter the tokenized equities market, which has surpassed $25 billion in tokenized assets as of July 2025.

Stablecoin as a Service: Bitgo's Stablecoin as a Service platform has seen significant growth, with assets under management exceeding $5 billion in early 2026. The company has added new clients, including SoFi, and plans to continue expanding this offering.

Regulatory Environment: Bitgo expects growing regulation in the digital asset industry, such as the GENIUS Act and discussions on the CLARITY Act, to increase its total addressable market. The company anticipates more traditional firms will seek secure and compliant solutions for entering the digital asset industry.

Revenue Projections: Bitgo expects strong year-over-year growth in trading revenue for Q1 2026, supported by the launch of its derivatives business. However, revenue from subscriptions and services is expected to be lower than Q4 2025 due to a decline in development fees. Staking fees are also expected to be significantly lower in Q1 2026 compared to Q1 2025, but with an improved take rate.

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Shareholder Return Plan

The selected topic was not discussed during the call.

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Key Q&A

Q:What are your thoughts on the CLARITY Act and its potential impact on your business?

A:Michael Belshe expressed excitement about the CLARITY Act, emphasizing its importance for regulatory clarity and the role of the CFTC in regulation post-passage. He hopes it passes soon to provide a clear legislative path forward for the industry.

Q:Can you provide more details on the strong client pipeline and its focus on TradFi?

A:Michael Belshe highlighted the strong pipeline, mentioning major players like Morgan Stanley and Citibank entering the digital asset space. He noted the lengthy process of client onboarding and emphasized the need to expand the sales team to meet demand.

Q:How does the broader crypto market's weakness affect your business segments?

A:Michael Belshe acknowledged the impact of lower digital asset prices on the sector but noted that stablecoins and trade volumes are less correlated to crypto prices. Subscription services also provide some stability.

Q:How is Bitgo positioned for agentic wallets, and how does it integrate with subscription services?

A:Michael Belshe explained that Bitgo's institutional-grade wallets are well-suited for agentic needs, offering features like multiple user policies and risk-based permissions. He encouraged feedback from users to improve the product.

Q:Do you think agentic AI could move the industry forward faster than the CLARITY Act?

A:Michael Belshe stated that both agentic AI and the CLARITY Act will drive growth but in different ways. He emphasized the importance of regulatory clarity for traditional finance and the early-stage exploration of agentic AI.

Q:Can you provide more details on the new token added to the staking product line and its impact?

A:Edward Reginelli mentioned the addition of the Canton token, which has significantly improved margins. He also highlighted the success of derivatives trading in Q1 and the potential for growth in subscriptions and services.

Q:What global catalysts do you expect to be most meaningful for the company and the sector in the next 1-2 years?

A:Michael Belshe pointed to the growing total addressable market (TAM) for digital assets, regulatory unlocks, and increasing participation from traditional financial firms as key catalysts. He cited predictions from industry leaders about the digitization of all assets.

Q:How are attach rates for additional services like prime brokerage trending?

A:Michael Belshe and Edward Reginelli noted strong attach rates, with 70% of clients using two or more products and 50% using three or more. They emphasized the focus on yield-generating activities and moving clients up the product stack.

Q:Can you provide details on the launch and performance of derivatives trading?

A:Michael Belshe stated that derivatives trading launched on January 1 and has seen substantial client adoption, with multibillions in trade volume within three months. He expects derivatives to dominate trading volume in the future.

Q:What is the outlook for trading revenue given recent volatility and the launch of derivatives?

A:Edward Reginelli projected a quarter-on-quarter decline in gross trading volume but significant year-on-year growth. He noted a shift in client behavior towards derivatives and yield-generating activities.

Q:How do you see the CLARITY Act affecting the pipeline and revenue growth?

A:Michael Belshe observed no slowdown in readiness to adopt digital assets among traditional financial firms. He noted the lengthy decision and deployment process but remained optimistic about continued growth.

Q:Can you elaborate on the partnership with Susquehanna and its impact on prediction markets?

A:Michael Belshe described the partnership as a differentiated way to access prediction markets, enabling clients to place investments through Bitgo's OTC capabilities. He noted early excitement but no specific data yet.

Q:What is the potential for Stablecoin as a Service, and how can it be monetized further?

A:Michael Belshe highlighted the success of stablecoin projects like USD1 and SoFi USD, predicting significant growth in stablecoin adoption for payments and settlements. He mentioned plans to enhance conversion capabilities between stablecoins.

Q:What does the OCC approval mean for your business?

A:Michael Belshe emphasized the benefits of the OCC National charter, including enhanced credibility, immunity from state-level regulatory complexities, and alignment with traditional finance standards. He noted its positive impact on client acquisition.

Q:What is the pipeline for Stablecoin as a Service in 2026?

A:Michael Belshe mentioned a healthy pipeline of stablecoin projects and partnerships with major players like PayPal and Fidelity. He noted the potential for more issuers due to current regulatory constraints on interest for stablecoins.

Q:Review of Unclear Management Responses

A:Management avoided providing specific details on the exact timeline for the CLARITY Act's passage and its immediate revenue impact. Additionally, they did not provide concrete data on the early performance of the partnership with Susquehanna or the exact attach rates for prime brokerage services.

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Earnings Word Cloud

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BTGO Transcript

Bitgo Holdings, Inc. (BTGO) Q4 2025 Earnings Call Transcript

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