BitGo's Q1 2026 results, disclosed in a May 13 8-K, are a useful case study in why gross revenue can be the most misleading number in a crypto-services company's release. The headline figure is enormous — total revenue of $3,773.6 million, up 112.6% year over year — and almost meaningless on its own, because sitting directly beneath it is $3,724.6 million of direct costs. Net the two and the actual contribution is roughly $49 million. The company still posted a net loss of $60.7 million for the quarter and an adjusted EBITDA of negative $1.7 million.

That structure tells you what kind of business BitGo runs. A company whose revenue and direct costs both sit near $3.7 billion is largely a pass-through operation — moving digital assets and executing trades where the gross flow is huge but the company keeps a thin sliver. The growth story is real in the sense that flow more than doubled; the profitability story is that turning that flow into earnings remains a work in progress. The quarter's operational highlight was a new product line built precisely to capture more margin from that flow.

"Launched a derivatives offering in Q1, generating approximately $3 billion in notional trading volume during the first quarter."— BitGo Holdings, Inc. 8-K, Exhibit 99.1, source

The derivatives launch matters because derivatives carry better economics than spot brokerage. A $3 billion notional figure in the product's very first quarter signals fast adoption, and notional volume is the input that drives derivatives revenue. For a company whose core custody-and-trading business runs on thin net margins, adding a higher-margin product is the logical path toward closing the gap between gross revenue and the bottom line. But notional is not revenue — $3 billion of notional volume produces some fraction of that in fees, and the 8-K's net loss makes clear that the new line had not yet pulled the company into profitability by quarter's end.

Custody, staking, and stablecoins-as-a-service

BitGo describes itself as "the digital asset infrastructure company," and the quarter's narrative spans digital-asset sales, staking, and what it calls "Stablecoin-as-a-Service," which the release says continued to gain momentum on the back of client adoption and new partnerships. The company also touted institutional platform expansion through partnerships including 21shares, SoFi, and others. The throughline is that BitGo is positioning as the back-end plumbing — custody, staking infrastructure, stablecoin issuance support — that other crypto businesses build on top of, rather than as a consumer-facing brand.

That positioning is strategically sound and is where the more durable economics should eventually live. Custody and infrastructure are sticky, recurring revenue, and stablecoin-as-a-service is exactly the kind of regulated-adjacent service with a clear institutional demand curve. The challenge visible in the numbers is that the high-volume, low-margin sales activity dominates the revenue line today, masking the smaller but better-quality infrastructure revenue underneath. A reader has to look past the $3.8 billion to find the business BitGo actually wants to be valued on.

The sequential decline is the caution

One number in the release deserves more attention than it will get: revenue fell 38.7% sequentially from the prior quarter's $6,156.5 million. Year-over-year growth of 112.6% sounds triumphant, but a 38.7% drop from Q4 2025 to Q1 2026 tells you the business is volatile quarter to quarter, which is unsurprising for a company whose revenue is dominated by transaction flow that rises and falls with market activity. Crypto trading volumes are cyclical and were softer in a quarter when bitcoin traded in the mid-$70,000s, and BitGo's flow-driven revenue moved with them. The net loss widened to $60.7 million from $25.7 million a year earlier and from $50.0 million in the prior quarter — losses are growing, not shrinking, even as the company scales.

It is worth dwelling on why the gross-revenue figure is structured the way it is, because the pattern recurs across crypto-trading businesses and trips up readers who are used to traditional companies. When a firm acts as a principal in digital-asset sales — buying an asset and selling it to a client — accounting rules often require it to report the full transaction value as revenue and the cost of acquiring the asset as a direct cost, even though the firm only ever keeps the spread. The result is a revenue line that scales with the gross value of assets changing hands rather than with the economic value the firm captures. That is why BitGo can show $3.8 billion of revenue against $3.7 billion of direct costs: the company is not keeping $3.8 billion of anything. A reader who anchors on the top line will badly overestimate the size of the business; the meaningful figures are the roughly $49 million of revenue net of direct costs and the adjusted-EBITDA trajectory toward breakeven. Treating gross flow as if it were sales revenue is the single most common error in reading a crypto-brokerage income statement.

For investors, the honest framing of BitGo's first reported quarter is that it is a large, fast-growing, and currently unprofitable infrastructure business whose reported revenue dramatically overstates the size of its actual economic engine. The metrics to track going forward are the ones that strip out pass-through gross flow: net revenue after direct costs, the trajectory of adjusted EBITDA toward breakeven, and the growth of the higher-margin lines — derivatives and stablecoin-as-a-service — relative to the low-margin sales activity. The $3 billion derivatives launch and the stablecoin momentum are the right bets. Whether they convert a $60.7 million loss into a profit is the question the next several quarters will answer.