Bullish stock pulls back on missing earnings, $605M loss as value of cryptocurrency holdings declines

Cryptocurrency exchange Bullish fell short of Wall Street expectations on Thursday, revealing a first-quarter loss amid disappointing revenue generated outside of client trades.

The company reported adjusted revenue of $92.8 million for the three-month period ending March 31, below analysts’ expectations of $94.1 million. This failure was driven by revenue from subscriptions and services, which amounted to $54.8 million compared to $57.6 million.

As falling digital asset prices continue to impact cryptocurrency-related businesses, Bullish noted that the company’s losses widened to $604.9 million from $348.6 million last year. The performance represented a deterioration from a loss of $563.6 million in the previous quarter.

Despite the loss, CEO Tom Farley said in a statement that he was “pleased” with the Cayman Islands-based company’s first-quarter results. Highlighted the upside Proposed acquisition worth $4.2 billion From financial services company Equiniti, saying it will boost the company’s tokenization campaign.

Shortly after the opening bell on Thursday, bullish shares fell 8.8% to $38, according to Yahoo FinanceBut they have since regained most of that ground, most recently trading at $41.32, down more than 1% on the day. When the company debuted on Wall Street in August, shares closed at $69.54 amid growing demand for cryptocurrency-related companies.

In a note published Thursday, Citi analysts posited that the decline in revenue from subscriptions and services was driven by seasonality within the business. Crypto news outlet CoinDeskwhich Bullish acquired in 2023, recently hosted the leading cryptocurrency conference Consensus in Miami.

Likewise, analysts at investment bank Compass Point said in a note that they believe the loss of subscriptions and services was driven by seasonality related to cryptocurrency conferences. The conferences in the first and second quarters attracted more than 26,000 participants, Polish said.

Like most companies in the cryptocurrency space, fluctuations in the value of Bullish’s cryptocurrency holdings impacted its bottom line, contributing $559 million in unrealized losses. In total, the company noted that it has digital assets worth about $2.3 billion.

In a presentation to shareholders, Bullish highlighted options trading volume of $11.6 billion. The company said it has consolidated its position as the second most popular exchange for Bitcoin Options behind crypto exchange Deribit.

The offshore company indicated that it is looking to expand this sector in the United States, noting that it has applied for the necessary licenses from the Commodity Futures Trading Commission (CFTC).