FTX increased revenue by 1,000% in the crypto craze, circulated financials reveal

August 23, 2022: -FTX rode the crypto craze to a billion dollars in revenue in the previous year while we expanded its global footprint through a flurry of acquisitions, according to internal documents seen by CNBC.

The audited financials provide a rare peek into the privately held company’s finances. FTX was profitable, quickly expanding globally, and saw breakneck growth.

The crypto exchange’s revenue is zoomed over 1,000%, from $89 million to $1.02 billion in 2021. Its profitability, such as many start-ups, depends on the way you measure it. Operating income was $272 million, from $14 million before a year. FTX saw a net income of $388 million in the previous year, up from just $17 million a year earlier.

According to an investor deck shared with CNBC, the company brought in $270 million in revenue in the initial quarter of 2022. It was on track to do roughly $1.1 billion in revenue in 2022. But it’s unclear how FTX held up in the second quarter as crypto prices lowered during the so-called “Crypto Winter.”

By comparison, publicly-traded Coinbase also experienced a cash boom in the crypto’s bull market, with $7.4 billion in revenue and $3.6 billion of net income in the previous year. But in the second quarter of this year, it said $808.3 million in revenue, a refuse of 64% from the quarter of a year ago, and a surprise net loss of $1.1 billion, which is compared with $1.59 billion in net income before a year, as retail trading volumes cratered.

FTX was founded by former Wall Street quant trader Sam Bankman-Fried. The 30-year-old CEO has stepped in as the industry’s lender of last resort, which looks to backstop companies as liquidity dries up. On top of multiple loans of hundreds of millions of dollars, Bankman-Fried’s companies looked to acquire distressed assets.

In July, FTX signed a deal that gave it the option to buy lender BlockFi and was in discussions to get South Korean Bithumb. FTX also offered to buy Voyager in August but is turning down for what the company argued was a “low ball bid.”

FTX had $2.5 billion in cash by this year’s end and 27% profit margins, according to the documents. Margins stood closer to 50% if advertising and “related party” expenses were stripped out. It last raised money in January, collecting $400 million from investors like SoftBank’s Vision Fund 2 and Tiger Global, at a $32 billion valuation.