Citing internal documents, CNBC pointed out that the cryptocurrency exchange FTX generated $1.02 billion in revenue in 2021, an increase of more than 1,000% from the previous year. At the same time, FTX has also successfully expanded its global operating territory through a series of acquisitions and achieved amazing growth.
Audited financials show FTX’s revenue of $89 million in 2020, but in 2021, as the global cryptocurrency boom hits, the cryptocurrency exchange’s revenue soared to $1.02 billion, growing more than 1000%. The document also mentioned that about two-thirds of FTX’s revenue comes from trading fees for futures and derivatives, and about 16% comes from spot trading.
In addition, FTX’s Operating Income also increased from $14 million in 2020 to $272 million last year, and net income rose from $17 million to $388 million.
FTX was founded three years ago by former Wall Street quantitative trader Sam Bankman-Fried (SBF). The 30-year-old CEO has recently been active in bailouts of financially troubled cryptocurrency companies, seeking to acquire distressed assets in addition to multiple loans that run into the hundreds of millions of dollars. In July, FTX signed an agreement giving it the option to acquire cryptocurrency lending platform BlockFi and is in discussions to acquire South Korean cryptocurrency exchange Bithumb. FTX also made an asset acquisition offer to Voyager in August, but it was later rejected by the other party on the grounds that the bid was “too low.”
FTX declined to comment on the leaked financial documents, but after the news came to light, SBF immediately issued a document confirming that FTX’s performance figures last year were indeed as reported.
A rare look under the hood at FTX’s finances & growth in 2021. Leaked financials show📃
– Revenue jumped 1,000%, topped $1B
– Profitable, with 27% operating margins
– Most biz coming from derivatives, outside U.S.
– Global footprint growing through M&Ahttps://t.co/ocSlsNarRA
— Kate Rooney ☘️ (@Kr00ney) August 20, 2022
The filing said FTX’s phenomenal growth was driven by its global operations, with U.S. operations FTX US accounting for less than 5% of total revenue. In addition, FTX will spend about 15% of its revenue on advertising marketing, celebrity endorsements in 2021, and plans to spend about $900 million in this area in the next few years.
According to an investor report obtained by CNBC, FTX had revenue of $270 million in the first quarter of 2022 and is on track to generate about $1.1 billion in revenue this year. However, the cryptocurrency market fell into a cold winter in the first half of the year, and many companies in the industry faced losses and layoffs. It is still unknown whether FTX’s performance has also been affected.
As of the end of last year, FTX had about $2.5 billion in cash and a 27 percent profit margin, or nearly 50 percent if you strip out advertising and “related party” fees, the filings show.
FTX announced in January this year that it had completed a $400 million Series C financing. Investors include traditional venture capital such as Temasek, SoftBank Vision Fund, and Tiger Global. The company’s valuation reached $32 billion.