GMOQ2 financial report: Cryptocurrency trading revenue increased 7 times, mining business revenue increased 90% but still lost money

Japanese Internet giant GMO announced its second quarter results for the current fiscal year, talking about the performance of its crypto exchange and mining businesses, with profits increasing sevenfold quarter-on-quarter. The report details the performance of the company's cryptocurrency business and changes to future plans.

The report states that GMO’s overall crypto business “generated 2.6 billion yen (about $23.5 million) in revenue in just one year of launch.” In the second quarter of this year, the company posted an operating profit of 250 million yen (about $2.26 million), compared to an operating loss of 730 million yen (about $6.6 million) in the previous quarter.

GMO Coin, the company’s crypto exchange business, saw “revenue increase 7.3 times quarter-on-quarter” in the second quarter. Net revenue for the second quarter was 1.42 billion yen (about $12.82 million) and operating profit was 550 million yen (about $4.97 million). In the first quarter of this year, the subsidiary lost 760 million yen (about $6.86 million).

Additionally, GMO revealed that its crypto exchange’s “customer accounts are growing steadily,” with approximately 177,000 accounts opened in a year.

GMO's crypto mining business generated revenue of 1.17 billion yen (about $10,568,436) in the second quarter, up 91.8% from the previous quarter. Although "our hash rate grew as expected," the overall loss was 360 million yen (about $3,252,429). Noting that "the loss was greater than our expectations," the company began to change its mining business strategy. In July, GMO mined 568 bitcoins, a slight increase from 528 bitcoins in the previous month. However, the hash rate in July was 384 PH/s, which was the same as the previous month.

GMO said the losses came from external “uncontrollable factors,” namely Bitcoin’s lower price and rising total hash rate, and elaborated on the change in priorities.

Previously, the company's priority was to mine cryptocurrencies internally, followed by providing cloud mining services to the public, and finally selling mining machines. The new strategy puts selling mining machines first, followed by internal mining, and finally providing cloud mining services. The company will also "secure cheaper electricity supply" to reduce the cost of electricity for mining.

GMO hopes that the change in strategy will bring greater control over its investments and enable earlier returns on investment. In the meantime, the company plans to sell the GMO Miner B2 and B3 by the end of October.