Voyager Digital Q1 Loss Widens; Shares Drop

Shares of Voyager Digital (VOYG) fell in early trading Tuesday after the crypto company reported a wider operating loss despite higher revenues.

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Voyager is one of the fastest-growing publicly traded cryptocurrency platforms in the United States. (See Insiders’ Hot Stocks on TipRanks)

Q1 2022 Results

Revenue for the quarter ended September 30 came in at $65.6 million plus the $15.9 million from the Coinify business, for a total of $81.5 million. The revenue of $65.6 million represents an increase of 3,280% from $2 million in the prior-year quarter. During the quarter, Voyager acquired Coinify, a leading crypto payments processor and provider.

Operating loss was $28.3 million in Q1 2022 compared to an operating loss of $2.7 million in Q1 2021. The company said losses were mainly due to investments in the loyalty and rewards program, and have been reversed in the current quarter.

Total funded accounts exceed 860,000 and were up 29% from 665,000 at fiscal year ended June 30, 2021. Total Assets Under Management (AUM) grew to $4.3 billion from $2.6 billion as of June 30, with AUM currently just under $7 billion.

CEO Commentary

Voyager CEO and co-founder Stephen Ehrlich said, “Although the global crypto industry saw reduced volumes in the September quarter, our strategic decision to invest in customer acquisition and retention during that period has paid off as it resulted in a significant increase in downloads and a rise in the app rankings. That coupled with the volume uptick in the first half of the December quarter has Voyager well-positioned to exceed our June quarter record revenues in this quarter.

“If we look at our results on a calendar basis, we expect to exceed revenue of $360 million for the calendar year. We saw the September quarter as just a speed bump for the industry, experienced by other platforms as well, and Voyager has fared better than others on a comparative basis.”

Ehrlich also said the company plants to diversify its income by adding coins that generate staking rewards, as well as income streams through NFTs and crypto-based debit cards.

Voyager launched Tuesday the Voyager Debit MasterCard, the first crypto-based debit card that pays up to 9% annual rewards, and even more for Voyager Loyalty Program members.

Wall Street’s Take

On November 1, H.C. Wainwright analyst Kevin Dede maintained a Buy rating on VOYG with a C$28 price target. This implies 25.2% upside potential.

The rest of the Street is bullish on Voyager with a Strong Buy rating based on four Buys. The average Voyager Digital price target of C$30.39 implies 35.9% upside potential to current levels.