FTX grew revenue 1,000% during the crypto craze: Leaked financials

FTX rode the crypto craze to a billion dollars in revenue last year while expanding its global footprint through a flurry of acquisitions, according to internal documents seen by CNBC.

The audited financials give a rare glimpse into the privately held start-up’s finances. FTX was profitable, quickly expanding across the globe and saw breakneck growth.

The privately held crypto exchange’s revenue soared more than 1,000% from $89 million to $1.02 billion in 2021. Its profitability, like many start-ups, depends on how you measure it. Operating income was $272 million, up from $14 million a year earlier. FTX saw net income of $388 million last year, up from just $17 million a year earlier.

FTX declined to comment on the leaked financial documents.

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

By way of comparison, publicly traded Coinbase also experienced a cash boom times during crypto’s bull market, with $7.4 billion in revenue and $3.6 billion of net income last year. But in Q2 of this year, it reported $808.3 million in revenue, a decline of 64% from the year-ago quarter, and a surprise net loss of $1.1 billion, compared with $1.59 billion in net income in the same quarter last year, as retail trading volumes cratered.

FTX was founded in three years ago by former Wall Street quant trader Sam Bankman-Fried. The 30-year-old CEO has recently stepped in as the industry’s lender of last resort, looking to backstop companies as liquidity dried up. On top of multiple loans of hundreds of millions of dollars, Bankman-Fried’s companies also looked to acquire distressed assets. In July, FTX signed a deal that gives it the option to buy lender BlockFi and was in discussions to acquire South Korean Bithumb. FTX also offered to buy Voyager in August but was turned down for what the company claimed was a “low ball bid.”

According to the documents, FTX had roughly $2.5 billion in cash at the end of last year and 27% profit margins, according to the documents. Margins were closer to 50% if advertising and “related party” expenses are 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.

FTX was founded at a time when Coinbase and Binance had solidified themselves as the world’s largest trading venues. Coinbase still operates largely within the U.S. Binance, the largest exchange by trading volume got its start in…