Q2 preview: consensus points to a swing back to profit, but downside surprise is likely
Q2 operating income is projected to swing back into positive territory at $3.86 billion, following two consecutive quarters of steep losses, according to consensus estimates on LSEG. However, that forecast rests on the views of just seven analysts, two of whom submitted their estimates in early May – before Bitcoin’s sharp June decline. BTC closed the quarter lower than where it started, falling from around $68,100 at the end of Q1 to about $59,100 by 30 June.
More tellingly, the accretion metrics that management asked investors to focus on in place of GAAP losses have also deteriorated. YTD BTC yield fell to 5.8% as of 21 July, while the growth rate of Bitcoin per share decelerated to 8% YoY. The argument that GAAP losses are immaterial so long as the accretion engine is running well no longer holds up. Investors should be prepared for the possibility of a significant downside surprise relative to consensus – on both the metrics Wall Street tracks and the ones management prefers.
