GSTechnologies’ Losses Widen Despite Revenue Rise, Bitcoin Treasury Adopted

GSTechnologies (LON: GST), a fintech firm, reported a widened net loss for the year ended March 31, 2025, despite a significant increase in revenue. The company's strategic shift towards a Bitcoin treasury reserve policy adds another layer of complexity for investors to consider.

Revenue climbed 91% to US$2.96 million (FY24: US$1.55 million), driven by growth in its fintech and cybersecurity businesses.

However, the net loss deepened to US$2.29 million (FY24: US$1.22 million loss) as the company continued to invest heavily in its GS Money solutions.

The company successfully raised £3.75 million through equity fundraising to accelerate its GS Money strategy, both organically and via acquisitions. At the end of the fiscal year, GSTechnologies held US$4.21 million in cash and cash equivalents (FY24: US$2.61 million) and net assets increased substantially to US$8.44 million (FY24: US$5.34 million).

The increased operating loss reflects significant investment in the business. Net operating expenses jumped from US$2.54 million in FY24 to US$5.16 million in FY25. This increase is attributed to higher employee and office costs associated with expansion, as well as the full-year contribution from Semnet and key hires, including the CAKE team.

Post-period, GSTechnologies adopted a Bitcoin treasury reserve policy, intending to hold a significant portion of its cash in Bitcoin.

This move, according to the company, reflects confidence in Bitcoin's ability to reduce counterparty and exchange rate risk, enhance shareholder value, and align with the Group's GS Money strategy and integration of the Bake Cryptocurrency Platform. They further raised £1.925 million to build the Bitcoin treasury reserve.

The company's income is solely derived from its fintech and cybersecurity businesses, with the revenue increase reflecting growing commercial traction. The second half performance was affected by the acquisition of CAKE, with additional transitional expenses and the repositioning of the digital assets business as the Bake platform integrated with the GS20 Exchange.

Net assets as of March 31, 2025, reached US$8.44 million. The company held US$4.21 million in cash, with an additional £1.925 million raised post-period end. Directors believe the Group is in a stable financial position with resources to expand operations and meet liabilities, along with access to further capital if needed.

The adoption of a Bitcoin treasury reserve policy signals a bold move, potentially impacting the company's risk profile and future financial performance. The decision to allocate a significant portion of its cash reserves to Bitcoin introduces volatility associated with cryptocurrency markets.