Coinbase Global on Thursday reported a mixed set of results for the first quarter, with revenue climbing but profit sharply down, as the largest US crypto exchange faced higher costs and market volatility driven by erratic macroeconomic signals and ongoing digital asset turbulence.
The San Francisco-based company said revenue rose 24% year-on-year to $2b. However, that figure was down about 10% from the previous quarter and fell short of analyst estimates of $2.1b, according to LSEG data.
Transaction revenue remained a key contributor, increasing 17.3% to $1.26b. Meanwhile, revenue from the firm’s growing subscription and services business jumped 37% to $698.1m. This unit includes offerings such as staking and custodial services, which are less dependent on trading activity.
Heavy Marketing Spend and Asset Losses Drag Down Coinbase Profit
Net income for the quarter plunged 94% to $66m, or 24 cents per share, as the firm booked losses related to the declining value of its crypto holdings.
Coinbase marks these assets to market each quarter, exposing its earnings to the volatile swings in cryptocurrency prices. On an adjusted basis, the company reported a net income of $526.6m, or $1.94 per share, compared to $2.53 a year ago.
Operating expenses surged 51% to $1.3b, driven by heavier marketing spend and losses on held crypto assets. The stock dipped around 2% in after-hours trading and is down 17% so far this year.
Coinbase Bets on Derivatives as User Base Grows Beyond Trading
Despite the earnings miss, the platform logged its second-highest monthly transacting user count in company history. Chief financial officer Alesia Haas said many customers are now engaging with a broader range of services beyond trading. “We are gaining share, we are driving utility,” she said. “We are seeing a healthy maturation of the products.”
Coinbase also announced the acquisition of Deribit in a deal valued at $2.9b. The move signals the company’s ambition to expand deeper into the crypto derivatives market, a sector where Deribit handled nearly $1.2t in volume last year.
Looking ahead, Coinbase said it expects second-quarter revenue from subscriptions and services to fall between $600m and $680m. The company also disclosed that it generated about $240m in transaction revenue in April. While revenues from Circle’s USDC stablecoin rose 32% sequentially to $298m, growth was partially tempered by lower average interest rates.
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