Coinbase Posts $394 Million Q1 Loss, Shares Fall 4% After Revenue Miss

Coinbase posted a first-quarter loss after crypto prices fell, with the company reporting an earnings per share of $1.49 loss versus 27 cent profit expected and revenue of $1.41 billion versus $1.52 billion expected.

Coinbase shares fell 4% in after-hours trading after transaction revenue came in at $755.8 million versus $805.2 million expected, while subscription revenue was $583.5 million versus $619.3 million estimated.

@coindesk

The quarter ended March 31 also showed bitcoin rising 12% in March but posting a 22% decline in the first quarter, a backdrop Coinbase CFO Alesia Haas said it was trying to offset through diversification.

Coinbase’s push beyond spot trading included stablecoin revenue of $305 million, up from $274 million last year, and a forecast that its prediction market business would see $100 million in annualized revenue by the end of this year.

The earnings miss landed in the same week CEO Brian Armstrong announced Coinbase would cut roughly 14% of its workforce, or 700 jobs, citing an AI-driven restructuring effort and the crypto downturn as a catalyst.

Coinbase’s after-hours slide followed results that showed a net loss of $394.1 million for Q1, or $1.49 per share, reversing a $65.6 million profit in the same quarter a year ago.

Boursorama

On the call, Coinbase CFO Alesia Haas said “Macro conditions were genuinely tough,” adding that the total crypto market capitalization and overall trading volume declined by more than 20% quarter over quarter.

Coinbase also pointed to a weaker trading backdrop, with transaction revenue down 40% year-over-year to $755.8 million and subscription and services revenue at $583.5 million missing the $619.3 million forecast.

Coinbase also faced a multi-hour outage of cryptocurrency trading on Thursday, which CoinDesk attributed to an Amazon Web Services outage affecting multiple AWS availability zones in the US East region, located in Virginia.

“Coinbase posted lower-than-expected results for the first quarter as crypto prices fell, weighing on one of the companies' major revenue drivers — spot trading in digital assets”

CNBC

Coinbase said “Coinbase experienced service disruptions due to elevated temperatures in the affected AWS service,” and later posted that “This major issue is now fully resolved—thanks for your patience,” while adding it would investigate.

As the company pursued new business lines, Coinbase’s prediction markets strategy and derivatives growth were part of its longer-term plan, including a derivatives trading volume of roughly $4.2 billion in the first quarter and a 169% increase over the same period a year ago.

Even with the operational disruption and financial pressure, Coinbase reported a record 8.6% share of global crypto trading volume market share, and it said its Base blockchain processed 62% of global onchain stablecoin transaction volume during the quarter.