COIN: Coinbase Underwater, Earnings disappoint
Coinbase's shares dropped as its first-quarter revenue fell short of Wall Street's expectations.
Quick overview
- Coinbase's shares fell after first-quarter revenue missed Wall Street expectations, reporting $65.6 million in earnings compared to $1.18 billion a year prior.
- Despite a year-over-year revenue increase from $1.64 billion to $2.03 billion, it fell short of the consensus estimate of $2.12 billion.
- The company experienced a 17% decline in consumer trading volume from the previous quarter, totaling $78.1 billion.
- Coinbase announced a $2.9 billion acquisition of Deribit, marking the largest deal in the cryptocurrency sector to enhance its international presence.
Coinbase’s shares dropped as its first-quarter revenue fell short of Wall Street’s expectations. Coinbase’s earnings for the quarter were $65.6 million, or 24 cents per share, as opposed to $1.18 billion, or $4.40 per share, in the same period last year.
Coinbase’s adjusted earnings, excluding the effect of cryptocurrency investments, came to $527 million, or $1.94 per share.
Although revenue increased from $1.64 billion to $2.03 billion over the previous year, it fell short of LSEG’s consensus estimate of $2.12 billion. The quarter’s total revenue was $1.26 billion from transactions, while $698.1 million came from subscriptions and services.
The US’s biggest cryptocurrency exchange reported a 17 percent decline in consumer trading volume from the fourth quarter to $78.1 billion. The election of President Donald Trump and expectations that he would bring a more favorable regulatory environment raised volume at the end of last year.
Institutional trading volume dropped to $315 billion, a 9 percent decrease from the fourth quarter. Cryptocurrency saw several encouraging developments in the first quarter, including a record high for bitcoin in January. 20. However, April saw high volatility due to worries about Trump’s tariff policy, which reduced investor interest in riskier assets like cryptocurrency.
About $240 million was made in transactions in April alone. For the second quarter, Coinbase expects subscription and service revenue between $600 million and $680 million. Coinbase declared it would pay $2.9 billion to purchase Deribit, a major Dubai-based cryptocurrency derivatives exchange.
The agreement is the biggest acquisition in the cryptocurrency sector to date, and will allow Coinbase to increase its presence outside of the US.
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