Shares of Coinbase Slide as Revenue Drops 27%

Coinbase reported first quarter earnings this week, revealing that revenues had dropped 27% from a year ago and missed analyst expectations.

With a major sell-off across the crypto market, shares of Coinbase had fallen as much as 19% in extended trading on Tuesday. This was added to the drop of 12.6% already seen during trading hours before the company posted results.

For the first quarter, Coinbase reported a loss per share of $1.98 and revenue of $1.17 billion. Analysts per Refinitiv had been expecting revenue of $1.48 billion.

The crypto trading platform’s shares have lost more than 70% of its value since late March, as a broader slide in tech stocks and the value of cryptocurrencies hit Coinbase particularly hard.

Bitcoin briefly dropped below the symbolic price threshold of $30,000 on Monday, and is down more than 30% this year.

Usage on the platform also declined from the fourth quarter. Retail monthly transaction users (MTUs) fell to 9.2 million, down from 11.4 million in the fourth quarter, while total trading volume dropped from $547 billion in Q4 to $309 billion.

Revenue fell 27% from a year ago and the company also reported a net loss of $430 million in the first quarter.

Coinbase remains optimistic, however. The company has reminded shareholders that its stock should be thought of as a long-term investment due to the volatile nature of cryptocurrency price moves.

“We believe these market conditions are not permanent and we remain focused on the long-term,” the company wrote in a letter to shareholders accompanying its earnings release.

Coinbase also said that it’s focusing on the next generation of crypto opportunities beyond trading.

“While we continue to invest and enhance our core investment platform, the application era of crypto is upon us, led by NFDs and decentralized finance, and we are increasingly focusing our efforts on these market opportunities.”

Emilie Choi, president and chief operating officer of Coinbase, added on the company’s earnings call that the company invests heavily in compliance.
“That’s important to us, because it helps us solidify our relationship with our customers and regulators, so that’s another piece of headcount that matters,” Choi said.

Disclaimer: We have no position in any of the companies mentioned and have not been compensated for this article.