Coinbase Posts Jump in Revenue, Drop in Quarterly Earnings

Revenue increased about 24% to $2 billion from the year-ago period, though it was around 10% sequentially lower from the fourth quarter, the San Francisco-based company said in a blog post Thursday. Revenue was expected to be $2.105 billion, according to the average forecast of analysts surveyed by Bloomberg.

Net income fell 94% to $66 million, or 24 cents per share. Much of the decline was due to Coinbase marking its crypto holdings to market price. Coinbase’s shares fell about 2% in after-hours trading. The stock is down 17% so far this year.

Coinbase had its second-highest monthly transacting users in the quarter, Alesia Haas, the company’s chief financial officer, said in an interview. Many of these customers don’t just trade but also use other Coinbase services, such as staking, she said.

“We are gaining share, we are driving utility,” Haas said. “We are seeing a healthy maturation of the products.”

In the current quarter, Coinbase is starting a pilot program that will let businesses make stablecoin payments and payouts, Chief Executive Officer Brian Armstrong said during a call with investors. Earlier in the day, Senate Democrats blocked a much-anticipated stablecoin legislation due to concerns over President Donald Trump’s crypto ventures.

Coinbase has been seeking to lessen its reliance on positive investor sentiment to adding services and expanding into new sectors. Coinbase said before the start of trading Thursday that it agreed to acquire Deribit, the world’s largest exchange for Bitcoin and Ether options, for $2.9 billion.

The acquisition marks Coinbase’s most ambitious push yet into the lucrative crypto derivatives market, with Deribit’s total trading volumes nearly doubling last year to almost $1.2 trillion. It also comes on a day when Bitcoin hit $100,000 for the first time since February amid easing global trade tensions.

“This is the largest crypto M&A deal in history,” Cantor analyst Brett Knoblauch said in a note Thursday, adding, “We believe this is an A+ acquisition for COIN.”

In a shareholder letter on Thursday, Coinbase said it generated about $240 million of total transaction revenue in April. It expects second-quarter subscription and services revenue to be within $600-$680 million range, as the company expects sequential growth “in stablecoin revenue to be more than offset by a decline in blockchain rewards revenue due to lower asset prices.”

Revenues from Circle’s USDC stablecoin, from which Coinbase receives a share, rose 32% sequentially to $298 million in the first quarter. Growth was partially offset by lower average interest rates, the company said.

Cryptocurrencies rallied earlier this year when crypto-friendly Trump took office. He quickly replaced key agency heads with crypto-friendly people. The Securities and Exchange Commission closed investigations and cases into a slew of crypto companies. Then the news of global tariffs have begun impacting crypto as well as other asset classes. More recently, though, bellwether Bitcoin has recovered much for its value lost during the dip.

“In the first half of April, it was still pretty weak, but over the last few weeks, it’s started to come back,” Owen Lau, an analyst at Oppenheirmer & Co. Inc., said of the crypto market in an interview ahead of the earnings. “April is still slightly up from March.”

(Updates with Brian Armstrong’s comments in sixth paragraph.)

Coinbase Posts Jump in Revenue, Drop in Quarterly Earnings

Yahoo Finance

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