Coinbase shares rise as first-quarter revenue grows 23% to $773 million from fourth quarter
Crypto exchange Coinbase ( COIN ) reported Q1 revenue of $773 million, beating analyst estimates of $655 million, according to FactSet, and up from Q4 revenue of $629 million. The company reported an adjusted loss of $0.34 per share, compared with an analyst estimate of a loss of $1.45 per share and a narrowing from Q4’s loss of $2.45 per share.
Trading volume came in at $145 billion versus analyst estimates of $147.7 million for the quarter. Trading volume was approximately $146 billion in the fourth quarter.
Shares of Coinbase rose about 8% to $53 in after-hours trading on Thursday. Shares are up about 40% this year with bitcoin up roughly 74% year-to-date.
“This is the fourth crypto cycle that Coinbase has been through, and we’ve come out stronger after each one,” Coinbase CEO Brian Armstrong said in a statement sent to CoinDesk. “We have changed the business to operate more efficiently in this down market, leading to positive Adjusted Ebitda in Q1.”
Investors have been particularly interested in Coinbase’s recent unveiling of its derivatives exchange in Bermuda, which is part of the company’s expansion outside the US, because it could have a positive impact on the revenue that comes from fees. The initiative comes as regulators crack down on crypto companies in the US
“The goal here is to enter the derivatives market in a more pronounced way and better serve the international customer base,” Anil Gupta, chief investment officer at Coinbase, told CoinDesk. “It’s very early days, so we don’t expect a huge financial contribution in the short term, but it’s something we’re very excited about in the coming quarters.”
Out of the US-based crypto companies, Coinbase is one of the most active advocates for clearer regulation in the country. During an earnings call in March, Armstrong said he would spend more time in Washington, DC, because politics is his top priority in 2023.
“America is in a position to lead in crypto and help update the global financial system,” Coinbase said in a letter to shareholders. “We need crypto-specific rules, rather than regulation by enforcement, to help this innovative technology flourish and for America to maintain its leadership position.”
While the company is very focused on international expansion, including in Canada, Brazil and Singapore, its US-based business remains its core business, Coinbase said.
Coinbase is scheduled to hold a call with analysts at 5:30 PM ET on Thursday.
UPDATE (May 4, 2023, 20:31 UTC): Adding Coinbase quotes.
UPDATE (May 4, 2023, 20:53 UTC): Adds additional context on Coinbase’s efforts in Washington DC and quotes from Anil Gupta, Chief Investment Officer at Coinbase.
