In this illustration taken on June 8, 2023, a smartphone displaying the Coinbase logo and representing the cryptocurrency is placed on the keyboard.
Ruvik Dice | Reuters
Coin library First-quarter earnings released Thursday showed revenue that beat expectations. The stock fell about 4% in after-hours trading.
Here’s how the company performed compared to the London Stock Exchange Group analyst consensus.
- income: $4.40 per share. This may not compare to the average analyst estimate of $1.09.
- income: $1.64 $1 billion vs expected $1.34 billion
Coinbase, the main U.S. marketplace for buying and selling digital tokens, reported a net profit of $1.18 billion, or $4.40 a share, compared with a loss of $78.9 million, or 34 cents a share, a year earlier. In February, the company reported its first profit in two years.
Profit for the quarter included a $650 million mark-to-market gain on crypto assets held for investment as the company adopted updated accounting standards.
Consumer transaction revenue in the quarter was $935 million, an increase of more than 100% Started a year ago. Total transaction revenue nearly tripled in the quarter to $1.07 billion.
Transaction revenue has historically been the main driver of revenue, with subscription and services revenue of $511 million in the quarter.
Coinbase shares are up about 30% this year after soaring nearly fivefold in 2023. Bitcoin The sharp rise in cryptocurrencies has led to increased trading volumes and increased demand for other services.
In the first quarter, Bitcoin hit an all-time high of over $73,000 in March, while Ethereum, the second-largest digital asset, experienced its first major upgrade in more than a year.
The industry has also seen an influx of institutional investors since the U.S. Securities and Exchange Commission approved a slew of new U.S. spot Bitcoin exchange-traded funds. Many ETFs work with Coinbase as their custody partner. Collectively, these funds brought in more than $50 billion as of the end of the first quarter.
Raymond James analysts said cumulative net inflows peaked on April 8 and have since declined as Bitcoin prices have declined.
“Bitcoin prices peaked and have edged lower since mid-March as inflows slowed,” Raymond James analysts wrote in a report this week. “Indeed, trading on the Coinbase platform Volume is well below levels in early March.”
Coinbase is also embroiled in a legal battle with the SEC. In March, a judge ruled that a jury could hear regulators’ accusations at a trial that cryptocurrency exchanges engaged in unregistered securities sales.
Another potential headwind is new competition from Crypto.com, which has regained market share in recent months.
inside sales
Raymond James analysts said that multiple Coinbase insiders, including four members of top management, sold a total of $383 million worth of company stock in the first quarter.That’s more than double Q4 2023 sales and the largest insider sales ever Since the company’s listing on Nasdaq in 2021.
Raymond James noted that the biggest seller was co-founder and board member Fred Ehrsam, who netted $129 million on his shares.
— CNBC’s Michael Bloom and Kate Rooney contributed to this report.
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