Coinbase’s revenue rose 72% to $1.6 billion, beating analysts’ expectations

Consumer transaction revenues doubled compared to the previous quarter, to $935.2 million, and volume increased by more than 93%, to $56 billion. Meanwhile, institutional trading saw even greater increases, with revenue rising 133% from the previous quarter, to $85.4 million, and more than doubling in volume to $256 billion. Bitcoin accounted for a third of consumer and institutional transactions.

Numbers, According to MSNBCIt significantly beat analysts’ expectations of $1.34 billion in revenue and net income of $1.09 per share. Shares were down slightly in after-hours trading after rising nearly 9% to nearly $229 earlier Thursday. A year ago, it traded for barely $51.

To put earnings into greater perspective, during the first quarter of last year, the company reported losses of $78.9 million (or 34 cents per share). Furthermore, in the first quarter of this year, Coinbase’s EBITDA (earnings before interest, taxes, depreciation, and amortisation) reached $1 billion – a figure larger than the entirety of last year. While the overall quarterly results were very strong, the huge revenue numbers were boosted by a one-time paper gain of $737 million that came due to new accounting rules that allow cryptocurrency companies to record cryptocurrency price increases on their balance sheet.

“We have made significant progress toward our 2024 priorities of increasing revenues, facilities, and regulatory clarity,” the company wrote in an accompanying letter to shareholders. Quarterly report. “Our market share in US spot and derivatives transactions has increased, we have reached all-time highs on Coinbase Prime, and the market cap of USDC has increased.”

After launching in August, Base, the company’s layer-two Ethereum chain from which Coinbase collects fees, generated $56.1 million. It also saw twice as many transactions as Ethereum, and developer activity on the network rose by 800%. In the same month, Coinbase also announced that it had acquired a minority stake in Circle, the issuer of the USDC stablecoin, which grew by 30% market capitalization in the first quarter. As a result, Coinbase subscriptions and services rose by a third, which included a 15% increase in stablecoin revenue.

While Coinbase has diversified its revenue streams through Base and USDC, most of the recent gains have been a result of favorable market conditions. For example, during this quarter, the price of Bitcoin rose by 57%, reaching an all-time high of $73,000, due to the entry of more than $50 billion into 10 spot exchange-traded funds approved on January 11 by the… Securities and stock exchange. commission.

However, the company’s transaction expenses rose 73% to $217 million. The company said in the report that it is looking forward to the second quarter, and estimates that its total expenses will reach $890 million, driven primarily by higher expenses associated with high trading volumes, such as customer support and infrastructure costs.