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Thursday, Apr 25, 2024

Coinbase revenue tripled from last quarter as crypto prices skyrocketed

Coinbase revenue tripled from last quarter as crypto prices skyrocketed

Coinbase revenue tripled from last quarter, as the price cryptocurrencies took off in 2021.

Coinbase shares were up about 3% in after-hours trading Thursday, after reporting that revenue and net income skyrocketed in the first quarter of 2021 as the cryptocurrency trading platform capitalized on a boom in crypto prices and corresponding interest from investors. The results largely matched estimates that Coinbase delivered on April 6, about a week before its public debut.

Here’s how the cryptocurrency exchange did in its first earnings report since the company’s direct listing in April:

*  Earnings: $3.05 per share
*  Revenue: $1.80 billion, up from $585 million in the previous quarter.

The company’s net profit for the quarter was over $771 million, more than fourfold over Q4 2020′s figure of $177 million and more than 24 times higher than the year-ago quarter’s profit.

On the earnings call, the company said that it planned to list dogecoin in the next six to eight weeks. The meme-inspired cryptocurrency was up as much as 26,000% in the last six months, before falling after Elon Musk’s “Saturday Night Live” hosting debut, in which he called dogecoin a “hustle.”


Coinbase’s fate is tethered to the performance of digital assets like bitcoin. Roughly 94% of the company’s net revenue in the first quarter came from transaction fees from trading. In an introductory note, the company noted that bitcoin prices nearly doubled during the quarter, and ether prices almost tripled.

Coinbase fees, which account for the bulk sum of the company’s revenue, are higher than some rivals. When asked about this, CFO Alesia Haas doubled down on the company’s strategy, suggesting margins will remain high for the cryptocurrency exchange.

“We’re not trying to win on fees,” said Haas. “We’re not trying to compete on fees. We’re competing on being the most trusted.”

Haas told CNBC that the company’s main focus in the first quarter was reliability. “We are dealing with unprecedented growth in demand, and our focus was making sure that our exchange stayed up.”

Monthly transacting users more than doubled from the previous quarter, from 2.8 million to 6.1 million. Coinbase’s 56 million verified users, along with record-breaking price moves in the crypto market, led trading volume to more than triple from the previous quarter.

In its release, Coinbase did not offer detailed revenue nor earnings guidance for either Q2 or the full year, warning that, “As we have previously discussed, it is important for investors to remember that our business is inherently unpredictable.” However, it offered guidance of between 5.5 million and 9.0 million monthly transacting users for the full year, depending on crypto prices, and predicted that annual average net revenue would exceed the historic mark of $35 to $45 that it’s averaged for the last two years.

During last month’s direct listing, Coinbase opened at $381 per share and was briefly valued at as much as $100 billion, a landmark event for the cryptocurrency industry.

Excluding the after-hours move, Coinbase stock has fallen about 30.4% since going public on April 14, while the Nasdaq fell 5.3% over the same period.

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