SUPERNEWS

Crypto

Coinbase Q1 Earnings Soar to $1.64B, Bitcoin Rally Fuels Surge

Coinbase Q1 earnings soar to $4.40 per share, crushing estimates with a $1.64 billion revenue, fueled by a Bitcoin rally.

By Alex P. Chase

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5/2, 16:21 EDT
Bitcoin / U.S. dollar
Coinbase Global, Inc.
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Key Takeaway

  • Coinbase Q1 revenue surpassed expectations at $1.64 billion, driven by a bitcoin rally and a $650 million mark-to-market gain.
  • Shares surged 30% this year, buoyed by institutional investors and new U.S. spot bitcoin ETFs partnerships.
  • Insider selling hit a record with C-suite members offloading $383 million in shares amid ongoing SEC legal challenges.

Coinbase Surpasses Expectations

Coinbase Global Inc. has reported a remarkable first-quarter earnings report, significantly exceeding analysts' expectations. The company announced earnings of $4.40 per share, a stark contrast to the $1.09 average analyst estimate provided by LSEG. This performance is particularly noteworthy considering the company reported a loss of $78.9 million, or 34 cents a share, in the same period a year ago. Revenue also saw a substantial increase, reaching $1.64 billion against the expected $1.34 billion. This surge in revenue and profit includes a $650 million mark-to-market gain on crypto assets, highlighting the impact of the company's adoption of updated accounting standards.

Trading Volume and Revenue Growth

Coinbase's transaction revenue has seen a significant uptick, with consumer transaction revenue alone amounting to $935 million for the quarter, marking an increase of over 100% from the previous year. Total transaction revenue nearly tripled to $1.07 billion. This growth is attributed to the increased trading volumes and demand for other services, spurred by significant rallies in cryptocurrencies like Bitcoin, which reached a new all-time high above $73,000 in March. The introduction of U.S. spot Bitcoin exchange-traded funds (ETFs), many of which have partnered with Coinbase for custody services, has also played a crucial role in attracting more than $50 billion by the end of the first quarter.

Insider Selling and Market Challenges

Despite the positive earnings report, Coinbase faces challenges, including a notable amount of insider selling and legal battles with the SEC. Insiders, including four C-suite members, sold $383 million of the company's shares in the first quarter, the highest since its Nasdaq listing in 2021. Additionally, Coinbase is navigating a legal fight with the SEC over claims of unregistered sales of securities, adding a layer of uncertainty to its future prospects. Moreover, the company is contending with new competition from platforms like Crypto.com, which has regained market share in recent months.

Street Views

  • Raymond James Analysts (Neutral on Coinbase and Bitcoin):

    "The price of Bitcoin peaked as the pace of inflows moderated, and has been drifting modestly lower since mid-March... Indeed, trading volumes on Coinbase’s platform have come well down from early-March levels."