Coinbase Achieves Strong First-Quarter Performance with 22% Revenue Growth. Coinbase, a leading cryptocurrency exchange, has announced impressive financial results for the first quarter, showcasing a 22% increase in revenue and successful cost-cutting measures. As a result, the company’s shares surged by 7% during after-hours trading.
Notably, interest income experienced substantial growth, rising by 32% to $240 million, surpassing the estimated $205 million. Of this amount, $199 million was derived from the popular stablecoin, USDC. In comparison, interest income in the previous quarter amounted to $182 million, with USDC contributing $146 million.
Coinbase reported total revenue of $736 million for the first quarter, exceeding analysts’ estimates of $658 million, according to a survey conducted by FactSet. Additionally, the company’s EBITDA turned positive, reaching $284 million, which was significantly better than the estimated negative $36 million.
Anil Gupta, Coinbase’s Vice President of Investor Relations, attributed the company’s growth to its subscription and services segment, which includes staking and interest income. In an interview with The Block, Gupta stated that subscription and services revenue amounted to $362 million, surpassing estimates of $316 million.
However, the decreasing circulating supply of USDC may have a more pronounced impact on Coinbase’s revenue as the year progresses. Ryan Coyne from Mizuho shared his insights, suggesting that interest income derived from USDC is expected to decline in the second quarter. Gupta confirmed this expectation.
Staking revenue also contributed positively to Coinbase’s performance, amounting to $73.7 million, slightly above the estimated $71 million by FactSet. Nonetheless, the firm acknowledged that staking led to increased transaction expenses due to the rewards paid out to users. Notably, staking faced scrutiny during the first quarter, as Kraken reached a $30 million settlement with the Securities and Exchange Commission. Consequently, shares in Coinbase experienced a decline as staking revenues came under threat.
In terms of trading volume, Coinbase maintained a stable performance quarter on quarter, marking the first time since the “crypto winter” began that the exchange’s quarterly volume did not decline. Furthermore, the number of monthly transacting users saw a modest increase from 8.3 million to 8.4 million.
Overall, Coinbase’s first-quarter results reflect a strong financial performance, with significant revenue growth and positive EBITDA. The company’s focus on subscription and services, along with its ability to adapt to changing market conditions, positions it well for continued success in the cryptocurrency industry.