Coinbase earnings report disappoints! Q1 revenue and profit fall short of expectations, stock drops over 5% after hours

America’s largest cryptocurrency exchange Coinbase (NYSE: COIN) announced its latest financial report on Thursday. Due to weak coin prices and cooling trading activity, the company’s first-quarter revenue and profits fell below market expectations, causing the stock to plummet over 5% after hours.
Coinbase reported a first-quarter loss of $1.49 per share, far from the analyst forecast of a $0.27 profit per share; revenue was $1.41 billion, also below the market estimate of $1.52 billion.
In terms of revenue structure, the core “trading income” reached $755.8 million, below the market expectation of $805.2 million; the “subscription and services revenue,” considered key to Coinbase’s transformation and aimed at reducing reliance on transaction fees, was $583.5 million, also under the estimated $619.3 million.
Under the dual pressures of declining cryptocurrency prices and converging market volatility, spot trading volumes across major exchanges generally shrank. Although Bitcoin rebounded about 12% in March, it still couldn’t make up for the damage caused by the early-season sell-off, and investors were already prepared for Coinbase’s disappointing first-quarter earnings.
In fact, to break through the limitations of a single business, Coinbase has been actively expanding in recent years, extending into stablecoins, staking, derivatives, and blockchain infrastructure, with initial signs of success in its transformation strategy.
Coinbase stated on Wednesday that thanks to strong growth in derivatives trading, the company’s global cryptocurrency trading market share has risen to a record high of 8.6%. Coinbase said that derivatives trading volume over the past 12 months surged 169% year-over-year; the “annualized run rate” for retail derivatives revenue has also exceeded $200 million for the first time.
Additionally, the explosive potential of the prediction market and stablecoin businesses should not be underestimated. Coinbase revealed that its prediction market business in the U.S. reached an annualized revenue of over $100 million within just two months of launch. Meanwhile, the blockchain network developed by Coinbase, “Base,” handled up to 62% of global on-chain stablecoin transactions this quarter.
To cope with the downward pressure in the crypto market and seek technological breakthroughs, Coinbase announced earlier this week that it would lay off about 700 employees, accounting for roughly 14% of its total workforce, and also launched an AI-driven organizational restructuring plan.