Coinbase Shares Rise as Q1 Revenue Grows 23% to $773M From Q4

Crypto exchange Coinbase (COIN) reported Q1 revenue of $773 million, exceeding analyst estimates of $655 million, according to FactSet, and up from Q4 revenue of $629 million. The company reported an adjusted loss of $0.34 per share, compared to an analyst estimate for a loss of $1.45 per share and a narrowing from Q4’s loss of $2.45 per share.

Trading volume came in at $145 billion versus analyst estimates of $147.7 million for the quarter. Trading volume was roughly $146 billion in the fourth quarter.

Shares of Coinbase were up about 8% to $53 in after-hours trading Thursday. Shares are up about 40% this year with bitcoin’s rise of roughly 74% year to date.

“This is the fourth crypto cycle that Coinbase has been through and we've emerged stronger after each one,” said Coinbase CEO Brian Armstrong in a statement sent to CoinDesk. “We've shifted the business to operate more efficiently in this down market driving positive adjusted Ebitda in Q1.”

Investors have been particularly interested in Coinbase’s recent unveiling of its derivatives exchange in Bermuda, which is part of the company’s expansion outside the U.S., because it could have a positive impact on revenue coming from fees. The initiative comes as regulators crack down on crypto companies in the U.S.

“The goal here is to get into the derivatives market in a more pronounced way and better serve the international customer base,” Anil Gupta, chief investment officer at Coinbase, told CoinDesk. “It’s really early days so we’re not expecting a big financial contribution in the near term, but it’s something we’re super excited about in the coming quarters.”

Out of the U.S.-based crypto companies, Coinbase is one of the most active advocates for clearer regulation in the country. During an earnings call in March, Armstrong said that he would be spending more time in Washington, D.C., because policy is his top priority in 2023.

“America is in a position to lead in crypto and help update the global financial system,” Coinbase said in a letter to shareholders. “We need crypto specific rules, rather than regulation by enforcement, to help this innovative technology flourish and for America to maintain its leadership position.”

While the company is very much focused on international expansion, including in Canada, Brazil and Singapore, its U.S.-based operations remains the core business, Coinbase said.

Coinbase is scheduled to have a call with analysts at 5:30 p.m. ET on Thursday.

Read more: Coinbase to Stop Issuing New Loans Via Coinbase Borrow

UPDATE (May 4, 2023, 20:31 UTC): Adds Coinbase quotes.

UPDATE (May 4, 2023, 20:53 UTC): Adds additional context about Coinbase's efforts in Washington D.C. and quotes from Anil Gupta, chief investment officer at Coinbase.