Coinbase Share Price Surges 7.9% as Q1 Results Beat Expectations


Crypto exchange Coinbase managed to substantially reduce its net loss in the first quarter of 2023 due to strong income from retail investor trading activity.

The company’s net loss decreased from $557 million in the fourth quarter of 2022 to $79 million in the first quarter, partly due to a 22% increase in revenue to $736 million.

results beat expectations Coinbase (COIN) share price gained as much as 7% in after-hours trading, according to some analysts.

Coinbase (COIN) share price. Source: Google Finance.

Transaction revenue – derived from its fees for trades – grew 66% from its institutional base to more than $22.3 million, while transaction revenue from retail investors grew 14.1% to $352.1 million, According Coinbase’s May 4 shareholder letter.

Overall, revenue from transactions increased 16% quarter-over-quarter to $375 million, although Trading volume remained flat.

Interest income from staking and blockchain rewards brought in the most revenue for the quarter, rising to $240.8 million and $73.7 million, respectively, from Q4 2022.

e3995af3 794f 4c59 abc9 f2e3c15c7e3c
Coinbase’s revenue for the first quarter of 2023. Source: Coinbasewoo 10 / ch 66

percentage of revenue from bitcoin (B T c) (36%) and ether (ETH) (18%) Trades remained roughly flat during the quarter.

The firm is inching closer to profitability after a turbulent 2022 that saw net losses totaling $1.16 billion, $803 million, $576 million and $605 million. in each respective quarter Last year.

Coinbase explained that the quarter represented a “turning point” towards building a more “efficient” and “financially disciplined” firm:

“We reduced costs, doubled down on operational excellence and risk management, and continued to drive product innovation and regulatory clarity. Our efforts are showing meaningful progress.”

“Our teams are smaller but more agile than ever and we are pleased with the pace of innovation and the results we are seeing,” the firm said.

Coinbase laid off employees 18% in June, 2022 And then Another 20% in January, 2023 This is to ensure that the firm maintains an appropriate level of “operational efficiency,” Armstrong explained.

Connected: Coinbase International Exchange Launches Amidst SEC Crypto In US

Coinbase’s comments were made in light of Wells notice hanging over his head From the United States Securities Exchange Commission (SEC):

“We see this as an opportunity to continue pushing for a clear rulebook for crypto regulations in the US.”

The firm said it is “glad” to see more bi-partisan support for the upcoming crypto legislation and hopes to play a role in advocating for a rules-based industry.

magazine: Crypto Regulation – Does SEC Chairman Gary Gensler Have the Final Say?