COIN: Coinbase Underwater, Earnings disappoint

Coinbase’s shares dropped as its first-quarter revenue fell short of Wall Street’s expectations. Coinbase’s earnings for the quarter were $65.6 million, or 24 cents per share, as opposed to $1.18 billion, or $4.40 per share, in the same period last year. Coinbase’s adjusted earnings, excluding the effect of cryptocurrency investments, came to $527 million, or $1.94 per share. Although revenue increased from $1.64 billion to $2.03 billion over the previous year, it fell short of LSEG’s consensus estimate of $2.12 billion. The quarter’s total revenue was $1.26 billion from transactions, while $698.1 million came from subscriptions and services. The US’s biggest cryptocurrency exchange reported a 17 percent decline in consumer trading volume from the fourth quarter to $78.1 billion. The election of President Donald Trump and expectations that he would bring a more favorable regulatory environment raised volume at the end of last year. Institutional trading volume dropped to $315 billion, a 9 percent decrease from the fourth quarter. Cryptocurrency saw several encouraging developments in the first quarter, including a record high for bitcoin in January. 20. However, April saw high volatility due to worries about Trump’s tariff policy, which reduced investor interest in riskier assets like cryptocurrency. About $240 million was made in transactions in April alone. For the second quarter, Coinbase expects subscription and service revenue between $600 million and $680 million. Coinbase declared it would pay $2.9 billion to purchase Deribit, a major Dubai-based cryptocurrency derivatives exchange. The agreement is the biggest acquisition in the cryptocurrency sector to date, and will allow Coinbase to increase its presence outside of the US.