In the first quarter of the year, Coinbase reported impressive financial results, including a revenue of $1.6 billion, a 72% increase from the previous quarter. The largest cryptocurrency exchange in the United States also disclosed a net income of $1.18 billion, driven by increased transactions in the cryptocurrency market and a change in accounting rules related to cryptocurrencies. Consumer transaction revenue doubled to $935.2 million, with Bitcoin playing a significant role in both consumer and institutional transactions.
Analysts had predicted revenue of $1.34 billion and net income of $1.09 per share, but Coinbase exceeded expectations. Following the announcement, after-hours trading saw a slight decline in Coinbase’s shares, which had initially risen nearly 9% to around $229 earlier in the day. A year ago, the shares were trading at only $51. In the first quarter of the previous year, Coinbase reported losses, but this year, the company’s EBITDA reached an impressive $1 billion, surpassing the previous year’s total.
Coinbase’s market share in the United States increased during the quarter, with progress made towards driving revenue, utility, and regulatory clarity. The company highlighted achievements in U.S. spot and derivatives markets, all-time highs on Coinbase Prime, and growth in USDC market capitalization. Coinbase’s Ethereum layer-2 chain, Base, generated revenue and outperformed Ethereum in terms of transaction volume. The company also acquired a stake in Circle, the issuer of stablecoin USDC, leading to an increase in subscriptions and services revenue.
During the first quarter, Coinbase benefited from favorable market conditions, including a 57% increase in the price of Bitcoin and the approval of spot exchange-traded funds by the Securities and Exchange Commission. Transaction expenses also grew significantly, increasing by 73% to $217 million. Looking ahead to the second quarter, Coinbase expects overall expenses to be as high as $890 million, primarily due to higher trading volumes and associated costs like customer support and infrastructure expenses.
Overall, Coinbase’s exceptional first-quarter results were driven by increased transactions in the cryptocurrency market and changes in accounting rules related to cryptocurrencies. The company exceeded analysts’ predictions and saw significant growth in consumer and institutional transaction revenue. Additionally, Coinbase made progress towards its 2024 priorities of driving revenue, utility, and regulatory clarity, achieving all-time highs in market share and revenue from its various services. Despite a slight decline in after-hours trading, Coinbase’s shares have seen significant growth compared to a year ago, highlighting the continued success of the largest cryptocurrency exchange in the United States.
