Coinbase Global released its first-quarter results, showcasing a mixed bag of outcomes. While revenue saw a 24% year-on-year increase to $2 billion, profit took a significant hit, dropping by 94% to $66 million as a result of losses related to the declining value of its crypto holdings. Operating expenses also surged by 51% to $1.3 billion, driven by increased marketing spend and losses on held crypto assets.
The platform reported a rise in transaction revenue by 17.3% to $1.26 billion, with revenue from subscription and services business jumping by 37% to $698.1 million. This segment includes offerings such as staking and custodial services, which are less reliant on trading activity.
Despite the profit decline, Coinbase experienced its second-highest monthly transacting user count in company history. Chief Financial Officer Alesia Haas noted that many customers are now exploring a wider range of services beyond trading, signaling a healthy maturation of the products.
In a strategic move to expand further into the crypto derivatives market, Coinbase announced the acquisition of Deribit in a deal valued at $2.9 billion. Deribit, which handled nearly $1.2 trillion in volume last year, will bolster Coinbase’s position in the derivatives sector.
Looking ahead, Coinbase anticipates second-quarter revenue from subscriptions and services to fall between $600 million and $680 million. The company also revealed that it generated approximately $240 million in transaction revenue in April. Additionally, revenues from Circle’s USDC stablecoin climbed by 32% sequentially to $298 million, although growth was dampened by lower average interest rates.
Despite the challenges posed by market volatility, higher costs, and asset losses, Coinbase remains optimistic about its future prospects. The company’s focus on diversifying its offerings and expanding into new markets demonstrates its commitment to innovation and growth in the evolving crypto landscape.