Monitors display Coinbase signs during the company’s initial public offering (IPO) on the Nasdaq MarketSite in New York, USA, on Wednesday, April 14, 2021.
Michael Nagle | Bloomberg | Getty Images
Coinbase reported earnings in the first quarter that missed analysts ’estimates after Tuesday’s call. Shares fell 19% in expanded trading before rebounding. Now stocks have fallen about 14% in no time.
Here are the key figures:
- Loss per share (EPS): $ 1.98
- Income: $ 1.17 billion against an expected $ 1.48 billion, according to Refinitiv
Prior to the report, stocks had lost more than 60% of their value since late March as a wider decline in technology stocks and the value of cryptocurrencies hit Coinbase particularly hard. On Monday, bitcoin fell below a symbolic price threshold of $ 30,000.
Overall, usage has declined since the fourth quarter. The number of retail monthly transaction (MTU) users fell to 9.2 million from 11.4 million in the fourth quarter, while total trading fell from $ 547 billion in the fourth quarter to $ 309 billion.
The company’s revenue was down 27% year-over-year, and it also reported a net loss of $ 430 million in the first quarter.
But Coinbase doesn’t seem to be worried about its long-term prospects. The company has doubled the argument it made earlier, reminding shareholders that its shares should be seen as long-term investments due to the volatile nature of cryptocurrency prices.
“We believe that these market conditions are not constant, and we are still focused on the long term,” the company wrote in a letter to shareholders, who accompanied the information on profits. It also says it focuses on next-generation crypto-capabilities other than commerce.
“While we continue to invest and improve our core investment platform, the crypto-era era of application led by NFD and decentralized financing, and we are increasingly focusing our efforts on these market opportunities.”
The increase in costs also contributed to lower company profits.
General and administrative expenses were $ 414 million, up 39% from the previous quarter. Coinbase attributes the growth to increased costs associated with staffing and contractors. The purpose of these costs, according to the company, was “investment to strengthen and scale our customer support, legal functions, compliance and business support.”
Total operating expenses were $ 1.72 billion, ahead of profits for the first time since the company began making public finances.
While Coinbase previously disclosed plans to increase staff, operating costs, which jumped nearly 70% in six months, suggest that the company is still spending both in the hypergrowth phase, even as users and transactions declined between quarters..
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