Coinbase revealed a substantial net loss for the first quarter, marking its second consecutive quarterly deficit as the cryptocurrency market faced severe volatility. The exchange’s stock dropped about 5% following the earnings release, reflecting investor concerns over declining revenues and mounting losses amid a turbulent market environment.
The company recorded a net loss of $394.1 million, or $1.49 per share, compared to a profit in the same period last year. Revenue from Coinbase’s subscription and services unit, which includes non-trading business lines, declined by 13.5%, totaling $583.5 million. Adjusted EBITDA—a measure of profitability before certain expenses—shrunk sharply to $303.3 million from nearly $930 million the previous year. Transaction revenue, a key indicator of trading activity, fell 40% year-over-year, amounting to $755.8 million.
Coinbase also reported a loss of $482.4 million on crypto assets it holds for investment, slightly improving from the prior year’s loss of $596.7 million. The company attributed its results mainly to harsh macroeconomic conditions and a broader crypto market contraction. The overall crypto market capitalization and trading volumes each declined by more than 20% quarter-over-quarter, intensifying pressures on Coinbase’s revenue streams, as explained by the company’s chief financial officer.
Despite these headwinds, Coinbase highlighted several important growth areas. The exchange achieved a new high of 8.6% market share in crypto trading volume, underscoring its competitive position. It also claimed to hold more cryptocurrency on behalf of customers than any other platform, securely storing 12% of the global crypto assets. Derivatives trading emerged as a bright spot, with volume increasing by 169% year-over-year, fueled by rising participation from retail and institutional investors.
Derivatives revenue from retail investors surpassed $200 million on an annualized basis, marking a record for Coinbase. Additionally, after launching in the US, prediction markets reached $100 million in annualized revenue by March. The company’s CEO emphasized that while external factors weighed heavily on the business, Coinbase successfully executed its “Everything Exchange” strategy, particularly through strong growth in derivatives trading.