Coinbase (COIN) Q1 2024 Earnings

  • Earnings: $4.40 per share. This may not be comparable to the average analyst estimate of $1.09.
  • he won: $1.64 One billion compared to an expected $1.34 billion

Coinbase, the main U.S. marketplace for buying and selling digital tokens, reported net income of $1.18 billion, or $4.40 per share, compared with last year's loss of $78.9 million, or 34 cents per share. In February, the company reported its first profit in two years.

Earnings in the quarter include a $650 million mark-to-market gain in crypto assets held for investment related to the company's adoption of updated accounting standards.

Consumer transaction revenue reached $935 million during the quarter, up more than 100%. From the period of the previous year. Total transaction revenue nearly tripled in the quarter to $1.08 billion.

Transaction revenue has historically been the main revenue driver, with subscription and services revenue bringing in $511 million for the quarter.

Coinbase shares rose nearly 9% on Thursday before the report and have jumped about 32% year to date after rising nearly five-fold in 2023. The stock is tipped to benefit from big gains in bitcoin as big rallies in the cryptocurrency lead to… Increased trading volumes and demand for other services.

During the first quarter, Bitcoin reached a new all-time high above $73,000 in March, and Ethereum, the second-largest digital asset, underwent its first major upgrade in more than a year.

The industry has also seen an influx of institutional investors since the Securities and Exchange Commission approved a raft of new US bitcoin exchange-traded funds. Many ETFs have partnered with Coinbase as their custodial partner. By the end of the first quarter, these funds had collectively brought in more than $50 billion.

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Cumulative net inflows peaked on April 8, according to Raymond James analysts, and have declined since then, along with Bitcoin's decline.

“Bitcoin price peaked as the pace of inflows moderated, and has declined modestly since mid-March,” Raymond James analysts wrote in a note this week. “In fact, trading volumes on Coinbase are down significantly from early March levels.”

Coinbase is also still mired in a legal battle with the Securities and Exchange Commission. In March, a judge ruled that the regulator's claim that the cryptocurrency exchange engaged in unregistered sales of securities could be heard by a jury in the trial.

Another potential headwind is new competition from Crypto.com, which has regained market share in recent months.

Several Coinbase insiders, including four members of the C-suite, collectively sold $383 million of company stock during the first quarter, according to analysts from Raymond James. This was more than double the amount sold in the fourth quarter of 2023 and the largest amount of insider selling since the company listed on the Nasdaq Stock Market in 2021.

Raymond James noted that the biggest seller was co-founder and board member Fred Ehrsam, who made $129 million on his shares.

CNBC's Michael Bloom and Kate Rooney contributed to this report.

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