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 first quarter results that missed analysts ’earnings estimates after Tuesday’s call. Shares fell more than 15% in trading during non-business hours, relying on a 12.6% drop during normal trading hours before results fell.
Here are the key figures:
- Loss per share (EPS): $ 1.98
- Income: $ 1.17 billion against an expected $ 1.48 billion, according to Refinitiv
Shares have lost more than 70% of their value since late March as a wider decline in technology stocks and the value of cryptocurrencies has hit Coinbase particularly hard. bitcointhe most popular cryptocurrency, declined briefly below the symbolic price threshold of $ 30,000 on Monday, and fell more than 30% this year.
Overall, Coinbase 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.
Revenue fell 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 doubled on the argument that it has done beforereminding shareholders that its shares should be viewed as long-term investments due to the volatile nature of cryptocurrency price movements.
“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. Total operating expenses were $ 1.72 billion, ahead of profits for the first time since the company began making public finances.
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.”
Emily Choi, president and chief operating officer of Coinbase, added that the company is investing heavily in meeting the requirements.
“It’s important to us because it helps us strengthen our relationships with our customers and regulators, so that’s another part of the staff that matters,” Choi said.
While Coinbase had previously disclosed plans to increase staffingoperating costs, which jumped nearly 70% in six months, suggest the company is still spending as if in a hyper-growth phase, even as users and transaction volumes declined between quarters.
Coinbase CFO Ales Haas said during a conversation with analysts that she could grow slower to focus on profits, but decided to spend on growth and diversification of product lines.
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