Coinbase Earnings Beat Estimates

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Last Updated on May 5, 2023 by Bitfinsider

Coinbase reported a 22% increase in first-quarter revenue as cost-cutting tactics paid rewards. After-hours trading saw a 7% increase in shares.

Interest income increased 32% to $240 million, exceeding projections of $205 million, with USDC accounting for $199 million. Interest income totaled $182 million in the fourth quarter, with USDC accounting for $146 million.

The cryptocurrency exchange reported $736 million in revenue for the first quarter, exceeding the $658 million projection of FactSet analysts polled. EBITDA was positive $284 million, exceeding the negative $36 million forecast.

Anil Gupta, the firm’s vice president of investor relations, mentioned that following the release that subscription and services helped fuel this increase. Subscription and services revenue, which included staking and interest income, totaled $362 million, exceeding the $316 million expectation.

According to Mizuho’s Ryan Coyne, the diminishing circulating supply of USDC may have a more significant influence on Coinbase’s earnings as the year develops. Gupta acknowledged that the exchange expects interest income from USDC to reduce in the second quarter as a result of this.

Staking accounted for $73.7 million, exceeding FactSet’s estimate of $71 million. It did, however, result in a rise in transaction expenses as awards were sent to users, according to the corporation. During the first quarter, staking was scrutinized. Kraken settled with the Securities and Exchange Commission for $30 million. Coinbase shares fell after the SEC cracked down on staking, threatening staking revenues.

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