Coinbase Reports 40% Revenue Growth to $2 Billion, Net Income Drops 95%

Coinbase, a leading cryptocurrency exchange, reported a significant increase in its first-quarter revenues, reaching $2 billion, marking a 40% year-over-year growth from $1.6 billion in the same period last year. This substantial revenue growth highlights the company's expanding user base and increasing demand for its services.

However, despite the impressive revenue figures, Coinbase's net income for the quarter saw a notable decline. The exchange posted a net income of $66 million, a stark contrast to the $1.2 billion reported in the first quarter of 2024. This decrease in net income can be attributed to various factors, including unrealized gains of $737 million recorded in the previous year, which are not included in the current quarter's earnings.

Coinbase's adjusted EBITDA for the quarter stood at $930 million, with adjusted net income reaching $527 million. These figures reflect the company's operational efficiency and its ability to generate profits despite market fluctuations. The exchange's subscription and services revenue also saw a 9% quarter-over-quarter increase, reaching $698 million. This growth in non-trading income sources underscores the increasing demand for Coinbase's diverse range of services beyond traditional trading activities.

In terms of financial resources, Coinbase reported $9.9 billion in USD resources, including cash, cash equivalents, and USDC. The average assets under custody climbed by $25 billion over the quarter, indicating a growing trust and reliance on the platform by its users. Coinbase processed $315 billion in institutional trading volume in the first quarter, further solidifying its position as a key player in the institutional crypto market.

Additionally, Coinbase added 39 new perpetual contracts to its international exchange, pushing its global derivatives trading volume above $800 billion. This move highlights the exchange's commitment to providing advanced financial instruments to active crypto traders, further cementing its role as the platform of choice for sophisticated investors.

Coinbase also revealed that 86% of surveyed institutional investors either held digital assets or planned to make allocations this year. This trend underscores the growing institutional interest in cryptocurrencies and the increasing adoption of digital assets as part of investment portfolios. Stablecoins emerged as a major growth segment for Coinbase, with the average USDC balance held in Coinbase products rising 49% quarter-over-quarter to $12 billion. USDC revenue also saw a 32% increase, reflecting the growing demand for stablecoins as a reliable store of value and medium of exchange.

The total stablecoin balance on Base, Coinbase’s Ethereum Layer 2 network, climbed 12% to $4 billion, contributing to record demand as USDC market cap hit $60 billion. Base itself saw a 16% quarter-over-quarter rise in transaction volume, reinforcing its position as the most active Ethereum L2 by user engagement. This growth in stablecoin usage and transaction volume on Base highlights the network's increasing popularity and utility within the crypto ecosystem.

Coinbase will release its full 10-Q filing with the SEC on May 9, detailing reconciliations between GAAP and non-GAAP metrics used in its earnings presentation. This filing will provide a comprehensive overview of the company's financial performance and operational metrics, offering further insights into its growth and strategic initiatives.