Bitcoin
Coinbase sees big impact in Q1 thanks to Bitcoin boom and increased interest in crypto
Coinbase reported a big first-quarter drop Thursday night, driven by the bitcoin boom at the start of the year and renewed interest in cryptocurrencies. Meanwhile, bitcoin recovered slightly after falling on Wednesday to a key pressure point for institutional investors. The prices of spot cryptocurrencies and bitcoin ETFs have increased as bitcoin has advanced. Coinbase shares initially fell on the results.
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Coin base (COIN) reported earnings of $4.40 per share, up from a loss of 34 cents per share in the same quarter a year ago. Total revenue jumped to $1.64 billion, a 111% increase year over year and a 72% increase over the last quarter.
Analysts polled by FactSet expected Coinbase to report earnings of $1.15 per share, with revenue rising 76% to $1.36 billion.
Transaction revenue increased 187% year over year to $1.08 billion, also doubling from the fourth quarter. Consumer transaction revenue increased to $935.2 million, up from $468.9 million in the fourth quarter and $392.2 million in the first quarter of last year. Institutional transaction revenue soared to $85.4 million, jumping nearly 133% from the fourth quarter and rising massively from the $22.3 million recorded last year.
Subscription and services revenue increased 41% to $511 million, compared to the company’s previous estimates of $410 million to $480 million and analyst estimates of $458 million. The revenue increase was primarily driven by Coinbase blockchain rewards, which more than doubled to $150.9 million.
Stablecoin revenue fell slightly to $197.3 million in the quarter.
Coinbase has seen a huge increase in revenue from custody fees, largely due to higher cryptocurrency prices. The scholarship is also serving as the custodian of most US spot bitcoin ETFs which was released in January.
Coinbase’s custodial fee revenue rose 90% to $32.3 million, compared to FactSet estimates of $31 million. It reported $19.7 million in revenue from custody fees in the fourth quarter ended in December.
The company said it generated more than $300 million in total transaction revenue in April. Coinbase guided for second-quarter subscription and services revenue to range from $525 million to $600 million.
FactSet forecasts second-quarter earnings of 94 cents per share on revenue growth of 82% to $1.29 billion. Analysts expect subscription and services revenue for the quarter to increase 45% to $489 million.
Coinbase Stock
Coinbase shares narrowed their after-hours loss to 1.4% on Thursday following the results. Shares jumped 8.9% during regular trading leading up to the results.
COIN shares are down about 20% from their peak of 283.48 on March 25, which marked their highest level since December 2021. Still, Coinbase shares are up nearly 28% in 2024 through the close of Thursday.
Meanwhile, bitcoin has recovered more than 3% in the last 24 hours, returning to above $59,000 on Thursday evening. The world’s largest crypto is in another correction that began in late March and continued until the halving event on April 19, digital asset analytics firm 10x Reported research. Bitcoin is down nearly 20% from its March 14 record high of $73,798. Still, bitcoin has jumped more than 41% this year.
Other crypto-related stocks rose on Thursday as bitcoin rallied. Digital Marathon (MARA) led bitcoin miners with a 6.2% jump on Thursday, followed by Riot Platforms (REBELLION) which rose 4.9%, and Cabin 8 (CABIN) with an advance of 2%. CleanSpark (CLSK) rose 1.9%, after five consecutive daily drops.
US bitcoin ETFs, including the iShares Bitcoin Trust (I BITE), ARK 21Shares Bitcoin ETF (ARKB) and Grayscale Bitcoin Trust (GBTC), all advanced about 4.3% on Thursday as bitcoin rose.
You can follow Harrison Miller for more stock news and updates on X/Twitter @IBD_Harrison
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