A
smartphone
with
displayed
Coinbase
logo
and
representation
of
cryptocurrencies
are
placed
on
a
keyboard
in
this
illustration
taken,
June
8,
2023.
Dado
Ruvic
|
Reuters
Coinbase
reported
better-than-expected
revenue
in
its
first-quarter
earnings
report
on
Thursday.
The
stock
was
trading
about
2%
lower
in
extended
trading.
Here’s
how
the
company
did,
compared
to
analysts’
consensus
from
LSEG.
-
Earnings:
$4.40
per
share.
That
may
not
be
comparable
to
the
$1.09
average
analyst
estimate. -
Revenue:
$1.64
billion
vs.
$1.34
billion
expected
Coinbase,
the
primary
marketplace
in
the
U.S.
for
buying
and
selling
digital
tokens,
reported
net
income
of
$1.18
billion,
or
$4.40
per
share,
compared
to
a
year-ago
loss
of
$78.9
million,
or
34
cents
a
share.
In
February,
the
company
reported
its
first
profit
in
two
years.
Profit
in
the
quarter
includes
a
$650
million
mark-to-market
gain
on
crypto
assets
held
for
investment
in
connection
with
the
company’s
adoption
of
updated
accounting
standards.
Consumer
transaction
revenue
was
$935
million
for
the
quarter,
up
well
over
100%
from
the
year-earlier
period.
Total
transaction
revenue
almost
tripled
in
the
quarter
to
$1.08
billion.
Transaction
revenue
has
historically
been
a
primary
driver
of
revenue,
with
subscription
and
services
revenue
bringing
in
$511
million
for
the
quarter.
Coinbase
shares
climbed
almost
9%
on
Thursday
ahead
of
the
report
and
have
jumped
roughly
32%
year
to
date
after
soaring
almost
fivefold
in
2023.
The
stock
tends
to
benefit
from
big
gains
in
bitcoin
as
large
rallies
in
the
cryptocurrency
lead
to
increased
trading
volumes
and
demand
for
other
services.
During
the
first
quarter,
bitcoin
hit
a
new
all-time
high
above
$73,000
in
March,
and
ethereum,
the
second-biggest
digital
asset,
underwent
its
first
major
upgrade
in
over
a
year.
The
industry
has
also
seen
an
influx
of
institutional
investors
since
the
Securities
and
Exchange
Commission
approved
a
raft
of
new
U.S.
spot
bitcoin
exchange-traded
funds.
Many
of
the
exchange-traded
funds
have
partnered
with
Coinbase
as
their
custody
partner.
By
the
end
of
the
first
quarter,
the
funds
had
collectively
brought
in
more
than
$50
billion.
Cumulative
net
inflows
peaked
on
April
8,
according
to
Raymond
James
analysts,
and
have
fallen
since
then,
alongside
a
slippage
in
bitcoin.
“The
price
of
Bitcoin
peaked
as
the
pace
of
inflows
moderated,
and
has
been
drifting
modestly
lower
since
mid-March,”
Raymond
James
analysts
wrote
in
a
note
this
week.
“Indeed,
trading
volumes
on
Coinbase’s
platform
have
come
well
down
from
early-March
levels.”
Coinbase
also
remains
mired
in
a
legal
fight
with
the
SEC.
In
March,
a
judge
ruled
that
the
regulator’s
claim
that
the
crypto
exchange
engaged
in
unregistered
sales
of
securities
could
be
heard
by
a
jury
at
trial.
Another
potential
headwind
is
new
competition
from
Crypto.com,
which
has
regained
market
share
in
recent
months.
Insider
selling
Multiple
insiders
at
Coinbase,
including
four
members
of
the
C-suite,
collectively
sold
$383
million
of
the
company’s
shares
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
greatest
amount
of
insider
selling
since
the
company
listed
on
the
Nasdaq
Stock
Market
in
2021.
Raymond
James
noted
that
the
biggest
seller
has
been
co-founder
and
board
member
Fred
Ehrsam,
who
netted
$129
million
for
his
shares.
—
CNBC’s
Michael
Bloom
and
Kate
Rooney
contributed
to
this
report.
