Coinbase publishes its tripled 1Q earnings data

Coinbase’s stock price rose by about 3% in after-hours trading on Thursday. Earlier, revenue and net income soared in the first quarter of 2021. Coinbase took advantage of the rise in cryptocurrency prices and the related interest of investors.

The company’s quarterly profit was US$771 million, or US$3.05 per share, higher than the US$32 million in the same period last year. Total revenue surged from US$191 million to US$1.8 billion.

At the beginning of April, the company expected between 730 million and 800 million U.S. dollars and revenue of 1.8 billion U.S. dollars.

Coinbase’s revenue and profits largely depend on the popularity of Bitcoin and other digital currencies. By the end of the first quarter, Bitcoin price had risen from approximately $7,300 in early 2020 to nearly $59,000. On April 14 (the same day Coinbase went public), Bitcoin hit an all-time high of $64,802.

Bitcoin’s rebound has boosted people’s understanding of Coinbase itself. Its app has recently become one of the most downloaded apps in the Apple App Store. The company has also been actively marketing and plans to increase its efforts this year.

Since its listing on April 14, excluding after-hours trading, Coinbase’s share price has fallen by about 30.4%, while Nasdaq has fallen by 5.3% over the same period.

By the end of 1Q, Coinbase had 56 million verified users, compared with 34 million last year. The number of active users that the company calls “monthly trading users” rose from 1.3 million to 6.1 million.

The total transaction volume is 335 billion U.S. dollars. Assets on the company’s platform have doubled.

Coinbase expectations for 2Q

The company expects the leading business indicators for the second quarter to meet or exceed the first quarter. It pointed out that the number of active users continues to increase. At the current rate, the total transaction volume will be the same as in the first quarter. It might even slightly exceed the first quarter.

According to one measure, institutional customers have become Coinbase’s largest customers. Of the US$335 billion in transaction volume, US$215 billion came from institutional clients, and US$120 billion came from individuals.

However, most of the company’s revenue comes from transaction fees from individual investors. Transaction fee income from these customers totaled $1.46 billion this quarter, while transaction fee income from institutional customers was $85 million.

Coinbase lists 109 digital assets on its exchange. However, Bitcoin and Ethereum account for more than half of its trading volume. Bitcoin accounted for 39% of transaction volume during the quarter, while Ethereum accounted for 21% of its transaction volume.