Coinbase Global (COIN) posted a wider-than-expected Q1 net loss on Thursday, marking the major crypto exchange’s second quarter in the red since the crypto market began to slump last fall.
The company reported a net loss of $394 million, or $1.49 per share, in the first quarter. That’s compared to a profit of $66 million, or $0.24 per share, in the year-ago period and a net loss of $667 million, or $2.49 per share, in the previous quarter.
Net revenue also missed analyst expectations, falling 31% to $1.4 billion.
“We controlled what we could control,” Coinbase CFO Alesia Haas said in an interview, adding that the firm grew the US spot crypto trading market during the period.
“Our fundamentals are strong despite short-term macro headwinds,” Haas added.
Coinbase stock fell 4% in after-hours trading.
Earlier this week, Coinbase gave investors notice about how the firm weathered a tough period for the crypto markets, disclosing plans to reduce its headcount by 14%, or 700 workers, citing “current market conditions” and a need to “optimize the Company’s operations for the AI era.”
The value of Coinbase’s massive crypto holdings weighed on its Q1 results. The market capitalization for all digital assets sank by roughly $600 billion during the period, according to CoinMarketCap data. Since then, major cryptocurrency price have seen some relief but remain well off their October highs.
Overall net transaction revenue fell 40% from the year-ago period to $756 million, driven by a pullback of retail customers while fees from institutions held up slightly better.
“As customers do when prices are down, they tend to HODL more than they trade,” Haas said, borrowing a crypto world phrase.
Coinbase stock is down 15% since the beginning of the year, and 50% from its October peak.
Without accounting for the slump in crypto prices, Coinbase’s revenue streams still faced pressure. The company’s adjusted EBITDA fell 67% to $303 million.
It’s unclear what has caused digital assets to lag significantly while major stock indexes continue to hit record highs. But that slump still dried up transaction activity in Coinbase’s core business of earning fees on crypto trades.
David Hollerith covers the financial sector, ranging from the country’s biggest banks to regional lenders, private equity firms, and the cryptocurrency space.
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