UPDATED 19:46 EST / MAY 10 2022

BLOCKCHAIN

Coinbase shares plunge on big earnings and revenue miss

Shares in Coinbase Global Inc. plunged in late trading after the cryptocurrency exchange missed estimates in its latest quarter.

For the fiscal first quarter ended March 31, Coinbase reported a net loss per share of $1.98 compared to a profit of $3.80 per share in the same quarter of 2021. Revenue came in at $1.165 billion, just a bit over $1.597 billion a year ago.

Analysts had been expecting a loss of a penny per share on revenue of $1.5 billion.

The company’s metrics were down across the board, with fewer users doing less trading. Retail monthly transaction users dropped to 9.2 million in the quarter, down from 11.4 million in the previous quarter, with trading volume coming in at $309 billion, down from $547 million. Assets on the platform also dropped to $246 billion, from $278 billion.

In a letter to shareholders, Coinbase noted that the first quarter of 2022 continued a trend of both lower crypto asset prices and volatility that began in late 2021. The market conditions are said to have directly impacted Coinbase’s results.

“This doesn’t faze us because we’ve always taken a long-term perspective on crypto adoption,” the company said. “We may earn a profit when revenues are high, and we may lose money when revenues are low, but our goal is to roughly operate the company at break-even, smoothed out over time, for the time being.”

Coinbase once against failed to give a solid outlook, instead making broad statements about the market.

The company claims it’s encouraged by the increasing role that crypto is playing in the world, such as assisting in raising money for Ukraine. Coinbase also cites Biden administration orders and a decision by the U.K. government to embrace crypto as a strategic priority as increasing the global relevance of crypto.

“With estimates of nearly 20% of Americans having used or traded crypto in these relatively early days, we firmly believe the future for crypto is bright,” the looking-ahead section states. “The core tenants of crypto – that it’s instant, borderless, lacks expense and inefficient intermediaries, and native to the Internet – give way for a future that is incredibly exciting and transformational.”

Investors did not appreciate the lack of a specific outlook and the big miss on earnings. After already falling almost 13% during regular trading, Coinbase’s share price dropped a further 15% after the bell.

Photo: Coinbase

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