Monitors show Coinbase captions during Nasdaq MarketSite’s initial public offering (IPO) in New York, USA, on Wednesday, April 14, 2021.
Michael Nagle Bloomberg | Getty Images
reported Coinbase results from the first quarter which missed analysts’ revenue forecasts after the bell on Tuesday. Shares fell more than 15% in after-hours trading, building on a 12.6% decline during regular trading hours before the results fell.
Here are the key numbers:
- Loss per share (EPS): $ 1.98
- income: $ 1.17 billion versus the expected $ 1.48 billion, according to Refinitiv
Shares have lost more than 70% of their value since the end of March, as the wider decline in technology stocks and the value of cryptocurrencies hit Coinbase particularly hard. Bitcoin, the most popular cryptocurrency, briefly fell below a symbolic $ 30,000 price threshold on Monday and fell more than 30 percent this year.
Overall, Coinbase usage has declined since the fourth quarter. Consumers of monthly retail transactions (MTUs) fell to 9.2 million, down 11.4 million in the fourth quarter, while total trade fell from $ 547 billion in the fourth quarter to $ 309 billion.
Revenue fell 27 percent from a year earlier and also reported a net loss of $ 430 million in the first quarter.
But Coinbase doesn’t seem worried about its long-term prospects. The company doubled the argument that he has done it beforereminding shareholders that its shares should be seen as a long-term investment due to the volatile nature of cryptocurrency price movements.
“We believe that these market conditions are not constant and we remain focused on the long term,” the company wrote in a letter to shareholders accompanying the announcement of profits. He also said he was focusing on next-generation cryptocurrencies outside of commerce.
“As we continue to invest and improve our core investment platform, the era of crypto applications is ahead of us, led by NFD and decentralized financing, and we are increasingly focusing our efforts on these market opportunities.
The increased costs also helped reduce the company’s end result. Total operating expenses totaled $ 1.72 billion, surpassing revenue for the first time since the company began reporting publicly.
General and administrative expenses were $ 414 million, up 39 percent from the previous quarter. Coinbase attributes the increase in higher costs to full-time and contractor staff. The purpose of these costs, according to the company, was “to invest in strengthening and scaling our customer support, legal, compliance and business support functions.”
Emily Choi, president and chief operating officer of Coinbase, added to the company’s call for profits that the company is investing heavily in compliance.
“It’s important to us because it helps us strengthen our relationships with our customers and regulators, so that’s another part of the number of employees that matters,” Choi said.
While Coinbase had previously revealed plans to increase the number of employeesoperating expenses, which jumped nearly 70% in six months, suggest the company is still spending as if in a hyper-growth phase, although consumers and transaction volumes have fallen between quarters.
Coinbase CFO Alessia Haas said during a conversation with analysts that she could have grown slower to focus on profits, but instead chose to spend on growth and diversification of product lines.