Coinbase booked a $394 million net loss in the first quarter, missing Wall Street targets as crypto trading volumes collapsed.
Earnings Miss
The largest U.S. crypto exchange posted a $1.49 per-share loss for the quarter ended Mar. 31, according to a Thursday earnings release. Analysts polled by LSEG had expected a 27-cent profit.
Revenue came in at $1.41 billion, down 31% year-over-year and well short of the $1.52 billion consensus.
Transaction revenue fell to $755.8 million, while subscription and services revenue reached $583.5 million.
Both lines undershot analyst projections.
A $482 million unrealized loss on crypto held for investment dragged the bottom line. Bitcoin (BTC) slid sharply through the period, contributing to the writedown. Total crypto market capitalization shed more than 20% during the quarter.
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Armstrong Pivot
CEO Brian Armstrong pointed to crypto cyclicality and AI-driven productivity gains as the rationale behind a 14% workforce cut announced two days before earnings, affecting roughly 700 staff. He framed the move as a structural reset, not a cost trim.
The company still notched its 13th consecutive quarter of positive adjusted EBITDA at $303.3 million, though the metric fell 46% from the prior quarter.
Spot trading volume on the platform dropped 37%, even as Coinbase's market share in crypto trading climbed to a record 8.6%.
Subscription and services accounted for 44% of net revenue, the highest mix on record. Stablecoin revenue contributed $305 million, with average USDC (USDC) holdings on Coinbase products up 55% year-over-year to $19 billion.
Stock Reaction
COIN shares slid as much as 4.7% in extended trading after the print, touching $183.56 before paring losses. The stock had rallied earlier in the week on news of the layoffs.
Coinbase has missed earnings estimates in three of the past four quarters, leaving investors increasingly focused on whether the subscription segment can offset trading revenue swings. Management guided second-quarter subscription and services revenue to a range of $565 million to $645 million.
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