In brief
- Coinbase narrowly missed per share earnings while posting impressive profit and revenue numbers
- The earnings are not a surprise as they were a formal version of ones posted in April
- The company also released a shareholder letter
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Coinbase reported first quarter earnings of $3.04 per share Thursday afternoon, narrowly falling short of analysts' estimates of $3.07. Overall, the company notched a profit of $771.5 million on revenue of $1.8 billion for the quarter.
The profit and revenue numbers are impressive for a newly public company but are unlikely to make much of an impact on the market, given that Coinbase released a preliminary version of them on April 6, days before the company listed its shares. Thursday's numbers instead reflect the final, official version of those results. The revenue number lines up exactly with the figure Coinbase had earlier released, while the profit figure falls in the middle of the $730-$800 million estimate it had provided.
In an unsigned letter addressed to "fellow shareholders," Coinbase sounded a bullish note, predicting that its growing user numbers would produce a "flywheel" effect.
"[W]e continued to see our growth flywheel in action. First, more participants than ever entered the cryptoeconomy in Q1. We now have over 56 million Verified Users, including more than 8,000 institutions, and over 134,000 ecosystem partners on our platform ... We added support for 7 new assets to trade and 13 new assets to custody. Adding support for new assets is an important driver of growth of Trading Volume and Assets on Platform," said the letter.
Meanwhile, Coinbase's share price has slumped badly since its public listing. After reaching a high of $429 on its first date of trading, the stock has fallen around 40% and was trading around $267 on Thursday. Today alone, the price dropped approximately 7% prior to the earnings release—likely the result of a broader sell-off in the crypto markets following a tweet by Tesla CEO Elon Musk that his company would no longer accept Bitcoin.
On an earnings call following the release of the numbers, Coinbase CEO Brian Armstrong announced the company would be adding Dogecoin, a popular meme-based cryptocurrency, in the next 6-8 weeks.
The call by Coinbase, whose ticker symbol is COIN, was unusual in that, rather than answer analyst calls as is customary, Armstrong responded to a series of questions posted to a Reddit-style message board where the public had an opportunity to "upvote" the ones they liked.
This story was updated on Thursday afternoon to include the Dogecoin details from the earnings call.