Coinbase share price spikes 7.9% as Q1 results beat expectations
Crypto exchange Coinbase managed to significantly narrow its net loss in the first quarter of 2023, due in part to robust earnings from retail investor trading activity.
The company’s net loss fell from $557 million in Q4 2022 to $79 million in Q1, partly attributed to a 22% increase in revenue to $736 million.
The results beat expectations from some analysts, leading to a 7% spike in Coinbase’s (COIN) share price in after hours trading.
Transaction revenue — derived from fees its charges for trades — from its institutional base increased a whopping 66% to over $22.3 million, while transaction revenue from retail investors increased14.1% to $352.1 million, according to Coinbase’s May 4 shareholder letter.
Overall, revenue from transactions increased 16% quarter-on-quarter to $375 million, though trading volumes remained fairly flat.
Interest income and blockchain rewards from staking brought in the most revenue for the quarter, which increased to $240.8 million and $73.7 million respectively from Q4 2022.
The percentage of revenue from Bitcoin (BTC) (36%) and Ether (ETH) (18%) trades remained almost identical over the quarter.
The firm is inching closer to profitability following a tumultuous 2022 which saw overall net losses of $1.16 billion, $803 million, $576 million and $605 million across each respective quarter last year.
Coinbase explained that the quarter represented a “turning point” towards building a more “efficient” and “financially disciplined” firm:
“Our teams are smaller, but more nimble than ever and we are pleased with the pace of innovation and the results we are seeing,” the firm added.
Coinbase cut staff by 18% in June, 2022 and then another 20% in January, 2023 in order to ensure the firm maintains an
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