The logo for Coinbase Global Inc, the largest US cryptocurrency exchange, will be displayed on the jumbotron of the Nasdaq MarketSite and other in Times Square in New York, USA on April 14, 2021.
Shannon Stapleton | Reuters
Coinbase shares rose around 3% after trading on Thursday after reports that sales and net income skyrocketed in the first quarter of 2021 as the cryptocurrency trading platform benefited from a boom in crypto prices and investor interest . The results were largely in line with estimates Coinbase provided on April 6, about a week before its public debut.
Here’s how the cryptocurrency exchange has performed in its first earnings report since the company’s direct listing in April:
- Merits: $ 3.05 per share
- Revenue: $ 1.80 billion, up from $ 585 million in the previous quarter.
The company’s net income for the quarter was over $ 771 million, more than quadruple from $ 177 million in the fourth quarter of 2020 and more than 24 times higher than earnings for the year-ago quarter.
On the call to win, the company announced that it plans to list Dogecoin in the next six to eight weeks. The meme-inspired cryptocurrency surged up to 26,000% in the past six months before falling after Elon Musk’s “Saturday Night Live” hosting debut, calling Dogecoin a “hustle”.
Coinbase’s fate is linked to the performance of digital assets like Bitcoin. Approximately 94% of the company’s net sales in the first quarter came from transaction fees from trading. In an introduction, the company noted that Bitcoin prices nearly doubled in the quarter and ether prices nearly tripled.
Coinbase fees, which make up most of the company’s revenue, are higher than some of its competitors. When asked, CFO Alesia Haas has doubled the company’s strategy, suggesting margins for cryptocurrency exchanges will remain high.
“We’re not trying to win with fees,” said Haas. “We’re not trying to compete on fees. We’re competing to be the most trustworthy.”
Haas told CNBC that the company’s primary focus in the first quarter will be reliability. “We are facing unprecedented growth in demand and we have focused on keeping our exchanges going.”
The monthly transaction users have more than doubled compared to the previous quarter from 2.8 million to 6.1 million. The 56 million verified users of Coinbase as well as the record-breaking price movements in the crypto market meant that the trading volume more than tripled compared to the previous quarter.
In its press release, Coinbase did not provide detailed sales or profit forecasts for either the second quarter or the full year. He warned: “As mentioned earlier, it is important for investors to remember that our business is inherently unpredictable.” However, it forecasted 5.5 to 9.0 million monthly transaction users for the full year, depending on crypto prices, and forecast that annual average net sales would hit the historic mark averaged over the past two years of $ 35 to 45 would exceed.
During its direct listing last month, Coinbase opened at $ 381 per share and was briefly valued at up to $ 100 billion, a milestone for the cryptocurrency industry.
Excluding the after-business move, Coinbase stock is down 30.4% since going public on April 14, while the Nasdaq is down 5.3% over the same period.
CLOCK: Ethereum hits record high, outperforming Bitcoin in Monster 2021 surge.
Disclosure: “Saturday Night Live” is a television show hosted by NBCUniversal, the parent company of CNBC.
Correction: Coinbase announced the profit on Thursday. In an earlier version the day was incorrectly specified The Nasdaq is down 5.3% since April 14th. In an earlier version, the percentage was incorrectly stated.