American publicly traded company and cryptocurrency exchange Coinbase Global has released its first-quarter earnings report which showed that it did better than analysts estimated.
Coinbase reported Q1 revenue of $773 million which exceeded the $655 million estimate made by analysts. At the same time, this recorded revenue is 22% higher than that of Q4 2022 ($629 million) but down 34% year-over-year.
Coinbase Cuts Down Losses by 76% With Layoff Exercise
This is not to say that there were no losses, rather they were lower than expected. An adjusted loss of $0.34 per share was recorded by the crypto exchange compared to the estimated loss of $1.45 per share. Analysts previously estimated a net loss of $330 million but according to data from FactSet, the company ended up with a trimmed net loss of only $79 million.
This indicates a 76% difference from the estimate and it is worth noting that this significant reduction was contributed by the reduction in operating costs. Owing to a restructuring exercise carried out in its workforce in January, Coinbase successfully reduced its operating cost to $896.4 million.
The company’s interest income increased by 32% leaving the value at $240 million instead of the $205 million estimate.
Markedly, about 83% of the income interest was derived from the United States dollar-backed stable in USDC. The stablecoin contributed a similar percentage to Coinbase’s interest income in Q4 2022. During that time, the figure was $182 million, and $146 million was from USDC.
Coinbase Q1 Report Shows Positive EBITDA
Unlike the negative $36 million EBITDA projected by analysts, Coinbase ended up with a positive figure of $284 million. As per a statement by Coinbase Chief Executive Officer (CEO) Brian Armstrong
“This is the fourth crypto cycle that Coinbase has been through and we’ve emerged stronger after each one.” Also, “We’ve shifted the business to operate more efficiently in this down market driving positive adjusted Ebitda in Q1.”
Coinbase Ink Several Strategic Partnerships in Q1
Apart from beating analysts’ estimations in Q1, the company also expanded its operations and inked several partnerships at the same time. In January, Coinbase expanded its partnership deal with professional football club Borussia Dortmund (BVB) which is based in Germany. Again in March, the crypto exchange acquired One River Digital Asset Management, or ORDAM, a hedge fund that specializes in cryptocurrencies.