Coinbase recorded a major first-quarter beat Thursday evening, driven by the bitcoin boom earlier this year and a surge in interest in cryptocurrencies. Meanwhile, Bitcoin rebounded slightly after falling on Wednesday. at a key pressure point for institutional investors. Prices of cryptocurrencies and Bitcoin spot ETFs have surged thanks to Bitcoin’s advance. Coinbase stock initially fell on the results.
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Coinbase (PIECE OF MONEY) reported earnings of $4.40 per share, up from a loss of 34 cents per share in the same quarter a year ago. Total revenue jumped to $1.64 billion, up 111% year-over-year and 72% from last quarter.
Analysts surveyed by FactSet expected Coinbase to report earnings of $1.15 per share on a 76% rise in revenue to $1.36 billion.
Transaction revenue increased 187% year over year to $1.08 billion, also doubling from the fourth quarter. Revenue from consumer transactions reached $935.2 million, compared to $468.9 million in the fourth quarter and $392.2 million in the first quarter of last year. Institutional trading revenue reached $85.4 million, up nearly 133% from the fourth quarter and a sizable increase from the $22.3 million recorded last year.
Subscription and services revenue jumped 41% to $511 million, compared to the company’s previous estimates of $410 million to $480 million and analyst estimates of $458 million. The increase in revenue was primarily driven by Coinbase’s blockchain rewards, which more than doubled to $150.9 million.
Stablecoin revenue decreased slightly to $197.3 million for the quarter.
Coinbase has seen its custodial fee revenue increase significantly, largely due to rising cryptocurrency prices. The exchange also serves as the custodian of the majority of spot bitcoin ETFs in the United States which was launched in January.
Coinbase’s custodial fee revenue jumped 90% to $32.3 million, compared to FactSet estimates of $31 million. It reported $19.7 million in childcare fee revenue for its fourth quarter ended December.
The company said it generated more than $300 million in total transaction revenue in April. Coinbase guided Q2 subscription and services revenue between $525 million and $600 million.
FactSet forecast second-quarter earnings of 94 cents per share on revenue growth of 82% to $1.29 billion. Analysts expect subscription and services revenue for the quarter to increase 45% to $489 million.
Coinbase Stocks
Coinbase stock narrowed its after-hours loss to 1.4% Thursday following the results. Shares jumped 8.9% in regular trading leading up to the results.
COIN stock is down about 20% from its March 25 high of 283.48, which marks its highest level since December 2021. Nonetheless, Coinbase stock is up nearly 28% in 2024 through ‘at Thursday’s close.
Meanwhile, bitcoin rebounded more than 3% in the past 24 hours to climb back above $59,000 late Thursday. The world’s largest cryptocurrency is in another correction that began in late March and continued through the April 19 halving event, according to the digital asset analytics firm. 10x Reported Research. Bitcoin has fallen nearly 20% from its March 14 all-time high of $73,798. Still, bitcoin has surged more than 41% so far this year.
Other crypto-related stocks climbed Thursday as bitcoin rebounded. Digital marathon (MARA) led Bitcoin miners with a 6.2% jump on Thursday, followed by Riot platforms (RIOT) which jumped 4.9%, and Cabin 8 (HUT) with an advance of 2%. CleanSpark (CLSK) rose 1.9%, after five consecutive daily declines.
US spot Bitcoin ETFs, including the iShares Bitcoin Trust (I BITE), ARK 21Shares Bitcoin ETF (ARKB) and Grayscale Bitcoin Trust (GBTC), all rose about 4.3% on Thursday as bitcoin surged.
You can follow Harrison Miller for more stock news and updates on X/Twitter. @IBD_Harrison
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