May 2, 2024 - Business

Coinbase posts Q1 revenue beat with a boost from higher bitcoin prices

A hand holding a phone with the Coinbase app up.

Coinbase Global's latest earnings report, which for the first time included the impact of the January-debuted bitcoin ETFs, was a stunner.

Why it matters: The largest publicly traded crypto firm is a good barometer for how well the industry is doing at large, and its latest financials show the vastly improved environment this year, compared to the last.

The big picture: Bitcoin's wind was in the crypto exchange's sails — higher prices for the oldest cryptocurrency boosted its various lines of revenue, including sales derived from transaction fees as well as its growing subscriptions and services unit.

Zoom in: Coinbase reported total revenue of $1.6 billion for the first quarter, up 72% gain from the fourth quarter of 2023, its filing shows.

  • Net income was $1.2 billion, though, that was mostly from $737 million in pre-tax crypto asset mark-to-market gains, which are largely unrealized.
  • The company adopted the FASB accounting standard for digital assets early, which helped boost profits.

Transaction revenue was largely driven by consumers, with growth in that segment up 99% quarter-over-quarter to $935 million.

  • That said, growth came in higher from the institutional side, which saw a 133% jump over the same period to $85 million.

Reality check: The San Francisco-based firm was selected as custodian to 8 of the 11 spot bitcoin ETFs that debuted in January, but that doesn't appear to have contributed much to its top line so far.

  • Custodial fee revenue was $32 million, up 64% quarter-over-quarter.

Our thought bubble: A version of Coinbase's infographic sent to Axios included unfinished data about the exchange's work in ETFs, but the section was ultimately left out of the final version of the filing.

By the numbers: Coinbase shares closed up 9% Thursday prior to the report, but have given back some of those gains in post-market trading.

What we're watching: The company should have more color around its quarter and what's coming next at its earnings call at 5:30 PM ET.

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