coinbase said May 4 its net revenue increased 22% quarter-over-quarter to $736 million and its operating expenses fell 24% from the prior quarter.
The reduction in operating expenses is related to the fact that the company laid off 950 employees in January. Although the restructuring strategy cost it $144 million, Coinbase said it is now a “more efficient” company that can “do more for less.”
The company said these trends resulted in a net loss of $79 million, but generated $284 million in adjusted earnings before interest, taxes, depreciation and amortization (EBIDTA).
Coinbase added that its balance sheet held $5.3 billion in US dollar resources, including cash, cash equivalents, USDC and custodial account overfunding.
More revenue and activity trends
Coinbase transaction revenue increased 16% to $375 million, with consumer transaction revenue up 14% and institutional transaction revenue up 67%.
The company reported quarterly trading volume of $145 billion, equal to the previous quarter.
Coinbase reported that its “platform assets” – meaning the US dollar value of various digital assets stored on its services – increased by 62% to $130 billion.
The company also saw revenue growth quarter over quarter in several other categories. Subscriptions and services revenue increased 28% to $362 million, Blockchain rewards revenue increased 18% to $74 million, Custody revenue increased 49% to to reach $17 million and interest income increased by 32% to reach $241 million.
Coinbase Provides Q2 Outlook
Coinbase also provided its outlook for the second quarter of the year.
The company expects transaction expenses to represent up to 15% of its net income. Conversely, it expects to see $300 million in subscription and services revenue, a decline due to a reduction in USDC’s market capitalization.
The company also said technology and development expenses, as well as general and administrative expenses, could reach $650 million. This represents an increase in costs and is partly due to Coinbase’s higher legal fees. The company has an ongoing dispute with the United States Securities and Exchange Commission (SEC).
Coinbase added that its sales and marketing expenses could be between $80 million and $90 million, thanks in part to an NBA partnership and equity compensation.
The company noted that crypto market cap and asset volatility diverged in Q2 from Q1, with the average crypto market cap standing at $1.3 trillion, up 17% than the first quarter average of $1.1 trillion.
Coinbase said crypto asset volatility in April was 25% lower than the first-quarter average and impacted the company’s trading business as it generated around $110 million in total trading revenue. in April.
The company warned investors not to extrapolate from this data, noting that “last year’s experience reminds us of how quickly the market can move.”
Coinbase (COIN) stock is up 1.51% today and 7.05% after hours.
