Coinbase reported total sales of $ 1.8 billion, in line with its April forecast, but slightly below the $ 1.81 billion expected by analysts polled by Bloomberg. The company’s net income of $ 771 million fell to the middle of the forecast range of $ 730 million to $ 800 million, and exceeded analysts’ expectations of $ 762.6 million.
Coinbase reported a day after Tesla Inc. said it would stop accepting Bitcoin for payment, leading the world’s largest cryptocurrency to crash below $ 50,000. Coinbase CFO Alesia Haas said in an interview that the sharp drop “is just a day away. It is important not to over-index in a single day. “
Coinbase shares first fell above $ 250 after-hours trading, briefly exceeding the benchmark price set by the Nasdaq for its direct listing on April 14. No trade has ever taken place at this price – it started at $ 381 – but it is seen below. as a default for the listing.
“Coinbase’s strong forecast for 2Q21 trading volume – equal to or greater than the $ 335 billion it released in 1Q21 – and its improved 2021 scenarios for users trading monthly were the key takeaways, at our opinion, ”said Mark Palmer, analyst at BTIG. “However, the market appears to have initially focused on modest ‘hiccups’ on consensus estimates, even though the company has hit its pre-announced number (in the case of revenue) or produced results in the pre-announced range (in the case of net income). “
Although Coinbase’s letter to shareholders did not comment on the crash, the company once again stressed that its business “is inherently unpredictable.” He added that “the wind is in our sails right now, and he It’s heard good, ”he added. “But crypto is a volatile young industry and there will come a time when times will be tougher.”
The company raised its expectations for the full year for users doing monthly transactions, with the number of those customers rising to 6.1 million in the first quarter, more than double the previous quarter. In the current second quarter, the company expects its total trading volume to meet or slightly exceed its first quarter trading volume.
But investors shouldn’t expect major profits in the future, the company said. “We are looking to run the business at roughly breakeven in terms of profitability, smoothed over time, for the time being,” the company said, explaining that it is focused on expansion. He plans to increase marketing “substantially” this year, with investments in sales and marketing adding until between 12% and 15% of turnover.
Coinbase ended the quarter with nearly $ 2 billion in cash and cash equivalents, and it expects to remain acquisitive, likely making larger acquisitions than in the past, as many crypto startups have grown, said Haas. Coinbase has recently acquired a number of companies, including the Skew analytics platform.
Coinbase also plans to add features to its app, enabling easy NFT trading, for example. And he’s exploring new services. Most of the company’s revenue comes from retail users, although institutions account for most of the assets it holds under management. Coinbase is trying to bring in institutional money in order to later offer more services to larger customers, Haas said.
Coinbase pointed to growing competition as a risk factor. “Our competitors support some crypto assets that are experiencing high transaction volume and market capitalization growth that we do not currently support, as well as new products and services that we do not offer,” said the company in the letter. “We welcome these challenges because they indicate that the market we serve is growing rapidly, but we must also continue to act quickly to meet them, and that inspires us. towards action and growth. “
Coinbase shares have fallen about 20% since the company’s inception in April via a direct listing.
(Updates with analyst comments)