Coinbase’s Q1 2022 revenue and profit predictions were not met by analysts
Coinbase has released its earnings results for the first quarter 2022. These results won’t do much to change the current negative mood in crypto markets.
The company revealed that it earned $1.17 billion in revenue, far less than the $2.5 billion it took in Q4 and much lower than analysts’ Q1 estimates of $1.5 billion.
Coinbase suffered a loss of $430million in its quarter. It was also surprising that the loss, Coinbase’s first quarterly loss as a public company, was so large. Analysts had expected it to close to breakeven.
Coinbase shares fell to $62 after hours trading, having closed trading at $72. Coinbase and other Bitcoin-exposed shares experienced a sudden drop of $62 in after hours trading. This was in response to the wider meltdown in crypto markets over the past week.
The company’s share price has fallen from its public-market debut last year, when it traded for over $350.
Coinbase’s Q1 letter to shareholders, despite the disappointing financial results showed a positive note despite these disappointing results.
“The trend of lower crypto asset prices and volatility continued in the first quarter 2022. This trend began in late 2021. These market conditions directly affected our Q1 results. However, we entered these market conditions with foresight, preparation, and remain excited about the future crypto,” stated the letter. It concluded with #wagmi, a crypto acronym that stands for “we are all going to make it.”
During its last earnings release, the company warned investors to expect soft results due to a likely drop in trading.
Coinbase will be able to benefit from volatility in both directions, so Coinbase’s revenue may be boosted by the turmoil in crypto markets. However, this activity occurred in April and May and is therefore not included in the Q1 numbers.
On the earnings call, scheduled for 5:30pm ET, Coinbase executives will give more information about the results and answer questions from analysts.