The Coinbase Q1 Stats That Stood Out Most to Analysts

The exchange’s net revenues and operating expenses beat many analyst estimates, and Coinbase seeks to continue its business diversification


Nadezda Murmakova/Shutterstock modified by Blockworks


One of the most watched crypto companies reported its Q1 results on Thursday. 

Coinbase’s net loss dropped from $557 million during the fourth quarter of last year to $79 million in the first three months of 2023, which was a better improvement than some analysts expected. 

But beyond the headline net income stat, some other first quarter results stood out to the company and the analysts that cover it.

Adjusted EBITDA goes positive

The long acronym, which stands for earnings before interest, taxes, depreciation and amortization, was a major focus for Coinbase, executives said during the company’s earnings call Thursday. 

The exchange generated $284 million in adjusted EBITDA in the first quarter, compared to a $124 million loss in the prior quarter, company data shows. This metric was also negative in the second and third quarter of last year, at $151 million and $116 million, respectively.  

“We’re better positioned at Coinbase to generate adjusted EBITDA in all market conditions,” CEO Brian Armstrong said on the call. 

The adjusted EBITDA figure of $284 million was much better than the $51 million loss forecasted by Piper Sandler Senior Research Analyst Richard Repetto, he wrote in a research note. Repetto had also estimated a significantly higher net loss of $295 million.  

Owen Lau, executive director at Oppenheimer & Co., called the change in adjusted EBITDA a “key metric” now and going forward. 

“It tells the market that the company can manage the cost base without sacrificing its ability to generate revenue and expand, and be a long-lasting business,” Lau told Blockworks after the reported results. “Not to mention its $5.3 [billion] total available USD resources.”

Net revenues, and diversification 

Net revenues grew 22% quarter over quarter to $736 million. About 51% of that came from transaction revenues, which were up about $52 million, or 16%, from the fourth quarter.  

Coinbase’s subscriptions and services revenue, which includes blockchain rewards and interest income from its USD Coin (USDC) reserves, totaled $362 million. This was a 28% quarter over quarter rise from $283 million in 2022’s fourth quarter.

“The balance in their business lines is testament to the potential power of the momentum of what the firm is trying to build,” said Dan Weiskopf, a co-portfolio manager of the Amplify Transformational Data Sharing ETF (BLOK). “All of this comes while regulatory hurdles have put the company under a microscope with the SEC and forced it to get lean.”

Read More: Coinbase Warns SEC About Launching Litigation Against the Exchange 

But subscriptions and services revenue could fall to roughly $300 million, Coinbase Chief Financial Officer Alesia Haas said on Thursday’s call.  

“This decline is largely driven by the USDC market cap, which fell 23% in April from the Q1 average level — directly correlated with the banking crisis,” she noted.

Haas added the company is committed to diversifying its revenue further to ensure those streams are “driven by different macro factors.”

She noted that blockchain rewards represented roughly 3% of net revenue in the first quarter. Nearly 20% of revenues now come from outside the US, she added.

Read More: Coinbase International Debuts Perpetual Futures for Non-US Institutional Traders 

“Though COIN clearly sees itself as a US domiciled company, the international opportunity provides a reluctant hedge from the regulatory uncertainty in the US,” Repetto said in his latest research note.

Operating expenses

On the other side of net revenues was total operating expenses, which fell to $896 million — a 24% drop from the prior quarter. It represented the company’s lowest level of expenses since the first quarter of 2021.

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“We had to take a close look at every investment we’re making, every vendor we work with, every dollar that goes out the door, and frankly, even every headcount in the company,” Armstrong said. 

The quarter over quarter drop was 37% if the $144 million in restructuring costs — reflecting expenses from Coinbase’s layoffs in January — are excluded.

Read more: Coinbase Lays Off 950 Staff, Cuts Operational Costs by 25% 

Morningstar Analyst Michael Miller told Blockworks that Coinbase has navigated cost reductions better than he anticipated.

“This does signal that the company is serious about seeking to become more efficient with its spending, which is a necessary change as the company really had allowed its cost structure to grow out of control in 2021 and the first half of 2022,” Miller said. 

Coinbase’s operating expenses peaked in 2022 at more than $1.8 billion during the second quarter, more than double the total of last quarter.

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