Coinbase (COIN) shares fell about 4% in after-hours trading Thursday after the crypto platform reported weaker-than-expected first-quarter results as falling crypto prices weighed on trading activity, one of the company’s main sources of revenue.
The company posted a loss of $1.49 per share, compared with analysts’ expectations for a profit of 27 cents. Revenue reached $1.41 billion, below estimates of $1.52 billion.
Transaction revenue totaled $755.8 million, missing analysts’ expectations of $805.2 million. Subscription and services revenue, a segment investors are watching closely as Coinbase tries to reduce its reliance on trading fees, came in at $583.5 million, below expectations of $619.3 million.
Crypto markets weakened sharply like bitcoin and other digital assets declined. Lower prices and reduced volatility typically lead to weaker spot trading volumes across exchanges. Investors had expected a slowdown after the crypto selloff at the beginning of the quarter, even though bitcoin rose about 12% in March.
Coinbase has spent the last several years expanding beyond its core trading business into stablecoins, staking, derivatives and blockchain infrastructure. The company said on Wednesday that its global crypto trading market share rose to 8.6%, a record high, driven in part by growth in derivatives trading.
Trailing 12-month derivatives trading volume increased 169% year-over-year, while retail derivatives revenue exceeded an annual run rate of $200 million for the first time, Coinbase said.
The company also pointed to growth in prediction markets and stablecoin activity. Coinbase said its predictive market business surpassed $100 million in annual revenue within the first two full months of its US launch.
Meanwhile, Coinbase said its Base blockchain processed 62% of global onchain stablecoin transaction volume during the quarter.
Earlier this week, Coinbase said it would cut about 700 jobs, or about 14% of its workforce, as part of an AI-driven restructuring effort. The company also cited the broader crypto slump as a factor behind the layoffs.
Investors are increasingly focused on whether Coinbase’s subscription and infrastructure businesses can offset the cyclical swings in crypto trading revenue in weaker markets.
