Coinbase Global Inc. swung to a loss in its most recent quarter and posted lower-than-expected revenue as it lost 2.2 million crypto traders from its platform, citing the impacts of lower volatility and prices for crypto assets.
The company on Tuesday reported a first-quarter net loss of $430 million, or $1.98 a share, compared with net income of $388 million, or $3.05 a share, in the year-prior quarter. Analysts tracked by FactSet expected a 1-cent loss per share on a GAAP basis.
Net revenue fell to $1.17 billion from $1.60 billion a year before, while analysts had been modeling $1.50 billion.
Shares of Coinbase COIN, -12.60% were down 15% in after-hours trading Tuesday after sliding about 13% in the regular session. Shares were trading at lower prices than they have in any regular trading session since the company went public a little more than a year ago.
Coinbase reported trading volume of $309 billion in its March quarter, compared with $547 billion in the December quarter and $335 billion in the year-prior March quarter. Retail trading volume was $74 billion, compared with $177 billion in the December quarter and $120 billion a year before.
The company had 9.2 million monthly transacting users, compared with 11.4 million in the December quarter.
“We believe these market conditions are not permanent and we remain focused on the long-term. In fact, our investment in our business now is especially critical – these periods of low volatility can provide the opportunity to focus more intently on product development (as opposed to peak periods, when we are more focused on meeting high demand),” the company said in its shareholder letter.
Coinbase disclosed that 24% of its overall volume was concentrated in bitcoin, along with 21% in ethereum and the rest in other assets. That compares with 16% concentrations in each of bitcoin and ethereum in the December quarter.
While Coinbase acknowledged “market softness,” it said that it was seeing encouraging trends, such as increasing adoption of non-investing products. About 5 million Coinbase monthly transacting users engaged with a non-investing product during the quarter, with staking serving as the most popular option.
The report follows a rough slide for Coinbase shares, which have shed 55% over the past month as the S&P 500 SPX, +0.25% has lost 11%. The company disclosed that it saw “continued declines in both crypto asset volatility and crypto asset prices” during the month of April.
For the second quarter, Coinbase expects that monthly transacting users and total trading volume will be lower than what was seen in the first quarter. Coinbase also anticipates that subscription and services revenue will be similar to or modestly lower than what the company saw in the first quarter.