Crypto exchange Coinbase posts smaller loss on cost cuts, more revenue sources
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Earlier this year, Coinbase said it will cut 950 more jobs in its third round of layoffs since last year.
PHOTO: REUTERS
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BENGALURU – Cryptocurrency exchange Coinbase Global posted a smaller-than-feared loss in the first quarter, benefiting from cost cuts and diversification of revenue sources, and sending its shares up 7 per cent in extended trading on Thursday.
The company has benefited from its deal for One River Digital Asset Management to ramp up product offerings in subscription and services revenue, while it also launched wallet-as-a-service and other products to scale blockchain.
“We are also seeing the benefits of increased cost efficiencies, and we have taken deep lessons from growing too quickly and believe that we are going to be prudent in our spend going forward,” Coinbase chief financial officer Alesia Haas said.
Coinbase posted a loss of 34 US cents a share, while analysts anticipated a loss of US$1.35, as investors tiptoed back to the speculative asset class to hedge against elevated market risks after a brutal sell-off last year.
But the trend is yet to power gains for the cryptocurrency exchange as trading volumes more than halved to US$145 million (S$192 million), while retail trading volumes, which had been instrumental in making Coinbase a household name in 2021, sank 72 per cent.
Earlier this year, the company said it will cut 950 more jobs
Ms Haas said the improved cost structure will help the company hit its 2023 goal to improve core profit year-over-year.
The company lowered operating expenses by 24 per cent from the last quarter and reported US$607 million in expenses, much lower than its prior range of between US$625 million and US$675 million.
“Everyone was expecting disastrous results, and it does not look to be a disaster for Coinbase at all,” said Mr Dave Weisberger, chief executive of CoinRoutes, an algorithmic trading platform for the digital asset industry.
Coinbase shares, which lost 85 per cent of their value in 2022, have risen nearly 40 per cent this year as at Thursday’s close as cryptocurrencies gain some ground. REUTERS
