Coinbase first quarter revenue in Q1 surpassed PayPal’s annual earnings in 2020 and was at par with NASDAQ
Coinbase exchange released its first-quarter results on Tuesday, noting that it raked in profits in excess of millions in Q1 2021. The blockbuster earnings are largely due to the parabolic rise of the underlying crypto industry. To say that Coinbase had a stellar first-quarter performance would be an understatement.
Coinbase released its earnings report for the first quarter of 2020 a week before direct listing
According to a report on Tuesday, Coinbase’s user base increased by a staggering 117% from 2.8 million in Q4 2020 to 6.1 million in Q1 2021 quarter. As a result, the exchange’s revenue ballooned to $1.8 billion over the three-month period ending March 31, netting a profit of roughly $740 million to $800 million.
Additionally, Coinbase’s total assets surged from $90 billion to $223 billion during a single quarter; $122 billion of those assets originated from institutional investors.
The announced Q1 results come just days before Coinbase’s public listing on Wednesday, April 14. After a promising quarter, the price of the exchange’s shares could easily soar from the $343.58 apiece estimated from the period between January and March.
Fundstrat’s Thomas Lee tweeted as Coinbase’s Q1 earnings outshined top traditional exchanges like NYSE, NASDAQ, CBoE, and ICE:
Yup, Coinbase $COIN is literally the most profitable exchange in the World across any market and across any geography
— Thomas Lee (@fundstrat) April 7, 2021
The net income of the exchange is between $700-$800 million. This year’s projected revenue is $7.2 billion with an EBITDA of $4 billion. For comparison, the EBITDA of Intercontinental Exchange (ICE), the parent company of NYSE and Bakkt, last year was $7.8 billion. At the same time, NASDAQ reported earnings before tax and interest of $1.3 billion. The financials of Coinbase currently look stronger than the world’s largest exchanges.
Further, PayPal’s Q4 revenue last year was $6.1 billion with an operating income of nearly $1 billion. Nevertheless, Paypal has 377 million users compared to Coinbase’s 56 million user base.
Currently, Coinbase admits that high volatility remains the Achilles heel of the crypto market, but the firm plans to do its best even when prices drop.
“This revenue unpredictability, in turn, impacts our profitability on a quarter-to-quarter basis. In terms of expenses, we intend to prioritize investment, including in periods where we may see a decrease in Bitcoin price.”
Estimates for the exchange’s active monthly users for the rest of the year are provided in the report, though the exchange does not speak on revenue or profits. 7 million transacting users is a high figure in a scenario where the aggregate crypto market valuation surges throughout 2021. The firm cites 5.5 million users as a mid figure in case the market cap remains flat and 4 million as a low figure in a 2018-esque bear market.
Overall, Coinbase’s imminent public listing will mark a watershed moment in the evolution of crypto as a mature and respectable sector.
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