Coinbase Reports First-Quarter Loss as Crypto Prices Slide and Outage Hits Trading

Coinbase reported a first-quarter loss of $1.49 per share on revenue of $1.41 billion, missing analysts' expectations for a profit of 27 cents per share and revenue of $1.52 billion. Transaction revenue totaled $755.8 million against an expected $805.2 million while subscription and services revenue reached $583.5 million versus an estimate of $619.3 million.

Bitcoin fell 22 percent in the quarter even as it rose 12 percent in March. Declines in cryptocurrency prices weighed on spot trading, the company's largest revenue source. Coinbase shares fell about 4 percent in extended trading after the results were released on Thursday.

The company has been expanding non-trading businesses to reduce dependence on volatile crypto transaction fees. Stablecoin revenue rose to $305 million from $274 million a year earlier, driven by growth in the market capitalization of USDC and higher average holdings on Coinbase platforms.

The company also recorded $4.2 billion in derivatives trading volume during the quarter, a 169 percent increase from the same period last year. Coinbase gained market share in both spot and derivatives trading, reaching an all-time high of 8.6 percent globally.

Coinbase is attempting to build what it calls an "everything exchange" that includes prediction markets, tokenized real-world assets and payments alongside traditional crypto trading. The company forecast that its prediction market business, launched in late January in partnership with another platform, would generate $100 million in annualized revenue by the end of this year.

It also highlighted growth in event contracts and crypto derivatives. The company will cut roughly 14 percent of its workforce, or about 700 jobs, as part of an AI-driven restructuring prompted in part by the crypto downturn. Coinbase Chief Financial Officer Alesia Haas said the firm is diversifying the assets customers can trade so revenue holds up as market conditions change.

>"We're trying to diversify the things that people can trade so that as markets shift, as different behaviors shift, we'll always have something that people want to trade. Adjusted EBITDA came in at $304 million, below the $408 million consensus estimate.

Several analysts lowered price targets after the results but maintained positive ratings, pointing to stablecoin growth, derivatives and potential U.S. crypto legislation as longer-term supports. Pending legislation known as the CLARITY Act would clarify which digital assets fall under Securities and Exchange Commission oversight and which are regulated by the Commodity Futures Trading Commission.

Coinbase executives told analysts they expect a Senate Banking Committee markup this month and a broader vote later in the summer. Some analysts said clearer rules could encourage banks and asset managers to expand crypto activity.

Coinbase trading platforms remained down for more than five hours on Friday because of an Amazon Web Services outage at a data center in northern Virginia. The company said the performance issues were caused by the AWS disruption. All markets were later re-enabled.

AWS attributed the problem to increased temperatures within a single data center and said it had shifted traffic away from the affected Availability Zone for most services. Work to add more cooling capacity took longer than expected and the company had no timeline for full recovery as of its last update.

It was not immediately clear whether related issues at the CME derivatives marketplace were connected to the same AWS event. The outage is the latest in a series of disruptions that have exposed vulnerabilities in interconnected technology infrastructure.

AWS suffered a major outage last October that affected thousands of websites and applications. The following month, CME Group experienced one of its longest outages in years after a cooling failure at a data center operated by another provider.