Coinbase's Q1 revenue down by 35.26% to $1.17 Billion

Coinbase Global (COIN) announced on Tuesday its Q1 2022 total net revenue declined by 35.26% annually to $1.17 billion, undershooting expectations.

Crypto market capitalization dropped 18% from the end of March and crypto asset volatility declined 14% vs. Q1 average and was the lowest levels observed since mid-2020.

The cryptocurrency exchange's outlook for 2022 is largely unchanged. It expects 5.0 million to 15.0 million MTUs (monthly total users) in prior guidance, 2022 transaction expenses were in the low 20% range and technology, research and development expenses, excluding stock-based compensation.

Q1 net revenue of $1.17 billion trailed $1.48 billion consensus, dropping from $2.49 billion in Q4 2021 and $1.60 billion in Q1 2021. Q1 trading volume stood at $309 billion vs. $547 million in Q1 and from $335 million in Q1 2021.

The company also registered a net loss of $429.66 million, worsening from the net income of $771.46 million observed in the same trimester in 2021. It also recorded a diluted loss per share of $1.98, compared with diluted earnings per share (EPS) of $3.05 per share observed in Q1 2021.

"You can expect volatility in our financials, given the price cycles of the cryptocurrency industry. This doesn’t faze us, because we've always taken a longterm perspective on crypto adoption. [Our] goal is to roughly operate the company at breakeven, smoothed out over time, for the time being," the company's statement read. Also, CEO Brian Armstrong said “we have over $7 billion on the balance sheet of cash in crypto, which gives us lots of opportunities”.

All in all, as COIN’s transaction volume grew exponentially over the period, Coinbase’s financials, unfortunately, unveiled a much higher correlation with direction of the crypto market, so the next step for the company to effectively lure more investors, would be to rebuild its system of fees and commissions so that it becomes less dependable on various external factors and events.