In brief

  • On the heels of its best ever quarter in Q4, Coinbase posted record new profits for Q1.
  • The results come eight days before the company goes public on April 14.
  • Coinbase CEO Brian Armstrong will share details of the results on the company's first earnings call.

Coinbase announced its 2021 first quarter earnings on Tuesday, revealing that the crypto giant made a profit of between $730 million and $800 million on revenue of approximately $1.8 billion. The results amounted to a blockbuster quarter for Coinbase, eclipsing its performance for the entire previous year.

The results, which noted that Coinbase's monthly active user base has grown to 6.1 million, are also likely to boost the buzz surrounding the company's imminent direct listing on the Nasdaq, just eight days away.

Coinbase's blowout Q1 performance is likely to drive the price of Coinbase shares, which sold at an average price of $343.58 in private transactions between January and March, to new highs before the April 14 listing date. But the results will also increase expectations for Coinbase, whose public listing is both a key milestone for the company and for the crypto industry as a whole.


Coinbase's gaudy earnings and its ability to turn a profit sets it apart from other high profile startups hitting the public markets—Uber and DoorDash, for instance, remain mired in losses—but could also spell trouble if the white-hot crypto market cools off. Over the years, the crypto market has proven highly cyclical, including downturns that have seen asset prices and trading volumes tumble more than 80%.

As Coinbase remains dependent on trading commissions for the vast majority of its revenue, another market downturn—known as "crypto winter" in industry slang—could lead the company's financial performance to crater, and could induce a whipsaw effect in its share price.

In its earning announcement, Coinbase acknowledged the volatility of the crypto sector, and said the company intends to invest in its operations even if prices do fall.

"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," the company stated.

The announced Q1 earnings come six weeks after the company disclosed its financial results for the first time in an S-1 regulatory filing. Those results showed the company made a profit of $322 million on revenues of over $1.2 billion for the year 2020, compared to a loss of $30 million on revenue of $533 million in 2019.


Coinbase did not provide profit or revenue guidance for the rest of 2021, but did supply predictions about its number of "Monthly Transacting Users," citing 7 million as a "high" figure, 5.5 million as a "mid" figure, and 4 million as a "low figure." For comparison, Coinbase had an average of 2.8 active users per month in the last quarter of 2020.

First investor call

Shortly after the earnings release, Coinbase hosted its first-ever conference call—an unusual event given that companies typically only host such calls after they have gone public. In light of Coinbase being in a so-called "quiet period" before its public listing, the company did not take the customary questions from media and analysts, but instead arranged for its executives to answer questions from a Coinbase staffer.

These included a question about Coinbase's potential market for growth.

"Anyone with a smartphone," CEO Brian Armstrong replied, adding that the company views its mission as "to increase economic freedom in the world."

Armstrong also noted that Coinbase will be able to differentiate itself from the growing number of traditional financial companies moving into crypto because it is "100% focused" on cryptocurrency. He further stated that the company's ongoing priorities include regulatory compliance and cybersecurity.

In response to a question about the cyclical nature of the industry, CFO Alesia Haas said previous expansionary cycles have lasted two to four years, and that Coinbase believes the crypto industry entered a fourth such cycle in late 2020, and suggested the price of Bitcoin has yet to reach its all-time-time in this current cycle.

Haas also discussed a metric known as ARPU—short for average revenue per user—that is important to many corporate analysts. She noted that ARPU has ranged from $35-$40 over the past two years, and that this is likely to be higher in the future.

The CFO also described how institutional investors, including pension and hedge funds, are poised to represent a growing proportion of Coinbase's business, and that they currently account for more than half of the company's total assets under management—$122 billion of $223 billion.


The financial figures Coinbase cited on Tuesday represent the company's best estimates. The final, official figures will be released in coming weeks.

This story was updated with details from the conference call.

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