Coinbase Reports $394M Q1 Loss as Revenue Falls 31%

Coinbase reports a $394 million net loss for the first quarter, its second consecutive quarterly loss. The U.S. crypto exchange announced a 14% workforce cut earlier this week due to market conditions and AI optimization.

Net revenue fell 31% to $1.4 billion, missing analyst expectations. Transaction revenue, the company's core business, plunged 40% to $756 million from the year-ago period.

Shares dropped more than 5% in after-hours trading after the earnings release and recently traded near $182. As the largest publicly traded U.S. cryptocurrency exchange, Coinbase acts as a bellwether for the crypto industry.

The company highlighted positives, including prediction markets generating over $100 million in annualized revenue in their first two full months. Stablecoin trading volume is rising on its Base Ethereum layer-2 network, where it dominates AI agent stablecoin trading. Crypto market trading volume share hit a peak of 8.6%, and derivatives trading volume grew 169% over the past 12 months.

CEO Brian Armstrong says the company executed well on what it could control, citing huge derivatives growth, a new all-time high in USDC held in Coinbase products, and 10x year-over-year growth in Base stablecoin transactions.

CFO Alesia Haas notes 13 consecutive quarters of positive adjusted EBITDA and 12 quarters of native unit inflows. She adds that 12 product lines each generate over $100 million in annualized revenue, with prediction markets on track to become the 13th.