Coinbase CEO remains ‘bullish’ position despite US$ 430 million loss in Q1 2022

In an earnings call on April 6 2022 before their IPO next week, Coinbase co-founder and CEO Brain Armstrong said that he’s ‘never been more bullish on where we are as a company’ along with its first net loss as a public company in Q1 2022.

In its Q1 2022 report, Coinbase revealed its total revenue dropped to US$ 1.7 billion, from US 1.6 billion in Q1 2021 - a 27% decrease and far from its Q4 2021 revenue of US$ 2.5 billion. Its monthly transacting users has also declined to US$ 9.2 million from the previous quarter’s US$ 11.4 million - a 19% decrease.

Armstrong pointed out the tech stock and risk assets markets are declining in general and Coinbase is no exception before elaborating on the company’s Q1 2022 report. He explained that Coinbase will focus on building more innovation to benefit the company going forward and that the company's  earnings before interest, taxes, depreciation, and amortization (EBITDA), the formula to gauge a company’s financial  performance and profitability, is positive despite the bear market.

He also stated that Coinbase is on the right track towards achieving its financial goals because it has a liquid platform with over US$ 7 billion on the balance sheet of cash in crypto; 54% of its active users are utilizing crypto in other ways than trading. Further, its company’s new revenue streams such as risk-taking, subscription services has witnessed a 169% year-on-year growth.

On the other hand, statistics show that Coinbase has fallen by over 16% to close at US$73 over the day after the earnings call announcement. The company’s shares have also been declining since November 2021, when it almost hit the US$ 380 high in its initial public offering (IPO) in April 2021.

Outlook for 2022

Coinbase’s outlook for 2022 is to manage ‘a maximum of US$ 500 million adjusted EBITDA loss, assist in our operations and its brands that continue to make our focus on building great product experiences, building up our user base, and getting ready for the return of the market.’ As well as to expand crypto adoption long term. 

Armstrong also mentioned its recent NFT marketplace launch as an area of focus but did not elaborate on the specific activities associated with the launch and made no mention of the initiative in his opening statement.  

He closed his speech by saying that the industry is still in its infancy and sees plenty of opportunities for Coinbase to thrive in the market, adding that ‘regardless of whether the market is up or down, we're going to keep building.’

Photo: Getty