Coinbase Q1 Profit Dips Amid Higher Operating Expenses

Coinbase, a publicly traded cryptocurrency exchange, has reported a decline in first-quarter profit on account of substantial increase in operating costs. The exchange’s operating costs significantly outweighed its revenue from transaction and subscription services.

Following this announcement, the company’s shares dropped by 3 per cent in after-hours trading.

For the quarter ending March 31, 2025, Coinbase's operating expenses soared 51 per cent to $1.3 billion. This was largely due to higher marketing costs and losses related to cryptocurrency assets held for the company's operations, according to Reuters.

Elsewhere, the company's total revenue increased by 23.7 per cent to $2.03 billion from $1.64 billion in the same quarter last year, while its revenue from transactions grew by 17.3 per cent to $1.26 billion, while revenue from subscription and services division, which includes non-trading services like staking, saw a 37 per cent increase to $698.1 million.

Analysts had, however, forecast a revenue of $2.1 billion, according to data compiled by LSEG.

Coinbase's adjusted net income for the quarter was $526.6 million, or $1.94 per share, a decrease from $679.2 million, or $2.53 per share, reported for the same period last year.

According to the report, the volatility in global financial markets during the first quarter, influenced by factors such as US President Donald Trump's trade policies, led to a larger sell-off of riskier assets including cryptocurrencies. Market uncertainty had a substantial impact on Coinbase's trading volumes, it added.

Coinbase has said it intends to acquire Deribit, a cryptocurrency derivatives exchange for $2.9 billion in order to diversify its revenue streams and address these difficulties. This acquisition will enable Coinbase to expand its reach into the crypto options market and add a potential new source of more stable revenue.