Coinbase, the cryptocurrency exchange, said its revenue had fallen 61% in the last quarter as cryptocurrency prices fell and trading volumes fell.
The San Francisco-based company reported an after-tax loss of $1.1 billion on Tuesday, compared with the $1.6 billion net profit it posted amid the crypto boom a year ago. It said $446 million of the loss reflected an impairment charge on its crypto and venture investments.
Shares of Coinbase fell more than 5 percent in aftermarket trading, after losing nearly 11 percent earlier in the day.
The collapse in the prices of bitcoin and other cryptocurrencies put the company in the red in the first quarter, prompting it to lay off 18 percent of its staff in June. With trading volume up 30 percent compared to a weak first quarter, it suffered an operating loss of $647 million before the impairment charge and its net cash position fell by about $400 million to 2.8 billion dollars.
In an attempt to ease Wall Street concerns about its financial health amid what it called a crypto “winter,” Coinbase released additional information about its cash burn and said it had not experienced any credit losses, despite the financial strains that affected others. crypto companies.
CFO Alesia Haas said that, along with long-term debt taken on when interest rates were lower, Coinbase believed its $6.2 billion in available capital would allow it to keep investing during the recession.
He added that Coinbase believed it could stick to its plan to keep this year’s loss in earnings before interest, taxes, depreciation and amortization to no more than $500 million.
However, the company has also faced questions from analysts about its growing non-cash losses, with a net loss of $1.52 billion in the first six months, equivalent to 77 percent of its revenue.
Share-based awards to employees were 49 percent of revenue in the last quarter, and Coinbase forecast they would remain at the same level in the current quarter before declining next year.
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Haas said the company understood investors’ concerns about share-based pay and was “aligned” with shareholders on the issue. But he also said Coinbase took a long-term view of costs due to the volatility of crypto markets.
At $46 billion, trading volume on behalf of retail clients was down more than two-thirds compared to the previous year. Despite the setback, he maintained that the drop was part of a typical cycle in crypto markets and said his analysis “suggests [retail] customers do not exit the Coinbase platform.”
Coinbase reported net income of $803 million for the quarter and a loss per share of $4.98. Wall Street had expected a loss of $2.65 per share on revenue of $832 million.
Shares have been volatile in recent days, jumping more than 30 percent last week on an alliance with BlackRock. They had already given up two-thirds of the gain before Tuesday’s earnings announcement.
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