Coinbase announced impressive first-quarter results a week before it went straight to the Nasdaq, estimating that trading volume rose 276% and quarterly revenue reached $1.8 billion.
In its first-quarter earnings report, the company posted $190 million less revenue than in the same period last year and attributed some of the explosive growth to the bitcoin bull market.
The American Stock Exchange estimated net income at between $730 million and $800 million and EBIDTA at around $1.1 billion.
The bull market also saw a monthly increase in active users to more than six million, up from 1.3 million in the first quarter, with crypto-currency assets on the platform rising 1,200% year-on-year, from $17 billion to $223 billion.
Alesia Haas, CEO of the American Stock Exchange, said:
We have always noticed that high prices of crypto currency lead to more user activity and transaction volume on our platform.
With 56 million verified users, Haas suggested that monthly active users could peak at seven million this year, although he warned that this number could drop to four million if the bear market hits this year.
The company spends a lot of money to attract new customers. Following its IPO next week, Coinbase plans to increase its sales and marketing spend to 12-15% of net revenue this year, with the goal of achieving significant growth by 2021.
We plan to spend between $1.3 billion and $1.6 billion in 2021 on technology and development, and general and administrative expenses (excluding share-based compensation) to expand our business and drive innovation in manufacturing.
The findings of the report are preliminary and unverified, but the Exchange wanted a detailed report before the meeting scheduled for the 14th. Nasdaq IPO expected in April. The company will register approximately 115 million shares of Class A common stock under the ticker symbol COIN. As a direct listing, the exchange will not sell new shares and can only register existing shares, allowing existing stakeholders to sell their shares to new investors.
Coinbase has received multiple valuations ranging from $68 billion based on private market transactions to over $120 billion.
David Trainer, CEO of investment research firm New Constructs, had doubts about the high expectations. Coinbase’s expected valuation of about $100 billion is too high, he said Monday in a note to clients.
Given the growing competition in the mature cryptocurrency trading market and the unsustainability of its current market share and margins, it is difficult to make a simple argument that the company can meet the high expectations inherent in its valuation.
FTX founder Sam Bankman-Fried took to Twitter to congratulate Coinbase on its impressive quarterly numbers and upcoming IPO, comparing them to the much more recent data from the exchange itself.
5) FYI, FTX, that was probably it:
a) ~5-15% of sales
b) ~10-25% of sales
c) ~2x volume
d) much less users
e) higher quarterly growth
f) slightly higher growth than last year
(NO FINANCIAL ADVICE, NO AUDIT YET, ESTIMATES ONLY)
– SBF (@SBF_Alameda) April 6, 2021
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