Coinbase, the largest U.S. crypto exchange, reported a smaller net loss than expected in addition to a major increase in subscription revenue, continuing the firm’s rebound after a tumultuous 2022.
The company reported a net loss of $79 million, compared with $429 million in the same quarter last year and $557 million in the fourth quarter of 2022. Revenue of $736 million was an increase of more than 21% from the previous quarter, although it was still lower than the $1.2 billion recorded in the same quarter last year.
In January, the company joined several other crypto firms in laying off staff, losing about 950 employees as CEO Brian Armstrong said the company was focusing on efficiency.
“This quarter represented a turning point in our drive towards building a company that is more efficient and financially disciplined; a company that is able to do more for less,” the company said in a letter to shareholders Thursday.
Coinbase shares, which dropped 56% over the past year amid a dropoff in trading, surged 8% after hours to about $52 after a Thursday close at $49.
After doubling down on subscriptions to diversify earnings away from transaction fees, the company reported record subscription revenue of $361 million. Transaction revenue also turned a corner, surpassing the past two quarters at $374 million.
The company reported a 9% year-over-year decrease to 8.4 million monthly transacting users in the first quarter. A report by Apptopia, a research firm that tracks metrics related to app usage, claimed that usage dropped off steeply in March for both casual and more consistent users of the Coinbase app.
The company said that in the coming quarter it expects subscription revenue to fall, especially as it earns less interest on reserves backing the stablecoin USDC, which it jointly owns through a consortium with Circle.