Coinbase Global Inc. CEO Brian Armstrong speaks at the 2023 IFGS Summit in London on April 18, 2023. Carlos Jasso—Bloomberg/Getty Images
When Coinbase releases its first quarter results at market close on Thursday, the results will be important not only to its stock price, but also to the narrative surrounding the company and crypto in general. After a year of bad news and eye-popping losses, investors will be looking for signals that Coinbase can turn the corner.
Unfortunately for Coinbase, a key indicator suggests the pain may not be over. According to Apptopia, a research firm that tracks app usage metrics, the number of people downloading the company's app continues to decline even as crypto prices have rallied significantly from bottoming out. last December.
In a presentation this week, Apptopia VP of Research Tom Grant said his data paints a more bearish picture for Coinbase than consensus expectations. He shared the graph below which shows that app downloads continue to decline even though transaction volume has increased slightly.
The continued decline in downloads, of course, does not tell the whole story of Coinbase's performance. Given that Bitcoin's price has doubled since last quarter and volume is rebounding, the company's trading revenue, which still accounts for by far the largest portion of its revenue, likely increased significantly in the first quarter.
Grant, however, pointed to another indicator that suggests Coinbase's troubles are not over. Specifically, he notes that after a sharp increase in the first two months of the year, app usage dropped significantly in March. This was the case for both casual users and so-called power users, who make up 20% of Coinbase's customer base but account for 80% of time spent on the app.
The first graph below shows the increase and subsequent decline in users during the first quarter, while the second shows how non-experienced users fell by around 80% from an increase in February.
Coinbase did not respond to a request for comment on Grant's data. The company is currently in a so-called silence period, which significantly prevents public companies from making statements in the weeks leading up to the results.
When Thursday's results are released, investors will also be looking at things like trading volume trends as well as information on how Coinbase plans to navigate an increasingly hostile regulatory environment. They'll also look at how Coinbase's revenue from USDC — a bright spot in its latest earnings report — was affected by the stablecoin's declining market capitalization following a brief de-peg at the height of the market. recent banking crisis.
Analysts expect Coinbase to report a net loss of $329 million in the first quarter, or $1.38 per share, compared to a loss of $429 million, or $1.98 per share, in the same quarter one year ago.