- ▸ Coinbase missed Wall Street revenue estimates as softer crypto trading volumes pushed shares down roughly 9% after hours.
- ▸ Prediction markets emerged as a breakout growth engine, hitting $100M annualized revenue after just two full months live.
- ▸ “We see so many green shoots in our business,” CFO Alesia Haas said, pointing to continued investment in derivatives and prediction markets despite the softer macro environment.
Coinbase’s first-quarter earnings showed the exchange holding its ground through the crypto trading slowdown, with $1.4 billion in revenue and $303 million in adjusted EBITDA, but the results still missed Wall Street estimates and sent shares down around 9% in after-hours trading.
One major bright spot for Coinbase was its prediction markets product, which reached $100 million in annualized revenue in March after just two full months live, making it Coinbase’s 13th product to hit that milestone and one of the company’s fastest growers ever.
“We see so many green shoots in our business,” CFO Alesia Haas said during the analyst call. “We wanted to preserve our product roadmap and preserve the ability to continue to invest behind the growth areas we see in derivatives and prediction markets and many of these new products that we have put in the market.”
Coinbase not immune to macro trends
Total revenue fell 21% quarter-over-quarter to $1.4 billion, beating Coinbase’s own outlook but missing consensus expectations of $1.55 to $1.65 billion as crypto market volumes dropped 28% quarter-over-quarter and spot volumes plunged 37%.
Transaction revenue was $756 million, down 23% quarter-over-quarter, while subscription and services revenue provided a buffer at $584 million, or 44% of net revenue.
“We’ve seen a lot of volatility month to month, quarter over quarter, with retail trading on our platform going back since we went public,” Haas said. “It really will depend on broader crypto market volatility trading volumes and other factors.”
Coinbase CEO Brian Armstrong said on X that the company is “uniquely positioned to capitalize” on the financial system transformation currently underway.
There’s a generational shift happening, and Coinbase is uniquely positioned to capture it:
— Brian Armstrong (@brian_armstrong) May 7, 2026
1) The onchain economy has reached escape velocity
2) Coinbase's full stack platform is powering it
3) The next frontier is agentic and on Coinbase
Our thesis is simple: crypto is the… pic.twitter.com/5iJY8aeCfe
Other Coinbase first-quarter highlights
Coinbase reported a $394 million net loss, driven by $482 million in unrealized crypto investment losses, but adjusted EBITDA marked the 13th straight positive quarter. Additionally, assets on Platform hit a record $294 billion, and the company gained trading market share to an all-time high across spot and derivatives.
Derivatives trading volume grew 169% year-over-year, with retail derivatives now annualizing over $200 million.
Its USDC stablecoin reached an $80 billion market cap, with Coinbase holding $19 billion, or 25% of circulation, and capturing approximately 50% of USDC economics.
Prediction markets provide strong new product
Prediction markets stood out as a core part of Coinbase’s “Everything Exchange” vision that enables trading of crypto, equities, prediction markets, commodities, and FX in one place.
The presentation deck called them “one of our fastest growing products ever,” scaling to $100 million annualized revenue in March.
Prediction markets fit perfectly into Coinbase’s product suite as programmable, always-on event contracts in that ecosystem.
Some regulatory issues
The company’s SEC-mandated 10-Q report echoed the presentation’s numbers but flagged ongoing risks:
- Data theft incident in May 2025: $8.6 million net in losses/recoveries in Q1.
- Prediction markets suit: New York Attorney General case moved to federal court. New York alleges unlicensed gambling on politics and sports, while Coinbase claims it has Commodities Futures Trading Commission regulatory preemption.
- Banking pushback: ICBA criticized OCC’s conditional Coinbase National Trust approval.
Second quarter Coinbase outlook
The company issued guidance for the second quarter, estimating revenue of $565 to $645 million, including $215 million through May 5.
Coinbase did not issue a specific second-quarter expense estimate, but does expect a $500 million cost reduction in 2026 compared to the 2025 annualized rate, with the expectation of adjusted expenses to be flat year-over-year.
Coinbase also has 4,300 continuing employees, down from nearly 5,000 at the end of the first quarter. The headcount reduction is part of expense controls, according to the call.
Market reaction on Coinbase earnings
Shares slumped on the revenue miss and soft crypto environment, despite share gains, continued positive EBITDA, and new product scaling. Analysts praised Coinbase’s expense control but flagged the overall trading reliance.
Coinbase proved its durability with another positive EBITDA quarter and new product success, but the crypto market’s volatility will continue to have an effect on its year.
“We’ve made a long-term commitment to be adjusted EBITDA positive,” Haas said. “We’ve also made the commitment that we will be thoughtful about our expenses and size them to the revenue opportunities we see.”
