Coinbase misses revenue estimates in Q1

Coinbase (NASDAQ: COIN) reported its first quarter 2026 earnings on May 7, after the closing bell.

The crypto exchange posted revenue of $1.41 billion, falling short of the Wall Street consensus of $1.48 billion drawn from 22 analysts on Yahoo Finance. 

The result represented a 31% year-over-year decline, roughly in line with the broader crypto market pullback. 

The earnings miss was more pronounced. Analysts had penciled in a normalized EPS of $0.04, but Coinbase posted a GAAP net loss of $394 million, translating to $1.49 per share. 

A significant drag came from $482 million in unrealized losses on crypto assets held for investment, tied largely to Bitcoin's slide during the quarter.

Related: Analyst with 72% success rate revamps Coinbase price target

Some good news too

On a non-GAAP basis, adjusted EBITDA came in at $303 million, marking Coinbase's 13th consecutive positive quarter on that metric and offering some comfort to investors focused on operational health.

Bright spots also included derivatives trading volume surging 169% year-over-year and prediction markets hitting $100 million in annualized revenue within just two months of launch. 

The company also achieved an all-time high crypto trading market share at 8.6%, a notable achievement in a down market.

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Layoffs and lawsuits ahead of earnings

Ahead of its earnings, Coinbase announced it would lay off 14% of its global workforce. CEO Brian Armstrong cited crypto market cyclicality and the rapid impact of AI on productivity as the driving forces.

He explained that the company's ambition was to become what he called an "intelligence," with humans working at the edges of automated workflows rather than at the center.

The layoffs were not the only headwind heading into earnings.

On April 21, New York Attorney General Letitia James sued Coinbase and Gemini, alleging their prediction market platforms constitute illegal gambling under state law.

James is seeking forfeiture of profits, fines of three times those profits, and restitution to affected users. Coinbase argues its prediction markets are financial instruments subject to federal derivatives regulation, not state gambling law. No ruling has been made.

A second lawsuit landed on May 4, when a trader identified only as "D.B." sued Coinbase in the U.S. District Court for the Northern District of California. 

D.B. alleges that in August 2024, a cybercriminal used a fake DefiSaver login page to access their hardware wallet and drain an undisclosed amount of DAI stablecoins.

Blockchain investigators traced the stolen funds to a Coinbase retail account, which the exchange subsequently froze. Coinbase has reportedly declined to return the funds without a court order. D.B. is pursuing eight counts, including RICO violations and Computer Fraud and Abuse Act claims, seeking treble damages.

COIN stock closed 2.53% lower at $192.96. 

Related: Coinbase head of research: Major banks will soon embrace crypto