Cryptocurrency exchange Coinbase reported $1.17 billion in revenue during the first quarter, missing analyst estimates. Shares plummeted 12% in after-hours trading.  

“It’s worth just addressing the elephant in the room, which is that of course the broader markets are down,” Coinbase CEO Brian Armstrong said during the company’s earnings call Tuesday. 

“We tend to do our best work in downturns, so, ironically…I’ve never been more bullish on where we are as a company.” 

Coinbase’s monthly active users dropped to 9.2 million, coming in shy of the Street’s consensus of 9.5 million. 

First quarter total trading volume was $309 billion, a 44% decrease from the fourth quarter of 2021, which the exchange attributed to market conditions. The company said it’s expecting a further decline in transactions in the second quarter, but its outlook for 2022 is “largely unchanged,” in its shareholder letter Tuesday.

Of Coinbase’s first quarter revenue, $1 billion came from the exchange’s cut of trading fees, a 56% decline from the fourth quarter. The exchange has said it wants to diversify from trading fee revenue, moving into futures and derivatives products, prime brokerage offerings, and, most recently, a subscription model that comes with zero-fee transactions.

Coinbase collected $152 million in revenue from subscription and services during the first quarter. 

“We believe with our balance sheet resources, we are well capitalized assisting our operations, and as Brian said, continue to make our focus on building great products experiences, building up our user base and getting ready for the return of the market,” Coinbase Chief Financial Officer Alesia Haas said on the call. 

The first quarter showed a continuation of a trend of lower crypto prices and increased volatility that began in the fourth quarter of 2021, Armstrong said, something the company has addressed in part. 

“You can expect volatility in our financials, given the price cycles of the cryptocurrency industry,” Coinbase’s 2021 prospectus reads. “This doesn’t faze us, because we’ve always taken a long-term perspective on crypto adoption.”

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