After hours on May 7, Coinbase released its Q1 2026 earnings report. The data showed that the company's total revenue was $1.41 billion, a 31% year-over-year decline.
Driven by unrealized losses on its cryptocurrency holdings, the company recorded a net loss of $394 million, or $1.47 per share, compared to a net profit of $66 million in the same period last year.
After the earnings report, Coinbase's stock fell approximately 4.7% in after-hours trading, bringing its year-to-date decline to over 15%.
Trading revenue declined by 40%, with institutional and stablecoin activity standing out.
Coinbase's loss this time is largely due to unrealized paper losses.
Behind the net loss of $394 million is an unrealized loss of $482 million from the company’s held investment-grade crypto assets. These losses are accounted for based on price fluctuations and do not represent actual cash outflows.
After excluding this portion, the company's adjusted net loss was only $45.6 million, and adjusted EBITDA remained positive at $303 million, with an operating loss of approximately $21.4 million.
OneThe overall cryptocurrency market was sluggish in the first quarter. Bitcoin’s price dropped from over $97,000 at the beginning of January to around $63,000 by early February, and remained below $70,000 at the quarter’s end, causing a sharp decline in market sentiment and a significant drop in retail trading activity. According to CoinGlass data, global spot trading volume in the cryptocurrency market for Q1 was approximately $1.94 trillion, a year-over-year decrease of about 44%.
Burdened by this, the company’s total trading revenue declined 40% to $756 million, with consumer trading revenue falling 48% year-over-year to $567 million. Despite trading volume halving, Coinbase’s global spot crypto market share rose to a record high of 8.6%, ranking fourth among global spot exchanges.
The institutional segment showed a markedly different trend. Corporate institutional trading revenue reached $136 million, a 37% year-over-year increase. Even more impressive was the derivatives business, which benefited from the consolidation of Deribit following its acquisition in August 2025; derivatives trading volume surged 169% year-over-year, and the total value of client collateral in derivatives rose from $27.4 million at the end of last year to $333 million by the end of this quarter, an increase of more than tenfold.
For subscription and service revenue, the company recorded $584 million this quarter, a 14% year-over-year decline, significantly less severe than the decline in trading revenue, with its share of total net revenue rising to 44%. Stablecoin revenue reached $305 million, up 11% year-over-year, one of the few highlights this quarter. As of the end of the quarter, the platform’s total assets under management amounted to $294.4 billion.
For Q2, management’s outlook remains generally cautious. The company disclosed that trading revenue as of May 5 was approximately $215 million, but management emphasized that current market volatility means this figure does not represent the full quarter’s trajectory. The guidance for subscription and service revenue is set between $565 million and $645 million, with the midpoint slightly above Q1’s $584 million, indicating continued confidence in this revenue stream. Restructuring costs related to the recent layoffs, ranging from $50 million to $60 million, will be recognized as a one-time expense in Q2, after which cost pressures are expected to ease significantly.
It is worth noting that Robinhood’s Q1 financial report presented a different picture: total revenue increased by 15% year-over-year to $1.07 billion, net profit reached $346 million, and adjusted EBITDA amounted to $534 million.
Looking closely at the structure, the quality of growth is worth questioning. Crypto-related revenue also declined 47% to $134 million, with the company making up the gap primarily through three areas: prediction market contract revenue surged 320%, becoming the largest source of growth; net interest income increased 24% to $359 million; and Gold subscription revenue rose 32% to $50 million.
In addition, Robinhood secured the exclusive initial trustee status for Trump’s account, incurring an additional $100 million in construction costs.
This quarter, Robinhood sustained growth through market predictions and policy benefits from Trump's account, while Coinbase, under pressure from halved trading volume, bet on a more long-term transformation.
On the defensive side:Letting go of 700 people, what is the company restructuring?
On May 5, two days before the earnings report, Coinbase announced the layoff of approximately 700 employees, representing 14% of its global workforce.
CEO Brian Armstrong said the restructuring aims to return the company to startup speed, accelerate the transition to an AI-native organization, and rebuild Coinbase as a smart-core, human-at-the-edges organization.
Coinbase defines this approach as "AI-native"—not introducing AI tools into existing structures, but redesigning the company’s operations from the ground up. Data provided by the company shows a 78% year-over-year increase in pull requests per engineer, with team structures reorganized from traditional 10-person pods into AI-native pods of 2 to 3 people augmented by AI agents, and core service integration test coverage tripled within six months.
However, this accounting needs to be clear. Omar, a partner at crypto venture firm Dragonfly, estimates that this round of layoffs is expected to save the company approximately $225 million in annual salary costs. But the full-year 2026 expense guidance shows that, excluding the impact of USDC reward growth, expenses will remain roughly flat year-over-year, meaning , a significant portion of the savings from layoffs has been offset by investments in user incentive programs.
Notably, over the past year and a half, OpenAI has poached at least six senior marketing executives from Coinbase, including former CMO Kate Rouch and Sarah Russell, while Sarah Wolf, head of marketing for the Base chain, moved to Anthropic. Coinbase officially characterizes these departures as normal personnel turnover, butit is intriguingthat the company is using AI torestructure its organization and reduce headcount, yet continues to supply AI companies with its most skilled marketing talent in branding and growth.
When asked if further layoffs would occur in the future, CFO Alesia Haas said, "We cannot predict the future, but as a publicly traded company, we will always do what is best for the company."
Attackend:Building on-chain financial infrastructure
Everything Exchange map
At the end of last year, Armstrong proposed the strategic goal of "Everything Exchange"—transforming Coinbase from a spot-focused cryptocurrency platform into a multi-asset comprehensive platform encompassing derivatives, commodities, futures, and prediction market contracts, allowing users to avoid switching between different platforms.
Q1 data shows strong growth in derivatives, prediction markets, and decentralized trading, with AI agents on the Base chain accounting for 90% of the chain’s total stablecoin trading volume, derivatives trading volume reaching an all-time high, and contract trading surpassing spot for the first time.
Initial results are showing, and the companyrecentlycontinuesto furtherinvest,includinginvesting in Centrifuge to lock in RWA tokenization infrastructure, taking an equity stake in Kemet to integrate institutional derivatives channels, launching the stablecoin credit fund CUSHY, obtaining OCC national trust certification to clear institutional custody compliance barriers, and partnering with AWS to integrate wallet infrastructure and the x402 protocol into Amazon Bedrock’s AgentCore payment system, enabling AI agents to autonomously execute micropayments using USDC.
Stablecoin moat
Beyond the expansion of trading pairs, stablecoin services form a deeper revenue moat for Coinbase.
Under the revenue-sharing agreement between Coinbase and Circle, 100% of the earnings generated from USDC on the platform go to Coinbase, while earnings from USDC off the platform are split approximately 50/50 between both parties.
The market capitalization of USDC has now reached a historical high of approximately $80 billion, with over 25% held on the Coinbase platform, where balances have grown nearly tenfold compared to three years ago. As USDC adoption continues to expand, Coinbase’s share of the pie is growing alongside it.
However,this revenue stream is not without concerns,as the average interest rate decreased by 67 basis points this quarter, resulting in a negative impact of approximately $57.5 million on stablecoin revenue; changes in the interest rate environmentmayweaken the resilience of this revenue line.
CFO Alesia Haas emphasized on the earnings call, "Our USDC contract renews automatically every three years and is perpetual—it cannot be terminated." CLO Paul Grewal immediately added, "We expect to continue our partnership with Circle under the same terms in the future."
This statement is clearly a response to market concerns regarding regulatory legislation for stablecoins,Coinbase has engaged in a prolonged battle over the CLARITY Act:
- Support was withdrawn in January due to unfavorable terms, causing the Senate to delay the vote;
- In March, the rejection of the new draft again caused Circle's stock price to plummet 20% in a single day;
- In early May, a compromise text was released, banning "hold-to-earn" while preserving room for rewards tied to real-world activities.。Armstrong replied "Mark it up" on X, and Grewal publicly expressed strong confidence that the bill would pass this summer.
The true value of this game lies in the fact that Coinbase is not just following the rules—it’s helping to shape them. The legal teams, compliance processes, and regulatory communication capabilities required to repackage yield products represent a resource barrier that smaller exchanges cannot replicate in the short term.
In other words, once the CLARITY Act is enacted, the advantages of leading platforms will be codified into law; while clearer regulation is beneficial for the entire industry, those who benefit the most will always be the few capable of sitting at the negotiation table.
Howeverit is worth noting that after the bill passes, it will enter a 12-month rulemaking phase, and the final boundaries have yet to be defined, leaving uncertainty intact.
Conclusion
Trading volume halved by 50%, with a net loss of $394 million—Coinbase’s latest earnings report once again reminds the market that the company remains tightly bound to the crypto cycle. Skeptical voices abound: Is the AI narrative a genuine transformation or merely a facade masking declining business performance?
Brian Armstrong repeatedly emphasized that "all finance will eventually move on-chain," and as cryptocurrency becomes increasingly similar to traditional finance, Coinbase is striving to become more like a mature financial infrastructure company. This may well be its answer to the current cycle.