Preheat the oven to 325 degrees Fahrenheit (165 degrees Celsius).Grease and flour a 10-inch tube pan.
In a large bowl, beat the butter and cream cheese together using an electric mixer until blended.Add the sugar to the bowl and continue to beat until light and fluffy.Blend in the eggs one at a time, then stir in the coconut extract.Mix in the flour and baking powder until just moistened, then stir in the flaked coconut.Spoon the batter into the prepared pan.
Allow the cake to cool in the pan for 10 minutes. Run a table knife around the edges to loosen, then invert the cake carefully onto a serving plate or cooling rack. Let the cake cool completely.