Coinbase Shares Surge After Strong Earnings
16 Feb, 2024 ● Crypto News
Shares in cryptocurrency exchange Coinbase surged by 12.7% in after-hours trading following a strong fourth-quarter earnings report, which revealed a return to profit and earnings that surpassed expectations on Wall Street.
Coinbase reported a net revenue of $905 million in the fourth quarter, representing a remarkable 45.2% increase from the third quarter and surpassing consensus estimates of approximately $825 million.
The company also achieved profitability in the quarter, recording a net income of $273 million, marking its first positive income quarter since the fourth quarter of 2021.
This turnaround comes after a net loss of $2 million in the previous quarter.
Transaction revenue constituted the majority of Coinbase’s revenue, amounting to $529.3 million, with $493 million stemming from consumer cryptocurrency trading, nearly doubling from the third quarter.
Institutional transaction revenue more than doubled to $36.7 million.
Consumer trading volume exceeded $29 billion, representing a significant 164% increase quarter-on-quarter.
Additionally, the company earned $375.4 million from subscription and services revenue, primarily driven by stablecoin and blockchain rewards, amounting to $171.6 million and $95.1 million, respectively.
Prior to the earnings announcement, Coinbase stock had surged by 41.2% over the preceding eight trading days as investors anticipated a robust financial performance.
This optimism was further fueled by an upgraded rating from JPMorgan analysts on February 15th.
Ben Weiss, CEO of crypto firm CoinFlip, expressed little surprise at Coinbase's outperformance, citing the company's ongoing expansion of its offerings in Q4.
He emphasized the importance of Coinbase's continued leadership in compliance and regulatory discussions, foreseeing a need for clearer frameworks leading up to the 2024 election.
Coinbase highlighted that it achieved its 2023 objective of generating positive adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA), stating, "We generated net income of $95 million and positive Adjusted EBITDA in all four quarters, totaling nearly $1 billion."
Looking ahead, the company anticipates moderate headcount growth in 2024 and is preparing for a further increase in total expenses during the same period.
Sources:
https://cointelegraph.com/news/coinbase-shares-surge-after-fourth-quarter-earnings-beat
https://s27.q4cdn.com/397450999/files/doc_financials/2023/q4/Shareholder-Letter-Q4-2023.pdf
