Shares in crypto exchange Coinbase spiked 12.7% after-hours following a resilient fourth-quarter earnings report that saw the firm swing to profit and earnings that beat Wall Street expectations.
Coinbase’s net revenue reached $905 million in the fourth quarter, up a whopping 45.2% increase from the third quarter, surpassing consensus expectations of around $825 million.
Meanwhile, the firm swung to profit in the quarter, reaching net income of $273 million, the first positive income quarter since the fourth quarter of 2021. In the previous quarter, Coinbase had posted a net loss of $2 million.
Transaction revenue made up the bulk of the firm’s revenue at $529.3 million, with $493 million coming from consumer crypto trading which nearly doubled from the third quarter. Institutional transaction revenue more than doubled to $36.7 million.
Our Q4'23 and full-year 2023 update is in.
— Coinbase ️ (@coinbase) February 15, 2024
Read the full shareholder letter and tune into our earnings call: https://t.co/fod43YZKqw pic.twitter.com/DJ2NhFyfdU
Over $29 billion in trading volume was processed from consumers, which marked a massive 164% quarter-on-quarter increase.
The firm also made $375.4 million from subscription and services revenue — mostly from stablecoin and blockchain rewards at $171.6 million and $95.1 million, respectively.
The results have seen COIN’s share price rise 12.7% to $186.7 in after-hours trading, according to Google Finance.
Related: Coinbase latest ad argues blockchain could make pennies ‘useful’ again
Prior to the earnings release, Coinbase stock had surged 41.2% over the last eight trading days as investors anticipated a strong financial performance.
Part of this positive sentiment was bolstered by an increased rating from JPMorgan analysts on Feb. 15.
Ben Weiss, CEO of crypto firm CoinFlip told Cointelegraph he wasn't "surprised" that Coinbase exceeded earnings targets as the firm continued to expand its offerings in Q4.
"In the next quarter, I hope Coinbase will continue to be seen at the forefront of compliance and regulatory conversations," Weiss said, adding that it should set the stage for discussion around clearer frameworks ahead of the 2024 election.
Coinbase noted that it achieved its 2023 goal to generative a positive Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization):
“We generated net income of $95 million and positive Adjusted EBITDA in all four quarters, totaling nearly $1 billion.”
The firm added that it expects “moderate headcount growth” in 2024 and is preparing for its total expenses to rise further in 2024.
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