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.
Read the full shareholder letter and tune into our earnings call: pic.twitter.com/DJ2NhFyfdU
— Coinbase ️ (@coinbase) February 15, 2024
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.
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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