Coinbase (COIN) reported Q4 net revenue of $605 million, beating analyst estimates of $588 million, and up 5% from the previous quarter. Its adjusted loss of $2.46 per share also beat estimates of $2.52 a share. However, its transaction volume fell 12% quarter-over-quarter to $322 million due to lower overall trading volume. Shares of Coinbase rose 0.9% to $62.60 in after-hours trading Tuesday, and have risen 78% in 2023 so far, though they are still down 67% over the last 12 months.
Coinbase reported a 34% quarter-over-quarter growth in subscription and service revenues to $283 million in Q4. Subscriptions and services accounted for nearly 50% of overall revenue in Q4, mostly due to interest income of $162.2 million. In January 2023, the crypto markets improved compared to Q4, resulting in Coinbase generating $120 million in transaction revenue. However, Coinbase cautioned investors not to extrapolate those results forward since the market can quickly change. Coinbase is focusing on subscription and service revenues to drive growth and is monitoring the crypto markets closely to ensure it can capitalize on any opportunities that arise.
Coinbase, the leading U.S. cryptocurrency exchange, is facing uncertainty due to recent regulatory actions by the U.S. government. The Securities and Exchange Commission (SEC) has shut down Kraken’s staking service in the U.S. and plans to sue Paxos for allegedly selling BUSD as an unregistered security. Coinbase has its own retail staking business and a stablecoin, USDC, which it co-founded with Circle. To address the uncertainty, Coinbase is holding a call with analysts at 5:30 p.m. ET on Tuesday. The call is expected to provide clarity on the SEC’s actions and how they may affect Coinbase’s business. Investors and traders are advised to stay tuned for further updates.
