Coinbase, the prominent cryptocurrency exchange, sleepless its long-awaited fourth quarter and full-year 2023 financial results, showing a significant rebound in performance that exceeded market expectations.
Coinbase, the prominent cryptocurrency exchange, sleepless its long-awaited fourth quarter and full-year 2023 financial results, showing a significant rebound in performance that exceeded market expectations.
The results, announced on February 15, revealed a marked turnaround from a year earlier, with the company reporting a profit of $1.04 per share, a dramatic improvement from a loss of $2.46 per share. This marks the end of a string of seven consecutive quarterly losses for Coinbase.
Additionally, the company’s total revenue increased 51%, exceeding Wall Street forecasts, which called for a more modest increase.
Revenue and profits increase
The detailed earnings report highlighted strong growth across several segments of Coinbase’s business. Consumer transaction revenue saw a year-on-year increase of nearly 60%.
This growth is a significant increase from the $274.5 million reported in the third quarter. Similarly, institutional trading revenue soared 173% to $36.7 million.
The report also noted a healthy increase in total revenue from subscriptions and services, which increased nearly 33% to $375.4 million. Notably, revenue from custody fees increased to $19.7 million, indicating growing trust and utilization of Coinbase’s custody services.
Looking ahead, Coinbase has projected its revenue from subscriptions and services to be between $410 million and $480 million by the first quarter of 2024.
Market response and analyst perspectives
Prior to the release of these encouraging numbers, JPMorgan revised its rating on Coinbase from “underweight” to “neutral,” setting a new price target of $80. This adjustment reflects a shift in sentiment toward cryptocurrency trading, catalyzed by the broader rally in the cryptocurrency market, including a significant appreciation in the value of Bitcoin. Notably, JPMorgan’s adjustment came after a period of skepticism, particularly regarding the impact of US spot Bitcoin exchange-traded funds (ETFs) on the market. Even though ARK Invest, led by Cathie Wood, sold $34.3 million worth of Coinbase shares into three different funds just before the earnings report, Coinbase stock demonstrated resilience, buoyed by overall positive momentum in the cryptocurrency sector.
