Coinbase, the prominent cryptocurrency exchange, unveiled its much-anticipated fourth-quarter and full-year 2023 financial results, showcasing a significant rebound in performance that exceeded market expectations.
The results, announced on Feb. 15, revealed a stark turnaround from the previous year, with the company reporting a profit of $1.04 per share, a dramatic improvement from a loss of $2.46 per share. This marks an end to a series of seven consecutive quarterly losses for Coinbase.
Furthermore, the company’s total revenue surged by 51% , surpassing Wall Street forecasts which had anticipated a more modest increase.
The detailed earnings report highlighted a robust growth across various segments of Coinbase’s business. Consumer transaction revenue witnessed a nearly 60% year-over-year increase.
This growth is a significant uptick from the $274.5 million reported in the third quarter. Similarly, institutional transaction revenue soared by 173% to $36.7 million.
The report also pointed to a healthy climb in total subscription and services revenue, which rose almost 33% to $375.4 million. Notably, custodial fee revenue increased to $19.7 million, indicating growing trust and utilization of Coinbase’s custodial services.
Looking ahead, Coinbase has projected its subscription and services revenue to be between $410 million and $480 million for the first quarter of 2024.
Prior the release of these encouraging figures, JPMorgan revised its rating on Coinbase from “Underweight” to “Neutral,” setting a new price target of $80. This adjustment reflects a shift in sentiment towards the cryptocurrency exchange, catalyzed by the broader rally in the cryptocurrency market, including a significant appreciation in Bitcoin’s value. Notably, the adjustment by JPMorgan came after a period of skepticism, particularly concerning the impact of U. S. spot Bitcoin exchange-traded funds (ETFs) on the market. Despite ARK Invest, led by Cathie Wood, selling $34.3 million worth of Coinbase shares across three different funds just before the earnings report, Coinbase’s stock demonstrated resilience, buoyed by the overall positive momentum in the cryptocurrency sector.