Coinbase fourth-quarter revenue beats estimates despite falling 57% year-on-year

Coinbase’s fourth-quarter revenue beat estimates, with the exchange reporting revenue of $604.9 million compared to the $589 million FactSet estimate.

Although ahead of expectations, full year revenue came in 57% lower than levels seen in 2021, down to $3.1 billion from over $7.3 billion.

Coinbase said the firm and the industry were “largely resilient” despite “major shocks to the system” during the quarter and a 64% drawdown in the price of digital assets during 2022. 

“Coinbase and the cryptoeconomy have proven to be resilient and long-term fundamentals remain strong,” the company said. 

Coinbase reported adjusted EBITDA of negative $124 million for the fourth quarter, in line with estimates. Adjusted EBITDA for the entire year came in at negative $371 million, down from over $4 billion in 2021. 

Blockchain rewards, mostly made of staking revenue, came in at $62.4 million, slightly below estimates of $63 million. Staking based revenue increased to $275.5 million in 2022 from $223 million in 2021. 

In a call with The Block, Coinbase VP of Investor Relations Anil Gupta attributed a drop in trading volumes to retail holders “stepping back and HODL-ing” as well as lower volatility.

Coinbase shares rose 2.7% in post-market trading, according to TradingView.

“We are prepared to manage our business through a wide range of transaction revenue scenarios in 2023, which include possible increases, decreases or stabilization of crypto market capitalization and crypto asset volatility compared to levels at the end of 2022,” the company said, discussing its outlook for the year.