Coinbase’s Quarterly Net Revenue Surpasses Analyst Predictions

• Coinbase’s quarterly net revenue exceeded analyst estimates, reaching $605 million, up 5% from the last quarter.
• Despite the positive revenue performance, Coinbase’s quarterly transaction volume decreased.
• Coinbase reported $120 million in transaction revenue in January 2023 due to the rebounding cryptocurrency markets.

According to Coinbase’s quarterly report, the firm’s net revenue in 2022 was $605 million, up 5% from $590 million in the previous quarter and substantially exceeding analyst estimates of $588 million. Per data analysis platform FactSet, the company’s adjusted loss of $2.46 per share for the quarter was also higher than analysts’ predictions of $2.52 per share. Despite the performance, Coinbase’s quarterly transaction volume decreased to $322 million (a drop of 12%) due to reduced overall trading volume.

Most of Coinbase’s income comes from the exchange’s trading volume, which dropped from $547 billion a year ago to $145 billion. In 2022, trade volume decreased to $830 billion from $1.67 trillion in 2021. Furthermore, despite the crypto winter, Coinbase said that its platform’s average number of monthly transacting users rose to just under 9 million from 8.4 million in 2021.

The company’s subscription and service revenue climbed by 34% annually to $283 million in Q4. Around half of the company’s revenue in the fourth quarter came from subscriptions and services, mostly because of interest income, which totaled $162.2 million.

According to Coinbase’s shareholder letter, the business made $120 million in transaction revenue in January 2023 thanks to the rebounding cryptocurrency markets in Q1 compared to Q4 2022. However, the firm warned shareholders not to project such numbers into the future since 2022 saw the market shift abruptly.

In addition, the firm stated in its letter that it anticipates benefiting from the increased crypto regulation that is anticipated to occur in the coming year, both domestically and internationally. While it called out the United States for its “disjointed approach” to crypto regulation, it also vowed to keep pushing for more uniform and transparent policies in the sector.

Meanwhile, the U.S. Securities and Exchange Commission is looking into Coinbase’s staking products following a similar inquiry that led to a $30 million settlement between Kraken and the agency. Coinbase has repeatedly stated that it does not consider its staking products securities.

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