Coinbase Reports Strong Q4 2023 Earnings, Surpassing Analyst Estimates
Coinbase’s stock (COIN) experienced a significant surge after the U.S.-based cryptocurrency exchange exceeded analyst estimates for Q4 2023 earnings and revenue, capitalizing on the cryptocurrency price surge. With earnings of $1.04 per share, Coinbase blew past the average analyst estimate of $0.02 per share. The revenue of $953.8 million also surpassed analyst predictions of $826.1 million, according to the company’s statement.
Growing Strong and Positive Results
The cryptocurrency exchange’s stock rose by approximately 13% in after-hours trading, adding about 3% during regular session hours. COIN shares had dropped about 4% earlier in the year despite bitcoin’s 23% price surge.
We are extremely pleased with the results. The operational rigor we established earlier this year has truly paid off during 2023.
Boost from Bitcoin ETFs and Industry Optimism
Cryptocurrency prices climbed for much of 2023, but the rally intensified in the fourth quarter with high expectations for Bitcoin Spot ETFs – which were approved last month – sparking renewed interest in digital assets.
This appears to have translated into increased activity on Coinbase, with trading volume doubling compared to the third quarter. Fourth-quarter volume amounted to $154 billion, surpassing the estimate of $142.7 billion.
Coinbase’s Prominent Position in the ETF Frenzy
Coinbase provides custody services for 8 out of the 10 Bitcoin Spot ETFs, positioning itself as a key player in the industry.
The custody business is obviously a relatively small part of the company today, but the big news about ETFs is that it is turbocharging the entire sector… so you see a lot of activity and engagement on the platform.
Coinbase also reported adjusted EBITDA of $964 million for 2023, after previously expecting “significantly positive” adjusted EBITDA generation for the year. The company expects to generate about $410 to $480 million in subscription and services revenue in Q1 2024, having already generated approximately $320 million as of February 13th.
