Technology
Friday, February 16th, 2024 6:17 pm EDT
Key Points
- Coinbase shares surged by 15% in U.S. trading after the company announced its first profit in two years, with a net income of $273 million reported for the fourth quarter, marking the first positive net income since Q4 2021.
- The company disclosed a substantial increase in net revenue, reaching $905 million in Q4 2023, up nearly 50% from the same period in the previous year, driven by heightened interest in cryptocurrencies following the approval of the first spot bitcoin exchange-traded funds by the U.S. Securities and Exchange Commission.
- Transaction revenues served as the primary revenue driver for Coinbase in Q4 2023, with consumer trading revenue surging to $493 million, up 79% quarter over quarter, while subscription and services revenue remained relatively flat. The company’s Chief Financial Officer, Alesia Haas, noted that fee adjustments were unnecessary due to the platform’s fee structure accommodating higher trading volumes supported by a mix of fees for “Simple” and “Advanced” traders.
Coinbase, the largest cryptocurrency exchange in the United States, witnessed a substantial surge of 15% in its shares during U.S. trading on Friday following the announcement of its first profit in two years. The company reported a net income of $273 million in the fourth quarter of 2023, marking its first positive net income since the same quarter of 2021. This profitability comes amidst a booming cryptocurrency market, with Coinbase’s net revenue for the fourth quarter reaching $905 million, up nearly 50% from the previous year. The increased interest in cryptocurrencies was fueled by news of the U.S. Securities and Exchange Commission’s approval of the first spot bitcoin exchange-traded funds (ETFs), enabling retail investors to access bitcoin shares traded on regulated exchanges. This development heightened demand for cryptocurrencies, especially among retail investors, driving transaction revenues for Coinbase in the last quarter. While subscription and services revenue remained relatively flat, the company experienced heightened volatility in crypto prices similar to levels observed in the first quarter of 2023, attributed to the approval of bitcoin ETFs and optimistic expectations for improving macroeconomic conditions in 2024. Consumer trading revenue surged to $493 million for the quarter, a 79% increase quarter over quarter. Coinbase Chief Financial Officer Alesia Haas noted that the company’s fee structure, catering to both “Simple” and “Advanced” traders, supported the higher trading volumes without the need for fee adjustments. She emphasized that the growth in Simple and Advanced trading volumes reflected a shift in the platform’s trading mix during the fourth quarter. This positive financial performance underscores Coinbase’s resilience and adaptability within the dynamic cryptocurrency landscape, positioning it as a key player in the evolving market.
For the full original article on CNBC, please click here: https://www.cnbc.com/2024/02/16/coinbase-coin-share-surge-13percent-after-earnings.html
