US-listed cryptocurrency exchange Coinbase released its Q4 financial report on the 15th, showing a significant increase in revenue and its first-ever profit, with further revenue growth expected in Q1 of this year. Encouraged by this, Coinbase’s stock surged over 14% after hours.
Revenue increases, first profit in 2 years
Stablecoin revenue contributes significantly
Coinbase stock price soars over 14% after hours
Blockchain concept stocks mostly rise, few fall
US-listed cryptocurrency exchange Coinbase released its Q4 financial report on the 15th after the US stock market closed. The report showed that due to the optimistic expectation of the SEC’s approval of a Bitcoin spot ETF and the surge in BTC, Coinbase’s Q4 trading revenue increased by 64% year-on-year to $529.3 million.
This is the first time Coinbase has turned a profit since 2021, with a net profit of $273.4 million and earnings per share of $1.04 in Q4 of last year, significantly outperforming the loss of $557 million and loss per share of $2.46 in the same period of the previous year.
According to FactSet’s survey, analysts had previously predicted that Coinbase’s earnings per share in Q4 of last year would only be $0.02, so Coinbase’s performance far exceeded market expectations. Coinbase’s total revenue in Q4 of $953.8 million also exceeded analysts’ forecast of $826.1 million.
According to the financial report, Coinbase’s subscription and service department, which covers business other than trading, saw a 33% increase in revenue to $375.4 million in Q4 of last year, with stablecoin revenue contributing the most. Coinbase mainly cooperates with stablecoin issuer Circle to earn interest on stablecoins, and the Fed’s interest rate hike has been quite profitable for Coinbase.
Coinbase further expects that its subscription and service department revenue in the first quarter of this year will be between $410 million and $480 million, higher than the analyst’s estimated value of $356.22 million from LSEG’s survey.
Originally, Coinbase’s stock price rose 3.3% to $165.67 on the 15th, setting a new closing high since December 29, 2023. After the impressive financial report was announced, the stock surged 14.3% to $189.36 after hours.
On the other hand, driven by Bitcoin breaking through $50,000, most blockchain concept stocks rose. Apart from Coinbase, Robinhood rose 0.3%, PayPal rose 1.41%, Block rose 3.07%, and Mastercard rose 1.31%. However, mining companies Riot Platforms fell 6.19% and Marathon Digital fell 8.13%.
Blockchain concept stocks performance. Source: TipRanks
In addition, the US Department of Commerce released data on Thursday showing a 0.8% month-on-month decline in US retail sales in January, which is greater than expected. This further boosted market expectations that the Federal Reserve will start cutting interest rates quickly in the coming months. On the 15th, the US stock market showed more gains than losses:
The Dow Jones Industrial Average rose 348.85 points or 0.91% to close at 38,773.12 points.
The S&P 500 Index rose 29.11 points or 0.58% to close at 5,029.73 points.
The Nasdaq Composite Index rose 47.03 points or 0.30% to close at 15,906.18 points.
The Philadelphia Semiconductor Index fell 7.31 points or 0.16% to close at 4,558.10 points.
S&P 500 Index sector performance. Source: finviz
Related Reports
Coinbase sued by SEC progress: Argues for token listing as non-securities, court has yet to make a ruling.
Grayscale transfers another 9,000 Bitcoins to Coinbase, GBTC sees net outflow of $1.16 billion in three days.
What disaster would happen if Coinbase, the exclusive custodian of eight Bitcoin spot ETFs, were hacked?