Coinbase, one of the major US crypto exchanges, recently released its financial report for the fourth quarter of 2023, shedding light on its performance over the year. The report revealed some key insights into the company’s financial health and growth trajectory.
In Q4 2023, Coinbase reported a net income of $273 million and an adjusted EBITDA of $305 million, showcasing strong profitability during the period. The company also saw significant revenue growth, with total revenue reaching $954 million, up 41% quarter-over-quarter. Transaction revenue surged by 83% to $529 million, while subscription and services revenue increased by 12% to $375 million.
Looking at the full year of 2023, Coinbase reported a net income of $95 million and an adjusted EBITDA of $964 million. The company witnessed mixed growth over the entirety of 2023, with total revenue amounting to $3.1 billion, down 3% year-over-year. Transaction revenue decreased by 36% to $1.5 billion, while subscription and services revenue grew by 78% to $1.4 billion.
Coinbase emphasized its efforts to strengthen its balance sheet by reducing debt to 12% and increasing its total US dollar holdings to $5.7 billion. The company’s USD balance includes a significant amount of cash and cash equivalents, as well as USD Coin (USDC). The consolidated balance sheet indicates that the firm holds $207 billion of assets, with a significant portion in current assets.
The company highlighted its growing international presence, stating that it has onboarded over 100 institutions to its international exchange which was launched in May 2023. Coinbase pointed out that 80% of crypto trading now occurs outside of the United States, underscoring the global nature of the digital asset market.
Coinbase discussed its institutional activities, noting that it had onboarded one-third of the top 100 hedge funds by assets under management by Q4 2023. The company also mentioned its custodial role in several spot Bitcoin ETFs, involvement in the Fairshake Super PAC, and ongoing efforts to address Securities and Exchange Commission (SEC) charges.
Looking ahead, Coinbase reported generating $320 million in total transaction revenue in the first half of Q1 2024. The company, however, urged caution in extrapolating these results. Separately, Coinbase predicted that its subscription and services revenue for Q1 2024 would fall within the range of $410 to $480 million. The firm also expects total expenses to increase in 2024 as it continues to invest in its growth.
Following the release of the financial report, Coinbase’s stock (COIN) experienced a positive uptick, with a 3.3% increase on Feb. 15 and a 12.8% surge after hours. The share price stood at $165.67 as of the latest update, signaling investor confidence in the company’s performance and growth prospects.
Coinbase’s financial report for Q4 2023 and full-year results offer a comprehensive overview of the company’s financial position, growth trajectory, and international expansion. Despite some areas of mixed growth, the firm’s profitability and strong revenue generation demonstrate its resilience in the evolving cryptocurrency market. As Coinbase continues to navigate regulatory challenges and drive innovation in the industry, its future outlook remains promising.