coin base reported fourth-quarter revenue and earnings above expectations, but user numbers below analyst estimates. After the stock fell 4.8% during the day, he rose more than 2% in long-term trading.
Here’s how the company did it:
- Earnings: Refinitiv said it lost $2.46 per share, compared to a loss of $2.55 per share that analysts expected.
- Earnings: $629 million, according to Refinitiv, versus analysts’ expectations of $590 million.
Earnings plummeted by about 75% year-on-year as the so-called crypto winter continued to drive crypto prices down. The company also reported an (unadjusted) net loss of $557 million a year after Coinbase generated a net profit of $840 million at the peak of cryptocurrency adoption.
Coinbase’s user base continues to shrink. The company said it had 8.3 million monthly trading users (MTU) in the fourth quarter, down from 8.5 million in the previous quarter. Analysts had expected 8.22 million, according to StreetAccount. Transaction volumes fell 9% from the previous quarter to his $145 billion.
Retail transaction revenue of $322 million fell short of analyst consensus of $327 million as surveyed by StreetAccount.
For the first quarter of 2023, the company expects subscription and services revenue of $300 million to $325 million and restructuring charges of approximately $150 million.
Coinbase has made two major layoffs since June 2022 to cut spending to preserve cash. The exchange cut his 20% of staff last month after cutting headcount by 18% in 2022.
Stocks are up more than 75% in 2023, following a 2022 plunge in cryptocurrency prices and exits from riskiest stocks, before Tuesday’s after-hours move.. Bitcoin, the most popular cryptocurrency, is up more than 48% this year.
Coinbase’s business may also be affected by SEC actions that may govern certain types of cryptocurrency tokens and cryptographic services as securities. In a tweet by CEO Brian Armstrong and Chief Legal Officer Paul Grewal, suggested the company would fight such lawsuits in court.
For example, cryptocurrency exchange Kraken recently terminated its staking service as part of a settlement with the SEC over allegations that the platform sold unregistered securities.
Many centralized exchanges such as Kraken and Gemini offer their customers the option to wager their tokens to earn yields on digital assets sitting idle on their platforms. In crypto staking, an investor typically stores crypto assets using a blockchain validator that verifies the correctness of transactions on the blockchain. Investors can receive additional crypto tokens as a reward for locking out these assets.
However, in a call with CNBC, Coinbase Chief Financial Officer Alesia Haas argued that Coinbase’s staking product is “not a security.” Haas added that staking is less than 3% of net revenue, so it’s not a substantial net revenue source at this point, but a “key part of the ecosystem” the platform plans to grow. I was.
Executives will discuss the results in a conference call beginning at 5:30 PM ET.
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