COIN Stock Down in Pre-Market Despite Coinbase Reporting Better Than Expected Q4 2021 Earnings
Besides adding a total of 85 assets for trading and custody support for an additional 72 assets, Coinbase said the major cryptocurrencies including BTC and Ethereum (ETH) contributed as much as 55% of all trading volume.
American multinational digital assets trading platform Coinbase Global Inc (NASDAQ: COIN) has reported its Fourth Quarter earnings report and investors were not disappointed. Atop a fourth-quarter revenue of $2.5 billion from the $1.94 billion expectation from Refinitiv analysts, the company reported Earnings Per Share (EPS) of $3.32, versus $1.85 expected, according to a Refinitiv survey of analysts.
Coinbase came into the public scene last year when it made its debut on the Nasdaq Global Select Market in April. The company has often advised investors to see its shares as a long-term investment owing to the volatility of its business model which essentially is focused on Bitcoin (BTC) and cryptocurrencies. As a more defined overview of the impact of this volatility, Coinbase pointed out that the global crypto market capitalization is down by about 20% in the Quarter-to-Date period.
Coinbase’s performance was more impressive in the fourth quarter as its Monthly Transaction Units (MTUs) soared to 11.4 million in the prior quarter, up from 7.4 million in the third quarter; Coinbase saw a decline in MTUs between the second and third quarters. Additionally, Coinbase’s income came in at $840 million, almost a double-figure compared to its prior period. In sharp contrast, Coinbase’s income in the year-ago period came in at $177 million, proof that the company received a massive boom in the previous quarter.
“2021 was a year of tremendous growth and development in the crypto economy, as well as for Coinbase. We ended 2021 with strong performance across our key metrics that were within our outlook. In Q4, we generated $2.5 billion of net revenue, $840 million of net income, and $1.2 billion of Adjusted EBITDA. We ended the year with 11.4 million Monthly Transacting Users (“MTUs”) – of whom 32% both invested and engaged with a non-investing product,” the company wrote in its letter to its shareholders.
Additional Highlights on Coinbase Earnings and Future Guidance
The Coinbase earnings were favored on all sides with growth being recorded across more than one aspect of the company’s business. Besides adding a total of 85 assets for trading and custody support for an additional 72 assets, the company said the major cryptocurrencies including BTC and Ethereum (ETH) contributed as much as 55% of all trading volume.
Coinbase boasted of its ability to diversify its revenue model with over $500 million in Subscription and services revenues – including over $200 million in the fourth quarter – with traction in products including Staking, Earn, and Custody. The firm also said it grew its institutional customer base by over 50%, including “doubling the number of Custody customers, and launched Coinbase Prime, our integrated solution for institutional crypto needs.”
On top of all these impressive growth tracks, Coinbase is cautioning investors as to its future guidance and noted that the declining traction in the crypto market is poised to lower the MTUs record for the first quarter of 2022. Coinbase closed Thursday’s trading up 3.95% to $179.56 but has shed 4.54% in the pre-market.