Coinbase posts Q4 earnings miss…results hit by sharp drop in trading

Coinbase, the largest cryptoasset (cryptocurrency) exchange in the US, reported fourth-quarter results that fell short of market expectations. The downturn is attributed mainly to falling crypto prices and a pullback in investors’ trading activity.

On the 12th (local time), Coinbase said total revenue in the fourth quarter came to $1.78 billion. That compares with Wall Street estimates of $1.83 billion. Adjusted earnings per share (EPS) also came in at $0.66, well below the consensus forecast of $0.86.

The key driver of the weaker performance was a decline in transaction-fee revenue. Coinbase’s fourth-quarter transaction revenue totaled $983 million, missing the expected $1.02 billion. The figure not only fell from the prior quarter ($1.046 billion) but also marked a steep drop from a year earlier ($1.556 billion).

Subscription and services revenue was tallied at $727.4 million. While up from a year earlier ($641.1 million), it declined from the previous quarter ($746.7 million).

Coinbase also disclosed parts of its first-quarter guidance. Through the 10th, cumulative first-quarter transaction revenue was running at about $420 million. The company projected total first-quarter subscription and services revenue of $550 million to $630 million.

In a letter to shareholders, Coinbase said it remains “optimistic about the long-term trajectory of the cryptoasset industry,” adding that “the cryptoasset market is cyclical, and in our experience, it is never as good—or as bad—as it appears.” It added that while asset-price volatility may persist, “beneath the surface, the trend of technological change and adoption of cryptoasset products continues.”

Ahead of the earnings release, Coinbase shares closed down 7.9% in regular trading that day. The stock is down about 40% so far this year. In after-hours trading, however, it is showing a slight rise immediately following the results announcement.