Last week, we previewed Coinbase’s (COIN) Q4 earnings, while making some predictions along the way. Now that the company has officially reported, let’s take a look at how the largest public crypto company did…
By The Numbers
Coinbase Q4 2021 revenue was $2.5 billion, meaningfully higher than the $585 million from the same quarter in 2020. The increase in revenue led to net income of $840 million, up from $177 million in the prior period.
Why It Matters
The Street expected Coinbase to report $1.94 billion in revenues, so the more than $500 million revenue beat absolutely crushed expectations. This is leading some to realize just how difficult it is to predict the company’s revenue, regardless of the fact that the data is public. We should note that although the Street’s prediction was $1.94 billion, estimates were rather wide ranging from $1.19 billion to $2.44 billion.
And The Stock Went Up, Right?
Nope. The earnings beat did little work for the share price. After the release, the stock actually tumbled down to around its all-time low. Although the company had amazing Q4 results, Coinbase stated they expect monthly transacting users and trading volume to decline in Q1, with an expected total trading volume of $200B (down from $550B in Q4 2021). Additionally, the exchange expects lower subscriptions and services revenues in the upcoming quarter, with the overall top-line expected to dip in 2022 as a result.
Trading from institutional investors is significantly rising and is more than double the trading from retail. Despite the higher trading volumes though, Coinbase only generated $90 million in revenue from institutional trading, compared to $2 billion from retail investing last quarter.
It’s also now obvious that Bitcoin’s era of dominance in terms of trading volume and trading revenue generation at Coinbase is clearly over. Bitcoin has gone from 38% of the company’s trading volume to 16% over the past year, while other crypto assets rose from 48% to 68%.
Further Reading: SBFs quarterly breakdown of Coinbase earnings