After escaping profitability for two years, Coinbase executives celebrated a net profit of $273 million for the fourth quarter of 2023, bringing net profitability for the full year 2023 to $95 million.
Even before the earnings announcement, the markets reacted positively Coinbase, with shares closing up 3.3% on Thursday – and rising about 13% in after-hours trading. Although there were mixed forecasts among analysts as to whether Coinbase would achieve quarterly profitability, JPMorgan increased its recommendation from “Underweight” to “Neutral,” which also contributed to a rise in the stock price. according to Bloomberg.
During the earnings call, CEO Brian Armstrong again made the case for the importance of cryptocurrencies to the future of society, highlighted Coinbase's push for more regulation in the US – and even criticized its competitors at times.
“Coinbase has always taken a long-term approach and focused on compliant development, even if this has not been the popular choice. Many of our competitors Cut corners And Laws broken “We want to grow big quickly, and we've seen how this strategy works,” Armstrong said.
Coinbase CFO Alesia Haas credited recent gains and volatility in broader crypto markets, as well as the anticipation and eventual approval of Bitcoin ETFs, for helping push the price of the top cryptocurrency by market cap above $50,000 .
“The increase in volatility had a significant impact on our transaction revenues. We saw strong growth and re-entry among both basic and advanced traders. “The average trading volume of our advanced traders has increased significantly,” Haas said on the conference call.
Compared to the previous quarter, Coinbase reported a 78% increase in subscription revenue and a $2.6 billion decrease in operating expenses. Total revenue reached $954 million in the fourth quarter and was $3.1 billion for the full year.
While some feared that the newly launched Bitcoin ETFs could cannibalize some of Coinbase's business, executives on the call didn't seem nearly as concerned about that as they were about crypto innovation in the U.S. lagging behind other jurisdictions with established laws .
Chief Operating Officer Emilie Choi echoed Armstrong's sentiments about finding the best path forward, with the CEO highlighting that Coinbase supports two bills currently in Congress. The company has also invested an $85 million pro-crypto super PAC and supports the Stand with Crypto Alliance, which aims to register crypto users to vote in the upcoming general election.
“We remain confident that the United States will get this right,” Armstrong said, “whether through the creation of new case law by the courts, through the passage of new laws by Congress, or ultimately through the 52 million Americans who join Voted with cryptocurrencies in this upcoming election.”