Following a strong fourth-quarter earnings report in which the firm swung to profit and earnings that exceeded Wall Street expectations, Coinbase’s shares increased by over 12.5% after hours.
Coinbase’s net revenue in the fourth quarter exceeded consensus estimates of around $825 million, rising 45.2% from the third quarter to $905 million.
At the same time, the firm turned a profit for the first time since the fourth quarter of 2021, with a net income of $273 million. Coinbase reported a $2 million net loss for the prior quarter.
With $529.3 million in revenue, transaction profit accounted for most of the firm’s earnings. Of this, $493 million came from crypto trading, nearly doubling from the third quarter. At $36.7 million, institutional transaction profits more than doubled.
Consumer trading volume reached over $29 billion, a 164% increase in just one quarter. Additionally, the firm brought in $375.4 million from subscription and service fees, most of which came from blockchain rewards and stablecoins at $171.6 and $95.1 million, respectively.
Coinbase’s stock increased by 41.2% in the eight trading days leading up to the earnings release, as investors were expecting a solid financial result.
This optimistic outlook was partially reinforced on February 15th by increased ratings from JPMorgan analysts.
