Coinbase Q4 Results: 5x YoY growth in Revenue, beats street estimates

coinbase Q4

Earning - The company reported earnings per share of $3.32 against the analysts' expectation of $1.85. The earning in Q3 was $1.62, a good growth sequentially.

Revenue - The company reported a revenue of $2.5 billion higher than a street estimate of $1.94 in the December quarter revenue. The revenue in the previous quarter was $1.62 billion. The top line increased about five-fold year over year, reflecting increases in transaction revenues, subscription, and services revenues as well as other revenues.

Expenses - Coinbase reported a total operating expense of $1.6 billion, it increased by more than a four-fold year over year. The reason for increased expenses was an increase in transaction expenses, technology and development, sales and marketing, general and administrative, and other operating expenses.

EBITDA - It reported adjusted EBITDA of $1.2 billion for the December quarter, up more than a fourfold year over year. 

Monthly Transacting Users (MTUs) - MTU grew to 11.4 million, up more than a four-fold year over year driven by higher retail and institutional volume. Verified Users grew to 89 million.

2022 Outlook - The annual average retail MTU is expected between 5 and 15 million. Adjusted EBITDA losses are expected to be about $500 million. The subscription and services revenues are expected to strongly grow over 2021. The company expected transaction expenses, as a percentage of revenues, to be in the low 20%. 

Sales and marketing expenses, as a percentage of revenues, are expected to be about 12-15%. Technology & development and general & administrative expenses are projected to be between $4.25 and $5.25 billion.

Target Price - The 21 analysts offering 12-month price forecasts for Coinbase Global Inc have a median target of $300, with a high estimate of $600 and a low estimate of $200. 

The share price closed 1.52% lower on Friday at $176.83 per share.

Coinbase Q4 Results Review:

Coinbase has reported a good set of numbers, and both topline and bottom-line have beaten analyst estimates. The earnings come after major cryptocurrencies saw a weak month in December. However, the value has increased overall in 2021. Coinbase warned shareholders that its stock should be considered a long-term investment because its business is “volatile.”