Despite a larger decline in the crypto market, the largest crypto trading platform in the United States exceeded analysts’ estimates by 27% in its Q4 earnings.
Coinbase’s Q4 financial report blew away market expectations on Thursday, with the company reporting $2.5 billion in net sales for the period, above analyst projections by 27%.
Coinbase was expected to produce $1.9 billion in sales for the quarter, according to FactSet. Notably, transaction income more than doubled from Q3 to Q4, accounting for 91 percent ($2.276 billion) of the renowned crypto exchange’s entire Q4 revenue.
The company’s overall transaction revenue for 2021 was a stunning $6.8 billion, adding to investor confidence. Despite the report showing a significant increase in monthly transacting users (MTU) from 7.4 million in Q3 to 11.4 million in Q4, COIN share prices plummeted 4.7 percent in postmarket trade, bringing the year-to-date loss to 30 percent.
It’s also worth noting that non-trading goods like lending and staking brought in $213 million in Q4, accounting for just 9% of total revenue.
The US-based crypto platform noted that, compared to the all-time high conditions of Q4, crypto market volatility and asset values have recently decreased, owing in part to global market uncertainty. As a result, Coinbase predicts a decrease in MTUs and subsequent transaction income in Q1 2022, according to the report.
Despite a poor first quarter, Coinbase told investors that it wants to invest “aggressively” internally in 2022, while also ensuring that it is prepared for any possibly unfavourable market conditions.
“We may slow down our investments and anticipate to manage our adjusted EBITDA losses to around $500 million on a full-year basis if our business declines materially below the ranges we have budgeted for.”
Coinbase also cited the emergence of Web3, NFTs, and DeFi as potential drivers of future growth, citing the quick rise in NFT sales last year as an example.
In addition, the business stated that it wants to hire 6,000 workers by 2022, with a strong emphasis on customer assistance and reliability, which Coinbase has previously been criticised for.
In 2022, Coinbase estimates that between $4.25 and $5.25 billion will be spent, with a heavy emphasis on the technology and development teams.