(Bloomberg) -- Coinbase Global Inc. posted a profit for the first time in two years after a fourth-quarter rally in digital asset markets lifted trading revenue, sending shares of the largest U.S. cryptocurrency exchange higher. USA
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Revenue rose 51% to $953.8 million, beating the $826 million average estimate of analysts surveyed by Bloomberg. Net income was $273 million, or $1.04 per share, compared with a loss of $557 million, or $2.46, a year earlier, Coinbase said in a letter to shareholders on Thursday. Analysts had predicted a loss.
Consumer transaction revenue rose to $492.5 million, nearly double the third quarter, while institutional transaction revenue more than doubled quarter-over-quarter to $36.7 million.
โCoinbase was widely perceived as an unprofitable company, and this quarter may begin to change the picture going forward,โ said Owen Lau, an analyst at Oppenheimer & Co. who has an โoutperformโ rating on the stock. "I think the next step is to see if Coinbase can maintain profitability throughout the year."
Wall Street has been watching Coinbase for signs that the series of recently launched US exchange-traded funds that invest directly in Bitcoin could cannibalize some of Coinbase's retail revenue. The exchange makes more money from retail users than from institutions.
Coinbase shares rose more than 15% in after-hours trading. The stock rose nearly fivefold last year. after falling 86% in 2022.
In the letter, Coinbase cited "enthusiasm" around Bitcoin spot ETF approvals and broad expectations around improving macro conditions in 2024 as reasons for the sharp rise in cryptocurrency volatility in the quarter. quarter.
Investors are also watching the impact of ETFs on Coinbase's custody fee income, which rose to $19.7 million in the fourth quarter. Coinbase acts as a custodian for eight of the 10 Bitcoin Spot ETFs and as these funds raise funds, they should benefit from the growth in these fees.
With the rebound in institutional business, loans to institutional clients increased to $399 million at the end of the fourth quarter, the company said.
Alesia Haas, Coinbase's chief financial officer, said in an interview that the company plans a "modest increase" in staff to support product growth. The company sees a positive impact of Bitcoin ETFs across the industry through โelevated engagement,โ she said.
(Adds more details of the results, analyst comment in the fourth paragraph).
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