Cryptocurrency exchange Coinbase reported its Q4 2022 earnings on Tuesday, with net revenue of $605 million, surpassing analysts’ estimates of $588 million. The revenue figure was up 5% from the previous quarter’s $590 million. Coinbase’s adjusted loss of $2.46 per share also beat expectations of a loss of $2.52 per share. The company’s shares were up 0.9% to $62.60 in after-hours trading following the announcement.
Coinbase’s Subscription and Service Revenues Surge
Coinbase’s subscription and service revenues, which include interest income, increased by 34% quarter-over-quarter to $283 million in Q4. Subscriptions and services accounted for nearly 50% of overall revenue, driven primarily by interest income of $162.2 million.
Also Read: Coinbase CEO Defends Staking Services Against SEC Scrutiny
Coinbase announced that cryptocurrency markets had improved in Q1 2023 compared to Q4, generating $120 million in transaction revenue in January. However, the company cautioned investors against assuming this trend will continue, noting the volatility of the crypto market.
Coinbase expects more cryptocurrency regulation in the coming year, both in the US and abroad, and believes it can benefit from these developments. The company pointed to the European Union’s MiCA framework, as well as countries like Brazil, the UK, and India, which have already drafted clear legislation to regulate crypto. Coinbase criticized the US for its “disjointed approach” to regulating crypto but expressed optimism that the situation will improve with time.
Coinbase CEO Prioritizes Policy in 2023
During an earnings call with analysts, Coinbase CEO Brian Armstrong announced that policy is his top priority this year. He acknowledged spending a lot of time in Washington, D.C., and noted that there is “a lot of excitement about the potential of this technology.” Armstrong expressed a desire for cryptocurrency to be built in America and criticized the lack of consistent and clear policy in the US.
Coinbase has faced uncertainty due to recent regulatory actions by the US government, including the Securities and Exchange Commission’s shutdown of Kraken’s staking service in the US and the Commission’s plan to sue Paxos for allegedly selling BUSD as an unregistered security. Coinbase has its own retail staking business, as well as a stablecoin, USDC, which it co-founded with Circle.
