Coinbase’s Q4 financial report vastly beat market expectations on Thursday, after the firm posted $2.5 billion in net income for the quarter.beating analyst predictions by 27%.
The consensus of FactSet there was forecast that Coinbase would generate approximately $1.9 billion in revenue for the period. In particular, the popular cryptocurrency exchange doubled outperformed transaction revenue from the third to fourth quarters, generating 91% ($2,276 million) of its total fourth quarter revenue from transactions alone.
To increase investor confidence, the company’s total transaction revenue for 2021 was $6.8 billion. Despite the report recording $840 million in net revenue and showing substantial growth from 7.4 million monthly transactional users (MTUs) in the third quarter to 11.4 million in the fourth, COIN share prices fell 4.7% in after-market trading, and are now down a full 30% year-to-date.
It is also noteworthy that $213 million, just 9% of fourth quarter revenue, was generated by non-commercial products from other sources such as loans and gambling.
The US-based cryptocurrency platform stated that it has recently witnessed a drop in cryptocurrency market volatility and asset prices compared to higher conditions in the fourth quarter, due in part to volatile global market conditions. Consequently, the report states that Coinbase expects to see a comparative decline in MTUs and subsequent transaction revenue in Q1 2022.
Despite a potentially weak first quarter, Coinbase has written to its investors that it plans “aggressive” inward investment in 2022.while also ensuring that you are prepared for any potentially unpleasant market conditions.
“In the event of a material decline in our business, below the ranges we have planned for, we may slow our investments and would expect to manage our adjusted EBITDA losses to approximately $500 million for the full year.”
Coinbase also pointed to the growth of Web3, NFTs, and DeFi as sources of future growth for the company.using the rapid increase in NFT sales last year as a benchmark.
The company also said it plans to hire 6,000 employees in 2022 with a heavy focus on customer care and reliability.something Coinbase has suffered from in the past.
Coinbase predicts that between $4.25 billion and $5.25 billion will be spent in 2022, with a heavy focus on tech and development teams.
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