Still recovering from the crypto winter of 2022 which lingered into 2023, Coinbase’s recent full year (FY) 2023 financial results display a positive outlook for the cryptocurrency exchange.
Publishing its Q4 ‘2023 results yesterday, Coinbase stated that its “operational rigour” paid off as the exchange launched new products and significantly ramped up regulatory efforts in the US, despite lengthy disputes with the US Securities and Exchange Commission (SEC).
Total revenue for 2023 FY was $3.108bn, only marginally down from the $3.194bn for 2022 FY, a 2.6% decrease. Net Revenue was also slightly down from last year, with 2023 FY’s $2.927bn decreasing 7% from 2022 FY’s $3.149bn.
However, year-over-year (YoY) performance took a drastic upturn for both total and net revenue. It should be noted that during Q4 ‘2022, the crypto market was still reeling from the FTX collapse with the market hitting all-time lows.
Total revenue for Q4 ‘2023 was $953.8m, a 51.6% increase from $629.1m in Q4 ‘2022. Net revenue also took a significant leap of 49.5% to $905m in Q4 ‘2023, from $605m in Q4 ‘2022.
Coinbase revealed that consumer transaction revenue was up 79% YoY, and consumer trading volume rose by 164% YoY. Much of this revenue success was attributed to broader market activity but also continued investment in product offerings.
Coinbase Prime – the subscription service – also grew in terms of volume, which received much help off the back of the Bitcoin ETF approval from the SEC last month, along with the anticipation of its approval throughout the tailend of 2023.
Coinbase also cited elevated levels of client onboarding and strong levels of re-activation of large institutional clients across product suites.
Much aligned in its goal for financial discipline, operating expenses decreased as the company aimed to become more profitable amid the backdrop of the volatility of the market in the early stages of 2023.
Total operating expenses for 2023 dropped by 44.6% to $3.27bn for the year, from $5.9bn in 2022. Expense performance YoY also improved, with Q4 ‘2022 expenses totalling to $1.184bn, decreasing by 29.2% to $838.2m in Q4 ‘2023.
“In 2023, we saw our operational rigour pay off. We achieved our financial goal,launched new innovative products, strengthened our competitive position, and doubled down on our efforts to create momentum for a workable regulatory framework for crypto in the US,” said Coinbase.
“2023 was a year characterised by financial discipline and operational excellence for Coinbase. We were pleased with our ability to build and ship products to best position us for long-term growth and expand our international operations, while simultaneously reducing expenses and executing on our goal of generating positive Adjusted EBITDA in all market conditions.”
A key theme for the crypto exchange last year was the regulatory battle it contested with the US SEC, with the financial regulator suing Coinbase over its continued persistence that the tokens circulating on the exchange should be treated as securities.
Coinbase has been one of the louder vocalists against the SEC’s stance and has continually challenged the agency on its crypto stance, stating that its rules and regulations are unclear.
Elsewhere across the world however, Coinbase has been making progress entering or strengthening in several key markets. The exchange has applied for a EU licence which the company believes is indicative of its stance on crypto regulation through its ‘Go Broad, Go Deep’ campaign.
Coinbase concluded: “In 2024 Coinbase will focus on three main priorities. First, driving revenue through improving our core trading and USDC. Second, driving utility in crypto with experiments in payments using USC and Base. Lastly, we will continue to drive regulatory clarity for the industry.
“All told, Coinbase is a fundamentally stronger company today than a year ago, and we are in a strong financial position to capitalise on the opportunities ahead.”
