Shares of crypto company Coinbase (COIN 8.84%) jumped as much as 16.9% in trading on Friday after the company reported fourth-quarter 2023 financial results. Shares drifted lower late in trading and are up 13.5% at 2:30 p.m. ET.
Coinbase’s great quarter
Revenue jumped nearly 50% to $953.8 million, easily topping the $826.1 million that analysts were expecting. Net income was $275.7 million, or $1.04 per share, which easily topped the $0.02 in earnings that analysts expected.
Trading volume nearly doubled sequentially to $154 billion, and subscription and services revenue was up 33% to $375.4 million. Once again, stablecoin revenue was a huge boost to the business with $171.6 million in revenue coming from Coinbase’s stake in the USDC token.
Rising above the field
Coinbase has proven itself to be the market leader by waiting for more aggressive competitors to stumble, as FTX and Binance have done. That’s led to market-share gains in the exchange business and the expansion into derivatives, which account for most crypto trading today.
What’s more impressive long term is how Coinbase has built a fortress balance sheet alongside a cash-flow business as it develops new tools like easier-to-use wallets, the Base blockchain, and tools for decentralized finance. At the end of the quarter, Coinbase had $5.5 billion in cash and equivalents and cut debt by 12% to $3.0 billion.
If the crypto industry continues to gain momentum, which includes adding exchange-traded funds (ETFs) in 2024, this is a stock that may have a lot of room to run higher.
Travis Hoium has positions in Coinbase Global. The Motley Fool has positions in and recommends Coinbase Global. The Motley Fool has a disclosure policy.
