Coinbase Q4 2022 Earnings Report
Key Takeaways
Coinbase's Q4 2022 results showed resilience with a 5% Q/Q increase in net revenues, driven by subscription and services growth, despite a challenging year for crypto markets. The company focused on cost management, reducing expenses, and engaging with policymakers, positioning itself for potential benefits from future regulations. They ended Q4 with $5.5 billion in total $USD resources and $426 million in crypto assets.
Q4 net revenues increased 5% Q/Q, driven by Subscription and Services.
Subscription and services revenue grew 34% Q/Q to $283 million.
The company anticipates a 30%+ reduction in technology and development, sales and marketing, and general and administrative expenses in Q1’23 compared to Q4’22.
Total corporate exposure to client or counterparty insolvencies was $14 million with no customer funds lost.
Coinbase
Coinbase
Coinbase Revenue by Segment
Forward Guidance
Coinbase is focused on cost management, efficiency, and improving full-year Adjusted EBITDA in absolute dollar terms on a year-over-year basis. Crypto remains volatile, and the company is prepared to manage the business through a wide range of transaction revenue scenarios. They are rigorously assessing product-market fit and taking a scrappier approach to investments in new and unproven products.
Positive Outlook
- Focus on cost management and efficiency.
- Rigorous assessment of product-market fit.
- Scrappier approach to investments in new products.
- Nimble and adaptive to market conditions.
- Improved crypto markets in Q1 compared to Q4.
Challenges Ahead
- Crypto remains volatile.
- Limited ability to forecast transaction revenues.
- Transaction revenues remain correlated with crypto market capitalization and crypto asset volatility.
- Industry dynamics remain in flux.
- Caution against extrapolating January 2023 transaction revenue results forward.
Revenue & Expenses
Visualization of income flow from segment revenue to net income