Shulou(Shulou.com)11/24 Report--

On the morning of February 22, Beijing time, the cryptocurrency exchange Coinbase today released the company's fourth quarter and full-year results for fiscal year 2022. According to the report, Coinbase's fourth-quarter net revenue was $604.9 million (about 4.15 billion yuan), down sharply from $2.49 billion in the same period last year, while the net loss was $557 million (about 3.821 billion yuan), compared with a net profit of $840 million in the same period last year. The net diluted loss attributable to common shareholders was $558 million, compared with $837 million for the same period last year, and $2.46 per share for common shareholders, compared with $3.32 per share for common shareholders in the same period last year.

Coinbase's fourth-quarter revenue beat Wall Street analysts' expectations and beat analysts' expectations for a net diluted loss per share, pushing its shares up more than 3 per cent in after-hours trading.

Fourth quarter main results: for the quarter ended December 31, 2022, Coinbase posted a net loss of $557 million, compared with a year-on-year net profit of $840 million, and a diluted net loss of $558 million for common shareholders, compared with a diluted net profit of $837 million for common shareholders in the same period last year. The net diluted loss per share attributable to common shareholders was $2.46, compared with $3.32 a share for common shareholders in the same period last year, but the result beat analysts' expectations. Analysts had on average expected a diluted loss of $2.55 per share for Coinbase in the fourth quarter, according to Refinitiv, a provider of financial market data and infrastructure.

Coinbase's fourth-quarter revenue was $629 million, compared with $2.498 billion a year earlier, with net revenue of $604.9 million, down sharply from $2.49 billion a year earlier, but still exceeding analysts' expectations; other revenue was $24.2 million, compared with $8.4 million a year earlier. Analysts had on average expected Coinbase's fourth-quarter revenue to reach $590 million, according to Refinitiv.

By business unit: (1) Coinbase's total trading revenue in the fourth quarter was $322.1 million, compared with $2.2766 billion in the same period last year. Of this total, net trading revenue from retail investors was $308.8 million, compared with $2.1858 billion a year earlier, and trading revenue from institutional investors was $13.4 million, compared with $90.8 million a year earlier.

(2) Coinbase's total subscription and service revenue in the fourth quarter was $282.8 million, compared with $213.4 million in the same period last year. Of this total, blockchain awards were $62.4 million, compared with $102.7 million a year earlier, escrow fee revenue was $11.4 million, compared with $49.6 million a year earlier, and interest income was $182.2 million, compared with $7.6 million a year earlier. revenue from other subscriptions and services was $2670, compared with $5350 a year earlier.

Coinbase's total operating expenses were $1.184 billion in the fourth quarter, compared with $1.5762 billion a year earlier. Of this total, Coinbase's fourth-quarter transaction expenses were $83 million, accounting for 14% of net revenue, compared with $501.1 million in the same period last year, accounting for 20% of net revenue; sales and marketing expenses were $93.1 million, accounting for 15% of net revenue, compared with $244.6 million in the same period last year, accounting for 10% of net revenue Technology and development expenses were $590.1 million, compared to $459.6 million in the same period last year; general and administrative expenses were $377.7 million, compared to $297.4 million in the same period last year; restructuring expenses were $500000, compared to zero in the same period last year; other operating expenses were $40.6 million, compared with $7350 in the same period last year.

Coinbase posted an operating loss of $555 million in the fourth quarter, compared with an operating profit of $922 million a year earlier.

Coinbase's adjusted EBITDA (net income before interest, tax, depreciation and amortization) was-$124 million in the fourth quarter, compared with $1.205 billion in the same period last year.

At the end of 2022, Coinbase had 4510 full-time employees, down 4% from the previous quarter, but up 21% from a year earlier.

At the end of the fourth quarter, Coinbase held approximately $4.425 billion in cash and cash equivalents.

Operating indicator: Coinbase's total trading volume was $145 billion in the fourth quarter, compared with $547 billion in the same period a year earlier. Of this total, retail investors traded $20 billion, compared with $177 billion a year earlier, while institutional investors traded $125 billion, compared with $371 billion a year earlier. In terms of trading volume of various encrypted assets, bitcoin transactions in Coinbase accounted for 35 per cent of total trading volume in the fourth quarter, compared with 16 per cent in the same period a year earlier; ethercoin accounted for 33 per cent of total trading volume, compared with 16 per cent in the same period last year; and other encrypted assets accounted for 33 per cent of total trading volume, compared with 68 per cent in the same period last year.

Coinbase's total assets on the platform were $80 billion in the fourth quarter, compared with $278 billion a year earlier. Of this total, the platform assets of retail investors were $40 billion, compared with $141 billion in the same period last year, and those of institutional investors were $40 billion, compared with $137 billion in the same period last year. In terms of the platform assets of various encrypted assets, the assets on the bitcoin platform in the fourth quarter of Coinbase accounted for 41% of the total platform assets, compared with 40% in the same period last year, while the assets on the Ethernet platform accounted for 26% of the total platform assets, compared with 25% in the same period last year. Other encrypted assets on the platform accounted for 26 per cent of the total platform assets, compared with 30 per cent in the same period last year; French currency platform assets accounted for 6 per cent of the total platform assets, compared with 4 per cent in the same period last year.

Key results for fiscal 2022: Coinbase's full-year net revenue was $3.1488 billion, compared with $7.3548 billion in fiscal 2021. Of this total, total transaction revenue was $2.3562 billion, compared with $6.8373 billion in fiscal 2021, and total subscription and service revenue was $792.6 million, compared with $517.5 million in fiscal 2021.

Coinbase's full-year net loss was $2.625 billion, compared with a net profit of $3.624 billion in fiscal year 2021, and a diluted net loss of $2.631 billion attributable to common shareholders, compared with $3.19 billion in fiscal year 2021 The diluted loss per share attributable to common shareholders was $11.83, compared with diluted earnings per share attributable to common shareholders of $14.50 in fiscal 2021, but the performance slightly beat analysts' expectations. Analysts had on average expected a diluted loss of $11.91 per share for the full year, according to MarketWatch, a financial website.

In fiscal year 2022, Coinbase's annual average number of MTU (monthly trading users) was 8.8 million, in line with the company's previous forecast of slightly less than 9 million, and subscription and service revenue of $793 million, in line with the company's previous forecast of more than $700 million Transaction expenses accounted for 20% of net revenue, while the company had expected transaction expenses to be at the lower end of the range of 20% to 29%; sales and marketing expenses were $510 million, in line with the company's previous forecast of between $500 million and $555 million Technology and development and management fees are $3.9 billion (including $1.5 billion in equity incentive expenses), compared with the company's previous forecast that technology and development and management costs would be about $4 billion (including about $1.5 billion in equity incentive expenses); adjusted ETBIDA was-$371 million, compared with the company's previous forecast of-$500m.

Performance outlook: Coinbase said that the cryptocurrency market has improved so far in the first quarter of 2023 compared to the fourth quarter of 2022. The total market value of cryptocurrencies increased by 40% in the year to February 17. In addition, encrypted assets have been 5% more volatile so far in the first quarter than in the same period in the fourth quarter of 2022. These market developments are reflected in Coinbase's trading business, which had trading revenue of $120 million in January 2023.

Based on this, Coinbase expects between $300 million and $325 million in subscription and service revenue in the first quarter of fiscal 2023.

On the expenditure side, Coinbase expects transaction expenses to account for the middle of the 10% to 19% range of net revenue in the first quarter of fiscal 2023; technology and development and management costs will be between $625 million and $675 million (including about $200 million in equity incentive expenses) Sales and marketing spending will be between $60 million and $70 million (including about $15 million in equity incentives); restructuring spending is expected to be about $150 million.

Coinbase also said that due to the unpredictability of the cryptocurrency market, it was difficult for the company to determine the trend of its performance for the rest of the year, but said that the company was operating towards an improved EBITDA compared to the whole of 2022, and believed that the company's recent efforts to reduce costs would help achieve this.

Coinbase expects about 3650 employees in the first quarter, while looking forward to the full year, the company does not expect a significant increase in its headcount compared with the first quarter.

Share price movements: Coinbase shares fell $3.13, or 4.80%, to close at $62.07 in regular trading on the Nasdaq. In after-hours trading as of 05:18 est on the 21st (06:18 Beijing time on the 22nd), Coinbase shares rose $1.87, or 3.01 per cent, to $63.94. In the past 52 weeks, the price of the Coinbase has been as high as $206.79 and as low as $31.55.

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