Coinbase Global, Inc. (COIN) reported impressive financial results for the fourth quarter of 2024, significantly exceeding market expectations. The company’s performance was fueled by a substantial increase in trading volume, higher cryptocurrency asset prices, and growing subscription revenues.
Key Financial Highlights
Earnings and Revenue Performance
Coinbase reported net operating earnings per share of $3.39 for Q4 2024, surpassing the Zacks Consensus Estimate by 74.7%. This represents a more than threefold increase compared to the same period last year. Net income per share stood at $4.68.
Total revenues reached $2.3 billion, beating estimates by 21.3% and more than doubling year-over-year. This growth was driven by strong performance across all revenue segments, including transaction revenues, subscription and services revenues, and other revenues.
Trading Volume and Revenue Breakdown
Total trading volume more than doubled year-over-year to $439 million, significantly exceeding the consensus estimate of $391 million.
Transaction revenues surged nearly threefold to $1.56 billion, attributed to increased consumer and institutional trading activity. Subscription and services revenues grew 70.7% to $641.1 million, supported by higher crypto asset prices, increased staking and custody activities, and growing Coinbase One subscriptions. Other revenues increased 51.7% to $74.6 million.
profitability and Expenses
Adjusted EBITDA skyrocketed nearly fourfold year-over-year to $1.3 billion, demonstrating improved operational efficiency despite rising costs.
Total operating expenses increased 47.6% to $1.2 billion, primarily due to higher transaction expenses, technology and development costs, sales and marketing investments, and general administrative expenses.
Financial Position and Full-Year Performance
Balance Sheet Strength
Coinbase ended the quarter with $8.5 billion in cash and cash equivalents, representing a 66.2% increase from year-end 2023. Long-term debt stood at $4.2 billion, up 42% from the previous year, while shareholders' equity increased 63.6% to $10.3 billion.
The company generated $2.5 billion in net cash from operating activities during 2024, more than doubling year-over-year.
Full-Year 2024 Achievements
For the full year 2024, Coinbase reported operating income of $9.48 per share, representing a 25-fold increase year-over-year and exceeding estimates by 59%. Total operating revenues doubled to $6.5 billion, beating consensus estimates by 9.3%.
First Quarter 2025 Outlook
Coinbase provided optimistic guidance for Q1 2025, expecting subscription and services revenues to grow sequentially to between $685-$765 million.
The company anticipates technology, development, and general administrative expenses to range between $750-$800 million, reflecting variable costs associated with higher trading volumes and increased headcount. Sales and marketing expenses are projected to increase to $235-$375 million due to performance marketing variability and USDC reward programs.
Transaction expenses are expected to remain in the mid-to-high teens as a percentage of net revenues.
Industry Context and Peer Performance
The strong performance by Coinbase reflects broader trends in the digital asset industry, where increasing institutional adoption and recovering asset prices have driven trading activity and revenue growth across multiple platforms.
Other financial services providers also reported positive results:
- Bread Financial Holdings beat earnings estimates despite a 54% year-over-year decline in bottom line performance
- Virtu Financial reported a 32.6% earnings surprise with a fourfold year-over-year increase
- American Express exceeded revenue and earnings estimates with strong network volume growth
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Frequently Asked Questions
What drove Coinbase's strong Q4 2024 performance?
The exceptional results were primarily driven by significantly higher trading volumes across both consumer and institutional segments, increased cryptocurrency asset prices, and growing subscription revenue from Coinbase One and other services. The company also benefited from improved operational efficiency.
How does Coinbase generate revenue?
Coinbase generates revenue through multiple streams: transaction fees from trading activities, subscription services including Coinbase One, staking and custody services, USDC stablecoin-related services, and other technology solutions for institutional clients.
What is the significance of the increased subscription revenue?
The growth in subscription and services revenue demonstrates Coinbase's successful diversification beyond transaction-based income. This provides more stable, recurring revenue that is less dependent on market volatility and trading activity patterns.
How does Coinbase's performance reflect broader market trends?
Coinbase's strong results indicate renewed institutional and retail interest in digital assets, reflecting improved market conditions and potentially greater mainstream adoption of cryptocurrency technologies and investment products.
What challenges does Coinbase face moving forward?
The company must navigate regulatory uncertainty, manage operating expenses amid growth, maintain security standards, and continue diversifying revenue streams while competing in an increasingly crowded digital asset services landscape.
Why did expenses increase despite strong profitability?
The increased expenses reflect necessary investments in technology infrastructure, security enhancements, regulatory compliance, and marketing efforts to capitalize on growing market opportunities. The company's ability to grow revenue faster than expenses demonstrates effective scaling.
The strong quarterly results position Coinbase favorably for continued growth in 2025, particularly as cryptocurrency markets show signs of sustained recovery and institutional adoption accelerates. The company's diverse revenue streams and solid financial foundation provide stability amid market volatility.