Coinbase (NASDAQ:COIN) Surprises With Strong Q4

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Coinbase (NASDAQ:COIN) Surprises With Strong Q4

Cryptocurrency exchange Coinbase (NASDAQ:COIN) beat Wall Street’s revenue expectations in Q4 CY2024, with sales up 138% year on year to $2.27 billion. Its GAAP profit of $4.68 per share was significantly above analysts’ consensus estimates.

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Coinbase (COIN) Q4 CY2024 Highlights:

  • Revenue: $2.27 billion vs analyst estimates of $1.86 billion (138% year-on-year growth, 22% beat)

  • EPS (GAAP): $4.68 vs analyst estimates of $2.13 (significant beat)

  • Adjusted EBITDA: $1.29 billion vs analyst estimates of $846 million (56.7% margin, 52.4% beat)

  • Operating Margin: 45.5%, up from 12.1% in the same quarter last year

  • Free Cash Flow Margin: 42.5%, down from 57.8% in the previous quarter

  • Market Capitalization: $68.82 billion

Company Overview

Regarded by many as the face of crypto, Coinbase (NASDAQ:COIN) is a digital exchange helping the world onboard into the blockchain ecosystem.

Financial Technology

Financial technology companies benefit from the increasing consumer demand for digital payments, banking, and finance. Tailwinds fueling this trend include e-commerce along with improvements in blockchain infrastructure and AI-driven credit underwriting, which make access to money faster and cheaper. Despite regulatory scrutiny and resistance from traditional financial institutions, fintechs are poised for long-term growth as they disrupt legacy systems by expanding financial services to underserved population segments.

Sales Growth

A company’s long-term sales performance signals its overall quality. Even a bad business can shine for one or two quarters, but a top-tier one grows for years. Coinbase struggled to consistently generate demand over the last three years as its sales dropped at a 5.7% annual rate. This fell short of our benchmarks and is a sign of lacking business quality.

Coinbase Quarterly Revenue
Coinbase Quarterly Revenue

This quarter, Coinbase reported magnificent year-on-year revenue growth of 138%, and its $2.27 billion of revenue beat Wall Street’s estimates by 22%.

Looking ahead, sell-side analysts expect revenue to grow 3% over the next 12 months. While this projection indicates its newer products and services will fuel better top-line performance, it is still below the sector average.

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