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Coinbase shares are down 29% year to date.
Tiffany Hagler-Geard/Bloomberg
Coinbase Global
earnings topped Wall Street’s estimates in the fourth quarter, but an uncertain outlook for 2022 appeared to be weighing heavily on the stock.
Shares of the cryptocurrency exchange were down more than 3% in after-hours trading on Thursday to $173.
Coinbase (ticker: COIN) reported revenue of $2.5 billion in the quarter, beating consensus estimates by 27%, according to FactSet. Wall Street was looking for earnings per share of $1.94. The company delivered $3.32 in earnings per share, beating estimates by 71%.
Monthly transacting users, a measure of customer engagement with the exchange, hit 11.4 million users, exceeding forecasts for 9.7 million. That helped push trading volume to a record $547 billion in the quarter, beating forecasts for $465 billion.
Coinbase also appeared to hold the line on its take rate, the percentage of revenue it receives from retail trading volume in commissions and related revenue. After falling to 1.1% in the third quarter, its rate jumped back up to 1.23% in the fourth quarter.
But Coinbase didn’t give an upbeat outlook for the first quarter or remainder of 2022. “We enter 2022 with even more unknowns which make our business all the more difficult to forecast,” the company said in its shareholder letter.
Coinbase said it sees a 10% decline in crypto asset volatility with the overall market down 20% in prices this quarter. That’s contributing to lower retail trading volume, tracking at $200 billion in the quarter so far. Monthly transacting users are also down from the fourth quarter average, falling to 10 million users in the first quarter.
Coinbase also provided a wider-than-usual range of forecasts for transacting users and revenue in 2022. The company said it expects to average 5 million to 15 million monthly transacting users this year, far wider than its prior ranges.
“Simply put, we have less near-term visibility, and it is currently too early to provide a more precise range,” the company said.
Coinbase also sees its average transaction revenue per user falling below 2021 levels. That metric averaged $64 in 2021 and $45 in 2020.
“The 2022 guide shows ongoing lack of visibility,” wrote Mizuho Securities analyst Dan Dolev. And the wide range of transacting users makes modeling results for the year even more difficult, he noted.
Investors seem to view the uncertain outlook and broader pressures in crypto as reasons to sell the stock. Through Thursday’s close, the stock was down 43% over the past three months, which includes a 29% decline in 2022.
Write to Daren Fonda at daren.fonda@barrons.com
