Investing.com -- Coinbase (NASDAQ:COIN) posted fourth-quarter income that topped Wall Street estimates, as the approval of spot-Bitcoin exchange-traded funds boosted activity on the crypto exchange platform.
Shares in Coinbase surged in premarket U.S. dealmaking.
Coinbase reported earnings per diluted share of $1.04 in the three months ended on Dec. 31, above expectations for a loss of $0.01 per share, according to LSEG data cited by Reuters. Trading volumes climbed to $154B from $145B in the same period a year earlier.
"We believe the increases were driven by a variety of factors, principally excitement around Bitcoin spot ETF approvals and broad expectations around improving macroeconomic conditions in 2024, which contributed broadly in the capital markets to ‘risk on’ activity," the company said in a statement.
Total transaction revenue jumped 64% year-on-year to $529.3M in Q4, while subscription and services revenue, which climbed 33% to $375.4M in the fourth quarter.
Operating costs fell to $838.2M in the fourth quarter from $1.18B in the prior-year period. Speaking in a call with analysts, Chief Financial Officer Alesia Haas noted that the company "can absorb a lot of volume growth without adding expenses."
"That said, we continue to look at our expense base and invest proactively in diversifying our revenue streams," Haas said.
Investor sentiment on Coinbase has been warming in recent months following a jump in cryptocurrency prices.
"[W]e see the higher cryptocurrency prices not only sustaining, but improving, activity levels and Coinbase's earnings power as we look to [the first quarter of 2024], JPMorgan said in a note on Wednesday after upgrading its rating of the stock to "Neutral" from "Underweight".