Coinbase Eyes Q4 Earnings Beat as Crypto Rivals Stumble

Key Takeaways

• Analysts expect Coinbase to report strong growth in both transaction and subscription & services revenue for Q4 2024.
• Bitcoin and Ethereum’s surges, partly driven by Donald Trump’s presidential win, contributed to a 112% increase in trading volume across top exchanges.
• Despite challenges in the broader crypto market, Coinbase is likely to outperform its peers, with revenue growth projected at 37%.

After missing earnings estimates in the third quarter of 2024, Coinbase (COIN) is expected to bounce back with a strong performance in Q4.

Analysts are optimistic about the company’s transaction revenue and subscription & services growth, especially with Bitcoin (BTC) and Ethereum (ETH) surging in price and trading volume increasing by 112%.

Coinbase’s Optimistic Q4 Outlook

Bitcoin, up 48%, and Ethereum, rising 28% in the fourth quarter, have fueled a rally across the crypto market.

This momentum follows Donald Trump’s presidential win, which sparked renewed optimism for a more crypto-friendly regulatory environment. Traders are also eyeing the potential for a U.S. strategic Bitcoin reserve.

Coinbase stands to benefit from this surge as trading volume on centralized exchanges jumped, pushing analysts to revise their revenue growth forecasts.

The market’s projection of a 37% increase in Coinbase’s transaction revenue seems conservative, increasing the likelihood of an earnings beat.

Revenue Breakdown and Key Metrics

Coinbase is expected to report earnings of $0.87 per share for Q4, a 16% decrease from the previous year. However, revenues are anticipated to reach $1.59 billion, marking a 67% year-over-year increase.

Analysts have adjusted the consensus estimate down slightly by 1% over the past month. Despite this, subscription and services revenue is expected to grow by 53%, reaching $575.4 million, while transaction revenue may hit $934.2 million, up by 77%.

Other expected figures include:

• Institutional transaction revenue: $94.6 million, up 158%.
• Blockchain subscription revenue: $171.2 million, up 80%.
• Custodial fees: $37.7 million, up 91%.
• Interest income: $57.8 million, up 36%.

Trading volume is projected to soar to $354.75 billion, up from $154 billion in the same quarter last year.

Consumer trading volume is expected to rise to $57.32 billion from $29 billion, while institutional trading volume may hit $276.12 billion, up from $125 billion.

Analysts also predict an increase in monthly transacting users, which is expected to reach 8.5 million, compared to 7 million in the prior year.

Rivals Miss Expectations

While Coinbase’s outlook looks positive, the story is different for some of its crypto peers.

MicroStrategy, now known as Strategy, missed expectations for Q4 2024.

The company’s revenue totaled $120.7 million, falling short of the $123 million consensus estimate and marking a year-over-year decline.

The company also reported an adjusted loss of $3.20 per share, far worse than the—$0.12 analysts had expected.

Despite these setbacks, Strategy continued to expand its Bitcoin holdings, acquiring 218,887 bitcoins for $20.5 billion—its largest quarterly increase to date.

Other crypto stocks are also expected to show weak results. Analysts predict lower earnings for Riot Platforms and MARA in their upcoming earnings reports. However, there is optimism surrounding Robinhood , which is set to release its earnings on Wednesday.