Coinbase earning's report shows $2.6 billion loss in 2022

GB Market Commentary 22/02/2023

by Marcus Sotiriou

Coinbase’s earning report was released yesterday, which preceded a fall in Bitcoin’s price, despite beating estimates on revenue and EPS. The report revealed the digital asset platform’s net revenue in 2022 decreased from $7.4 billion in 2021 to $3.1 billion, with a net loss of $2.62 billion.

Coinbase cut their Sales & marketing spend to $90 million last quarter, compared to $244 million in Q4 2021.

The digital asset platform's goal is to improve EBITDA profitability in 2023 – we will see how this plays out next quarter in regard to their restructuring efforts.

In their shareholder letter, Coinbase details some key messages, such as prioritising its SAAS message over cost-cutting and regulatory situation. This could be wise, as their SAAS revenue was around $800 million in 2022.

The digital asset platform’s SAAS business, which has a run rate of $1.2 billion, seems to be the right focus. It means that Coinbase’s earnings are less volatile, as it transforms to a subscription-based model.

The challenge for Coinbase is becoming profitable in 2024, and they may need to raise capital to get through to the other side of this bear market.

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