Coinbase has higher revenue and earnings, but usage is decreasing

Coinbase, the leading US-based crypto exchange, reported fourth-quarter earnings and revenue that beat analysts' estimates. Revenue was $629 million with a net loss of $557 million, a sharp decline from the prior year when Coinbase generated net income of $840 million. The company also reported 8.3 million monthly transacting users (MTUs), down from 8.5 million the prior period, although this was higher than the 8.22 million estimated by analysts. Transaction revenue fell 12% to $322 million from the previous quarter. Coinbase CEO Brian Armstrong noted that markets have rebounded in the current quarter compared to Q4 2022, and that the company generated $120 million in transaction fee revenue in January. Additionally, the company has diversified its revenue streams away from just trading fees, with products such as Staking, Earn, and Custody generating over $200 million in the fourth quarter. However, the SEC has recently taken action against crypto exchanges that offer staking services, causing Coinbase to take caution. Coinbase CFO Alesia Haas affirmed that their staking products were not securities, and that staking was less than 3% of net revenue at this time. Coinbase's stock rose more than 2% in extended trading after dropping 4.8% during the day.