Coinbase’s Strong Financial Performance in 2024

Coinbase, a leading cryptocurrency exchange, has reported impressive financial results for the year ended December 31, 2024. The company’s net revenue grew significantly, reaching $6.3 billion, up from $2.9 billion in the previous year. This growth was driven by strong performance across both its transaction revenue and subscription and services revenue streams.

Transaction revenue, which includes fees from customers buying and selling cryptocurrencies, increased by 162% to $4.0 billion. This was primarily due to a 195% surge in consumer trading volume and a 139% increase in institutional trading volume. The company also saw growth in other transaction revenue, such as from its new Base platform and instant transfer withdrawals.

Subscription and services revenue, which includes income from products like stablecoin, blockchain rewards, and custody services, grew by 64% to $2.3 billion. This was driven by increased customer adoption of USDC (a stablecoin), higher crypto asset prices leading to more blockchain rewards, and growth in Prime Financing and Coinbase One.

The company’s net income for the year was $2.6 billion, a significant improvement from the $95 million reported in 2023. Adjusted EBITDA, a non-GAAP metric that excludes certain expenses, also saw a substantial increase, rising from $978 million in 2023 to $3.3 billion in 2024.

Table 1: Key Financial Metrics

Metric	2024	2023	Change
Net Revenue	$6.3 billion	$2.9 billion	116%
Transaction Revenue	$4.0 billion	$1.5 billion	162%
Subscription and Services Revenue	$2.3 billion	$1.4 billion	64%
Net Income	$2.6 billion	$95 million	N/A
Adjusted EBITDA	$3.3 billion	$978 million	242%

Key Business Metrics Demonstrate Growth

Coinbase’s key business metrics also showed strong growth in 2024. Monthly Transacting Users (MTUs), a measure of the number of customers actively using the platform, increased by 14% to 8.4 million. Assets on Platform (AOP), the total value of USDC and crypto assets held or managed on behalf of customers, grew by 112% to $404 billion. Trading Volume, the total value of spot trades executed on the platform, more than doubled, increasing by 148% to $1.162 trillion.

Table 2: Key Business Metrics

Metric	2024	2023	Change
MTUs (in millions)	8.4	7.4	14%
Assets on Platform (in billions)	$404	$191	112%
Trading Volume (in billions)	$1,162	$468	148%

The growth in MTUs was driven by a 1.3 million increase in trading users, influenced by overall crypto market sentiment and activity, as well as higher average crypto asset prices. The company also saw growth in users participating in its USDC rewards programs, offset in part by a decrease in staking-only users.

The increase in AOP was primarily due to rising crypto asset prices, particularly for Bitcoin, Ethereum, and Solana, as well as growth in USDC balances driven by the USDC rewards program and deeper integration of USDC across Coinbase’s products.

The surge in Trading Volume reflected both an increase in the overall crypto market and Coinbase’s ability to capture a larger share of the trading activity, thanks to its competitive position and product strategy.

Outlook and Strategic Initiatives

Coinbase believes it is well-positioned to drive revenue growth across all macroeconomic environments in 2025. The company remains committed to advancing regulatory clarity, which it sees as crucial for the continued growth of the crypto economy.

However, the company acknowledges that future interest rate decreases, which are not certain, may materially impact its subscription and services and other revenue. To address this, Coinbase plans to dynamically adjust its expense base to be responsive to market conditions and revenue opportunities, increasing or decreasing it as needed, especially with respect to certain variable expenses.

In the first quarter of 2025, Coinbase expects technology and development, as well as general and administrative expenses, to grow modestly compared to the fourth quarter of 2024, primarily due to headcount growth and variable infrastructure and customer support expenses. Additionally, the company expects sales and marketing expenses to grow, primarily due to higher USDC rewards expense and variable non-brand marketing spend.

Coinbase’s key strategic initiatives in 2024 included driving revenue growth, enhancing crypto utility, and pursuing regulatory clarity. The company made progress on these goals by deepening institutional adoption, scaling international growth, and expanding real-world utility. Investments in core products like derivatives and Coinbase One, as well as the focus on global expansion, drove revenue growth, while innovations such as USDC rewards showcased the power of on-chain finance.

Liquidity and Capital Resources

Coinbase continues to believe its existing cash, cash equivalents, and USDC holdings will be sufficient to meet its short-term and long-term cash requirements and plans. As of December 31, 2024, the company had $8.5 billion in cash and cash equivalents and $1.2 billion in USDC.

The company also holds $4.3 billion in long-term debt, which it may repurchase from time to time as market conditions warrant. In October 2024, Coinbase’s board of directors authorized a $1 billion share repurchase program, which the company plans to fund using its existing cash and cash equivalents and USDC, as well as future cash flows from operations.

Coinbase’s primary cash requirements and contractual obligations include operating leases, non-cancelable purchase obligations, and interest and principal payments on its long-term debt. The company was in compliance with all applicable capital requirements as of December 31, 2024.

Critical Accounting Estimates

Coinbase’s financial statements rely on several critical accounting estimates and assumptions, including those related to business combinations, goodwill and intangible assets, strategic investments, income taxes, and legal and other contingencies.

The valuation of acquired intangible assets and the assessment of goodwill for impairment involve significant judgment, estimates, and assumptions. The company also makes important estimates and assumptions in accounting for its strategic investments in privately-held companies, including the determination of fair value and the assessment of impairment.

Income tax accounting requires management to make significant estimates, assumptions, and judgments, particularly regarding the realizability of deferred tax assets and the recognition of uncertain tax positions. Legal and other contingencies also involve highly sensitive estimates and assumptions, as the outcomes are inherently uncertain and can have a material impact on the company’s financial statements.

Overall, Coinbase’s strong financial performance in 2024, driven by growth across its key business metrics and revenue streams, demonstrates the company’s ability to execute on its strategic initiatives and capitalize on the expanding crypto economy. However, the company’s financial results and future outlook remain subject to various risks and uncertainties, including the potential impact of changing interest rates, regulatory developments, and the continued volatility of the crypto market.