It is an open secret that U.S.-based cryptocurrency exchange Coinbase was preparing for a direct listing, and as its S-1 filing enters the public domain, it gives investors and enthusiasts the chance to do due diligence on the company and scrutinize its financial status.
In a blog post, the exchange wrote that it “intends to list its Class A common stock on the Nasdaq Global Market under the ticker symbol “COIN”.”
The filing today with the U.S. Securities and Exchange (SEC) represents the first time the exchange reveals sensitive information to the public as it has always kept its cards close to the chest.
Per the filing, the exchange, founded in 2012, generated a direct revenue of $1.1 billion in 2020. Coinbase managed to more than double the $482 million revenue it posted in 2019.
The lion’s share of Coinbase’s revenue – about 96% – came from transaction fees charged to users while the remaining 4% came from subscription services.
The company made $136 million from selling its assets to fulfill over-the-counter (OTC) transactions.
Coinbase’s increase in revenue also came with high operating expenses, which totaled more than $880 million and were mainly due to research and development, sales, and general administrative expenses.
A year of profits
2020 was a good year for Coinbase as it managed to turn in millions in profit, unlike in 2019 when it was in the red.
The exchange recorded a profit of $322 million compared to $30 million in losses suffered the year before.
“We have grown quickly and in a capital-efficient manner since our founding. For the years ended December 31, 2020 and December 31, 2019, we generated total revenue of $1.3 billion and $533.7 million, respectively, net income (loss) of $322.3 million and $(30.4) million, respectively, and Adjusted EBITDA of $527.4 million and $24.3 million, respectively.”
Growing user base
The exchange noted that its number of verified uses has swelled to 43 million due to increased interest in the cryptocurrency economy and the growth in Coinbase’s products and services.
The assets on the platform grew from $7 billion on Dec. 31, 2018, to $14 billion a year later and to $90 billion on Dec. 30, 2020.
Institutional trading is now higher than retail trading on Coinbase.