Coinbase CEO Brian Armstrong. Photo by Bloomberg.

Coinbase Sets Bar Low for Long-Term Profit Goals

Photo: Coinbase CEO Brian Armstrong. Photo by Bloomberg.

When it comes to profit goals, Brian Armstrong isn’t exactly setting the bar high. Coinbase declared today that it was abandoning the goal it laid out two years ago when it went public to operate “at break even, smoothed out over time,” so that losses sustained during crypto winters would be offset by profits made in good times. Instead, Coinbase said in a shareholder letter accompanying fourth-quarter earnings today that it was “setting our sights on positioning the company to generate adjusted Ebitda in all market conditions.”

Talk about qualified ambitions. Leaving aside the “setting our sights on positioning” verbiage, which makes the time frame hazy, the reliance on “adjusted Ebitda” as the metric makes this promise meaningless. Adjusted Ebitda is one of those metrics companies use when they want to pretend to be profitable by excluding all manner of inconvenient expenses. (See our deep dive here.) In the case of Coinbase, it shrank $557 million of net losses in the fourth quarter to $124 million of losses on an “adjusted Ebitda” basis by excluding a laundry list of expenses. These include stock-based compensation (that’s a biggie) and impairments on investments, as well as a $50 million penalty paid to New York regulators over “shortcomings” in its compliance program.

Access on the go
View stories on our mobile app and tune into our weekly podcast.
Join live video Q&A’s
Deep-dive into topics like startups and autonomous vehicles with our top reporters and other executives.
Enjoy a clutter-free experience
Read without any banner ads.
Former Apple design chief Jony Ive and OpenAI CEO Sam Altman. Photos by Getty.
Designer Jony Ive and OpenAI’s Sam Altman Discuss AI Hardware Project
Jony Ive, the renowned designer of the iPhone, and OpenAI CEO Sam Altman have been discussing building a new AI hardware device, according to two people familiar with the conversations.
From left to right: Blair Effron, Robert Pruzan and David Handler. Photos by Getty; Tidal Partners.
Exclusive Finance
Disputes, Employee Misconduct Rattle Centerview’s Silicon Valley Dreams
The San Francisco Bay Area–based bankers at Centerview Partners, the investment bank that advised Silicon Valley Bank’s owner and Credit Suisse through recent turmoil, got two doses of bad news last week.
Art by Clark Miller
Exclusive startups entertainment
MasterClass Takes a Crash Course in Frugality
MasterClass had a problem with the shoot featuring its latest star instructor, Walt Disney Co. CEO Bob Iger.
OpenAI CEO Sam Altman and Microsoft CEO Satya Nadella. Photos via Getty
Exclusive microsoft ai
How Microsoft is Trying to Lessen Its Addiction to OpenAI as AI Costs Soar
Microsoft’s push to put artificial intelligence into its software has hinged almost entirely on OpenAI , the startup Microsoft funded in exchange for the right to use its cutting-edge technology.
From left: Paul Graham, Garry Tan and Michael Seibel. Photos by Getty. Art by Mike Sullivan.
Exclusive startups ai
Y Combinator’s Garry Tan Goes to the Mat
Garry Tan was in his happy place. Surrounded by food trucks and techies basking in San Francisco’s September sun, the CEO of Y Combinator snapped selfies with entrepreneurs as he meandered through a crowd of 2,700 attendees at the startup accelerator’s annual alumni event.
Dave Rogenmoser, cofounder of Jasper. Photo via Getty.
Exclusive startups ai
Jasper, an Early Generative AI Winner, Cuts Internal Valuation as Growth Slows
Jasper AI, an early darling of the generative artificial intelligence boom, has cut the internal value of its common shares 20%, according to former employees who were notified by the company.