After a tough last year, when Coinbase Global, Inc. (NASDAQ:COIN) turned from generating $4.1 billion of adjusted EBITDA in 2021 to a loss of $371 million in 2022, Oppenheimer analysts believe the company will likely return to positive adjusted EBITDA in Q1/23.

While not material at their $34 million view (vs. Street’s $9 million estimate), the analysts think it is an important milestone for two reasons: (1) there is still a strong impression Coinbase is not profitable, and (2) the move to positive adjusted EBITDA demonstrates that it can manage operating expense to march toward long-term profitability.

The analyst also highlighted the company’s strong balance sheet, with $4.4 billion cash, $861 million USDC, and $212 million custodial account overfunding ($5.5 billion total). It has no urgency to repay or refinance its debt in the near term. Even if conservatively assuming a cash burn of $1 billion annually, available resources can still cover the operation for six-plus years.