Coinbase, the second largest crypto exchange by transaction volume, published its Q3 2023 results Thursday, giving shareholders and market participants a chance to see what’s going on under the hood. In response to the report, the company’s shares fell about 5.5% after hours.
In the third quarter of 2023, Coinbase generated total revenue of $674 million, up from $707.9 million in the previous quarter. previous quarter. The company’s net revenue was $623 million, down 6% from the second quarter of 2023, but up from $576 million a year ago. The company’s net loss was $2 million over a three-month period on a GAAP basis, or a value of -$0.01 per share. The company also reported adjusted EBITDA earnings of $181 million..
Analysts were hesitant with the estimates, even amid a recent crypto market rally. Messari Analysts estimates that Coinbase will report $616 million, down 7% from the previous quarter, below consensus expectations of $650 million.
The Zacks Consensus Estimate expects Coinbase to report $650.8 million in revenue and negative earnings per share of 54 cents per share, according to a report. report powered by Yahoo Finance.
Prior to the third quarter earnings release, Coinbase stock was up 148% year to date. Although this was a fairly significant rally in a bear market, Coinbase’s stock value was still down 27% from its 52-week high of $114.43.
Global market capitalization of cryptocurrencies grew about 62% to $1.28 trillion since the start of the year and represents an increase from $1 trillion a year ago. However, recent gains in crypto asset value and a constitutive increase in trading volume do not mean that Coinbase’s Q3 numbers were impressive when considering trade-based revenue.
In the third quarter, Coinbase generated $288.6 million in trading revenue, with $274.5 million coming from consumer activity and another $14.1 million coming from institutional traders. These numbers are down from $310 million and $17.1 million in the second quarter of 2023, and $346.1 million and $19.8 million, respectively, from last year.
If Coinbase’s revenue was down, how did the company manage to show growth compared to the year-ago period? The answer is: interest-based income.
Other sources of income
Coinbase had an outlook of “at least $300 million” in August for its subscription and services revenue, and exceeded that estimate by $34 million in the third quarter with a final result of $334.4 million . This figure is down slightly from the $335.4 million reported in the previous sequential quarter.