Coinbase posts earnings beat with $674M in Q3 revenue
The company reported its third consecutive quarter of adjusted positive EBITDA
Sergei Elagin/Shutterstock modified by Blockworks
Coinbase reported a Q3 earnings loss per share of one cent, beating the loss per share analysts expected.
Additionally, it beat its revenue expectations, posting $674 million. Analysts had previously expected revenue of around $650 million.
Coinbase reported $288.6 million in transaction revenue for Q3, as well as $334.4 million in services and subscription revenue during the period.
In its shareholder letter, Coinbase said that it’s “on track to deliver meaningful positive adjusted EBITDA for 2023.” Its adjusted EBITDA — earnings before interest, taxes, depreciation and amortization — came in at $181 million, marking the third consecutive quarter of positive adjusted EBITDA.
Analysts leading up to the earnings highlighted adjusted EBIDTA as a metric to watch.
Last quarter, the company managed to eke out “better than feared” results and its adjusted EBITDA stayed positive.
The balance sheet had over $5.5 billion in USD resources on it, increasing by $20 million quarter over quarter. USD resources is defined as the cash, cash equivalents, USDC and “custodial account overfunding.”
Coinbase said that crypto asset volatility declined in the third quarter, hitting levels not seen since 2016.
“This macro backdrop contributed to global spot market trading volumes declining 24% Q/Q in Q3,” the report said.
Consumer trading volume in the quarter came in at $11 billion, down roughly 21% quarter over quarter, with total consumer transaction revenue topping $275 million.
“Similar to last quarter, within consumer, advanced trading volume declined more than simple trading volume, which we believe was driven by the low volatility environment.”
Monthly transacting users fell to 6.7 million for the three-month period, down from 8.5 million in 2022. Coinbase, in its 10-Q, noted that the slump was due to “a decline in [monthly transacting users] engaging in active trading transactions.”
Earlier this week, Coinbase opened its crypto futures trading to US investors.
The launch was announced a few months after the company received clearance to offer the contracts as a futures commission merchant from the National Futures Association.
The crypto exchange, which is still locked in a legal battle with the Securities and Exchange Commission, could see tailwinds as part of the recent Ripple and Grayscale victories.
In August, a panel of judges sided with Grayscale and asked the SEC to reconsider Gracyscale’s application to turn its bitcoin trust (GBTC) to an ETF. The SEC previously denied the application.
Earlier this summer, Ripple scored a partial victory over the SEC when a judge ruled that programmatic sales of Ripple’s XRP token did not violate securities laws. The commission and Ripple are still locked in a battle around institutional sales, however.
This is a developing story.
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