Coinbase (COIN) Q3 2022 Revenue
In this photo illustration the Coinbase logo seen displayed on a smartphone screen.
Raphael Henrique | SOPA Pictures | Light flare | Getty Images
Coinbase reported user numbers that beat analysts’ estimates, even as third-quarter revenue missed estimates and the cryptocurrency exchange posted a bigger-than-expected loss. The stock jumped in extended trading.
Here’s how the company did it:
- Earnings: Loss of $2.43 per share, adjusted, compared to a loss of $2.40 per share as expected by analysts, according to Refinitiv.
- Revenue: $590 million, versus $654 million as forecast by analysts, according to Refinitiv.
Revenue fell more than 50% from a year earlier as traders turned away from cryptocurrencies. The company’s finances turned south, resulting in a loss of $545 million after Coinbase generated a profit of more than $400 million a year earlier.
“Trading revenue was significantly impacted by stronger macroeconomic and crypto headwinds, as well as trading volume moving offshore,” Coinbase said in its letter to investors.
The stock has lost more than three-quarters of its value this year due to a fall in crypto prices coupled with a pullback in riskier stocks. Bitcoin, the most popular cryptocurrency, is down more than 70% from its November 2021 all-time high.
Coinbase’s user base has been shrinking throughout the year. The company said it had 8.5 million monthly transactional users (MTUs) in the third quarter, up from 9 million the prior period and 9.2 million in the first quarter. Analysts had expected 7.84 million, according to StreetAccount.
For the full year, Coinbase said its monthly user count would be “slightly less” at 9 million. The company said it was “cautiously optimistic” it would operate within the adjusted $500 million “safeguard against losses” it had set for the year.
Retail transaction revenue was $346.1 million, down from $1.02 billion a year earlier and below the consensus of $454.2 million among analysts polled by StreetAccount.
October’s trading volume was $47 billion, and monthly users through October were roughly in line with third-quarter results, the filing said. Coinbase said that in the fourth quarter “we expect lower trading volume and a similar number of MTUs compared to our third quarter results.”
After its debut on the exchange last year, Coinbase has set itself up to meet the growing demand for crypto trading tools and the excitement around emerging coins. But the momentum completely reversed in 2022, forcing the company to downsize. In June, Coinbase said it was cutting 18% of full-time jobs, translating to over 1,000 layoffs.
Ethereum accounted for 33% of trading volume in the quarter, up from 22% in the prior period, and 31% came from bitcoin. However, only 24% of transaction revenue came from Ethereum, while bitcoin accounted for 31%, even with its volume.
In September, Ethereum underwent an upgrade known as a merger, which was designed to reduce the cryptocurrency’s power consumption by more than 99%.
Executives will discuss the results on a conference call beginning at 5:30 p.m. ET.
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