Coinbase Q3 2023 Financials: “Strong Quarter” Is Weakest Volume Traded In Three Years

Coinbase Global (NASDAQ: COIN) released its Q3 2023 financials, headlined by a quarterly total revenue of $674.1 million. This is a drop from Q2 2023’s $707.9 million but an uptick from Q3 2022’s $808.3 million, but still surpasses the consensus of analysts surveyed by Bloomberg, who had predicted $590.3 million.

“Q3 was a strong quarter for Coinbase,” started the company’s letter to shareholders. “Amid multi-year low levels of volatility, Shareholders, we are pleased with our financial results.”

It is reported that Coinbase’s revenue figure beat the street estimate of $655 million, although this has been constantly adjusted from its earlier predictions.

The trend of getting the majority of its net revenue from subscriptions and services continued, which began last quarter. This category reached $334 million while transaction revenue decreased this quarter down to a new low of $289 million.

Despite the “strong quarter”, Coinbase recorded its lowest trading volume since Q4 2020, only managing to post $76 billion. This is a decrease from last quarter’s $92 billion and last year’s $159 billion.

The firm points to low volatility environment for the decline in consumer transactions while the decrease in institutional transactions are said to be due to “lower Markets volume.”

The firm’s net loss also widened came down to $2 million compared to last quarter’s $97 million loss. But it’s an improvement from last year’s net loss of $545 million.

For the third time, the company delivered a positive quarterly adjusted EBITDA, with the figure for Q3 2023 ending at $181 million compared to $194 million in the previous quarter and a negative value of $116 million in the previous year.

Following the release of the earnings report, Coinbase’s stock dropped over 4% in after-hours trading, erasing much of the jump it gained on the day. The stock has experienced a remarkable surge of over 60% since mid-June when BlackRock filed an application for a spot bitcoin exchange-traded fund and identified Coinbase as its custodian.

The crypto firm projects that Q4 subscription and services revenue will be “approximately flat” compared to Q3. It also anticipates achieving a positive Adjusted EBITDA for the entire year of 2023, a departure from our previous objective of merely improving the absolute dollar terms of full-year 2023 Adjusted EBITDA when compared to full-year 2022.

Information for this story was found via the sources and companies mentioned. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

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