Coinbase Cuts Q3 Net Loss to $2M, Posts Revenue Increase Despite Trading Volume Dip
Summary:
Coinbase, a cryptocurrency exchange, reduced its net loss to $2 million in Q3 despite diminishing trading volumes. Year-on-year revenue saw a 14.2% rise to $674.1 million, exceeding estimates. However, consumer and institutional trading volumes decreased from previous comparable periods. Despite this, Coinbase expressed satisfaction with the quarter's performance and highlighted a positive adjusted EBITDA, indicating a move towards a sustainable business model. The company's share price experienced a brief surge before dropping in after-hours trading.
In the third quarter, Coinbase, a cryptocurrency exchange, reduced its net loss to $2 million, posting higher revenue year on year despite a decrease in trading volumes. The company's net loss in Q3 was significantly less than the $545 million recorded the previous year, according to a financial statement released on November 2. Their total revenue rose by 14.2% compared to the previous year, reaching $674.1 million, although it dipped by 4.8% from the previous quarter. This figure surpassed the $653.2 million estimate made by the London Stock Exchange Group, according to a Reuters report. Revenue from subscription and services (primarily from stablecoin and blockchain rewards) contributed $334.4 million, while transaction-based revenues accounted for $288.6 million.
Consumer trading volume for the period was $11 billion, a drop from $26 billion in Q3 2022. Institutional trading volumes totalled $65 billion, which is less than $78 million in Q2 and $133 million in Q3 2022. These volumes have been in steady decline for the past five quarters. Despite the downward trend, Coinbase expressed satisfaction with the quarter's results, proclaiming it a firm financial period. The company highlighted that they managed to deliver a positive adjusted EBITDA for the third consecutive quarter. This is a promising sign of progression towards a more stable business model that can stimulate long-term growth. The adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) is an essential metric allowing analysts to draw meaningful comparisons between different businesses in the same sector.
Following the release of this financial report, Coinbase's share price (COIN) surged 8.7% to $84.6 during trading hours, after which it dipped 3.7% to $81.5 in after-trading hours, as per Google Finance data.
Published At
11/2/2023 11:44:49 PM
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