Coinbase (COIN) earnings Q3 2022

In this photograph illustration, the Coinbase brand is displayed on a smartphone display screen.

Rafael Henrique | SOPA Images | Lightrocket | Getty Images

Coinbase reported consumer numbers that topped analysts’ estimates whilst third-quarter income missed estimates and the cryptocurrency trade had a wider-than-expected loss. The inventory popped in prolonged trading.

Here’s how the corporate did:

  • Earnings: Loss of $2.43 per share, adjusted, vs. lack of $2.40 per share as anticipated by analysts, in response to Refinitiv.
  • Revenue: $590 million, vs. $654 million as anticipated by analysts, in response to Refinitiv.

Revenue plummeted greater than 50% from a 12 months earlier as merchants turned away from cryptocurrencies. The firm’s financials turned south, leading to a lack of $545 million after Coinbase generated a revenue of over $400 million a 12 months earlier.

“Transaction revenue was significantly impacted by stronger macroeconomic and crypto market headwinds, as well as trading volume moving offshore,” Coinbase stated in its investor letter.

The inventory has misplaced greater than three-quarters of its worth this 12 months resulting from a plunge in crypto costs {couples} with a retreat from the riskiest equities. Bitcoin, the most well-liked cryptocurrency, is down greater than 70% from its all-time excessive in Nov. 2021.

Coinbase’s consumer base has been declining all year long. The firm stated it had 8.5 million month-to-month transacting customers (MTUs) through the third quarter, down from 9 million the prior interval and 9.2 million within the first quarter. Analysts had been anticipating 7.84 million, in response to StreetAccount.

For the complete 12 months, Coinbase stated its month-to-month consumer quantity can be “slightly below” 9 million. The firm stated it is “cautiously optimistic” it’s going to function inside the $500 million adjusted “loss guardrail” that it set for the 12 months.

Retail transaction income got here in at $346.1 million, down from $1.02 billion a 12 months earlier and beneath the $454.2 million consensus amongst analysts polled by StreetAccount.

October trading quantity was $47 billion, and month-to-month customers via October had been roughly in-line with the third-quarter outcomes, in response to the submitting. Coinbase stated that within the fourth quarter “we expect lower trading volume and a similar number of MTUs compared to our Q3 results.”

After its inventory market debut final 12 months, Coinbase staffed as much as meet surging demand for crypto trading instruments and enthusiasm round rising cash. But momentum utterly reversed in 2022, forcing the corporate to slash headcount. In June, Coinbase stated it was eliminating 18% of full-time jobs, translating into greater than 1,000 cuts.

Ethereum accounted for 33% of trading quantity within the quarter, up from 22% within the prior interval, and 31% got here from bitcoin. However, solely 24% of transaction income got here from ethereum, whereas bitcoin accounted for 31%, even with its quantity.

In September, ethereum underwent a years-in-the-making improve generally known as the merge, which was designed to chop the cryptocurrency’s power consumption by greater than 99%.

Executives will talk about the outcomes on a convention name beginning at 5:30 p.m. ET.

This information is breaking. Check again for updates.

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