By
Steve Muchoki
April 25th, 2024
For the fourth quarter, Coinbase has already generated about $105 million of transaction revenue in October. The company expects Q4 subscription and services revenue to be approximately flat compared to Q3, as well as predicts ‘meaningful’ positive adjusted EBITDA for 2023.
Coinbase Global Inc (NASDAQ: COIN) has reported its Q3 2023 results. The company surpassed Wall Street expectations for the third time in a row but fell short in its total trading volume estimates. Following the release, Coinbase stock added 8.73% to close the session at $84.60 per share on Thursday. However, in an after-hours trade, it dropped by 4.73% to $80.60.
Coinbase Q3 2023 Earnings: Highlights
For the third quarter of 2023, the total revenue generated by Coinbase accounted for $674 million, which is down from $707.9 million in the previous quarter. The company’s net revenue totaled $623 million, down 6% from Q2 2023, but up from $576 million compared to last year’s third quarter. Meanwhile, Messary analysts bet on $616 million, and $650.8 million was predicted by the Zacks-Consensus-Estimate.
Of the total revenue, as much as $288.6 million was generated by settling transactions (consumer transaction net revenue accounted for $274.5 million, and institutional transaction revenue made up $14.1 million). According to Coinbase, a slump from last quarter’s figures was caused by a 9-percent decline in the overall crypto market cap and general volatility of crypto assets.
Further, $334.4 million was delivered by subscriptions and services. Coinbase saw increases in native units in custody, an increase in staked balances, and growth in USDC on its platform.
Corporate interest and other income totaled $51.1 million.
Speaking of the losses, Coinbase reported as much as $2.2 million. On a per-share basis, the company saw a Q3 adjusted loss of $0.01 per share, compared to FactSet estimates for a loss of $0.55 per share.
Total operating expenses declined by 4% quarter-over-quarter to $754 million. Technology and development costs, general expenses, sales and marketing expenses collectively accounted for $654 million, down 1% quarter-over-quarter. As Coinbase explained in a letter to shareholders, expenses were driven primarily by a shift in the timing of certain legal and marketing expenses from Q3 to Q4.
Coinbase CEO Brian Armstrong commented on the company’s Q3 performance:
“Speaking of financial strength, Q3 has been another strong quarter for us. In Q3, we delivered positive adjusted EBITDA for the third consecutive quarter and demonstrated continued operational discipline. In fact, we’re on track to deliver meaningful positive adjusted EBITDA this year, which reflects the direction we set at the start of this year to be a company that can generate adjusted EBITDA in all market conditions.”
According to Brian Armstrong, 2023 has been a year of ‘international progress for Coinbase’. He highlighted the exchange’s expansions of Go Deep into Brazil, Singapore, and Canada. In addition, in the third quarter, Coinbase obtained key licenses for running operations in Singapore and Spain. All these expansions allow the company to have a positive outlook for Q4 and full 2023.
Q4 2023 Guidance
For the fourth quarter, Coinbase has already generated about $105 million of transaction revenue in October. The company expects Q4 subscription and services revenue to be approximately flat compared to Q3, as well as predicts ‘meaningful’ positive adjusted EBITDA for 2023.
In the fourth quarter, Coinbase aims to decrease its expense. In particular, the company expects its technology and development, as well as general and administrative expenses, to decrease compared to Q3, but its sales and marketing spending is likely to grow and total $ 85 million – $95 million.