- Coinbase beat Q3 revenue forecasts and posted a small EPS loss despite declines in users and trading volumes amid low crypto market volatility.
- Revenue was $674M, surpassing estimates of $650M, while adjusted EBITDA remained positive at $181M for the third straight quarter.
- Though monthly transacting users and trading volumes dropped due to low volatility, Coinbase sees a path to profitability in 2023 based on subscription growth and potential crypto policy tailwinds.
Coinbase reported better-than-expected earnings for the third quarter of 2022, beating revenue forecasts and posting a small loss per share. The crypto exchange saw declines in monthly transacting users and trading volumes amid low market volatility. However, its adjusted EBITDA remained positive for the third straight quarter.
Financial Highlights
Coinbase raked in $674 million in revenue for Q3, surpassing analysts’ estimates of around $650 million. The company posted a loss per share of 1 cent, beating projections. Its adjusted EBITDA came in at $181 million. Coinbase saw $2.886 billion in transaction revenue and $3.344 billion in subscription and services revenue. Its balance sheet held over $55 billion in USD resources.
Declining Trading Volumes and Users
Crypto asset volatility hit lows not seen since 2016 in Q3, contributing to a 24% quarter-over-quarter decline in global spot trading volumes. Consumer trading volumes dropped 21% to $11 billion. Monthly transacting users fell to 67 million, down from 85 million last year, due to fewer active trading transactions.
Future Growth Potential
Coinbase says it’s on track to deliver positive adjusted EBITDA in 2023. Recent crypto policy developments like the Ripple lawsuit outcome and Grayscale’s Bitcoin Trust reconsideration could provide tailwinds for the company going forward. Coinbase also just opened crypto futures trading to US investors after getting regulatory approval.
Conclusion
Despite declines in trading activity, Coinbase managed to beat revenue expectations in Q3 thanks to growth in subscription services. While low volatility presents challenges, the company sees a path to profitability next year. Regulatory clarity in the US crypto market could also unlock new opportunities for Coinbase.
