Cryptocurrency exchange Coinbase demonstrated a resilient performance in the third quarter, narrowing its net loss to just $2 million, compared to a hefty $545-million loss during the same period the previous year. This significant improvement was disclosed in Coinbase’s Q3 earnings statement on November 2.
While Coinbase faced a 4.8% quarter-on-quarter drop in revenue, its year-on-year total revenue saw a robust increase of 14.2%, reaching $674.1 million. This figure exceeded the $653.2 million estimate from the London Stock Exchange Group, as reported by Reuters.
Breaking down the sources of revenue, $334.4 million was derived from subscriptions and services, primarily stemming from stablecoins and blockchain rewards, while $288.6 million came from transaction-based revenues.
Despite the decrease in trading volumes, Coinbase managed to record $11 billion in consumer trading volume during the quarter, down from $26 billion in Q3 2022. Institutional trading volumes also saw a decline, falling to $65 billion, compared to $78 million in the previous quarter and $133 million in Q3 2022. This marks the fifth consecutive quarter of decreasing trading volumes.
Coinbase, however, remained optimistic about its performance in Q3, emphasizing its financial results. The exchange stated, “Q3 was a strong quarter for Coinbase. Amid multi-year low levels of volatility, we are pleased with our financial results.”
A noteworthy achievement was Coinbase’s positive adjusted EBITDA for the third consecutive quarter, signifying progress toward building a sustainable and long-term growth-focused business. Adjusted EBITDA, which stands for “earnings before interest, taxes, depreciation, and amortization,” is a key metric used by analysts to make meaningful comparisons among companies in the same industry.
In response to the earnings announcement, Coinbase’s share price (COIN) experienced notable fluctuations. It initially surged by 8.7% during regular trading hours, reaching $84.6. However, in after-hours trading, the share price retraced by 3.7% to $81.5 following the release of the results, as reported by Google Finance.
Coinbase’s ability to reduce its net loss, maintain strong revenues, and achieve positive adjusted EBITDA in the face of declining trading volumes underscores its resilience in the volatile cryptocurrency market.
