Coinbase (COIN) earnings Q3 2022

Coinbase reported consumer numbers that topped analysts’ estimates at the same time as third-quarter income missed estimates and the cryptocurrency alternate had a wider-than-expected loss. The inventory popped in prolonged buying and selling.

Here is how the corporate did:

• Earnings: Lack of $2.43 per share, adjusted, vs. lack of $2.40 per share as anticipated by analysts, in line with Refinitiv.
• Income: $590 million, vs. $654 million as anticipated by analysts, in line with Refinitiv.

Income plummeted greater than 50% from a 12 months earlier as merchants turned away from cryptocurrencies. The corporate’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 income was considerably impacted by stronger macroeconomic and crypto market headwinds, in addition to buying and selling quantity shifting offshore,” Coinbase stated in its investor letter.

The inventory has misplaced greater than three-quarters of its worth this 12 months as a result of a plunge in crypto costs {couples} with a retreat from the riskiest equities. Bitcoin, the preferred 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 corporate 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 have been anticipating 7.84 million, in line with StreetAccount.

For the total 12 months, Coinbase stated its month-to-month consumer quantity will likely be “barely beneath” 9 million. The corporate stated it is “cautiously optimistic” it would function throughout 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 buying and selling quantity was $47 billion, and month-to-month customers by means of October have been roughly in-line with the third-quarter outcomes, in line with the submitting. Coinbase stated that within the fourth quarter “we anticipate decrease buying and selling quantity and an identical variety of MTUs in comparison with our Q3 outcomes.”

After its inventory market debut final 12 months, Coinbase staffed as much as meet surging demand for crypto buying and selling instruments and enthusiasm round rising cash. However momentum fully 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 buying and selling quantity within the quarter, up from 22% within the prior interval, and 31% got here from bitcoin. Nevertheless, 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 vitality consumption by greater than 99%.

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

This information is breaking. Test again for updates.

WATCH: Robinhood’s web curiosity earnings jumps 73% from prior quarter