© Reuters Coinbase posts Q3 beat but trading volumes drop again, shares plunge 4%
(Updated – November 3, 2023 6:39 AM EDT)
Coinbase (NASDAQ:) reported better-than-expected EPS and revenues for Q3 but saw a decrease in trading volumes for the second quarter in a row.
As a result, shares fell more than 4.5% in pre-market trade on Friday.
Q3 EPS came in at ($0.01), better than the consensus estimate of ($0.55). Revenue fell 5% quarter-over-quarter to $674.15 million, beating the consensus estimate of $650.97M.
Q3 total transaction revenue fell 12% quarter-over-quarter to $289M, driven by a 17% decline in total trading volume, partially offset by higher realized fees resulting from the mix of trading activity on the platform in the quarter. Q3 subscription and services revenue was largely flat quarter-over-quarter, coming in at $334M.
For Q4, the company expects subscription and services revenue to be approximately flat with Q3, and transaction expenses as a percentage of net revenue to be in the mid-teens.
Furthermore, the company estimates to generate meaningful positive adjusted EBITDA in full-year 2023, revised from its prior goal of improving full-year 2023 adjusted EBITDA in absolute dollar terms versus 2022.
Analysts at Piper Sandler remain on the sidelines as they “would like to see more progress on the regulatory front and a convincing turnaround in the underlying fundamentals of the business before becoming more positive on COIN.”
Analysts at Mizuho remain Underperform-rated despite the beat.
“While rising retail take rates may have saved the day in 3Q, the underlying fundamentals continue at COIN to worsen,” the analysts wrote in a note.
“Specifically: (1) retail volumes continued to slide to new lows ($11bn), as did institutional volumes. (2) subscription & services revenue ex. interest income was lower in 3Q vs. 2Q, breaking a multi-quarter trend. Most importantly, blended take rates appear to be down in October, at an estimated 35bps vs. 38bps in 3Q.”
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