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Coinbase Reports Impressive User Numbers Even As Revenue Dropped Over 50 Percent YoY

Crypto exchange giant Coinbase reported user numbers that surpassed analysts’ estimates, irrespective of missing third-quarter revenue estimates and the wider-than-expected loss that the company reported. The company also saw its stock pop in extended trading hours. 
In the third quarter, the company reported an adjusted loss of $2.43 per share. Analysts had estimated a loss of $2.40 per share, according to Refinitiv. Coinbase reported revenue of $590 million, less than analysts’ estimate of $654 million, according to Refinitiv. 
Revenue was down more than 50 percent from a year ago and was induced by the reduced interest in cryptocurrency trading. This declining interest has affected the financials of companies like Coinbase which reported a loss of $545 million after generating a profit of more than $400 million a year ago.
In its investor letter, Coinbase wrote that “Transaction revenue was significantly impacted by stronger macroeconomic and crypto market headwinds, as well as trading volume moving offshore.” 
Due to the decline in cryptocurrency crises and investors shunning away from the riskiest equities, Coinbase stock has lost more than three-quarters of its value this year alone. Bitcoin is down over 70 percent from its November all-time high of $69,000. 
Apart from the decline in revenue, Coinbase has also been experiencing a decline in users throughout the year. In the third quarter, the company said it had 8.5 million monthly transacting users (MTUs), down from 9 million in the second quarter, and 9.2 million in the first quarter. The company’s user number for the third quarter, however, surpassed analysts’ estimate of 7.84, according to StreetAccount.
The company said that for the full year, its monthly user number would be slightly below 9 million. The company also added that it is “cautiously optimistic” it will operate within the $500 million adjusted “loss guidance” that it set for the year.
The company reported retail transaction revenue of $346.1 million, down from the $1.02 billion reported a year ago. It was also below analysts’ expectation of $454.2 million, according to StreetAccount. 
According to the company’s filing, October trading volume was $47 million, and monthly users through October were roughly in-line with the third-quarter results. It added that in the fourth quarter “we expect lower trading volume and a similar number of MTUs compared to our Q3 results.”
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