Coinbase Stock Plunges with Q3 Earnings Miss Estimates

Coinbase released its third-quarter financial results on Wednesday, reporting figures that missed Wall Street’s expectations amid a subdued crypto trading environment. The company’s stock dipped over 6% in after-hours trading following the earnings announcement.

Inside Coinbase’s Earnings Report

For the quarter, Coinbase reported an earnings per share of $0.28, which fell short of the $0.41 anticipated by analysts surveyed. Revenue also came in under expectations at $1.21 billion, compared to the forecasted $1.26 billion.

Despite the miss, Coinbase’s net income reached $75.5 million, or $0.28 per share, marking an improvement over last year’s third-quarter net loss of $2.3 million, or $0.01 per share.

Coinbase’s results were impacted by $121 million in pretax losses from its crypto investment portfolio, primarily unrealized. These losses stemmed from a decrease in cryptocurrency prices between June 30 and September 30.

In its primary operations, Coinbase saw a 98% annual rise in revenue from retail trading, which totaled $483.3 million for the quarter. Institutional trading revenue also surged, reaching $55.3 million, a 292% increase compared to the same period last year.

Overall, total transaction revenue saw a 98% year-over-year growth, amounting to $572.5 million. On the other hand, Coinbase’s subscription and service-based revenue, encompassing stablecoins, staking, and leverage services for Prime users, declined by 7% year-over-year to $556.1 million.

COIN Stock Dips

Despite the initial plunge, the company’s stock recovered notably. At press time, the COIN stock dipped 0.99% to $209.64 in the after hours on Wednesday.

Meanwhile, the crypto market has experienced a period of stagnation throughout 2024, with Bitcoin trading in a narrow range of $55,000 to $70,000. The lack of significant market-moving events and low volatility has kept many investors on the sidelines, as attention remains focused on the approaching U.S. presidential election.

Whilst, Coinbase has been actively advocating for pro-crypto policies, allocating substantial funds to support political action committees aligned with the industry’s interests.

Also Read: MicroStrategy’s Mega Bet on Bitcoin with $42B Plan Despite Earnings Miss