Coinbase (NASDAQ:COIN), the leading digital asset marketplace in the US, missed earnings expectations yesterday disappointing investors. In response, shares are tanking and as of now are down % in pre-market trading.
While analysts anticipated revenue of $1.6 billion, Coinbase missed that amount generating only $1.3 billion. Earnings came in at $1.62 while expectations had that number at $1.81.
Coinbase only became a publicly traded company in a direct listing on Nasdaq this past April closing the first day of trading at around $328/share. Today, Coinbase is trading around the same amount.
During the earnings call, Coinbase CFO Alesia Haas said that trading volume across the entire crypto stock market declined quarter over quarter in Q3. Haas said the trend has reversed in October.
In its shareholder letter, Coinbase stated:
“Swings in market conditions are expected in these early days of the cryptoeconomy. However, the cryptoeconomy is growing and innovating throughout, and Coinbase is positioned to thrive. In Q3, Verified Users grew to 73 million and retail Monthly Transacting Users (MTUs) were 7.4 million. The number of institutions and ecosystem partners using Coinbase also continued to grow nicely. We generated $1.2 billion in net revenue, marking our third consecutive quarter of over $1 billion in net revenue. This includes $1.1 billion in transaction revenue and $145 million in Subscription and services revenue. Net income and Adjusted EBITDA were $406 million and $618 million, respectively.”
Coinbase provided a more positive outlook stating:
“October trends include higher levels of activity among retail traders who have historically traded more on Coinbase during periods of heightened volatility. As a result, our blended average retail fee rates increased in October compared to reported Q3 levels. Our blended average fee rate is an output based on how active different types of customers are on our platform. We do not manage our business to optimize for fee rates nor do we have insights into the remainder of 2021. We believe that retail MTUs and total trading volume will be higher in Q4 as compared to Q3.”