Coinbase shares will open lower after a 75% drop in net revenue in Q3

Coinbase reported total net revenue of $1.235 Billion in Q3, which was 30% less than the FactSet estimates of $1.614 Billion.
Coinbase (COIN), shares fell after the company reported a 75% drop in net income for the third quarter. COIN closed Nov. 9 at $357.39 with a gain of 0.98%. However, the release of the Q3 report from the top U.S. exchange after market close coincided with a dip in after-hours trading of around 13.10%. Coinbase reported Q3 revenue of $1.235 Billion, well below analyst estimates of $1.614 Billion according to FactSet. While the profit of the firm was lower than expected, it was still higher than analyst expectations of $380M. Coinbase also reported earnings at $1.62 per share. This was 10% less than the FactSet consensus estimate.– Shibetoshi Nakamoto (@BillyM2k) November 9, 2021

Coinbase reported that Q3 was a weak quarter, pointing to increased investor engagement and the development new products like its NFT marketplace. The firm also emphasized that it is focused on the long term as opposed to quarter-to-quarter:”Coinbase is not a quarter-to-quarter investment, but rather a long-term investment in the growth of the crypto economy and our ability to serve users through our products and services. We encourage our investors take this view. It appears that the frosty relationship between Coinbase and U.S. Securities and Exchange Commission is starting to thaw. In September, CEO Brian Armstrong highlighted the company’s problems with the SEC. He revealed that the enforcement agency had threatened to sue Coinbase if the firm launched its USD Coin (USDC), lending program. Armstrong continued those remarks later in the month by saying that the SEC was not willing to meet with him. Armstrong stated today on the Q3 earnings conference that he had a productive meeting with Gary Gensley, SEC chairman. @brian_armstrong, Coinbase CEO, says he met with Gary Gensler, SEC chairman, last week. He called it “very productive.” “– Kate Rooney, @Kr00ney November 9, 2021

The firm also reported a 41% increase in subscription services revenue of $145 millions compared to Q2. This was due to its avenues such as its ETH 2.0 staking programme, custodial fees revenues and token rewards. The firm noted that approximately 28% of our retail MTUs invested in or engaged with at least one product in Q3. In Q3, 49% of our retail MTUs invested in or engaged with at least one other product. This includes 2.8 million users who were earning a return on their crypto assets. For the second quarter in row, Ether (ETH), outperformed Bitcoin(BTC) in terms trading volume. The former accounted for 22% of total volume while the latter accounted for 19%. 59% of trading volume was accounted for by “Other crypto assets”, which was 18% more than Q2.

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