Coinbase Surges Past Expectations with $674M Revenue in Q3

Coinbase reported an impressive $674 million in revenue for the third quarter, beating what analysts had predicted. This represented a year-on-year increase of 14.2%, even though there was a slight 4.8% dip from the previous quarter.

In that quarter, the crypto powerhouse headquartered in San Francisco brought in $288.6 million from transactions and $334.4 million from services and subscriptions. However, the company did face a net loss of $2 million.

The earnings report also highlighted that Coinbase’s balance sheet boasted over $5.5 billion in U.S. dollar assets, a modest climb of $20 million from the previous quarter. Here, “USD assets” include cash, equivalents, USDC, and any extra funds in custodial accounts.

Continuing a trend from the last quarter, the company saw a larger drop in advanced trading volumes as opposed to basic trading volumes in the consumer sector, with this trend being attributed to the market’s low volatility.

Transaction revenues reached $289 million in total for Q3, which is down by 12% from the last quarter. This decline was largely due to trading volumes falling by 17%, although the blow was somewhat softened by increased fees, thanks to a shift in the nature of trading activities on their platform.

For consumer transactions specifically, revenue was at $275 million for Q3, which is 11% lower than the preceding quarter. The consumer trading volume also fell by 21% to $11 billion, yet it still managed to do better than the U.S. spot market overall.

In the consumer segment, advanced trading suffered more than simple trading due to unfavorable market conditions, which led to a rise in the average fee rate in Q3 when compared to Q2.

Institutional transaction revenue came in at $14 million, an 18% decrease from the previous quarter, with the trading volume for institutions seeing a 17% fall to $65 billion. Despite this, it was still ahead of the U.S. spot market’s performance.

The drop in institutional volume was mainly due to a general decline in market volume, which is predominantly market maker volume on their platform. The third quarter also saw a spike in USDT volume across the industry, which included Coinbase, primarily due to events where it temporarily lost its peg to the dollar.

Despite these challenges, Coinbase considers the third quarter a strong one and expresses satisfaction with its financial outcomes.

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