Coinbase Shares Dip 5% After-Hours despite Q3 Earning Beats Estimates

Coinbase Global (Nasdaq: COIN) has managed to beat the market estimates with its third-quarter revenue of $674.1 million and an adjusted loss of $0.01 per share. However, shares of the crypto exchange plummeted nearly 5 percent due to the missed total trading volume expectations.

Mixed Q3 Results of Coinbase

According to the official figures published yesterday (Thursday), the total trading volume between July and September amounted to $76 billion, falling short of the estimated $80.1 billion. The figure also slipped from $92 billion in the previous quarter.

Transaction revenue for the third quarter reached $288.6 million, reflecting a 12 percent decline quarter-over-quarter. Coinbase attributed the drop in transaction revenue to the overall decline in the crypto markets and increased volatility.

The crypto exchange, which went public in April 2021, reported its seventh consecutive quarter of losses. However, it significantly narrowed down the net loss to $2 million, down from $97 million in the previous quarter. Adjusted EBITDA for the quarter stood at a positive $181 million, a decrease from the previous quarter’s $194 million.

In a letter to Coinbase shareholders, it was stated: “We anticipate that we will generate meaningful positive Adjusted EBITDA in full-year 2023, revised from our prior goal of improving full-year 2023 Adjusted EBITDA in absolute dollar terms versus full-year 2022.”

The California-based exchange managed to lower its operating expenses by 4 percent, totaling $754 million. Costs related to technology & development, sales & marketing, and general & administrative expenses collectively decreased 1 percent to $654 million.

Meanwhile, with the latest crypto rally, Coinbase has already generated approximately $105 million of transaction revenue in October.

Our Q3’23 update is in.Read the full shareholder letter and tune in to our earnings call here → https://t.co/fod43YZcAY pic.twitter.com/Iusjw1Uysx

Markets React Strongly

As a publicly listed company, Coinbase's performance and the optimism of its inventors directly impact its share price. Nasdaq-listed COIN gained about 9 percent at the close of Thursday's trading session. However, following the release of the numbers after that market closed, the cryptocurrency exchange's shares declined by roughly 5 percent in after-hours trading.

Coinbase is currently embroiled in a legal dispute with the US Securities and Exchange Commission (SEC), which has accused the exchange of operating an illegal trading platform and listing unregistered securities.

Faced with regulatory hostilities in its home country, the American exchange is bolstering its international presence. It has designated Ireland as its primary global regulatory hub and has submitted a license application to the Central Bank of Ireland. Additionally, it has obtained licenses in jurisdictions such as Singapore and Bermuda.