We saw those other pathways thrive this quarter.”Ĭoinbase has shifted away from a transaction-based revenue business model in recent years to focus on products with “stickier” revenue, Choo noted. “Commission revenue is a bridge to Coinbase’s real future, which is as a crypto super app - a center of gravity in the crypto universe that has multiple pathways to monetization, including Base, stablecoins and much more. “People think of Coinbase as a commission-based business, but that’s short-sighted,” Choo told Blockworks. The subscription and services business line includes revenues generated from stablecoins and custodial fees, as well as blockchain rewards and interest income. “Comparatively the company lost over half a billion dollars during last year’s quarter despite having higher revenue.” Subscription and services revenue proves criticalĪlyssa Choo, crypto equities specialist at Bitwise, highlighted that Coinbase’s subscription and services revenue - at $334 million - topped transaction revenue for the second straight quarter. “Coinbase’s cost-cutting efforts have put the firm on a much better footing to be resilient during current conditions,” Miller added. The exchange’s operating expenses between July and September dropped 4% from the second quarter, to $754 million. “I do think it’s notable that the company was effectively break-even despite continued weakness in cryptocurrency markets and low volatility,” Morningstar equity analyst Michael Miller said. The crypto exchange’s net loss was $2 million in the third quarter. “If crypto markets turn around, earning power can improve.” “It is a great outcome given the difficult crypto and operating environment,” Lau said. Owen Lau, an executive director at Oppenheimer & Co., estimates that Coinbase can generate roughly $800 million in adjusted EBITDA for 2023. Read more: Coinbase posts earnings beat with $674M in Q3 revenue That figure was down slightly from $194 million in the prior three-month span, but positive for the third straight quarter. Its adjusted EBITDA - earnings before interest, taxes, depreciation and amortization - was $181 million. Total transaction revenue was $289 million, down 12% from the prior three-month period - a fate analysts had expected. The low volatility and broader “macro backdrop” contributed to Coinbase’s spot market trading volumes declining 24% quarter over quarter, the company said in its Thursday shareholder letter. Though Coinbase’s trading volumes have continued to drop, analysts said the crypto exchange’s third quarter results signal its other business segments could carry the company in future quarters.
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