Coinbase Revenue Down 17% to $1.2B as Transaction Profits Tumble 

On Oct. 30, the largest crypto exchange in the United States reported that its quarterly revenue for Q3 was $1.2 billion, down 17% from the previous quarter.

In its shareholder letter, the firm reported $75 million in net income and a seventh consecutive quarter of positive Adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization), which was $449 million.

The firm noted that it saw average native unit growth across staking, on-platform USDC, and custody “despite softer market conditions.”

The period from July to September saw crypto markets trading sideways as the months of consolidation continued, which isn’t great for companies that make most of their profit from fees.

Transaction Fees Down

Coinbase usually makes the lion’s share of its profits from transaction fees, which are some of the highest in the industry. Its transaction revenue was $573 million, down 27% from the previous quarter. However, it still made up almost half of the total revenue.

It reported that in October, it generated approximately $190 million of total transaction revenue, adding that it expects Q4 subscription and services revenue to be between $505 and $580 million.

Revenue from the firm’s subscription and services, which includes offerings like stablecoins, staking, and leverage for pro-traders, declined 7% to $556 million. The company has shown diversification from transaction-based revenues, which made up more than 80% of the total a couple of years ago.

Stablecoin revenue reached $247 million, up 3% from the previous quarter. Coinbase said that its USD Coin (USDC) has been the fastest-growing major USD one year-to-date.

USDC supply has increased by 43% since the beginning of the year, whereas Tether (USDT) supply has seen 32% growth over the same period. However, Coinbase failed to mention that USDC supply tanked 57% between mid-2022 and late 2023, whereas USDT only dipped 22%.

“The upcoming 2024 elections are the next major milestone in our ongoing work to drive regulatory clarity for crypto,” the firm concluded before adding, “We continue to be a trusted partner to policymakers and organizations like Fairshake and StandWithCrypto.”

Coinbase CEO Brian Armstrong reiterated the firm’s commitment to pro-crypto candidates in the presidential election in a post on X on Oct. 31.

We get the U.S. election results in 6 days, and no matter how you slice it, it will be the most pro-crypto congress ever.

But we’re not slowing down post-election.

Today I’m announcing that @coinbase has committed another $25M to support Fairshake PAC, which they will use…

— Brian Armstrong (@brian_armstrong) October 30, 2024

COIN Price Tanks

Earnings per share fell short of expectations, coming in at $0.28 compared to the forecasted $0.41.

As a result, company stock (COIN) slid 5% on the day, falling to $201 in after-hours trading, according to Google Finance. The firm’s stock is up 28% since the beginning of the year, however.