In the third quarter, Coinbase Global Inc. managed to reduce its net loss to $2 million, marking a significant improvement from the $545 million loss reported in the same quarter of the previous year. This financial detail was part of the company’s November 2 earnings report.
Despite a downturn in trading activity, the cryptocurrency exchange saw a year-over-year revenue increase of 14.2%, reaching $674.1 million. This surpassed the forecast of $653.2 million projected by the London Stock Exchange Group, as per a Reuters article. However, the revenue showed a slight dip of 4.8% from the previous quarter.
Breaking down the revenue sources, subscription and services, which are primarily composed of stablecoin and blockchain rewards, contributed $334.4 million. Transaction-based revenue accounted for $288.6 million. On the volume front, consumer trading volumes dropped to $11 billion from $26 billion in the third quarter of the previous year.
Institutional trading followed a similar pattern, registering $65 billion, down from $78 million in the second quarter and significantly lower than $133 million in the third quarter of the previous year. This decline represents the fifth consecutive quarter of downward trends in trading volumes.
Coinbase, however, expressed satisfaction with the quarter’s financial outcomes, stating in their report:
“The third quarter was robust for Coinbase. We delivered pleasing financial performance even as volatility hit a multi-year low.”
The company also highlighted a positive adjusted EBITDA for the third quarter in a row, which it interprets as progress toward establishing a “sustainable business” with potential for enduring growth. Adjusted EBITDA is a commonly used financial metric that allows for more effective comparisons across companies by excluding the effects of non-operating expenses like interest, taxes, depreciation, and amortization.
Following the disclosure of these financial results, Coinbase’s stock (ticker: COIN) experienced a notable 8.7% surge to $84.6 during regular market hours, but later retreated by 3.7% to $81.5 in after-market trading, as reported by Google Finance.
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