No-moat-rated Coinbase reported third-quarter results that aligned with market expectations. While trading revenue declined, higher stablecoin income and reduced operational spending balanced the performance.
Financial Performance Overview
- Net Revenue: $623 million (↑8.2% YoY, ↓6% QoQ)
- Net Loss: Narrowed to $2 million from $545 million YoY due to cost-cutting measures.
- Fair Value Estimate: Maintained at $80; shares considered fairly valued.
Trading Revenue Decline
- Q3 Trading Revenue: $289 million (↓21.1% YoY)
- Volume Drop: 52% YoY, partially offset by improved fee structures favoring retail traders.
- October Trading Revenue: ~$105 million, weaker than anticipated despite bullish crypto ETF news.
Growth in Subscription & Services
- Revenue: $334 million (↑59% YoY)
- USDC Interest Income: $172.4 million (↑124% YoY), driven by higher interest rates on reserve holdings.
👉 Explore how stablecoins like USDC generate passive income
Key Takeaways
- Cost Efficiency: Operational streamlining significantly reduced losses.
- Revenue Diversification: USDC income cushions volatility in trading volumes.
- Market Position: Coinbase remains a key player despite competitive pressures.
FAQs
Q: Why did Coinbase’s trading volume decline?
A: Reduced crypto market activity and a shift in trader mix (fewer high-volume, low-fee advanced traders).
Q: How does USDC generate income for Coinbase?
A: Reserves backing USDC earn interest, shared between Coinbase and Circle proportionally.
Q: Is Coinbase profitable now?
A: Nearly breakeven ($2M net loss), with profitability within reach if cost controls persist.
👉 Learn more about crypto revenue streams
Keywords: Coinbase earnings, USDC income, crypto trading volume, stablecoin revenue, interest income, fair value estimate, Morningstar analysis
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