Coinbase earns $719 million in Q3 but misses revenue forecasts as users drop
Recurring revenue grew, but a fall in users and new executive share-sale plans weighed on the exchange in a difficult week for crypto stocks.
Coinbase made a $719 million profit in the third quarter, but its revenue came in below analysts’ expectations as the number of users declined.
What happened
The largest US crypto exchange reported growth in recurring revenue, the steadier income that does not depend on trading activity. That was not enough to make up for fewer users and a revenue figure that missed forecasts. Plans by CEO Brian Armstrong for new share sales added to the pressure, and the results arrived in the same week as Binance’s record security breach.
Stablecoins are a growing part of the picture. The gap between Coinbase’s third-quarter stablecoin revenue and the rewards it discloses paying to stablecoin holders narrowed by 16.6%, a calculation that leaves out other costs and income.
Background
Coinbase earns money in two broad ways: fees on trading, which rise and fall with market activity, and subscription and services revenue, which includes its share of the interest earned on reserves behind the USDC stablecoin. The company has worked to grow the second category so that its results depend less on crypto trading cycles.
Why it matters
The quarter shows both sides of that strategy. Recurring revenue adds stability, but a shrinking user base points to cooler interest from retail traders. A narrower stablecoin margin suggests that sharing more income with holders is becoming more expensive. Investors will be watching whether user numbers recover and whether stablecoin income keeps growing faster than the rewards paid out.
Written by Tech Security with AI assistance. Not financial advice. See our disclaimer.