Coinbase misses earnings expectations – Q3 2021

Coinbase Global Inc. (COIN), the U.S. based online cryptocurrency trading platform, released its third-quarter earnings on November 9, 2021, after the closing bell. Here is an overview of the latest disclosure.

  • Revenue: $1.31 billion vs $1.56 billion expected
  • EPS: $1.62 adjusted vs $1.72 expected
  • Net Income: $406,100
Analysts Estimate

The Zacks Consensus Estimate for earnings per share (EPS) was pinned at $1.79. Therefore, it indicated that the earnings would decline by a huge 72.1% quarter-over-quarter. The estimated revenue was pegged at $1.56 billion.

The Earnings Expected Surprise Prediction was -16.36% which indeed indicated that the consensus didn’t expect Coinbase to meet its estimates.

Earnings History

The company reported second-quarter earnings and revenue of FY21 that beat the consensus estimates. The reported earnings per share were $6.42 which beat the estimates by a whopping 159%. The revenue was $2.23 billion, much more than the expected figure of $1.83 billion.

“Retail Monthly Transacting Users (MTUs) grew to 8.8 million, up 44% from Q1 2021. Verified Users were 68 million. We now have over 9,000 institutions who continue to deepen and broaden their activities in the cryptoeconomy and more than 160,000 ecosystem partners who are using our crypto tools and services to engage with their own customers. We generated $2.0 billion in net revenue, including $1.9 billion in transaction revenue and over $100 million in subscription & services revenue. Net income was $1.6 billion and Adjusted EBITDA was $1.1 billion.” said the report.

Coinbase’s first-quarter estimated results included:

  • Verified Users of 56 million
  • Monthly Transacting Users (MTUs) of 6.1 million
  • Assets on Platform of $223 billion, representing 11.3% crypto asset market share
  • Includes $122 billion of Assets on Platform from Institutions
  • Trading Volume of $335 billion
  • Total Revenue of approximately $1.8 billion
  • Net Income of approximately $730 million to $800 million
  • Adjusted EBITDA of approximately $1.1 billion

Future Forecast

The Zacks’ estimate for EPS of the fourth quarter is pegged at $1.82. Moreover, the estimated revenue for the same is $1.63 billion.

The Annual Forecast for FY21 estimates the earnings per share to be $13.92. Also, the estimated revenue for the year is pinned at $7.22 billion.

Stock Performance

Coinbase’s stock price had earlier declined by 0.9% in the past 24 hours. However, it has recovered a bit and shows a decline of 0.53%. Since the decline is not much, Zacks ranks it as “HOLD”. Therefore, its investors should wait and see the stock sentiments before taking any decision related to investments.

Upcoming Launches

The earnings report also disclosed their ‘upcoming launches’ which include:

  • 24/7 Customer Support– They announced that in Q4, Coinbase will launch 24/7 live phone and messaging support to all customers. And that they are continuing to invest aggressively in customer support to eliminate pain points and build a best in class customer experience — including industry leading response and resolution rates through our tech and tooling investments.
  • Coinbase NFT- They had recently announced that they are launching Coinbase NFT, a new product experience where users can mint, collect, discover and showcase their NFTs, all in one place.
  • Payroll & Expense Reimbursements– They are making it easier for new users to join the cryptoeconomy by organically integrating into everyday financial services like payroll and expense reimbursements.
  • Retail Advanced Trading- To address the constantly evolving needs of their retail customer base, they recently began the rollout of a unified trading experience that combines the advanced tools of Coinbase Pro with popular features from our consumer platform like Staking and Earn, all from a single balance. Over time, this new, powerful and feature-rich experience will be made available to all Coinbase users.
Related Posts