In this photo illustration, the Coinbase logo is displayed on a smartphone screen.

Rafael Enrique | Images of SOPA | Lightrocket | Getty Images

Coinbase on Thursday reported third-quarter earnings that missed analysts’ estimates, and the cryptocurrency exchange suffered a bigger-than-expected loss.

Here’s how the company did it:

  • income: The adjusted loss was $2.43 per share, compared with the loss of $2.40 per share expected by analysts, according to Refinitiv.
  • income: $590 million versus the $654 million analysts expected, according to Refinitiv.

Revenue fell by more than 50% year-over-year as traders abandoned cryptocurrencies. The company’s financials turned south, leading to a $545 million loss after Coinbase posted a profit of more than $400 million a year earlier.

“Transaction revenues were significantly impacted by macroeconomic and crypto market strengthening, as well as the movement of trading volume offshore,” Coinbase said in a letter to investors.

The stock has lost more than three-quarters of its value this year as crypto prices tumbled, coupled with a retreat from the riskiest stocks. Bitcoin, the most popular cryptocurrency, is down more than 70% from its all-time high in November 2021.

Coinbase’s user base has been shrinking for the year. The company said it had 8.5 million transactional users (MTUs) in the third quarter, down from 9 million in the prior period and 9.2 million in the first quarter. Analysts had expected 7.84 million, according to StreetAccount.

For the full year, Coinbase said monthly users will be “just under” 9 million. The company said it was “cautiously optimistic” and would operate within the adjusted $500 million “loss garage” it had set for the year.

Retail transaction revenue came in at $346.1 million, down from $1.02 billion a year earlier and below the $454.2 million consensus estimate among analysts polled by StreetAccount.

October trading volume was $47 billion, and monthly users through October were roughly in line with the third quarter, according to the filing. Coinbase said that in the fourth quarter, “we expect lower trading volume and a similar number of MTUs compared to our Q3 results.”

After debuting on the stock market last year, Coinbase has recruited staff to meet the growing demand for crypto trading tools and the enthusiasm surrounding new coins. But in 2022, the momentum reversed completely, forcing the company to cut staff. In June, Coinbase said it was cutting 18% of its full-time jobs, representing more than 1,000 layoffs.

Executives will discuss the results on a conference call beginning at 5:30 p.m. ET.

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