Coinbase Stock Rose on Q3 Earnings Miss Despite the Decreased Trading Volume and More Significant Interest Income

Coinbase Stock

Coinbase Stock (NASDAQ:COIN)

The subscription and services revenue of cryptocurrency exchange Coinbase Global (NASDAQ:COIN) grew sequentially owing to more significant interest income, leading to an increase in full-year expectations for those sales. As a result, COIN surged.

Despite this, the company reported profits and revenue for the third quarter that were below consensus projections. Coinbase stock struggled with declining trading volume, rising expenditures against fallen token values, and worsening macroeconomic circumstances.

The business now forecasts MTUs will reach the upper half of its prior expectation range of 7.0M-9.0M in 2022.

With interest rates on the rise, projections for subscription and services income in 2022 have increased from over $600 million to over $700 million. As the exchange continues to better control costs, it has reduced its range for technology and research plus general and administrative expenditures to roughly $4.0B from the previous range of $4.0B-4.25B.

Compared to Q3 2021’s EPS of $1.92, Q3 2022’s EPS of -$2.43 fell short of the -$2.38 estimate.

This quarter is a significant decline from $1.31B in the prior-year quarter to $590.34M.

With just $8.39M in interest income a year ago, this year’s total is $101.78M.

The MTU count in Q3 was 8.5M, down from Q2’s 9.0M but higher than Q3 2021’s 7.3M. The Q2 volume was $217B, the Q3 volume last year was $327B, and the Q1 volume was $159B.

The $1.15B spent on operations is up from the $1.02B spent the previous year.

From a profit of $618M in Q3 2021, Adjusted EBITDA plummeted to a loss of $116M.

2:30 p.m. Pacific Time (PT) conference call (5:30 p.m. ET).

Coinbase had a GAAP loss per share of -$2.43, missing estimates by $0.05, and sales of $590.34M, short by $51.54M.

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