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Coinbase Global (COIN) Q3 Earnings & Revenues Miss Estimates

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Coinbase Global’s (COIN - Free Report) third-quarter 2021 adjusted earnings of $1.62 per share missed the Zacks Consensus Estimate by 9.5%.

The quarter witnessed softer crypto market conditions, driven by low volatility and declining crypto asset prices.

Coinbase Global, Inc. Price, Consensus and EPS Surprise

Behind the Headline

Total revenues came in at $1.3 billion and missed the Zacks Consensus Estimate by 15.7%. The top line increased more than four-fold year over year, reflecting increases in transaction revenues, subscription and services revenues as well as other revenues.

Retail Monthly Transacting Users (MTUs) grew to 7.4 million, up more than seven-fold year over year driven by higher retail and institutional volume. Verified Users grew to 73 million.

The company’s users generated $327 billion of trading volume in the reported quarter, down 29% year over year. Total trading volume continued to diversify beyond Bitcoin into Ethereum and other crypto assets.

Total operating expenses increased nearly five-fold year over year to $1 billion, attributable to an increase in transaction expense, technology and development, sales and marketing and general and administrative and other operating expense.

Adjusted EBITDA was $618.2 million in the reported quarter, up nearly five-fold year over year.

Financial Update

As of Sep 30, 2021, cash and cash equivalents were $6.4 billion, up nearly six-fold from the figure at 2020 end. Total assets were $18.5 billion, up nearly three-fold from the level at 2020 end.

At the end of the quarter, the long-term debt of the company was $3.4 billion.

Total shareholders’ equity was $5.4 billion at the end of the reported quarter, up more than five-fold from the value on Dec 31, 2020.

Cash from operations increased more than 19-fold year over year to $2.8 billion in the first nine months of 2021.

Guidance

The company estimates MTU in 2021 to be in the range of 8 million to 8.5 million.

Given the solid year-to-date results, it estimates 2021 annual average net transaction revenue per user to be in the high $50s per month.

It expects transaction expenses to be in the midteens as a percent of net revenues for full-year 2021.

Sales and marketing expenses are estimated to be 10% of net revenues in 2021.

Zacks Rank

Coinbase Global currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Other Securities and Exchanges

Third-quarter earnings of Nasdaq (NDAQ - Free Report) , MarketAxess Holdings (MKTX - Free Report) and CME Group (CME - Free Report) beat the respective Zacks Consensus Estimate.