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Coinbase (COIN) Q1 Earnings Top Estimates, Revenues Fall Y/Y

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Coinbase Global (COIN - Free Report) reported first-quarter 2023 earnings of 15 cents per share against the Zacks Consensus Estimate of a loss of $1.44. The company had reported a loss of $1.98 per share a year ago.

In the quarter under review, Coinbase witnessed lower trading volumes in both retail and institutional as a result of both lower crypto asset prices and volatility that began in late 2021.

Coinbase Global, Inc. Price, Consensus and EPS Surprise Coinbase Global, Inc. Price, Consensus and EPS Surprise

Coinbase Global, Inc. price-consensus-eps-surprise-chart | Coinbase Global, Inc. Quote

Behind the Headline

Total revenues of $773 million beat the Zacks Consensus Estimate by 18.4%. However, the top line declined 33.7% year over year, reflecting decreases in transaction revenues, partially offset by an increase in subscription and services revenues.

The trading volume of $145 billion declined 53.1% year over year, attributable to a decline in the crypto market cap.

Total operating expenses declined 47.9% year over year to $896.4 billion, attributable to lower transaction expenses, sales and marketing as well as other operating expenses.

Adjusted EBITDA was $284 million in the reported quarter versus $20 million in the year-ago quarter.

Financial Update

As of Mar 31, 2023, cash and cash equivalents were $5 billion, up 13.4% from the figure at 2022 end. Total assets were $139.3 billion, up 55.4% from the level at 2022 end.

At the end of first-quarter 2023, the long-term debt of the company was $3.4 billion, up 0.1% from 2022 end.

Total shareholders’ equity was $5.7 billion at the end of first-quarter 2023, up 4% from the value as of Dec 31, 2022.

Cash used in operations was $463.1 million in the first quarter of 2023 versus cash from operations of $691.6 million in the year-ago quarter.

Q2 2023 Guidance

Coinbase estimates subscription and services revenues of about $300 million.

Transaction expenses are expected to be in the mid-teens as a percentage of net revenues.

Sales and marketing expenses are expected to be in the range of $80-$90 million and restructuring expenses are expected to be about $15 million.

Technology and development as well as general and administrative expenses are estimated to be between $600 million and $650 million.

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

Nasdaq, Inc. (NDAQ - Free Report) reported first-quarter 2023 adjusted earnings per share of 69 cents, beating the Zacks Consensus Estimate by 6.1% as well as our estimate of 62 cents. The bottom line improved 4.5% year over year. Revenues of $914 million increased 2% year over year and beat the Zacks Consensus Estimate by 0.2%.

Annualized Recurring Revenue (ARR) increased 7% year over year. Annualized SaaS revenues increased 11% and represented 36% of ARR. Operating margin of 52% remained unchanged year over year.

Nasdaq expects 2023 non-GAAP operating expenses in the range of $1.78 billion to $1.84 billion compared with the prior expectation of $1.77 billion to $1.85 billion. Nasdaq forecasts non-GAAP tax rate in the range of 24-26% in 2023.

MarketAxess Holdings Inc. (MKTX - Free Report) reported first-quarter 2023 earnings per share of $1.96, which outpaced the Zacks Consensus Estimate by 3.7% and our estimate of $1.86. The bottom line advanced 13.3% year over year. Total revenues improved 9% year over year to $203.2 million in the quarter under review. The top line surpassed the consensus mark by 1.4% and our estimate of $200.2 million.

Commission revenues rose 9.6% year over year to $182 million in the first quarter. Information services revenues attained a record figure of $11 million, up 12.2% year over year. Meanwhile, post-trade services revenues of $10 million inched up 1% year over year in the quarter under review.  MarketAxess’s U.S. high-grade trading volume climbed 14.8% year over year to $392.7 billion.

CME Group (CME - Free Report) reported first-quarter 2023 record adjusted earnings per share of $2.42, which beat the Zacks Consensus Estimate by 2.5% and our estimate of $2.02 per share. The bottom line increased 14.7% year over year. CME Group’s revenues of $1.4 billion increased 4.8% year over year. The top line beat the Zacks Consensus Estimate by 1.9% and our estimate of $1.2 billion.

Average daily volume (ADV) was 26.9 million contracts. Non-U.S. ADV reached 7.2 million contracts, which included the second-highest quarterly ADV across EMEA, Asia and Latin America. ADV increased in three of its six asset classes.

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