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Coinbase (COIN) Q2 Earnings Beat Estimates, Revenues Fall Y/Y
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Coinbase Global (COIN - Free Report) reported second-quarter 2023 loss of 42 cents per share, narrower than the Zacks Consensus Estimate of a loss of 78 cents and the year-ago loss of $4.95.
In the quarter under review, Coinbase witnessed lower trading volumes in both retail and institutional space as a result of both lower crypto asset prices and volatility that began in late 2021.
Coinbase Global, Inc. Price, Consensus and EPS Surprise
Total revenues of $708 million beat the Zacks Consensus Estimate by 10.6%. However, the top line declined 12.4% year over year, reflecting decreases in transaction revenues, partially offset by an increase in subscription and services revenues.
Trading volume of $92 billion declined 57.6% year over year, attributable to a decline in the crypto market cap. Both consumer and institutional trading volume declined year over year.
Total operating expenses declined 57.8% year over year to $782 million, attributable to lower technology and development, general and administrative, restructuring as well as other operating expenses.
Adjusted EBITDA was $194 million in the reported quarter versus $151 million loss incurred in the year-ago quarter.
Financial Update
As of Jun 30, 2023, cash and cash equivalents were $5.2 billion, up 16.5% from the figure at 2022 end. Total assets were $137.7 billion, up 53.4% from the level at 2022 end.
At the end of second-quarter 2023, the long-term debt of the company was $3.3 billion, down 1.7% from 2022 end.
Total shareholders’ equity was $5.8 billion at the end of second-quarter 2023, up 5.5% from the value as of Dec 31, 2022.
Cash from operations was $614.2 million in the first half of 2023 versus cash used in operations of $442.5 million in the year-ago quarter.
Q3 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.
Technology and development as well as general and administrative expenses are estimated to be between $600 million and $650 million.
COIN remains focused on improving 2023 adjusted EBITDA in absolute dollar terms versus 2022.
Nasdaq (NDAQ - Free Report) reported second-quarter 2023 adjusted earnings per share of 71 cents, beating the Zacks Consensus Estimate of 65 cents. The bottom line improved 3% year over year. The improvement was mainly driven by organic growth and solid results at the Solutions segment. Nasdaq’s revenues of $925 million increased 4% year over year. The upside can primarily be attributed to a 4% impact from organic growth, including contributions from all segments. The top line beat the Zacks Consensus Estimate of $910 million.
Annualized Recurring Revenue (ARR) increased 6% year over year. Annualized SaaS revenues increased 11% and represented 36% of ARR. Operating margin of 52% contracted 200 basis points year over year.
Nasdaq expects 2023 non-GAAP operating expenses in the range of $1.785 billion to $1.815 billion, compared with the prior expectation of $1.78 billion to $1.84 billion.
MarketAxess Holdings Inc. (MKTX - Free Report) reported second-quarter 2023 earnings per share of $1.63, which outpaced the Zacks Consensus Estimate of $1.58. The bottom line, however, declined from $1.78 per share a year ago.
Total revenues decreased 1.3% year over year to $179.8 million in the quarter under review. The top line also missed the consensus mark by 0.8%.
MarketAxess reported an operating income of $75.7 million, which decreased 10.7% year over year in the second quarter and missed our estimate by 8.5%.
MarketAxess’ high-grade trading volume declined 1.8% year over year to $353.2 billion, missing our estimate by 5.1%. Average daily volume (ADV) of the same product category fell 1.8% year over year to $5,697 million, missing our estimate by 5.1%.
CME Group (CME - Free Report) reported second-quarter 2023 record adjusted earnings per share of $2.30, which beat the Zacks Consensus Estimate by 5.5%. The bottom line increased 16.8% year over year. CME Group’s revenues of $1.4 billion increased 9.9% year over year. The year-over-year increase was primarily due to higher clearing and transaction fees (up 9.1% year over year) and market data and information services (up 7.5% year over year). The top line beat the Zacks Consensus Estimate by 1.3%.
Operating income increased 11.9% from the prior-year quarter to $838.6 million and beat our estimate of $831.9 million.
ADV was 22.9 million contracts. Non-U.S. ADV reached 6.3 million contracts, which included double-digit year-over-year growth in Agricultural, Metals and Energy products.
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Coinbase (COIN) Q2 Earnings Beat Estimates, Revenues Fall Y/Y
Coinbase Global (COIN - Free Report) reported second-quarter 2023 loss of 42 cents per share, narrower than the Zacks Consensus Estimate of a loss of 78 cents and the year-ago loss of $4.95.
In the quarter under review, Coinbase witnessed lower trading volumes in both retail and institutional space 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-eps-surprise-chart | Coinbase Global, Inc. Quote
Behind the Headline
Total revenues of $708 million beat the Zacks Consensus Estimate by 10.6%. However, the top line declined 12.4% year over year, reflecting decreases in transaction revenues, partially offset by an increase in subscription and services revenues.
Trading volume of $92 billion declined 57.6% year over year, attributable to a decline in the crypto market cap. Both consumer and institutional trading volume declined year over year.
Total operating expenses declined 57.8% year over year to $782 million, attributable to lower technology and development, general and administrative, restructuring as well as other operating expenses.
Adjusted EBITDA was $194 million in the reported quarter versus $151 million loss incurred in the year-ago quarter.
Financial Update
As of Jun 30, 2023, cash and cash equivalents were $5.2 billion, up 16.5% from the figure at 2022 end. Total assets were $137.7 billion, up 53.4% from the level at 2022 end.
At the end of second-quarter 2023, the long-term debt of the company was $3.3 billion, down 1.7% from 2022 end.
Total shareholders’ equity was $5.8 billion at the end of second-quarter 2023, up 5.5% from the value as of Dec 31, 2022.
Cash from operations was $614.2 million in the first half of 2023 versus cash used in operations of $442.5 million in the year-ago quarter.
Q3 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.
Technology and development as well as general and administrative expenses are estimated to be between $600 million and $650 million.
COIN remains focused on improving 2023 adjusted EBITDA in absolute dollar terms versus 2022.
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 (NDAQ - Free Report) reported second-quarter 2023 adjusted earnings per share of 71 cents, beating the Zacks Consensus Estimate of 65 cents. The bottom line improved 3% year over year. The improvement was mainly driven by organic growth and solid results at the Solutions segment. Nasdaq’s revenues of $925 million increased 4% year over year. The upside can primarily be attributed to a 4% impact from organic growth, including contributions from all segments. The top line beat the Zacks Consensus Estimate of $910 million.
Annualized Recurring Revenue (ARR) increased 6% year over year. Annualized SaaS revenues increased 11% and represented 36% of ARR. Operating margin of 52% contracted 200 basis points year over year.
Nasdaq expects 2023 non-GAAP operating expenses in the range of $1.785 billion to $1.815 billion, compared with the prior expectation of $1.78 billion to $1.84 billion.
MarketAxess Holdings Inc. (MKTX - Free Report) reported second-quarter 2023 earnings per share of $1.63, which outpaced the Zacks Consensus Estimate of $1.58. The bottom line, however, declined from $1.78 per share a year ago.
Total revenues decreased 1.3% year over year to $179.8 million in the quarter under review. The top line also missed the consensus mark by 0.8%.
MarketAxess reported an operating income of $75.7 million, which decreased 10.7% year over year in the second quarter and missed our estimate by 8.5%.
MarketAxess’ high-grade trading volume declined 1.8% year over year to $353.2 billion, missing our estimate by 5.1%. Average daily volume (ADV) of the same product category fell 1.8% year over year to $5,697 million, missing our estimate by 5.1%.
CME Group (CME - Free Report) reported second-quarter 2023 record adjusted earnings per share of $2.30, which beat the Zacks Consensus Estimate by 5.5%. The bottom line increased 16.8% year over year. CME Group’s revenues of $1.4 billion increased 9.9% year over year. The year-over-year increase was primarily due to higher clearing and transaction fees (up 9.1% year over year) and market data and information services (up 7.5% year over year). The top line beat the Zacks Consensus Estimate by 1.3%.
Operating income increased 11.9% from the prior-year quarter to $838.6 million and beat our estimate of $831.9 million.
ADV was 22.9 million contracts. Non-U.S. ADV reached 6.3 million contracts, which included double-digit year-over-year growth in Agricultural, Metals and Energy products.