Coinbase Q3 Earnings Surpass Estimates on Higher Revenues

Core Insights - Coinbase Global, Inc. reported third-quarter 2024 core earnings of 62 cents per share, exceeding the Zacks Consensus Estimate by 51.2% and recovering from a loss of 1 cent per share in the same quarter last year [1] Financial Performance - Total trading volume more than doubled year over year to $185 million, indicating growth in both the total market and market share in the United States [3] - Total revenues reached $1.2 billion, a 79% year-over-year increase, although it missed the Zacks Consensus Estimate by 5.2% [3] - Total transaction revenues surged 98% year over year to $572.5 million, driven by consumer transaction revenues of $478.2 million and institutional transaction revenues of $20.9 million [4] - Subscription and services revenues increased 66% year over year to $556 million, attributed to stablecoin revenues, blockchain rewards, and higher custodial fee revenues [5] - Other revenues rose 50% to $76.5 million, primarily due to higher average corporate balances [6] - Adjusted EBITDA was $449 million, more than doubling year over year, while total operating expenses increased 37% to $1 billion [6] Financial Position - As of September 30, 2024, Coinbase had cash and cash equivalents of $7.72 billion, a 50% increase from the end of 2023 [7] - Long-term debt rose 42% from the end of 2023 to $4.2 billion, while shareholders' equity increased by 39% to $8.7 billion [7] - Net cash provided by operating activities was $1.6 billion in the first nine months of 2024, a 71.5% year-over-year surge [7] Q4 Outlook - Coinbase anticipates subscription and services revenues to be between $505 million and $580 million for Q4 [8] - Expected transaction expenses for Q4 are projected to be in the mid-teens as a percentage of net revenues [8] - Technology and development, along with general and administrative expenses, are expected to range from $690 million to $730 million [8] - Sales and marketing expenses are expected to increase quarter over quarter to between $170 million and $220 million [9]