Coinbase(US:COIN) First Shanghai Securities·2024-08-23 08:53Investment Rating - The report maintains a "Buy" rating for Coinbase Global with a target price of $260.00 per share, corresponding to an 11x price-to-sales ratio for 2025 [1][6]. Core Insights - The cryptocurrency trading market showed weakness in Q2, but Coinbase's subscription and service revenue demonstrated stable growth, reaching nearly $600 million, which is considered a more resilient revenue source [1][6]. - The company achieved positive revenue growth for four consecutive quarters, with Q2 revenue at $1.45 billion, a decrease of 11% from the previous quarter but a year-over-year increase of 105% [2][6]. - Monthly trading users (MTU) increased from 8 million in Q1 to 8.2 million in Q2, reflecting a 12% year-over-year growth [1][2]. Summary by Sections Financial Performance - Q2 total revenue reached $1.45 billion, with net profit dropping from approximately $1.176 billion in Q1 to $36 million in Q2. Adjusted EBITDA was $596 million, up from $189 million year-over-year but below the consensus estimate of $612 million [1][2]. - Total trading revenue was $781 million, down 27% quarter-over-quarter but exceeding the consensus estimate of $754 million. Retail revenue accounted for $665 million, representing about 48% of total revenue and 85% of total trading revenue, a 130% increase year-over-year [1][2]. - Subscription and service revenue grew 17% quarter-over-quarter to $599 million, driven mainly by blockchain rewards and stablecoin income [1][2]. Operational Costs - Total operating expenses were $1.1 billion, a 26% increase quarter-over-quarter, with technology and development, general and administrative, and sales and marketing expenses totaling $850 million, up 14% [1][2]. Q3 Guidance - For Q3 2024, management expects subscription and service revenue to be between $530 million and $600 million, with trading fees expected to account for approximately 15% of total revenue [5][6]. - The company anticipates total operating expenses, including stock-based compensation (SBC), to be between $730 million and $750 million, with sales and marketing expenses projected to be between $160 million and $210 million [5][6]. Market Context - The report notes that the cryptocurrency market has been influenced by various factors, including regulatory changes and market competition, which could impact Coinbase's market share and revenue [6].