Coinbase(COIN) Tianfeng Securities·2024-11-11 07:32Investment Rating - The report assigns a "Hold" rating for the company, indicating an expected relative stock price return of -10% to 10% over the next six months compared to the S&P 500 index [8] Core Insights - Coinbase reported Q3 2024 revenue of $1.21 billion, which fell short of consensus expectations of $1.25 billion. Trading revenue was $570 million, below the expected $620 million, while subscription and services revenue was $560 million, also below the adjusted expectation of $570 million. Adjusted EBITDA was $450 million, slightly below the consensus of $460 million, and adjusted net profit was $75.5 million. The quarter experienced a fair value adjustment loss of approximately $120 million from cryptocurrencies [1] - The company continues to make progress on its key priorities for 2024, which include driving revenue growth through the expansion of primary revenue sources such as derivatives, international markets, and custody services, as well as integrating USDC into the crypto economy. Efforts to enhance the utility of cryptocurrencies are also underway, including promoting the use of stablecoins beyond trading and launching cbBTC [3][4] - Coinbase announced a stock repurchase plan of up to $1 billion, approved by the board in October 2024, allowing for the repurchase of Class A common stock without an expiration date [3] Summary by Sections Trading Business - Q3 2024 trading revenue decreased due to market volatility, with retail trading revenue at $480 million, down 27% quarter-over-quarter. Retail trading volume was $34 billion, down 8% quarter-over-quarter. The retail fee rate decreased to 1.42% from 1.80% in Q2 2024, primarily due to a significant increase in trading volume of stablecoin pairs and a reduction in non-retail trading revenue. Institutional trading revenue was $55.3 million, down 13% quarter-over-quarter, with institutional trading volume at $151 billion, down 20% [2] Subscription and Services Business - Q3 2024 subscription and services revenue was $560 million, down 7% quarter-over-quarter. While staking, custody, and average USDC balances increased, they were offset by lower average prices of crypto assets. Stablecoin revenue was $250 million, up 3%, while blockchain rewards revenue was $160 million, down 16%. Interest and financial fees revenue was $64 million, down 8%, and custody fee revenue was $32 million, down 8% [3]