Coinbase(COIN) First Shanghai Securities·2024-11-13 01:54Investment Rating - The report maintains a "Buy" rating for Coinbase Global with a target price of $350.00 per share [1][8][12]. Core Insights - The report highlights a long-term diversification of revenue for Coinbase, with expectations that subscription and service revenue will exceed $2 billion this year [7][12]. - Recent performance in the cryptocurrency market, particularly Bitcoin and Ethereum, has been strong, positively impacting Coinbase's outlook [8][10][12]. - The board has authorized a stock buyback plan of up to $1 billion, supported by significant cash resources on the balance sheet [7][12]. Summary by Sections Performance Summary - For Q3 2024, Coinbase reported revenue of $1.2 billion, a 17% decrease from the previous quarter but a 104% year-over-year increase, falling short of the consensus estimate of $1.26 billion [2][4]. - Net profit increased from $36 million in Q2 to $75.5 million in Q3, with adjusted EBITDA at $449 million, below the expected $469.2 million [2][4]. - Total trading revenue was $573 million, down 27% quarter-over-quarter, with retail revenue accounting for approximately 40% of total revenue [2][4]. Revenue Breakdown - Subscription and service revenue decreased by 7% to $556 million, representing about 49% of total revenue, primarily due to a decline in average cryptocurrency prices [2][4]. - Total operating expenses were $1 billion, a 6% decrease from the previous quarter, with technology and development, general and administrative, and sales and marketing expenses totaling $870 million, up 3% [2][4]. Future Outlook - The company anticipates that subscription and service revenue will be impacted by factors such as a 10% decline in Ethereum prices and decreasing interest rates [7][12]. - Projected technology and development expenses for Q4 are expected to be between $690 million and $730 million, while sales and marketing expenses are projected to be between $170 million and $220 million [7][12]. Financial Projections - Revenue for 2024 is forecasted to reach $5.1 billion, with a significant increase expected in subsequent years [14]. - The report indicates a projected net profit of $1.28 billion for 2024, with continued growth anticipated in the following years [14].