Coinbase Global Inc. shares dropped roughly 3% in late trading Wednesday following the company’s third-quarter earnings report, which fell short of analyst expectations for revenue and net income, Bloomberg reports.
Despite nearly doubling its revenue compared to the previous year, Coinbase reported $1.21 billion in total revenue—slightly below the $1.25 billion analysts had forecasted. Net income reached $75 million, missing the projected $112.2 million.
The US-based crypto exchange attributed the miss in part to market challenges, as cryptocurrency prices have stalled since Bitcoin hit a peak in March, discouraging retail traders. This slowdown in trading activity resulted in an 18% decrease in revenue from the prior quarter. Additionally, an accounting adjustment, implemented last quarter, led Coinbase to price its digital assets at market value, incurring a pre-tax loss of $121 million.
Despite the earnings miss, Coinbase CFO Alesia Haas emphasized the company’s positive net income and adherence to its expense guidance.
“What’s super important here is that Coinbase met all of its financial objectives,” she said.
Haas noted that the firm’s workforce grew by 5% during the quarter. Coinbase also announced a $1 billion share repurchase program.
Looking forward, Coinbase expects current-quarter subscriptions and services revenue to range between $505 million and $580 million, with transaction revenue in October reaching $190 million. Haas added that increased market volatility ahead of the US elections could drive crypto trading activity in the coming months.
Coinbase continues to face regulatory uncertainty from a lawsuit by the Securities and Exchange Commission, and the impact of the upcoming US elections could affect crypto policy. While the company’s shares have risen around 27% this year, they remain well below the 70% gain achieved by Bitcoin in the same period.
