Key Points

• Coinbase reported profits of $719 million in the third quarter, exceeding Wall Street's expectations.
• Cryptocurrency trading revenue declined by 44% year-on-year to $590 million.
• Strong performance in predictive market and subscription services business.

Behind the $719 million profit of Coinbase, there are also hidden concerns.

Coinbase managed to turn a profit again after three consecutive quarters of losses, but a large portion of its reported earnings came from investment income rather than core business operations.

According to investor.coinbase.com, transaction revenue also decreased by 44% year-on-year to $590 million, which may be related to the weakening of the cryptocurrency trading environment and the decrease in market volatility. Nevertheless, Coinbase's share of cryptocurrency trading volume still increased to 10.7%, marking the fourth consecutive quarter of growth for its market share.

After adjustment, EBITDA reached $333 million, an improvement of 60% compared to the previous quarter, but a decrease of 58% compared to the same period last year.

Predicting that the market will become the main driving force for growth

Despite the slowdown in cryptocurrency trading, Coinbase indicates that its newer business segments have achieved significant growth. It predicts that the annual revenue from its market business has exceeded $200 million, making it one of the fastest-growing products in the company's history.

The number of daily active traders in the forecast market has increased by more than 60% month-on-month, while the quarterly compound revenue growth rate of this business since its launch has reached 82%.

At the same time, subscription and service revenues reached $570 million, accounting for approximately 49% of net revenue.

The average holding balance of USDC in each product also reached a record of $22 billion, representing a year-on-year increase of 49%. During the same period, the subscription volume of the paid version of Coinbase One increased by 24%.

Coinbase What will happen to the stock next?

Coinbase has lowered its annual adjusted expenses forecast to between $4.15 billion and $4.3 billion, and expects subscription and service revenue in the fourth quarter to be between $550 million and $630 million. As of the end of September, the company held approximately $8.6 billion in cash and cash equivalents.

Danielle Walgenbach

Danielle is a journalist who covers cryptocurrency and financial markets, with over four years of reporting experience. She is adept at breaking down complex financial and economic issues into clear and solid reports.