Key Takeaways
- Coinbase transaction revenue fell 44% from $655.2 million in the second quarter to $365.9 million.
- Exchange cut its Q3 losses by 50% to $545 million from $1.1 billion in the second quarter.
- Coinbase’s Q3 net revenue was $576 million, of which $366 million constituted transaction revenue and $211 million was subscription/services revenue.
Leading crypto exchange Coinbase released its Q3 2022 financial results on Thursday. In its shareholder letter, the exchange has revealed that its transaction volume plummeting 44% from $655.2 million in the second quarter to $365.9 million.
Coinbase cited macroeconomic factor, geopolitical factors, and trading volumes shifting away from the United States due to the lack of regulatory clarity as major reasons behind the decline in transaction volume. “Transaction revenue was significantly impacted by stronger macroeconomic and crypto market headwinds, as well as the trading volume moving offshore”.
Despite this, Coinbase was able to cut its third-quarter losses by 50% to $545 million from $1.1 billion in the second quarter. The exchange ended the third quarter with $5.6 billion in cash, in addition to $483 million in crypto assets, which it believes “puts us in a strong position to manage through the crypto winter.”
As per the published official report, Coinbase’s Q3 net revenue was $576 million, of which $366 million was transaction revenue, and the rest $211 million was subscription and services revenue. The company’s subscription and services revenue witnessed a spike, growing 43% compared to the previous quarter. Coinbase’s Monthly Transacting Users(MTU) were 8.5 million in Q3, down from 9 million in Q2 and 9.2 million in the first quarter.
For the rest of 2022, Coinbase states its monthly user number will be “slightly below” 9 million. The exchange, however, adds that its “cautiously optimistic” about operating within the $500 million adjusted “loss guardrail” that it set for 2022.
Coinbase notes that in the coming quarter, it expects lower trading volume and a similar number of MTUs compared to its Q3 results. Coinbase’s stock has also plummeted by 76% so far in 2022, over 56% decline in the price of Bitcoin (BTC)
Detailing its goals for 2023, Coinbase states that for next year, the exchange is “preparing with a conservative bias and assuming that the current macroeconomic headwinds will persist and possibly intensify.”
Despite the poor performance, Coinbase was able to reduce its operating expenses by 38% from Q2 due to its staff cuts. Earlier this year, the exchange laid off 18% of its workforce, citing the broader market turndown.
