Quick Read
COIN has missed revenue expectations three quarters in a row, with Q2 revenue hitting $1.22B against a $1.29B consensus.
Analysts slashed Q3 EPS estimates from $0.43 to -$0.22 in 90 days, giving Coinbase a much lower bar to clear.
Coinbase cut staff by 14% and prediction markets revenue surpassed $100M annualized as part of its ‘Everything Exchange’ push.
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Coinbase (NASDAQ:COIN) reports third-quarter results Oct. 29 after the bell. It has missed revenue expectations three quarters in a row, so the big question is whether crypto’s late-summer rally came soon enough to end that run.
Pro Aerial Master / Shutterstock.com Bitcoin Rallied After Coinbase’s Weakest Quarter
Last quarter was rough. Revenue came in at $1.22B, missing the $1.29B consensus and falling 18.5% year over year. GAAP EPS of -$1.36 also missed the -$0.2278 estimate. Spot trading volume dropped 25% from the prior quarter as crypto volatility fell to multi-year lows.
There were bright spots. Coinbase’s share of crypto trading volume reached an all-time high of 10.3%, and adjusted EBITDA of $207.8M was positive for the 14th consecutive quarter. Since then, Bitcoin (CRYPTO:BTC) has gained 26.84% over 90 days to about $80,199. Momentum has cooled, though, with Bitcoin down 3.92% over the past month.
Consensus Estimates Point to a Loss Transaction Revenue and Cost Discipline Will Decide This Quarter
Transaction revenue comes first. Management reported about $130M quarter-to-date through July 26 but warned against projecting from it. Consumer transaction revenue fell 20% year over year to $452M in Q2. I’ll be watching whether the Bitcoin rally ended that fall.
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Subscription and services revenue is the buffer. Guidance calls for $500M-$580M, compared with $555M last quarter. Average USDC held in Coinbase products hit a record $20B, and the CFO confirmed the Circle agreement “will renew on the same terms.”
On costs, you should look at adjusted expenses against the $980M-$1,080M guide. Coinbase cut staff by 14% and lowered its full-year expense outlook to $4,200M-$4,450M. Management has committed to positive adjusted EBITDA in all market conditions.
I also want updates on the “Everything Exchange” push. Prediction markets revenue more than doubled last quarter and passed $100M annualized. The CEO’s argument was simple: “The diversity of trading fee revenue will continue to increase, and Bitcoin tends to cycle. It will come back in a big way at times.” Any early read on October volumes will matter as much as the third-quarter numbers.
A Lower Bar Gives Coinbase a Chance to Reset
Analysts have cut the quarterly EPS consensus sharply. It stood at $0.4273 90 days ago and now stands at -$0.2169 today. That leaves Coinbase a much lower bar to clear. After the Q2 miss, shares fell 10.59% on earnings day and then gained 20.89% over the next 30 days. If Coinbase meets expectations while stablecoin and subscription revenue holds firm, its diversification story will look much more credible heading into 2027.
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