Q3 Earnings Beat Offset by Management Share Sales

Coinbase reported Q3 results on October 29. Net revenue was $1.16 billion, a year-over-year decline of 34%; GAAP total revenue was approximately $1.216 billion, below expectations. Trading revenue was $590.2 million, a year-over-year decline of 44%; Subscription and services revenue was $570.2 million, a year-over-year decline of 20%. GAAP net profit was $718.7 million (driven by BTC price revaluation, which is not meaningful) However, adjusted net profit was only $78 million, beating expectations. Cryptocurrency trading market share reached 10.7%, increasing for the fourth consecutive quarter. Platform assets accounted for 12.5% of the global cryptocurrency market capitalization. The average USDC balance within Coinbase products reached $22 billion, a year-over-year increase of 49%. Coinbase One paid subscription users grew by 24% year-over-year. Prediction markets are running at an annualized revenue level exceeding $200 million. Conclusion: The revenue and profit figures look decent, and perpetual futures will likely start to ramp up in volume next quarter. The bad news is that the management team, led by Brian Armstrong, is about to sell off a large amount of shares again—this time, 13.6 million shares. Really bad.