Coinbase Beats Q3 Forecasts as Transaction Revenue Jumps to $1 Billion

Coinbase reported $1.9 billion in third-quarter revenue on Thursday, a 26% increase quarter-over-quarter that slightly surpassed Wall Street forecasts.

Analysts expected the San Francisco-based crypto exchange to disclose $1.8 billion in sales, reflecting a 50% increase from a year ago, according to Yahoo Finance. Coinbase disclosed a Q3 earnings per share of $1.50, coming in above analysts’ forecasts of $1.10 per share.

That translated into $433 million in net income for the third quarter, falling sequentially from $1.4 billion. A year ago, Coinbase notched $75 million in third-quarter income.

Coinbase shares rose in after-hours trading to $341. Year-to-date, the company’s stock price has increased around 33%, after peaking around $444 per share in mid-July. 

In the third quarter, Bitcoin and Ethereum roared to all-time highs, creating conditions for a potential bounce back after the exchange said traders pulled back in the second quarter amid macroeconomic headwinds and rising geopolitical tensions.

In the three months ended Sept. 30, Coinbase earned $1 billion from facilitating customers’ transactions, including institutions on its platform. That represented a 37% increase quarter-over-quarter from $764 million, while also being up from $573 million a year ago.

Over time, Coinbase has sought to diversify its business away from a reliance on transaction fees. That includes its staking services and revenue from reserves backing Circle’s USDC stablecoin, which fall under the exchange’s subscriptions and services umbrella.

Coinbase disclosed $355 million in Q3 stablecoin revenue, a 43% increase from $247 million a year prior. Meanwhile, Coinbase earned $185 million from so-called blockchain rewards.

Since the company debuted an Ethereum layer-2 scaling network in 2023, Coinbase has leaned into Base as a way to augment its services. In mid-September, the company said it was considering a token for Base, but there’s no set timeline or design yet.

Still, JPMorgan analysts estimated earlier this month that a token for Base could add up to $12 billion in value to Coinbase. In the note, the Wall Street bank lifted its price target to $404, while projecting a market capitalization of $12 billion to $34 billion for Base’s token.

In its earnings statement, Coinbase highlighted user growth for Base, noting that “Base revenue growth was driven by higher average ETH price and a higher number of transactions.” 

Among layer-2 networks, Base leads in terms of stablecoin adoption, with $4.6 billion worth of dollar-pegged tokens, according to crypto data provider DeFiLlama.

Earlier this month, the exchange said that it applied for a national bank trust charter, following in the footsteps of stablecoin issuers Circle and Paxos and Ripple, the XRP-linked fintech. 

Over the summer, Coinbase unveiled plans to offer tokenized assets to customers, following similar announcements from competitors like Kraken and Robinhood.