Coinbase shares to open lower after 75% drop in net income in Q3

Coinbase posted total net revenue of $1.235 billion in Q3 falling 30% short of FactSet estimates of $1.614 billion.

Coinbase (COIN) shares have taken a hit after the firm posted a 75% decrease in net income during the third quarter.

COIN closed Nov. 9 with a 0.98% gain at a price of $357.39, however the release of the leading U.S. exchange’s Q3 report after market close has coincided with a dip of around 13.10% (at time of this writing) in after-hours trading.

Coinbase posted revenue of $1.235 billion in Q3 falling well below analyst estimates according to FactSet of $1.614 billion. The firm’s profits totaled $406 million, marking a 74.7% decrease in profit compared to the previous quarter, although it was above analyst expectations of $380M. Coinbase also reported earnings of $1.62 per share, which came in 10% short of the FactSet consensus estimate.

Despite the underwhelming performance in Q3, Coinbase said in the report that it had been a “strong quarter” for the firm, pointing toward deeper investor engagement on the platform and the development of new products such as its upcoming NFT marketplace. The firm also emphasized that it is focused on the long term as opposed to quarter-to-quarter:

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The firm posted a 41% growth in subscription services revenue of $145 million compared to Q2 via its such avenues as its ETH 2.0 staking program, custodial fee revenues and token rewards. The firm also noted that its 7.4 million Monthly Transacting Users (MTUs) are beginning to “engage beyond crypto’s first use case.”

Related: Coinbase launches standalone browser extension for Coinbase Wallet

“Approximately 28% of our retail MTUs both invested and engaged with at least one other product in Q3. Further, 49% of our retail MTUs engaged with non-investing products such as Staking, Earn, and Coinbase Card, including 2.8 million users who were earning yield on their crypto assets.”

Trading volume on the platform tallied at $327 billion in Q3, down 29% compared to Q2, with institutional investors representing the lions’ share of trading with $234 billion, while retail traders accounted for $93 billion.

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Ether (ETH) outperformed Bitcoin (BTC) in terms of trading volume for the second quarter in a row, with the former totaling 22% while the latter equated to 19% of total volume. “Other crypto assets” accounted for 59% of trading volume, which was up 18% compared to Q2.

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