Coinbase's earnings and revenue

The financial report from cryptocurrency exchange Coinbase (COIN) disappointed investors as Q3 2021 revenues and profits were below analysts' forecasts due to low volatility and lower prices for crypto assets.

Coinbase (COIN) shares are down 12.4% in non-trading terms at the time of writing, as the company released disappointing results for its Q3 2021 financial report, which ended on 30 September, on Tuesday.

Coinbase shares have risen 8.9% since the start of 2021 and added 39.3% in the last month.

Management pointed out that the lower performance compared to the Q2nd was due to lower volatility and lower prices of crypto assets. Overall trading volume declined and Coinbase earned less on commissions.

The company pointed out that according to the World Bank and crypto.com, the number of cryptocurrency users globally doubled in the first half of 2021 to more than 200 million, and the rate of user growth is accelerating.

Coinbase's report compared to analysts' forecasts

Third-quarter profit rose to $405.3 million, or $1.62 per share, up from $81.3 million in the same quarter a year ago, before the cryptocurrency trading platform went public on Nasdaq. Analysts had forecast Coinbase's earnings to be $1.81 per share.

Total revenue rose to $1.31 billion in the quarter from $286.7 million a year earlier, but was down from $2.23 billion in the second quarter. Analysts had forecast revenues of $1.60bn. The company hired more than 600 people in the third quarter and ended the quarter with 2,781 full-time employees, twice as many as last year.

The positive news of the report was that Coinbase is increasing other sources of revenue, which will help it not be as reliant on trading volume in the future. Revenue from subscriptions and services grew 41% sequentially to $145 million. This quarter, just under half of Coinbase's active platform users accessed non-investment products, such as a "steaming" service that helps people earn interest from their cryptocurrency holdings.

The company also said it would launch a service for trading non-interchangeable tokens, or NFTs, another fast-growing part of the industry.

Coinbase forecasts

The company said, "We believe the number of monthly active users and total trading volume will be higher in Q4 compared to Q3."