Coinbase announced a $1 billion share buyback alongside its Q3 earnings, though revenue missed forecasts due to “softer market conditions.”
Coinbase, the most significant cryptocurrency exchange in the United States regarding trading volume, intends to acquire $1 billion in shares. Along with its third-quarter earnings report, Coinbase announced on Oct. 30 the authorization of a $1 billion share buyback program.
“In October 2024, our board of directors authorized and approved a share repurchase program, which provides for the repurchase of up to $1 billion of our outstanding Class A common stock without expiration,” according to Coinbase.
Repurchases would be contingent upon “market conditions,” according to the organization.
According to Yahoo Finance, Coinbase shares have increased by 22% year-to-date and were last traded at $211.74. Nevertheless, COIN experienced a nearly 4% decline in after-hours trading subsequent to the earnings release, as the company’s revenue and earnings per share were below Wall Street’s expectations.
Revenue falls Short of Expectations
Analysts’ expectations of $1.26 billion were not met by Coinbase, which reported Q3 revenue of $1.13 billion, an 81% increase from the same quarter last year. Additionally, earnings per share were 28 cents, which was substantially lower than the anticipated 45 cents per share.
The company attributed the revenue shortfall to “softer market conditions.”
Coinbase’s transaction revenue, which is the exchange’s primary source of income, decreased by 27% from the previous quarter. Retail trading revenue decreased by 27% to $483.3 million in the quarter, while institutional trading revenue decreased by 13% to $55.3 million.
Institutional trading revenue increased by 292%, while retail trading revenue increased by 95.6%. Both metrics saw substantial year-over-year growth.
In Q3, stablecoin-related revenue increased slightly from $240 million in Q2 to $247 million.
Coinbase reported a substantial increase in the trading volume of stablecoin pairs. “Our strategy is fundamentally based on the increasing adoption of stablecoins, particularly USDC, which we monetize through our commercial agreement with the issuer of USDC.”
Crypto.com has surpassed Coinbase in terms of USD volume in July and currently holds a 63.4% market share with $132.9 billion in October, compared to Coinbase’s $54 billion or 24.6%. Consequently, Coinbase is experiencing an increase in competition for USD-denominated trade.
Nevertheless, Coinbase was the presenter of $2.25 billion in daily volume, while Crypto.com hosted $594.5 million, as per CoinGecko’s normalized data.
Coinbase expressed confidence in the regulatory environment that will emerge subsequent to the Nov. 2 U.S. presidential election.
Coinbase stated, “It is evident that crypto has already made a significant impact as the 2024 U.S. elections approach.” “The voices of tens of millions of American crypto owners, many of whom reside in swing states, have established an undeniable voting bloc and generated momentum on both sides of the political spectrum in favor of pro-crypto legislation […] A substantial departure from previous years has been the adoption of more favorable positions toward crypto by both presidential candidates and politicians across the political spectrum.
Coinbase stated that it remains “optimistic” regarding the future of cryptocurrency in the United States, irrespective of the election’s results. Coinbase stated, “We are prepared to collaborate with either administration and are confident that the prospects for pro-crypto legislation are more favorable than ever.”
Coinbase announced a partnership with Visa on October 29th to simplify cryptocurrency investments. The collaboration allows eligible Visa debit card users in the U.S. and EU to instantaneously fund their Coinbase accounts through Visa Direct, a real-time payment system.
