Coinbase releases third-quarter financial report, net loss reduced, expected to be profitable in 2023
The U.S. compliant exchange Coinbase has released its third-quarter financial report. Due to the overall decline in the cryptocurrency market, third-quarter cryptocurrency trading volume dropped to $76 billion, leading to a decrease in trading-related revenue to $290 million. However, thanks to effective cost control, the net loss for this quarter narrowed to $2.26 million. The company stated that it expects to generate meaningful adjusted profits in 2023!
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Losses Shrinking Each Quarter, Expected Positive EBITDA on the Horizon
Coinbase reported generating around $105 million in trading revenue in October, with expectations to achieve "meaningful positive adjusted EBITDA" by 2023, slightly raising the bar from its previous "improvement" in 2023 full-year adjusted EBITDA target.
EBITDA stands for Earnings Before Interest, Taxes, Depreciation, and Amortization, which better represents a company's operational performance. However, U.S. companies often prefer to use adjusted EBITDA, which typically excludes significant expenses like stock-based compensation, even though these are actual costs incurred.
Encouragingly, Coinbase's losses are gradually diminishing, with the third quarter reduced to $2.26 million, a significant improvement from $540 million in the same period last year. Hopefully, Coinbase will soon achieve the "positive" profit as anticipated!
Coinbase Stock Price Drops 4% After-Hours
Yesterday, as U.S. stocks generally rose, Coinbase's share price surged 8.7% during regular trading hours, only to drop by 4.27% after the earnings report was released. COIN has risen by about 131% this year, while Bitcoin has increased by approximately 110% during the same period.
ARKF, a fund under Ark Investment, also took advantage of the rising stock prices driven by Bitcoin's surge at the end of October, selling 10,455 shares of Coinbase at a closing price of $77.21, totaling around $800,000, which accounts for only 0.1% of its fund's weight.
