Coinbase said Thursday that it lost more users in the third quarter. But the decline wasn’t the disastrous drop that Wall Street was expecting, and that sparked a rally in the crypto company’s shares after-hours.
Coinbase said its monthly transacting users fell to 8.5 million in the third quarter, down from 9 million the previous quarter and significantly lower than 11.2 million in the fourth quarter of 2021. The “Street was expecting a train wreck, and it was slightly better than feared,” Wedbush analyst Dan Ives told Protocol.
Coinbase shares were up about 4% in late trades. The company reported a loss of $2.43 a share on revenue of $590 million, compared to a profit of $1.62 a share on revenue of $1.3 billion in the year-ago quarter. Analysts were expecting a loss of roughly $2.40 a share on revenue of about $656.6 million.
Coinbase said it had “a mixed quarter” as transaction revenue was “significantly impacted by stronger macroeconomic and crypto market headwinds, as well as trading volume moving offshore,” the company said in a letter to shareholders.
But Coinbase saw “strong growth” in subscription and services revenue, aided in part by rising interest rates.
The results appear to show that Coinbase has managed to stabilize its business after a bruising second quarter and a broad market downturn. In August, the company told shareholders that the market slump “came fast and furious” and called the quarter “a test of durability for crypto companies and a complex quarter overall.”
Coinbase has been reining in costs to cope with the economic crisis, including a major round of layoffs.