Coinbase Announces $1 Billion Share Buyback and Q3 Earnings

Coinbase, the largest cryptocurrency exchange in the U.S. by trading volume, plans to buy back $1 billion worth of shares.

On Oct. 30, Coinbase announced the authorization of a $1 billion share buyback program alongside its third-quarter earnings report.

"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," Coinbase said.

The company noted that repurchases would depend on “market conditions”.

Coinbase shares have climbed 22% year-to-date to last change hands for $211.74, according to Yahoo Finance. However, COIN slipped nearly 4% in after-hours trading following the earnings release, with the company’s revenue and earnings per share falling short of Wall Street’s expectations.

Revenue Misses Expectations

Coinbase reported Q3 revenue of $1.13 billion, up 81% from the same quarter last year, but failed to meet analysts’ projections of $1.26 billion. Earnings per share also came in at 28 cents, significantly missing predictions of 45 cents per share.

The company attributed the revenue miss to “softer market conditions.”

Coinbase’s transaction revenue, which comprises the exchange’s Coinbase’s main source of income, dropped 27% compared to the previous quarter. Quarterly revenue from retail trading fell 27% to $483.3 million, while institutional trading fell 13% to $55.3 million.

Both metrics posted notable year-over-year growth, as retail trading revenue surged 95.6% and institutional trading rose 292%.

Stablecoin-related revenue grew to $247 million in Q3, marking a slight increase from $240 million in Q2.

“We saw stablecoin pair trading volume grow significantly,” Coinbase wrote. “Growing adoption of stablecoins (and USDC specifically) is core to our strategy as we monetize USDC via our commercial arrangement with the issuer of USDC.”

Coinbase is facing increasing competition from Crypto.com for USD-denominated trade, with Crypto.com overtaking Coinbase by USD volume in July and now boasting a 63.4% market share with $132.9 billion in October, compared to Coinbase with $54 billion or 24.6%.

However, Coinbase hosted daily volume overall with $2.25 billion while Crypto.com hosted $594.5 million, according to CoinGecko’s normalized data.

Coinbase bullish on regulatory landscape

Coinbase expressed optimism regarding the upcoming regulatory environment following the Nov. 2 U.S. presidential election.

"As we approach the 2024 U.S. elections, it’s clear that crypto has already made its mark,” Coinbase said. “The voices of tens of millions of American crypto owners — many in swing states — have formed an undeniable voting bloc and built momentum on both sides of the aisle toward pro-crypto legislation… Both presidential candidates, as well as politicians across the political spectrum, have adopted more favorable positions toward crypto, a significant shift from previous years.”

Coinbase added that it is “optimistic” about the future of crypto in the U.S. regardless of the outcome of the election. “We are prepared to work with either administration and believe the odds of pro-crypto legislation are better than ever,” Coinbase said.

On Oct. 29, Coinbase announced a partnership with Visa to streamline crypto investments. The collaboration enables eligible Visa debit card users in the U.S. and EU to fund their Coinbase accounts instantly through Visa Direct, a real-time payment system.