Three Bright Spots From Coinbase’s Dreary Quarter

Three Bright Spots From Coinbase’s Dreary Quarter
Jonathan Hobbs

over 1 year ago1 min

Coinbase’s latest quarterly update landed Thursday, and it didn’t have a ton of good news. The crypto exchange platform made just $576.4 million in net revenue (black box) – about 30% less than the quarter before. Still, there are three things I did like about the report.

First, Coinbase continues to build out other income streams. Trading revenue (red box) was down 44% compared to last quarter, as customers opted to hold coins through the bear market, rather than trade them. But revenue from everything other than trading (green box) jumped 43%. Interestingly, the $210.5 million pulled in on that front was just shy of the $213.4 million amount from the fourth quarter of 2021 – back when crypto prices were through the roof and business was a boomin’.

Second, Coinbase has become leaner and meaner. It lowered its operating costs by 22% in the latest quarter, trimming employee headcount to 4,706, from 4,977, and cutting its sales and marketing budget by about half. But as a growing company, Coinbase has stuck to its guns where it counts: it kept its technology and development budget mostly level.

Third, Coinbase is still sitting on stockpiles of cash. The company has over $5 billion on its balance sheet in cash and short-term money market funds – and another $368 million in USDC stablecoins. So assuming it keeps its spending down, it could withstand further losses for some time before it approaches the “danger zone”.

But we’re only just scratching the surface here: I’ll be writing a much deeper insight on the stock next week. So be sure to keep an eye out for that. In the meantime, you can check out this insight I wrote about Coinbase six months ago.

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