Coinbase Global Inc – Page 4

Coinbase prepares for likely worse 2023, Q3 revenue drops more than 50%

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Coinbase Global Inc. late Thursday reported a wider quarterly loss and a 54% drop in revenue, saying the headwinds for its business will continue and likely intensify next year.

Coinbase
COIN,
-8.09%
said it lost $545 million, or $2.43 a share, in the quarter, swinging from earnings of $406 million, or $1.62 a share, in the year-ago period.

Revenue dropped to $576 million from $1.24 billion a year ago.

Analysts surveyed by FactSet expected the crypto exchange to report a loss of $2.38 a share on revenue of $641 million.

Shares traded lower immediately after the report, but at last check were rising more than 8% in the extended session.

The quarter was “mixed” for Coinbase, the company said in a letter to shareholders. “Transaction revenue was significantly impacted by stronger macroeconomic and crypto market headwinds, as well as trading volume moving offshore.”

On the plus side, Coinbase saw “strong growth in our subscription and services revenue,” it said.

Those headwinds, however, continued to impact transaction revenue, which was down 44% quarter on quarter, Coinbase said in the letter.

Trading volume dropped to $159 billion in the quarter from $217 billion in the second quarter.

“For 2022, we remain cautiously optimistic that we will operate within the $500 million adjusted EBITDA loss guardrail that we previously communicated,” the company said. That assumes that the crypto market does not deteriorate further, it said.

For next year, however, Coinbase is “preparing with a conservative bias and assuming that the current macroeconomic headwinds will persist and possibly intensify,” the company said.

Coinbase earlier this week said its chief product officer was stepping down as the company reorganizes its business.

In August, the company reported a $1.1 billion loss.

Coinbase shares have lost more than 77% this year, compared with losses of around 21% for the S&P 500 index
SPX,
-1.06%.

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November 3, 2022

Crypto winter is hurting Google’s ad empire

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A cryptocurrency price crash and the onset of a new so-called “crypto winter” has left many companies in the industry facing a liquidity crisis.

Artur Widak | Nurphoto | Getty Images

Not even Google is immune from the Crypto winter.

In Alphabet’s third-quarter earnings call on Tuesday, Philipp Schindler, Google’s chief business officer, blamed a slowdown in revenue growth in part on reduced ad spending by cypto companies and other financial firms.

“In the third quarter, we did see a pullback in spend by some advertisers in certain areas in search,” Schindler said. “For example in financial services, we saw a pullback in the insurance, loan, mortgage, and crypto subcategories.”

Google’s overall ad growth of 6% in the quarter was the weakest for any period since 2013, other than one quarter at the beginning of the pandemic. YouTube ad revenue shrank from a year earlier. CEO Sundar Pichai said the “challenging macro climate” is having an impact on Google’s ad business.

Schindler referenced the crypto pullback twice, but he didn’t provide any additional color or specifics. The cryptocurrency industry has been battered in 2022, as investors have fled risky assets and sold out of digital coins and the related stocks that they bid up the prior couple years.

Bitcoin and ethereum have both lost close to 60% of their value this year. Crypto exchange Coinbase, which went public in 2021, is down by over 70%. Meanwhile, the industry has been beset by bankruptcies as hedge funds and lenders saw their liquidity dry up and, in some cases, were forced to default on debt. Celsius Network, Voyager Digital and Three Arrows Capital are some of the more notable names that were forced into bankruptcy.

Elsewhere, companies have downsized. Blockchain.com laid off 25% of its staff in July, Coinbase cut 18% of its workforce the prior month, and Crytpo.com has undertaken two rounds of layoffs this year.

For Google, there’s hope that the crypto sell-off represents just a short-term blip, as the company sees clear opportunities for growth in the future. Earlier this month, Google said it will rely on Coinbase to start letting customers pay for cloud services with cryptocurrencies in 2023. Additionally, Coinbase will move data-related applications to Google’s cloud infrastructure from Amazon Web Services, which the company has relied on for years.

— CNBC’s Jennifer Elias and Jordan Novet contributed to this report.

WATCH: Gene Munster breaks down Alphabet earnings

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October 25, 2022

Apple downgrade sparks tech sell-off, sending Alphabet and Microsoft to one-year lows

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Shares of large technology companies suffered heavy losses on Thursday, dragging down many other U.S. stocks along with them, after analysts at Bank of America lowered Apple’s stock rating.

Tech stocks have been pushed down all year as investors have rotated out of growth and flocked to more defensive assets to deal with higher interest rates and to get ahead of a possible recession.

The tech-heavy Nasdaq Composite rose on Tuesday and Wednesday, but the buying came after the worst two weeks since the onset of the Covid pandemic. Now the downward trend is back, with the Nasdaq off 2.8% on Thursday — it’s steepest one-day setback since Sept. 13. The broader S&P 500 fell 2.1%.

Apple CEO Tim Cook speaks at an Apple special event at Apple Park in Cupertino, California on September 7, 2022. – Apple is expected to unveil the new iPhone 14. (Photo by Brittany Hosea-Small / AFP) (Photo by BRITTANY HOSEA-SMALL/AFP via Getty Images)

Brittany Hosea-small | Afp | Getty Images

Apple shares declined nearly 5% as Bank of America analysts led by Wamsi Mohan changed their rating to neutral from buy, straying from the buy position held by a majority of analysts polled by FactSet.

The analysts pointed to several risks, including a weaker buying cycle associated with the iPhone 14 that Apple released this month. One day earlier, a report said Apple had scrapped its plan to boost iPhone production by 6 million units in the second half of the year.

Apple stock is now worth 20% less than it was at the end of 2021, while the Nasdaq is down 31% over the same period.

Of the technology companies with the largest market valuations, Microsoft took the lightest blow. It ended Thursday’s trading session down about 1.5%, which was still a 52-week low. Google parent Alphabet also reached a 52-week low, dropping 2.6%. Shares of Facebook parent Meta Platforms slid 3.7%, Amazon declined 2.7% and Tesla was off 6.8%.

Smaller growth-oriented tech companies also suffered, with Coinbase down nearly 8% after Wells Fargo initiated coverage with an underweight rating. Elsewhere, Shopify fell 8.45%, Rivian declined 7.9% and Roblox was off 7%.

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September 30, 2022