Crypto Earnings Disappoint as Coinbase, MicroStrategy, Riot, and Robinhood Miss Key Targets
MicroStrategy and Coinbase report significant earnings miss (Photo by: Jeenah Moon/Getty Images)
- Coinbase reported lower-than-expected earnings and revenue due to weak cryptocurrency trading activity.
- MicroStrategy announced it aims to raise $42 billion to further its Bitcoin treasury strategy.
- Other crypto players also missed the mark.
In a volatile week for crypto stocks, several industry giants reported earnings that failed to meet market expectations, spurring sell-offs across the sector.
These results highlight crypto companies’ ongoing challenges amid market pressures, rising costs, and the impact of the Bitcoin halving.
Coinbase Earnings Miss
Coinbase reported disappointing third-quarter results on Wednesday, impacted by subdued cryptocurrency trading activity.
The company remains hopeful for a more active trading environment in the fourth quarter, though recent declines in Ether prices may hinder growth within its subscription and services segment.
In the third quarter, the crypto exchange reported earnings per share of $0.28, below the expected $0.41, and revenue of $1.21 billion, falling short of the anticipated $1.26 billion.
The company’s net income reached $75.5 million, largely driven by a 98% year-over-year increase in retail trading revenue, which totaled $483.3 million.
However, its cryptocurrency investment portfolio sustained $121 million in pre-tax losses, mainly due to unrealized losses on its holdings.
Revenue from the subscription and services segment, which includes stablecoins, staking, and Prime trading, rose significantly by 66% year-over-year to reach $556.1 million.
However, Coinbase foresees flat growth in this segment due to ether’s price decline and the possibility of interest rate cuts.
The broader cryptocurrency market has remained sluggish this year, with Bitcoin trading within a narrow range and investor caution limiting volatility and trading activity.
Stablecoins continued to grow in popularity, with Coinbase‘s revenue climbing to $246.9 million, a 43% increase from the prior year.
This growth, however, may be tempered by potential reductions in interest rates that could impact revenue from stablecoin reserves.
Coinbase also announced a $1 billion stock buyback in its earnings report, underscoring the company’s confidence in its long-term growth potential.
MicroStrategy to Raise $42B in Bold Bitcoin Expansion
MicroStrategy, the largest corporate Bitcoin holder, has unveiled its Q3 2024 results, underscoring an ambitious new “21/21 Plan” to raise $42 billion in capital over the next three years with a clear intent to bolster its Bitcoin holdings.
According to CEO Phong Le, the capital raise, which targets a balanced mix of $21 billion in equity and $21 billion in fixed income, aims to maximize BTC yield.
In Q3 , the company successfully raised $2.1 billion via equity and debt, expanded Bitcoin holdings by 11%, and slashed annual interest expenses by $24 million.
Additionally, MicroStrategy completed a 10-for-1 stock split on Aug. 7 and continued share buybacks, showcasing a commitment to enhancing shareholder value.
As of Sept. 30, the firm held 252,220 Bitcoins , valued at $6.851 billion and a market worth of $16.007 billion. Software revenues dropped 10.3% year-over-year to $116.1 million, while gross profit fell to $81.7 million. Operating expenses, inflated by $412.1 million in digital asset impairment losses, rose to $514.3 million
The company posted a net loss of $340.2 million, deepening from $143.4 million in Q3 2023, and closed the quarter with $46.3 million in cash reserves.
Robinhood’s Mixed Earnings Beat
Robinhood’s Q3 earnings reported solid growth in its crypto offerings, with trading volume doubling to $14.4 billion and driving a 65% revenue increase in the crypto segment to $61 million.
For Q3 2024, the platform’s overall revenue reached $637 million—a 36% increase year over year—boosted by a 72% rise in transaction-based revenue, which hit $319 million.
Options trading remained the top performer, with revenue of $202 million, up 63% year-over-year, while equities trading grew by 37% to $37 million.
Despite a sharp turnaround in profitability—posting a net income of $150 million, or $0.17 per diluted share, compared to an $85 million loss a year prior—Robinhood’s stock fell nearly 13% in after-hours trading.
The miss against Wall Street’s $661.21 million revenue estimate and an expected EPS of $0.18 triggered investor disappointment.
CFO Jason Warnick explained the shortfall as a result of “contra revenue” from match promotions, which reduced net revenue by $27 million due to customer matches on transfers and deposits.
Riot Platforms Revises Hash Rate Targets Amid Strong Q3 Performance
Riot Platforms reported a solid Q3 , achieving 1,104 Bitcoin mined—on par with last year—despite challenges from the recent Bitcoin halving.
Revenue was boosted by a 159% expansion in hash rate capacity, reaching 28 EH/s as of September.
According to its earnings report, the crypto mining company posted a $154 million net loss, or $0.54 per share, a 92% increase year over year. This loss was driven by reduced power credits, higher operational costs, and halving effects.
With an average mining cost of $35,376 per Bitcoin, Riot maintains industry-leading energy efficiency at just 3.1 cents per kWh.
Riot’s balance sheet is robust, with $1.3 billion in cash and equity and a Bitcoin reserve of 10,427 BTC, worth about $750 million.
Due to infrastructure delays, Riot revised its year-end hash rate target to 34.9 EH/s from 36.3 EH/s and adjusted its 2025 goal to 46.7 EH/s. However, once all facilities are operational, the company aims for 65.7 EH/s by 2026.
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