Coinbase Reports Oct. 29 After Three Straight EPS Misses. Bitcoin Rose 43% in the Quarter but Averaged Less Than in Q2.
Key Takeaways
- Coinbase Global (COIN) reports third-quarter results on October 29 with the stock at $164.45, after three consecutive earnings and revenue misses. The central question is not whether bitcoin rose 43% during the quarter, but whether average prices, volatility and trading activity improved enough to lift transaction revenue.
- The evidence is split by time horizon: the composite score is weak at 37, the technical rating is weaker at 18, and the stock sits below both its 50-day and 200-day averages, while the analyst consensus remains Buy with a $212.82 target.
- July transaction revenue was only about $130 million through July 26, and Q2’s adjusted net loss was $104.9 million. Transaction revenue against that weak start, subscription revenue against the $500 million to $580 million outlook, and expenses against guidance are the October 29 tests.
The Quarter-End Bitcoin Rally Masks a Weaker Revenue Input
The headline crypto statistic is powerful: bitcoin climbed from $58,524 at the end of June to $83,556 at the end of September, a 42.8% quarterly increase. For COIN, however, the relevant operating question is not where bitcoin finished. It is what the asset’s average price and trading behavior looked like while customers were actually transacting.
On that measure, the quarter was less favorable. Bitcoin averaged $71,173 in the third quarter, slightly below its $71,643 average in the second. Its average absolute daily move also fell from 1.48% to 1.34%. Those are not forecasts of Coinbase revenue, but they are useful operating proxies: a higher average price can support balances and asset values, while larger daily moves tend to create more opportunities for customers to trade.
The distinction explains why a 43% quarter-end rally cannot be treated as proof of a stronger transaction quarter. Much of the price gain came late in the quarter: bitcoin was still near $63,000 in mid-August, so the quarter’s average did not rise with its closing price. Coinbase’s second-quarter transaction revenue had already fallen 21% sequentially to $599.2 million as total crypto spot volume declined 25% and volatility reached multi-year lows.
The key catalyst is therefore a conversion test. Did the late-quarter bitcoin advance translate into sustained customer activity, or did it mainly raise the closing value of crypto assets without repairing the fee engine? The October 29 report should answer that more clearly than the quarter-end price chart does.
Three Misses Make Revenue the First Test, Not Just EPS
Coinbase has missed consensus EPS estimates in each of the last three reported quarters. The latest shortfall was especially severe: second-quarter EPS came in at negative $1.36 against an estimate of negative $0.44. The preceding two quarters also missed, with actual EPS of negative $0.24 versus positive $0.36 and negative $2.49 versus positive $0.99.
GAAP EPS is an imperfect standalone measure because it includes changes in the value of crypto held for investment and strategic investments. That accounting exposure can widen a loss without representing the performance of the customer platform. But the broader record cannot be dismissed as an accounting artifact, because revenue also missed consensus in all three quarters.
That makes the revenue line more important on Thursday than the headline EPS number. The latest consensus calls for roughly $1.21 billion of revenue, almost flat with the $1.22 billion reported in the second quarter, and EPS of negative $0.23. The loss expectation lowers the earnings bar, but it does not eliminate the need to show that the operating business stopped deteriorating.
The July disclosure created a particularly low starting point. Transaction revenue was about $130 million quarter-to-date through July 26, and management explicitly cautioned against extrapolating that figure. It was not a full-quarter result, so it cannot be converted mechanically into a forecast. It does show, however, why the market needs evidence of acceleration rather than simply a favorable bitcoin closing price.
A credible upside surprise would therefore require more than EPS beating a depressed estimate. It would involve transaction revenue showing that customer activity recovered, total revenue clearing the roughly $1.21 billion consensus, or fourth-quarter commentary demonstrating that the July weakness was temporary.
Cost Control Helps, but the Core Business Was Still Losing Money
Coinbase has taken tangible steps to lower its cost base. Headcount fell 14% in May, and the full-year adjusted-expense guide was reduced to $4.2 billion to $4.45 billion. Adjusted EBITDA has also remained positive for 14 consecutive quarters, which provides a meaningful buffer in a cyclical trading business.
Those positives matter because lower fixed costs can improve earnings leverage when crypto activity returns. The company does not need the same revenue peak as before to recover profitability if expenses remain controlled. The third-quarter adjusted-expense outlook was $980 million to $1.08 billion, described as roughly flat sequentially, while stock-based compensation was expected to be about $245 million.
But cost discipline is not the same as current operating strength. Second-quarter adjusted net income was a loss of $104.9 million, and adjusted EBITDA fell 31% sequentially to $207.8 million. In other words, even after excluding investment-related marks and emphasizing the company’s preferred operating adjustments, the core business was not producing positive adjusted net income.
This is where the signals agree rather than conflict. The expense reduction supports a longer-term recovery case, while the revenue and adjusted-profit figures argue that the recovery has not yet arrived. Investors are paying for operating leverage before they have confirmation that the top line is turning.
The October report should be read through that mechanism. If expenses remain within the guided range while revenue improves, the cost cuts become an earnings multiplier. If revenue remains near the second-quarter level, the cuts are defensive rather than catalytic.
Subscription Revenue Is the Stabilizer, Not a Full Replacement for Trading Fees
Coinbase’s business is broader than spot trading, and that diversification is central to the bullish case. Derivatives volume held roughly flat sequentially even as the wider market declined, prediction-market contracts and revenue more than doubled sequentially, and subscription and services revenue reached $555.1 million in the second quarter.
Management’s third-quarter subscription and services outlook was $500 million to $580 million. The range implies that this part of the business could remain broadly stable, but it also identifies offsetting forces: higher USDC market capitalization and balances were favorable, while the roll-off of second-quarter performance earn-outs and lower quarter-to-date average crypto prices were unfavorable.
That mix matters. Subscription revenue can soften the impact of a weak spot-trading environment, but it does not yet prove that the company has replaced transaction cyclicality with a more predictable model. The upper end of the outlook would support the diversification argument. A result near the lower end would show that the supposedly steadier segment is still sensitive to crypto prices and one-time items.
Stablecoin economics are a potentially important bridge. The OCC finalized stablecoin rules under the GENIUS Act on October 21, and Coinbase shares rose 3.6% that day. That improves the regulatory backdrop for USDC-related balances and payments. They do not, by themselves, establish the amount of revenue Coinbase will report this quarter.
The practical hierarchy is clear: subscription and services revenue can keep the floor from falling, but transaction revenue must recover for the stock to regain durable momentum. A stable second segment paired with weak trading fees would be a resilience story, not yet a growth reacceleration story.
The Market Is Pricing a Rebound Before the Technicals Confirm It
At $164.45, Coinbase is down 27.3% this year and 54.5% from its highest close of the past year. The stock also sits below its 50-day average of $179.55 and its 200-day average of $180.50. Those are not minor deviations: the current price is about $15 below the shorter average and $16 below the longer one, leaving both trend references overhead.
Kavout’s technical reading reinforces that weakness. The technical rating is 18, the composite score is 37, and the moving-average component contributes no positive score. The exact internal scale is less important than the alignment: price trend, moving-average behavior and the broader composite judgment are all weak at the same time.
The stock’s path since late September adds context. It reached $198.13 on September 23 before falling to $164.45 by October 23, a decline of approximately 17%. The stock also dropped to $146.26 at the end of July after the previous earnings report, close to the 52-week intraday low of $139.11.
That pattern gives the October report unusually asymmetric technical stakes. A strong report could produce a sharp relief move because expectations and positioning have already been damaged. A weak report would threaten the support area that held after the July disappointment.
Bitcoin itself is not confirming a clean risk-on signal. It is near $80,592, below its 50-day average of $81,801 but above its 200-day average of $72,901. That combination says the longer-term crypto trend remains healthier than the short-term tape, but it does not remove the immediate pressure on Coinbase’s transaction business.
Coinbase daily chart with technical signals, through the Oct 23 close
Analysts See Value, While Informed Ownership Does Not Create a Near-Term Floor
The conventional equity view is more favorable than the technical readings. Twenty-one of 39 analysts rate Coinbase Buy, 15 rate it Hold and three rate it Sell. The consensus target is $212.82, with a median of $208.50 and a range from $110 to $330.
Relative to the current $164.45 price, the consensus target implies a gain of about 29%. The median implies roughly 27%. That upside is meaningful, but the $220 spread between the low and high targets shows that the target is a broad scenario range rather than a precise valuation anchor.
The analyst case appears to rest on operating leverage, crypto-market growth and the company’s expansion beyond spot trading. Those are legitimate reasons to look past one weak quarter. Yet the last three revenue misses make the consensus vulnerable if October 29 does not show a clear improvement in transaction activity.
Guru ownership adds evidence of institutional interest, but it should not be confused with a timing signal. The disclosed holders include 2.37 million shares at ARK, 1.12 million at Baillie Gifford, 670,000 at Citadel and 570,000 at T. Rowe Price Equity Income. At the same time, director Marc Andreessen sold approximately $7.8 million of shares across September and October, while CFO Alesia Haas sold approximately $8.0 million in September. The available data does not establish the purpose of those sales, so they should not be labeled either bullish or bearish.
The more useful conclusion is that ownership evidence supports the possibility of a long-term institutional thesis, but it does not offset the weak technical structure. The analyst target tells investors what a recovery could be worth; the price trend tells them that the market still wants proof.
October 29 Must Establish Whether the Weak Start Was Temporary
The earnings release has four load-bearing checkpoints. First, transaction revenue must be compared with the weak July run-rate and with the second-quarter base. Second, subscription and services revenue must be judged against the $500 million to $580 million outlook rather than treated as a generic diversification success.
Third, investors need to see whether adjusted expenses remain within the $980 million to $1.08 billion range. Fourth, any disclosure about fourth-quarter transaction revenue through October could matter more than a backward-looking EPS beat because it would indicate whether the operating improvement carried beyond the quarter.
There are also two details worth separating from the main thesis. Coinbase’s derivatives and prediction-market businesses may be gaining relevance, and the new stablecoin rules may strengthen the long-run USDC opportunity. But those businesses must become large enough to offset weaker spot activity before they can change the quarterly earnings profile.
The market is likely to focus on the direction of the business, not merely the distance from a single estimate. A result around consensus with cautious fourth-quarter commentary would leave the central problem unresolved. A revenue beat accompanied by improving transaction activity and controlled expenses would begin to repair the credibility damaged by three straight misses.
That is why the October 29 catalyst matters even though the consensus already expects a loss. The bar is low for EPS, but it is higher for evidence that Coinbase’s revenue engine is responding to the crypto rally.
What the Evidence Adds Up To
Coinbase goes into October 29 with a lower cost base, a broader product set and a consensus that already expects a loss. It also goes in with three straight revenue misses, a weak July start in transaction revenue, a quarter in which bitcoin’s average price and daily swings were flat to lower despite the quarter-end rally, and director and CFO share sales in September.
The report will show which of those facts matters more. The checks are transaction revenue against the July run-rate and Q2’s $599.2 million, subscription and services revenue against $500 million to $580 million, adjusted expenses against $980 million to $1.08 billion, total revenue against about $1.21 billion, and any disclosure of fourth-quarter transaction revenue to date.
Price levels give the reaction context. The $164.45 close sits about $15 below both the 50-day and 200-day averages, while the July 31 post-earnings close of $146.26 and the $139.11 52-week intraday low mark where selling stopped after the last report.
Bitcoin’s quarter-end price is not the number to watch on Thursday; transaction revenue is.
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