Coinbase announces $1 billion share buyback as it reports Q3 earnings

As Coinbase reported its third-quarter earnings on Wednesday the cryptocurrency exchange said its board of directors has authorized a $1 billion share repurchase program.

"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 timing and amount of any repurchases will depend on market conditions."

Coinbase also said its balance sheet is "strong" as the company ended the third quarter with $8.2 billion in USD resources, an increase of $417 million from the previous quarter.

The company added that repurchases would be made at its discretion and it is not obligated "to repurchase any dollar amount or number of shares of our Class A common stock, and the program may be modified, suspended, or discontinued at any time."

In after-hours trading, Coinbase shares were changing hands at $203.60 as of 4:32 p.m. ET, down 3.8%, according to Yahoo Finance.

Earnings mostly down

Across the board Coinbase's net revenue, net income and Adjusted EBITDA were all up year on year as crypto prices traded at lower levels in 2023. But when compared to the previous quarter only the company's net income improved to $75 million in this most recent quarter versus $36 million in the second quarter.

Coinbase registered a net revenue of $1.13 billion in the third quarter, down from the previous quarter's $1.38 billion. Adjusted EBITDA for the third quarter came in at $449 million as compared to last quarter's $596 million.

Stablecoin revenue was one of the only revenue streams that improved when compared to the second quarter. Coinbase reported $247 million in stablecoin revenue, a modest increase from the previous quarter's $240 million. Corporate interest and other income also rose slightly.

"We saw stablecoin pair trading volume grow significantly quarter on quarter. In part, we believe this growth was driven by a product update which enabled an easier way for Advanced traders to trade stablecoins on our platform," Coinbase said in its statement. "While we generate little to no fees on our stablecoin pair trades, 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."

Election neutral

Coinbase, which has for years been clamoring for regulatory clarity in the U.S., struck an upbeat and neutral tone ahead of the upcoming presidential election. 

"As we approach the 2024 U.S. elections, it’s clear that crypto has already made its mark. With tens of millions of Americans now owning crypto, including many in key swing states, their voices have been heard. 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 said in its letter to shareholders.

The company went on to say that "regardless of the elections’ outcome" Coinbase leadership is "optimistic" for the future. "We are excited to work with either administration in 2025 and believe the odds for meaningful, procrypto regulation have never been stronger."