Cryptocurrency exchange Coinbase reported a decrease in revenue from the previous quarter Thursday, finding its customers were less engaged in trading crypto over the summer.

Company sales fell to $1.2 billion in Q3 2024 from $1.45 billion in the previous quarter, while coming in below analysts’ expectations of $1.26 billion, according to FactSet data. Meanwhile, Coinbase reported a $75 million profit compared to a $2 million loss a year ago.

“It was a solid quarter for the business across the three priorities we set forth early in the year: driving revenue, driving crypto utility, and driving regulatory clarity,” Anil Gupta, vice president of investor relations told Decrypt, adding it was the company’s fourth straight profitable quarter.

Coinbase’s stock price climbed as high as $279 in March, not long after Bitcoin’s price set an all-time high of around $73,000. While shares had since fallen to $211, as of Wednesday’s market close, the stock was still up 35% in price year-to-date. During after-hours trading, Coinbase’s stock price was down 4%, falling to $202 as of this writing.

The company attributed its decline in third-quarter revenue to decreased trading volumes, which clocked in at $185 billion compared to $226 billion in the second quarter. Representing the company’s main source of revenue, the dip was more pronounced among its retail customers.

Coinbase disclosed that transaction revenue derived from retail users dipped quarter-over-quarter to $483 million, falling 27% from $664 million. Meanwhile, transaction revenue from institutional users fell 13% to $55 million from $63 million in the second quarter.

The company also disclosed that its board of directors had authorized a $1 billion stock repurchasing program, with the “the timing and amount of any repurchases” dependent on market conditions.

In a research note earlier this month, Oppenheimer analysts attributed a forecast slowdown in trading volume to a “lack of positive catalysts together with the U.S. election overhang.” Still, Oppenheimer viewed Vice President Kamala Harris’ support of a regulatory framework for digital assets as a factor that could benefit Coinbase trading volumes in the fourth quarter.

“We continue to build great products, with a focus on some of the building blocks that are now in place to help bring one billion users on-chain,” Coinbase said in a letter to shareholders. “Looking beyond Election Day 2024, we are prepared to work with either administration and believe the odds of pro-crypto legislation are better than ever.”

When cryptocurrency prices were depressed during the bear market, Coinbase embraced subscriptions and services revenue as a way to diversify its business. Including income earned on assets backing Circle’s USDC stablecoin, subscriptions and services revenue briefly overtook transaction-based revenue in the third quarter of last year.

Oppenheimer analysts wrote that Coinbase’s stablecoin revenue will likely fall as the Federal Reserve pushes forward with its easing campaign. Coinbase reported Thursday, however, that stablecoin revenue came in at $246 million, rising sequentially from $240 million.

While lower interest rates dented stablecoin revenue, the company said in its shareholder letter that the figure was bolstered by a growing amount of USDC on its platform, which increased  7% to $6.6 billion quarter-over-quarter.

“We're continuing to grow the native units on the platform,” Gupta said. “We're optimistic about long-term stablecoin revenue.”

The company’s Ethereum layer-2 scaling network, Base, has been a bright spot for the exchange, serving as a popular destination for its on-chain products. In its shareholder letter, the company said that Base “solidified its position as the leader in on-chain activity,” with the number of transactions it processed rising 55% quarter-over-quarter.

Edited by Andrew Hayward