Block, Circle, Riot crypto earnings reports
A pivotal week for publicly traded crypto companies is here, with Block, Circle, and Riot Platforms set to release their third-quarter crypto earnings reports. The results, covering the July-to-September period, will provide a crucial health check on the sector and follow a surprisingly profitable quarter for exchange giant Coinbase.
Investors will be closely watching to see if the modest rally in digital asset prices during Q3 translated into improved fundamentals across different business models. The reports from payments firm Block, stablecoin issuer Circle, and Bitcoin miners Riot Platforms and Marathon Digital Holdings will test the resilience of revenue streams from transactions, reserves, and mining operations.
Coinbase sets a high bar with surprise profit before crypto earnings reports
Coinbase Global (NASDAQ: COIN) kicked off the earnings season on October 29, delivering a stunning result that defied analyst expectations. The company posted a GAAP net income of $718.7 million, or $2.51 per share, completely reversing predictions of a loss.
The beat was largely driven by a $715 million mark-to-market gain on crypto assets held on its balance sheet, highlighting the direct impact of asset price swings on its bottom line.
While total revenue was flat from the previous quarter at $1.22 billion, a 35% decrease year-over-year, the company showed strength in other areas. Subscription and services revenue grew to $570 million, now accounting for nearly half of all net revenue. This segment’s performance was within the company’s guided range and is projected to grow to between $550 million and $630 million in the fourth quarter.
Adjusted EBITDA remained strong at $332.9 million, marking the 15th consecutive quarter of positive results in that metric. The exchange also boasted its fourth straight quarter of market share gains in both spot and derivatives trading.
Despite the strong headline numbers, the stock dipped about 2% in after-hours trading, suggesting the market had already priced in a positive result or was wary of the reliance on unrealized asset gains.
Block faces headwinds on bitcoin revenue
Block (NYSE: SQ) is first up this week, reporting after the market closes on Tuesday, November 3. Analyst consensus points to earnings per share (EPS) of $1.02 on revenue of $6.63 billion. The key metric under the microscope will be the performance of its Bitcoin business, which operates primarily through its Cash App.
Expectations are for Bitcoin-related revenue to continue its decline. The Zacks consensus estimate sits at $1.73 billion, which would represent a 12.2% drop from the same period last year.
This follows a weak second quarter where Block’s Bitcoin Ecosystem gross profit fell 31% year-over-year to just $72 million, a small fraction of its $3.17 billion in total gross profit. The company attributed the Q2 slide to lower fees on certain transactions and unfavorable trading dynamics.
Like Coinbase, Block also marks its corporate Bitcoin holdings to market each quarter, meaning the price fluctuation between June 30 and September 30 will flow directly to its net income statement. Investors might be cautious; after Block beat estimates and raised guidance in its Q2 report, its shares paradoxically fell over 6%.
Simply meeting the $1.02 EPS guidance may not be enough to spark a rally this time around.
Circle’s results hinge on usdc supply and rates
Stablecoin issuer Circle is scheduled to report before the market opens on Wednesday, November 4. Its financial health is not directly tied to volatile crypto prices but rather to the circulating supply of its USDC stablecoin and the interest it earns on the massive reserves backing it. This makes its report a key indicator of institutional and DeFi activity.
Analysts are forecasting an EPS of $0.40 on revenue of $796.95 million. The earnings figure would be a significant 37.5% decrease from the prior year, even as revenue is expected to climb 7.7%. This divergence highlights the core challenge for Circle: falling interest rates.
While its average USDC supply grew an impressive 25% year-over-year in Q2, the return rate on its reserves fell by 66 basis points to 3.5%, absorbing most of the benefit from that growth.
The critical number in the report will be the total USDC in circulation as of September 30, as this figure sets the foundation for its fourth-quarter reserve income potential. The market appears nervous heading into the report.
Circle’s shares dropped a steep 9.3% last Friday, the sharpest decline among the three major companies reporting this week, signaling investor anxiety about its ability to outrun the pressure of lower interest rates.
Mining outlook: Riot and Marathon face profitability test
The week’s earnings conclude with a look into the crypto mining sector, with both Riot Platforms (NASDAQ: RIOT) and Marathon Digital Holdings (NASDAQ: MARA) providing updates. The reports come as miners navigate a complex environment of fluctuating Bitcoin prices, rising network difficulty, and high energy costs.
These reports offer a window into the challenges facing even the largest players, including the ever-present threat of crackdowns on crypto brokers that can affect market liquidity.
Riot Platforms will hold its conference call on the morning of Wednesday, November 4, to discuss its Q3 performance. Analysts are bracing for a tough quarter, predicting a loss between $0.24 and $0.34 per share. Revenue is expected to decline by about 10.4% year-over-year to approximately $161 million.
The main driver of this decline is the firm’s core Bitcoin mining operation, where revenue is projected to fall by nearly 30% to $112.85 million. In contrast, its engineering segment is a bright spot, with revenue expected to jump 55.2%.
Marathon Digital Holdings is expected to report around the same time, with analysts also forecasting a loss, with estimates ranging from -$0.04 to -$0.39 per share on revenue of around $183 million.
This follows a difficult Q2 where the company posted a massive $1.60 per share loss, which included a $343 million mark-to-market loss on its digital asset holdings. Investors will be looking for updates on its pending acquisition of the Long Ridge power facility, which is seen as a key future growth driver.
The deal awaits regulatory approval but could add $144 million in annual EBITDA and expand its power portfolio significantly. The broader financial sector, as seen with the recent strong Microsoft earnings report, has shown resilience that crypto firms hope to emulate.
What the reports mean for the crypto market
Collectively, this week of earnings will paint a detailed picture of the public crypto economy. Coinbase’s results showed that holding assets can be more profitable than facilitating transactions in certain market conditions. Now, the question is whether companies with different models experienced similar fortunes.
Did the Q3 price rally do enough to boost mining revenue for Riot and Marathon, or were rising operational costs too much to overcome?
For Block, the narrative is about diversifying away from a volatile Bitcoin revenue stream. And for Circle, it’s a race between growing the adoption of USDC and the macroeconomic pressure of falling interest rates on its reserve yields.
Any signs of weakness could raise concerns, especially with ongoing regulatory scrutiny such as India’s foreign payout investigation that peripherally involves major exchanges. The answers provided in these calls will shape investor sentiment and crypto stock valuations for the remainder of the year.