Coinbase (COIN) third-quarter earnings and revenue missed Wall Street analysts' estimates on Wednesday, sending shares slumping in after hours trading.

The crypto exchange said its third-quarter total revenue was $1.2 billion versus the average estimate of $1.26 billion, according to FactSet data. Meanwhile, earnings per share of $0.28 missed analyst expectations of $0.45. Coinbase's third-quarter adjusted Ebitda of $449 million also missed estimate of $469.2 million.

The crypto exchange primarily suffered from weaker market conditions, the firm said in a shareholder letter, noting that it saw growth in some areas.

“Really solid results across the board, I think quarter to quarter, you definitely see volatility playing a role in trading revenues and we saw that play out with softer market conditions in Q3 but we’re overall happy with the results,” Anil Gupta, vice president of investor relations, told CoinDesk.

The company also said that it authorized up to $1 billion share buyback in October. The repurchase doesn't have any expiry date and the firm will purchase shares depending on the market conditions.

"We grew our balance sheet by over $400 million that's put us in a position to issue this new share buyback program," Gupta said. The company ended the third quarter with $8.2 billion in cash, cash equivalents and USDC.

Coinbase’s main source of income is transaction fees, which fell 27% from the second quarter as trading volume across U.S.-based exchanges slipped further. "Crypto asset volatility — a key driver of trading volume — declined approximately 5% when comparing the Q3 average with the Q2 average," the company said in the letter.

Shares of the exchange slumped nearly 7% in the minutes following the report. Year-to-date, the stock rose about 22% amid broader bullish sentiment in digital assets.

Despite continued regulatory uncertainty in the U.S., the company has launched several new projects this year, including most recently a feature that lets Visa debit card holders transfer funds to their Coinbase accounts nearly instantly.

In an effort to diversify its revenue and avoid solely relying on high trading volume, the exchange has also made it a point to build out its other ventures, including its custody offerings and participation in the tokenization of real-world assets.

UPDATE (Oct. 30, 20:42 UTC): Adds comments from investor relations, $1 billion buyback details.

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Helene Braun

Helene is a New York-based news reporter at CoinDesk, covering news about Wall Street, the rise of the spot bitcoin exchange-traded funds (ETFs) and updates on crypto exchanges. She is also the co-host of CoinDesk's Markets Daily show on Spotify and Youtube. Helene is a recent graduate of New York University's business and economic reporting program and has appeared on CBS News, YahooFinance and Nasdaq TradeTalks. She holds BTC and ETH.

Aoyon Ashraf

Aoyon Ashraf is CoinDesk's managing editor for Breaking News. He spent almost a decade at Bloomberg covering equities, commodities and tech. Prior to that, he spent several years on the sellside, financing small-cap companies. Aoyon graduated from University of Toronto with a degree in mining engineering. He holds ETH and BTC, as well as ALGO, ADA, SOL, OP and some other altcoins which are below CoinDesk's disclosure threshold of $1,000.