Coinbase Reports $1.22 Billion in Q2 Revenue, Net Loss of $359 Million
Coinbase reported second-quarter revenue of $1.22 billion on Thursday, a 14% decrease from the previous quarter, alongside a net loss of $359 million.
The cryptocurrency exchange’s shares experienced a sharp decline in after-hours trading, shedding approximately 5% of their value, after the company missed earnings estimates for the quarter. Analysts had projected $1.29 billion in second-quarter revenue.
According to Coinbase, total crypto spot trading volume fell by more than 20% compared to the prior quarter. This decline was attributed to a drop in crypto asset prices and market volatility reaching multi-year lows. Transaction revenue amounted to $599 million, falling short of the expected $628 million.
Subscription and services revenue reached $555 million, accounting for 48% of net revenue. Coinbase stated this figure was below its previously forecasted range of $565 million to $645 million. The company cited delays in the closure of certain USDC-related commercial agreements and reduced staking revenue due to lower crypto asset prices as contributing factors.
Stablecoin revenue totaled $292 million. The average balance of USDC held across Coinbase products hit a record $20 billion during the quarter, representing over 30% of USDC in circulation at the quarter’s end. Coinbase also highlighted that 88% of its net revenue originated from sources other than Bitcoin spot trading, a significant increase from 45% in the second quarter of 2020.
The company announced that its crypto trading market share reached a record 10.3% during the quarter, marking its third consecutive quarter of market share gains. Coinbase indicated it had expanded its share in both spot and derivatives trading.
In a positive development, prediction markets contracts and revenue surged by 106% from the previous quarter, exceeding a $100 million quarterly annualized net revenue run rate, according to Coinbase. Average Borrow/Lend balances increased by over $1 billion year-over-year to $1.49 billion. The company also confirmed that the conditions for its commercial agreement with Circle to renew in August had been automatically met.
The earnings report follows a busy second quarter for Coinbase. In May, the company became the first U.S. crypto exchange authorized to offer customers access to offshore crypto perpetual futures through its Deribit subsidiary. In June, Coinbase launched Coinbase for Agents, a platform enabling AI agents to trade crypto, make payments, and manage portfolios on behalf of users. Later that month, the company unveiled plans to introduce tokenized stock trading, crypto and equities options, alongside new lending and rewards products.
Coinbase concluded the quarter with $8.6 billion in cash and cash equivalents and $10 billion in total available resources. During the quarter, the company repurchased 814,000 Class A shares. Year-to-date, it has bought back nearly 7 million shares for $1.2 billion, with approximately $2 billion remaining under its share repurchase authorization.
Looking ahead to the third quarter, Coinbase reported transaction revenue of approximately $130 million as of July 26. The company anticipates subscription and services revenue to be between $500 million and $580 million, with adjusted expenses ranging from $980 million to $1.08 billion.
Despite the weaker-than-expected earnings report, Coinbase CEO Brian Armstrong expressed optimism about the company’s future. “Coinbase is no longer a bet just on the price of Bitcoin,” he stated during the earnings presentation. “All of financial services are getting updated by crypto technology, whether that’s trading or payments or lending. And Coinbase is the best-positioned company in the world to power this. And of course, this next frontier is going to be agentic finance, where we’re an early leader.”
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