Coinbase Q2 Revenue Hits $1.45B, Net Income Drops Sharply

Coinbase reported a total revenue of $1.449 billion for the second quarter, surpassing the market consensus estimate of $1.396 billion.

However, this figure represents an 11% decrease from the first quarter, partly attributed to falling consumer transaction revenues.

Coinbase Q2 Revenue Drops 29%

Coinbase’s Q2 consumer transaction revenues fell 29% to $665 million, down from $1.07 billion in Q1. However, stablecoin revenue increased to $240.4 million from $197.3 million.

The company’s adjusted EBITDA was $596 million, down from $1.01 billion in the previous quarter. Net income also declined to $36 million from nearly $1.2 billion in Q1. For the same period last year, total income was $674.1 million.

According to the company, the net income included $319 million in pre-tax crypto asset losses on its crypto investment portfolio, most of which were unrealized, caused by lower prices last month.

Meanwhile, transaction revenue dropped 11% to $781 million during the quarter, while subscription and services revenue rose 17% to $599 million as the company diversified its revenue sources.

Bitcoin was a key player in Coinbase’s trading volumes, making up 35% of the entire number and 31% of transaction revenues in Q2. On the other hand, Solana contributed 10%.

Overall trading volumes decreased 28% quarter-over-quarter, with consumer numbers down 34% and institutional volume declining by 26%. The exchange also reported significant progress with its Layer-2 network, Base, which saw a 300% increase in transactions quarter-over-quarter.

Coinbase noted that network efficiency improved significantly during Q2, with median daily fees per transaction dropping below 1 cent, positioning Base as one of the most cost-effective L2 networks.

Coinbase Projects Q3 Revenue

Coinbase predicts that subscription and services revenue for the third quarter will fall between $530 million and $600 million. This estimate takes into account several factors: a 3% decline in Ethereum’s average price in July, the potential for a rate cut in September, increased expenses due to the adoption of USDC as a compliant stablecoin, and a one-time $8 million blockchain rewards revenue benefit recorded in Q2.

The company also expects challenges from volatile crypto prices and additional costs associated with the adoption of the global USDC stablecoin.

Coinbase shares have risen about 20% year-to-date. After releasing their earnings report, the stock has since seen a 5.22% decrease, reaching $212 per share at the time of the report.