Coinbase Q2 Earnings Miss Wall Street Estimates Amid Crypto Market Slowdown
Coinbase stock experienced a sharp decline in after-hours trading Thursday following the company’s second-quarter results, which fell short of analyst expectations, despite the exchange reaching several significant business milestones.
Revenue and Earnings Discrepancy
Coinbase reported total Q2 revenue of $1.5 billion, significantly below the widely anticipated range of $1.56 to $1.59 billion. Core net income stood at $1.4 billion, but adjusted net income—excluding investment gains—declined markedly to just $33 million.
A particularly weak performance was seen in non-GAAP earnings, registering a mere $0.12 per share, falling considerably short of the projected $1.49 per share. This downward pressure was largely attributed to a significant drop in transaction revenue, stemming from reduced spot crypto trading volumes.
Bright Spots in Q2 Performance
While overall revenue decreased by 26% sequentially, subscription and services revenue demonstrated relative resilience, declining only 6% to $656 million. This segment was bolstered by an increase in stablecoin balances, primarily USDC, driving stablecoin-related revenue up 12% to $332 million.
Looking Ahead
For the upcoming fiscal third quarter, Coinbase forecasts subscription and services revenue between $665 million and $745 million.
Policy Milestones and New Initiatives
Despite the broader crypto market slowdown during the quarter, Coinbase highlighted substantial policy advancements as critical “monumental milestones.” Key among these was the U.S. President Donald Trump’s签署 of the GENIUS Act, establishing a federal framework for stablecoin adoption. Additionally, the House of Representatives passed the CLARITY Act, aiming to define the crypto market structure.
The company also pointed to product development as a positive factor, particularly the expansion of its stablecoin rewards program and the successful launch of the Base App, which has accumulated over 700,000 users in its open beta waitlist program.
Coinbase anticipates the nearing launch of a new comprehensive platform, referred to internally and prospectively as the “everything exchange.” According to Vice President of Product Max Branzburg, this platform will integrate capabilities for tokenized real-world assets, prediction markets, and early token sales. Launch plans target the U.S. market, with a cautious international rollout pending jurisdictional approvals.
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