Misses

Coinbase reported $1.22 billion in second-quarter revenue on Thursday, down 14% from the previous quarter, and a net loss of $359 million.

Coinbase shares fell sharply in after-hours trading, losing roughly 5% of its stock price, after missing on earnings estimates for the quarter. The company was expected to bring in $1.29 billion in Q2.

According to Coinbase, total crypto spot trading volume declined more than 20% from the previous quarter as crypto asset prices fell and market volatility reached multi-year lows. Transaction revenue totaled $599 million—lower than the expected $628 million.

Subscription and services revenue totaled $555 million, representing 48% of net revenue. Coinbase said the figure was below its previously forecast range of $565 million to $645 million because certain USDC-related commercial agreements closed later than expected and lower crypto asset prices reduced staking revenue.

Stablecoin revenue totaled $292 million. Average USDC held across Coinbase products reached a record $20 billion during the quarter, representing more than 30% of USDC in circulation at quarter-end. Coinbase also said 88% of net revenue came from sources other than Bitcoin spot trading, compared with 45% in the second quarter of 2020.

Coinbase said its crypto trading market share reached a record 10.3% during the quarter, its third consecutive quarter of market share gains. The company said it gained share in both spot and derivatives trading.

In a bright spot for the company, prediction markets contracts and revenue grew 106% from the previous quarter and exceeded a $100 million quarterly annualized net revenue run rate, according to Coinbase. Average Borrow/Lend balances increased by more than $1 billion from a year earlier to $1.49 billion. The company also said the conditions for its commercial agreement with Circle to renew in August automatically had been met.

The earnings report follows a busy second quarter for Coinbase.

In May, the company became the first U.S. crypto exchange cleared to offer customers access to offshore crypto perpetual futures through its Deribit subsidiary. In June, Coinbase launched Coinbase for Agents, a platform that lets AI agents trade crypto, make payments and manage portfolios on users’ behalf. Later that month, the company announced plans to launch tokenized stock trading, crypto and equities options, along with new lending and rewards products.

Coinbase ended 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 repurchased nearly 7 million shares for $1.2 billion, leaving about $2 billion remaining under its share repurchase authorization.

For the third quarter, Coinbase said transaction revenue totaled approximately $130 million through July 26. The company expects subscription and services revenue between $500 million and $580 million and adjusted expenses between $980 million and $1.08 billion.

Despite the weaker-than-expected earnings report, Coinbase CEO Brian Armstrong remained optimistic about the future of the company.

“Coinbase is no longer a bet just on the price of Bitcoin,” he said 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.”