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Coinbase Misses on Q2 Earnings as Crypto Trading Activity Slows
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Coinbase missed Wall Street's second-quarter earnings expectations on Thursday, reporting $1.22 billion in revenue and a net loss of $359 million. The results sent shares down roughly 5% in after-hours trading, as analysts had projected $1.29 billion in revenue. The crypto exchange attributed the shortfall to a more than 20% decline in total crypto spot trading volume from the prior quarter, driven by falling asset prices and multi-year low market volatility.
Transaction revenue came in at $599 million, below the expected $628 million. Subscription and services revenue totaled $555 million, or 48% of net revenue, missing Coinbase's own forecast of $565 million to $645 million. The company said certain USDC-related commercial agreements closed later than anticipated and lower crypto asset prices reduced staking revenue. Stablecoin revenue reached $292 million, while average USDC held across its products hit a record $20 billion.
Despite the earnings miss, Coinbase highlighted several positive trends. Its crypto trading market share reached an all-time high of 10.3% during the quarter, marking the third consecutive quarter of gains in both spot and derivatives trading. Prediction markets contracts and revenue grew 106% quarter over quarter, surpassing a $100 million annualized net revenue run rate. Average Borrow/Lend balances rose by more than $1 billion year over year to $1.49 billion.
The second quarter was also notable for product launches. In May, Coinbase became the first U.S. crypto exchange cleared to offer customers access to offshore perpetual futures through its Deribit subsidiary. In June, it introduced Coinbase for Agents, a platform enabling AI agents to trade crypto, make payments, and manage portfolios. Later that month, the company announced plans for tokenized stock trading, crypto and equities options, as well as 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. The company repurchased 814,000 Class A shares during the quarter and nearly 7 million shares year to date for $1.2 billion, leaving about $2 billion in remaining authorization. For the third quarter, Coinbase projected subscription and services revenue between $500 million and $580 million, with adjusted expenses of $980 million to $1.08 billion.
CEO Brian Armstrong remained optimistic, stating that "Coinbase is no longer a bet just on the price of Bitcoin." He emphasized that all financial services are being updated by crypto technology, from trading to payments and lending. Armstrong also pointed to "agentic finance" as the next frontier, where Coinbase is an early leader. The company's diversification efforts and new products could help cushion future volatility in crypto markets, though near-term trading revenue remains sensitive to market conditions.
