$COIN Q2 Revenue Misses, Net Loss $359M, Shares Fall 5%

Coinbase reported $1.22 billion in second-quarter revenue Thursday, missing analyst estimates, and posted a net loss of $359 million. The results sent shares down roughly 5% in after-hours trading.

Total crypto spot trading volume on the exchange fell more than 20% from the first quarter. Market volatility slumped to multi-year lows and crypto prices declined during the period. Transaction revenue came in at $599 million, below the $628 million analysts expected.

Subscription and services revenue, which Coinbase has been pushing as a more stable income stream, totaled $555 million. The figure fell short of the company's own forecast of $565 million to $645 million. Coinbase attributed the shortfall to delayed commercial agreements tied to USDC and lower staking revenue from weaker crypto prices.

Stablecoin revenue, however, remained a bright spot at $292 million. Average USDC held across Coinbase products hit a record $20 billion during the quarter, representing more than 30% of all USDC in circulation at quarter end. The conditions for Coinbase's commercial agreement with Circle to renew in August were met automatically, the company said.

Coinbase also said 88% of net revenue came from sources other than Bitcoin spot trading, compared with 45% in the same period five years ago. The company's market share in crypto trading rose to a record 10.3%, its third consecutive quarterly gain, with gains in both spot and derivatives.

Prediction markets contracts and revenue grew 106% from the previous quarter and exceeded a $100 million annualized net revenue run rate, the company said. Average Borrow/Lend balances increased by more than $1 billion from a year earlier to $1.49 billion.

The quarter included several product launches. In May, Coinbase became the first U.S. exchange cleared to offer offshore crypto perpetual futures through its Deribit subsidiary. In June, it launched Coinbase for Agents, a platform letting AI agents trade crypto and manage portfolios. Armstrong has said AI agents will outnumber human crypto users. The company also announced plans for tokenized stock trading, crypto and equities options, and new lending and rewards products.

Coinbase ended the quarter with $8.6 billion in cash and equivalents and $10 billion in total available resources. Coinbase repurchased 814,000 Class A shares during the quarter. Year to date, it has bought back nearly 7 million shares for $1.2 billion. About $2 billion remains under its buyback authorization.

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

CEO Brian Armstrong said on the earnings call: