Coinbase Q2 Revenue Surpasses Expectations Despite Decline in Trading Volumes, Shares Drop 2%

Coinbase Global (NASDAQ:COIN) reported second-quarter revenue that exceeded Wall Street expectations, despite a significant drop in trading volumes following the initial boost from the bitcoin-spot ETF. Following the results, Coinbase shares dropped more than 2% intra-day today.

For Q2, Coinbase posted earnings of $0.14 per share on revenue of $1.40 billion, compared to the analysts' predictions of $0.94 per share on revenue of $1.38 billion. However, total transaction revenue declined by 27% quarter-on-quarter to $781 million, attributed to lower trading volumes as funds exited the crypto markets during the quarter. The initial enthusiasm from the BTC-spot ETF launch earlier this year waned, contributing to this decline.

Total trading volume for the quarter was $226 billion, reflecting a 28% sequential decrease. Consumer trading volume dropped by 34% and institutional trading volume fell by 26% quarter-on-quarter.

Looking forward, Coinbase provided guidance for Q3 subscription and services revenue, projecting a range of $530 million to $600 million. The company noted potential headwinds due to the recent decline in the price of Ethereum (ETH) and increased expenses related to the stablecoin USDC.

For Q3, Coinbase expects transaction expenses to be in the mid-teens as a percentage of net revenue, while sales and marketing expenses are forecasted to rise sequentially to between $160 million and $210 million, driven primarily by higher variable digital marketing costs.