Coinbase’s $1.45 billion Q2 revenue exceeds estimates despite decline in transaction revenue

Coinbase reported total revenue of $1.449 billion for the second quarter, beating the market consensus estimate of $1.396 billion. Its total income for the same period last year was $674.1 million.

Meanwhile, the exchange’s net income for the period was $36 million, compared to a net loss of $97 million in 2023. EPS for the three months ending June 30 stood at $0.14 per share.

The exchange also highlighted the significant progress in the adoption of its Layer-2 network Base, which saw transactions increase by 300% quarter-over-quarter.

Coinbase said its efforts during the second quarter have significantly improved network efficiency. Median daily fees per transaction dropped below 1 cent, making Base one of the cheapest L2s available.

Despite the overall positive revenue, total revenue saw an 11% decline quarter-over-quarter.

Transaction revenue fell 11%, amounting to $781 million during the quarter, while subscription and services revenue experienced a 17% increase, reaching $599 million amid the company’s efforts to diversify revenues.

Bitcoin played a significant role in Coinbase’s trading volumes, representing 35% of trading volumes and 31% of transaction revenues in the second quarter.

However, total trading volumes decreased by 28% quarter-over-quarter, with consumer trading volume declining by 34% and institutional trading volume dropping by 26%.

Looking ahead, Coinbase anticipates third-quarter subscription and services revenue to be between $530 million and $600 million.

The company’s outlook reflects several factors, including a 3% decline in the average price of Ethereum in July, expectations of a September rate cut, increased expenses related to the adoption of USDC as a compliant stablecoin, and a one-time $8 million blockchain rewards revenue benefit recorded in the second quarter.

Coinbase also expects headwinds related to fluctuating crypto prices and additional expenses aimed at driving the global adoption of USDC.

The exchange’s shares have risen approximately 20% year-to-date. Following the earnings report, the stock was up 1.43% in after-hours trading, priced at $216 per share as of press time.

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