Coinbase (COIN) reported revenues of $708 million and adjusted earnings of a loss of $0.42 in the second quarter, beating analyst estimates of revenues of $628 million and earnings per share of a loss of $0.76. However, transaction revenue came in at $327 million, compared to $375 million in the first quarter, while total trading volume fell to $92 billion, compared to $145 billion in the first quarter. CEO Brian Armstrong said in a statement to journalists, “Q2 was a strong quarter for Coinbase as we executed well and showed resilience in a challenging environment.”
The company’s Q3 outlook is positive, with Coinbase having generated roughly $110 million in transaction revenue in July and expecting Q3 subscription and services revenue, which came in at $335 million in the second quarter, to be at least $300 million in the third quarter. Despite the positive results, shares of Coinbase initially rose as much as 9% after the results were announced, but were recently trading down 1.4% to $89.48. Shares of Coinbase are up about 160% this year, while the price of bitcoin has risen more than 75% over the same time period.
Berenberg analyst Mark Palmer commented on the results, saying, “Coinbase’s revenue beat versus consensus estimates was due in large part to interest income and staking revenue, which are two areas of the company’s business that appear to be at risk going forward given the ongoing declines in USDC’s market capitalization and the regulatory challenges to its staking programs.” He added, “At the same time, management’s guidance for Coinbase’s current quarter was muted, and the company’s adjusted EBITDA print included a huge adjustment for stock-based compensation – an area that management had said it would look to reduce due to negative investor feedback.”