Coinbase reports $1.45 billion in Q2 revenue as profits decline

Coinbase revealed on Thursday that it generated $1.45 billion in revenue during the second quarter (Q2), exceeding the $1.39 billion market estimate.

In a shareholder letter to investors published on the company's official website yesterday, Coinbase disclosed its second-quarter earnings. In Q2, our total revenue was $1.4 billion, and we made $36 million in net income*. We had positive adjusted EBITDA for the sixth consecutive quarter in Q2, with adjusted EBITDA of $596 million. With subscription and service revenue approaching $600 million, we are making good progress toward diversifying our sources of income. Finally, our Q/Q increase of $733 million brought our balance sheet's resources to $7.8 billion in USD, Coinbase said in a statement.

The total transaction revenue of Coinbase increased by 139% to $780.9 million during the second quarter. In the quarter, Coinbase's non-trading businesses saw a 79% increase in revenue to $599 million from their subscription and services unit. Due to inflows connected to spot bitcoin ETFs, quarterly custodial fee revenue increased to $34.5 million.

Based on LSEG data, the company's total revenue doubled to $1.45 billion, exceeding analysts' estimates of $1.4 billion. In comparison to a loss of 42 cents a year earlier, it reported a profit of 14 cents per share for the quarter.

Although revenue for Coinbase's second quarter decreased slightly from the prior quarter, it still more than doubled year over year. Additionally, Coinbase reported that its stablecoin revenue increased to $240.4 million from $197.3 million in the previous quarter, despite a $319 million pre-tax loss on its crypto asset portfolio.

Quinn Thompson, the founder of Lekker Capital, pointed out that Coinbase's revenue may be impacted by US investors shifting their trading activities towards ETFs, given that Ethereum and Bitcoin account for a significant portion of the trading volume and transaction revenue of the platform.

The U.S. Securities and Exchange Commission's approval of an exchange-traded fund to track the spot price of ether and bitcoin ended a nearly 10-year battle, which has given the cryptocurrency markets a boost this year.

The industry gained more legitimacy when spot bitcoin ETFs were approved, allowing established financial giants like Fidelity and BlackRock (BLK.N) to enter the digital asset space. Since then, the industry's overall market capitalization has increased to almost $2.36 trillion, according to CoinGecko, driven by increases in the value of both bitcoin and ether, the second-largest cryptocurrency token.

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