Coinbase disclosed that its trading business slowed significantly in the second quarter, with revenue falling short of market expectations and a net loss recorded, due to the decline in crypto asset prices and market volatility reaching multi-year lows. However, stablecoins, subscription services, and lending businesses continue to support its revenue structure.
Second-quarter revenue fell to $1.22 billion.
The company reported on Thursday that second-quarter revenue was $1.22 billion, a 14% decrease from the previous quarter; net loss was $359 million. The market had previously expected revenue of approximately $1.29 billion.
Coinbase reported that spot crypto trading volume declined by more than 20% in the quarter compared to the previous quarter. Trading revenue was $599 million, below market expectations of $628 million.
Subscription and stablecoin businesses continue to provide support.
Subscription and service revenue was $555 million, accounting for 48% of net revenue. This figure is also lower than the company's previous guidance range of $565 million to $645 million. Coinbase stated that the main reasons were that some commercial agreements related to USDC were completed later than expected, and the decline in the price of USDC reduced staking revenue.
Stablecoin revenue was $292 million. The company stated that the average holding of USDC in Coinbase-related products rose to a record $20 billion during the quarter, representing more than 30% of the circulating USDC supply at the end of the quarter.
Coinbase also stated that 88% of its net revenue no longer relies on Bitcoin spot trading, compared to 45% in the second quarter of 2020.
Prediction markets and lending businesses are growing rapidly.
The company stated that forecast market contracts and related revenue increased by 106% compared to the previous quarter, with annualized net revenue exceeding $100 million for the quarter. The average Borrow/Lend balance increased by over $1 billion year-over-year, reaching $1.49 billion.
Coinbase also stated that its business agreement with Circle has met the conditions for automatic renewal in August.
Continue to advance derivatives, tokenized stocks, and AI platforms.
During the second quarter, Coinbase continued to expand its product line. In May, the company, through its subsidiary Deribit, received approval to offer offshore crypto perpetual contracts to customers. In June, Coinbase launched a trading platform for AI agents, allowing AI agents to conduct crypto trading, payments, and asset management on behalf of users.
In the same month, the company also announced plans to launch tokenized stock trading, crypto and stock options, as well as new lending and rewards products.
As of the end of the quarter, Coinbase held $8.6 billion in cash and cash equivalents, with total available resources of $10 billion. The company repurchased 814,000 Class A ordinary shares during the quarter; year-to-date, it has repurchased nearly 7 million shares, amounting to approximately $1.2 billion, with approximately $2 billion remaining on its existing repurchase mandate.
Third-quarter revenue started at approximately $130 million.
For the third quarter, Coinbase stated that transaction revenue was approximately $130 million as of July 26. The company expects third-quarter subscription and service revenue to be between $500 million and $580 million, with adjusted fees estimated at between $980 million and $1.08 billion.
During the earnings call, Coinbase CEO Brian Armstrong stated that the company is no longer simply betting on Bitcoin price fluctuations and will continue to expand its business around trading, payments, lending, and AI-driven financial services.
Additional information:The company stated that it had $8.6 billion in cash and cash equivalents at the end of the second quarter, and total available resources reached $10 billion.
