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Coinbase reported weaker-than-expected second-quarter results after a drop in crypto trading activity. The exchange recorded its third quarterly loss in a row. Revenue fell 19% from a year earlier to about $1.22 billion. Analysts had expected roughly $1.29 billion.
The company posted a net loss of $359.5 million, or $1.36 per share, compared with a profit of $1.43 billion a year earlier. Coinbase shares fell more than 5% after the results were released.
Crypto Trading Revenue Falls 21%
Transaction revenue declined 21% from a year earlier to $599 million as weaker digital asset markets reduced trading activity. Uncertainty over U.S. interest rates and geopolitical tensions weighed on crypto markets during the quarter. Crypto investment products also continued to record outflows.
Coinbase’s subscription and services revenue also fell 12.2% to $555.1 million. This segment includes stablecoin revenue, blockchain rewards, custody services and interest income, which are intended to give the company more stable earnings outside trading.
Coinbase still increased its share of overall crypto trading volume during the quarter. However, gaining market share was not enough to prevent revenue from falling as the wider market slowed.
Coinbase Expands Beyond Spot Crypto Trading
Coinbase is trying to reduce its reliance on spot crypto trading by adding products such as derivatives, prediction markets, stablecoin payments and tokenized assets. The company has described its wider strategy as becoming an “everything exchange” offering several types of financial products on one platform.
The exchange is also expanding perpetual futures and other derivative products in the United States. However, revenue from these newer businesses was not yet large enough to make up for the decline in spot trading.
Coinbase also cut about 700 jobs, equal to roughly 14% of its workforce, during the second quarter. The restructuring included $52.4 million in related costs as the company reduced expenses and increased its use of artificial intelligence.
Coinbase Looks to Stablecoins and Clearer Rules
Coinbase expects stablecoin growth and clearer U.S. crypto rules to support its future expansion. CEO Brian Armstrong said he was “pretty optimistic” that the CLARITY Act would reach a full Senate floor vote.
For the third quarter, Coinbase expects subscription and services revenue of between $500 million and $580 million. The company generated about $130 million in transaction revenue through July 26. That figure points to another slow start for trading revenue in the new quarter.
As of June 30, Coinbase held a 10.3% share of crypto trading volume. It also reported $246 billion in assets on its platform, giving investors two measures to watch as the company expands beyond spot trading.
