Coinbase shares fell Thursday as second-quarter revenue fell shy of analysts' estimates. Gains in the cryptocurrency exchange's subscription revenue failed to offset weaker trading volumes.
In the quarter ended June 30, Coinbase net income rose to $1.43 billion, or $5.14 per share, from $36.13 million, or 14 cents per share, a year ago. Earnings in the latest period benefited from a gain $1.5 billion related its Circle investment and $362 million from its crypto investment portfolio.
On an adjusted basis, Coinbase earned $1.96 per share, topping estimates of $1.26 reported by LSEG.
Revenue rose slightly to $1.5 billion from $1.45 billion in the same quarter last year, coming in just under analysts' expectations of $1.6 billion. Revenue tied to transactions came in at $764 million, missing StreetAccount estimates of $787 million.
Shares fell 7% in extended trading.
Analysts were anticipating a weaker second quarter in the wake of the market's exuberance in the first quarter, when traders positioned themselves for the upside of the Trump administration's promises to create more favorable regulatory conditions for the crypto industry.
As Washington's focus shifted to tariffs in the second quarter, speculative trading by retail investors slowed across centralized crypto exchanges, while crypto ETF inflows and buying by crypto treasury companies supported prices.
Retail engagement and stablecoins
Coinbase reported that retail trading volume, which is typically more profitable than institutional volume, grew 16% year-over-year to $43 billion, but missed the $48.05 billion expected by analysts surveyed by StreetAccount.
Subscriptions and services offerings – which include stablecoins, staking, interest income and custody – grew 9% from the same period a year ago to $655.8 million, short of analysts' projection of $705.9 million.
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