Coinbase’s total revenue declined by 8% Q/Q, reaching $708 million. Net revenue also declined by 10% Q/Q, totaling $663 million. The company achieved $194 million in adjusted EBITDA, despite facing a net loss of $97 million.
Coinbase reported $327 million in transaction revenue in Q2, down 13% Q/Q. This revenue was split into two categories: Consumer transaction revenue was $310 million, stemming from $14 billion in consumer trading volume, marking decreases of 12% and 33% Q/Q, respectively. Additionally, institutional transaction revenue amounted to $17 million from $78 billion in institutional trading volume, down 24% and 37% Q/Q, respectively.
The company primarily attributed the revenue decline to lower volumes. However, Coinbase partially offset this with higher realized fees resulting from changes in trading activity. Despite the decline, the company outperformed the crypto spot market, which experienced a 48% Q/Q decline, gaining market share in the process.
On a positive note, Coinbase strengthened its balance sheet with a Q/Q increase of $156 million, reaching $5.5 billion in USD resources. This category includes cash, cash equivalents, the USDC stablecoin, and custodial account overfunding.
Coinbase’s Q2 earnings report had a relatively neutral impact on the price of its COIN stock. Although Bloomberg initially reported sudden gains, COIN only saw a slight increase of 0.35% on Aug. 3 and a decrease of 0.83% after hours.
Moving forward, Coinbase expects its Q3 revenue to be “largely consistent” and the company is optimistic that subscription and services revenue may reach at least $300 million. Coinbase bases this expectation on the absence of significant changes in the crypto market cap and its on-platform assets, contributing to a stable outlook. Additionally, the withdrawal of staking services in certain states is not projected to have a significant impact on revenue.
Coinbase also emphasized the highly anticipated public launch of its Layer 2 network, Base, scheduled for August 9. This launch is expected to bring faster, more secure, and cost-effective transactions for users. The company expressed enthusiasm over the “overwhelming response” from developers in diverse domains. Notably, over 50 prominent brands, such as Coca-Cola, Atari, and the NFT marketplace OpenSea, are poised to commemorate Base’s launch with NFT mints and other exciting offerings.
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