Coinbase Beats Analyst Estimates for the Second Quarter, Albeit Transaction Income Falls
Coinbase (COIN), a cryptocurrency exchange, beat analysts’ expectations for the second quarter. The company reported revenue of $708 million and adjusted earnings equivalent to a loss per share of $0.42. Analysts had forecast sales of $628 million and earnings of $0.76.
The Company’s transaction revenue was $327 million compared to $375 million in the prior quarter. Total trading volume fell to $92 billion compared to $145 billion in the previous quarter. In its shareholder letter, the company explained that poor transaction revenue results “reflect multi-year lows in crypto volatility.” Interest income fell from $241 to $201 in the first quarter. During the second quarter, the company received $151 million in interest from USDC.
Coinbase’s third-quarter guidance said the company generated about $110 million in transaction revenue in July and expected third-quarter subscriptions and services revenue to reach $335 million in the second quarter and would be $300 million or more in the third quarter.
Coinbase shares initially rose as much as 9 percent after the earnings were announced, but were recently up 1.4 percent to $89.48. Bitcoin price is up more than 75% this year compared to the 160% surge in Coinbase shares.
In a AskFX statement, CEO Brian Armstrong said, “Q2 was an excellent quarter for Coinbase. We have performed well and demonstrated resilience in a challenging environment.” “We have reduced costs, we are operating efficiently and remain well positioned to build the future of the crypto economy and drive regulatory clarity.”
Mark Palmer, Berenbergs Analyst wrote an email about the results. “Coinbase’s revenue increase was due in large part to interest income and equity income. These are two areas of Coinbase’s business that appear to be at risk going forward given the ongoing decline in USDC’s market cap and the regulatory challenges its equity program is facing. Interest.” Earnings for USDC fell 25% for a consecutive period.
Palmer said that “at the same time, management’s guidance for Coinbase’s current quarter is muted.” The company’s EBITDA figure includes a large adjustment to stock-based compensation — an area that management is trimming down due to negative investor feedback want.
Helene Braun is a reporter who contributed to this article.
The SEC ordered Coinbase to halt trading in all cryptos except Bitcoin before filing lawsuit: FT
UPDATE (3 Aug 20:54 UTC). Added updated share price and additional background information.
UPDATE (3 Aug 22:29 UTC). Added analyst comments
