- Coinbase has published its Q2 earnings and reported significant revenue despite overall losses.
- The company primarily attributed the revenue decline to lower volumes.
- Coinbase has emphasized the highly anticipated public launch of its Layer 2 network, Base, scheduled for August 9, as the launch is expected to bring faster, more secure, and cost-effective transactions for users.
Coinbase, a leading cryptocurrency exchange, has published its Q2 earnings and reported significant revenue despite overall losses. In its report on August 2, the platform said it saw $708 million in total revenue, marking a decline of 8% quarter-over-quarter (Q/Q), and $663 million in net income, drawing a drop of 10% Q/Q.
The company also saw $97 million in net loss and $194 million in adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA). Further, 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.
Coinbase Attributes The Revenue Decline To Lower Volumes
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 fall, the company outperformed the crypto spot market, which experienced a 48% Q/Q decline, gaining market share.
On the other hand, Coinbase strengthened its balance sheet by reaching $5.5 billion in USDC resources, a Q/Q increase of $156 million. That 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. However, Bloomberg initially reported sudden gains, and COIN only saw a slight increase of 0.35% on August 3 and a decrease of 0.83% after hours.
The crypto firm has stated that it expects its Q3 revenue to be “largely consistent” with its Q2 outlook. It said subscription and services revenue could reach at least $300 million. The company said that an absence of changes concerning the crypto market cap and its on-platform assets allows for this consistent outlook. It added that its withdrawal of staking services in certain states should have no material 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 has 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.