Coinbase’s quarter: A tale of two halves. While the year-over-year numbers are impressive, the sequential decline raises eyebrows.
Earlier today, we discussed MicroStrategy’s 226,500 Bitcoin holdings, parallel to its 7% year-over-year decline. This time, Coinbase reported a significant year-over-year revenue increase in the second quarter but experienced a slight downturn compared to the previous quarter.
Total revenue for the period reached $1.45 billion, marking an 11% decrease from the first quarter. This decline was primarily attributed to a decrease in consumer transaction revenue.
Coinbase reported $665 million in consumer transaction revenues for Q2, a 29% decrease from the $1.07 billion in Q1. However, the exchange’s stablecoin revenue increased to $240.4 million from $197.3 million in the previous quarter.
Notably, Solana contributed 10% to the overall transaction revenues.
The company’s adjusted EBITDA was $596 million, down from $1.01 billion in the previous quarter. Net income fell to $36 million, a significant drop from nearly $1.2 billion in Q1.
The decline in net income included $319 million in pre-tax crypto asset losses, mostly unrealized, due to lower crypto prices on June 30.
Transaction fees, Coinbase’s primary income source, decreased by 27% as trading volume fell by 28%. Despite this, subscription and services revenue grew by 17% from the previous quarter.
Subscription and services revenue benefited from higher average USDC on-platform balances, increased USDC market capitalization, and higher average crypto asset prices, particularly SOL and ETH, as per the exchange’s shareholder letter.
“On a Q/Q basis, subscription and services revenue benefited from higher average USDC on-platform balances and USDC market capitalization, as well as higher average crypto asset prices – notably SOL and ETH.”
The exchange is diversifying its revenue streams by engaging in the spot bitcoin and ether (ETH) exchange-traded funds (ETFs) business, listing some ETFs, and acting as a custodian. Additionally, Coinbase plans to create a tokenized money-market fund, targeting the growing real-world assets (RWA) finance sector.
