TLDR
- Coinbase shares fell over 6% after second-quarter revenue of $1.5 billion missed analyst estimates of $1.6 billion
- Transaction revenue came in at $764 million, falling short of expectations of $787-814 million
- Net income surged to $1.43 billion from $36.13 million year-over-year, boosted by $1.5 billion gain on strategic investments
- Retail trading volume grew 16% to $43 billion but missed analyst projections of $48.05 billion
- Company announced expansion plans beyond crypto to include tokenized assets, derivatives, and prediction markets
Coinbase shares dropped in after-hours trading Thursday following the release of second-quarter earnings that disappointed investors. The cryptocurrency exchange reported revenue of $1.5 billion, just missing analyst expectations of $1.6 billion.
The revenue figure represented a slight increase from $1.45 billion in the same quarter last year. However, it failed to meet Wall Street’s projections, sending shares down more than 6% in extended trading.
Transaction revenue, a key metric for the exchange, came in at $764 million. This fell short of StreetAccount estimates ranging from $787 million to $814 million, representing a 39% decline from the previous year.
Coinbase $COIN earnings out. Miss on everything.
*COINBASE 2Q TOTAL REV. $1.50B, EST. $1.59B
*COINBASE 2Q TRADING VOLUME $237B, EST. $252.76B
*COINBASE 2Q SUBSCRIPTION & SERVICES REV. $655.8M, EST. $715.2M
*COINBASE 2Q TRANSACTION REV. $764.3M, EST. $810M
*COINBASE SEES 3Q… pic.twitter.com/O6UccqRwLq— MartyParty (@martypartymusic) July 31, 2025
Despite the revenue miss, Coinbase posted strong net income numbers. The company earned $1.43 billion, or $5.14 per share, compared to $36.13 million, or 14 cents per share, in the same quarter last year.
The earnings boost came largely from a $1.5 billion gain on strategic investments, including an unrealized gain related to its Circle investment. An additional $362 million gain from its crypto investment portfolio also contributed to the strong bottom line.
On an adjusted basis, Coinbase earned $1.96 per share, beating estimates of $1.26. Adjusted net income came in at $33 million, well below analyst expectations of $319 million.
Trading Volume Challenges
Retail trading volume grew 16% year-over-year to $43 billion but fell short of analyst expectations. StreetAccount had projected retail volume of $48.05 billion for the quarter.
The lower-than-expected trading volumes reflected broader market conditions during the second quarter. After the first quarter’s enthusiasm around potential crypto-friendly policies from the Trump administration, speculative retail trading slowed as Washington’s focus shifted elsewhere.
Institutional and retail trading remains Coinbase’s core business model. The company generates higher profit margins from retail transactions compared to institutional volume, making the retail miss particularly important for investors.
Subscription Services Growth
Subscriptions and services revenue, which includes stablecoins, staking, and custody services, reached $655.8 million. This represented a 9% increase from the same period last year but missed analyst projections of $705.9 million.
Stablecoin revenue came in at $332.5 million, roughly in line with estimates of $333.2 million. This marked a 38% increase from the previous year and a 12% jump from the first quarter.
The stablecoin business has become increasingly important for Coinbase. The company has a revenue-sharing agreement with Circle, keeping 100% of revenue from USDC held on Coinbase platforms plus about 50% of other USDC revenue generated elsewhere.
Operating expenses increased by $193 million, or 15%, to $1.5 billion compared to the previous year. The increase included $307 million in costs related to a data breach incident disclosed earlier this year, where tens of thousands of users were affected after cyber attackers bribed overseas support workers.
Expansion Plans
Coinbase announced Thursday it plans to expand beyond cryptocurrency trading. The company will offer tokenized real-world assets, derivatives, prediction markets, and early-stage token sales within its main app.
This expansion represents Coinbase’s push to become what it calls an “Everything Exchange.” The rollout will initially focus on U.S. users, with plans to operate 24 hours a day with low transaction friction.
The company also announced a partnership with JPMorgan Chase to accelerate crypto adoption. Chase credit card customers can now use their cards on Coinbase and redeem rewards points for USDC stablecoin.
CFO Alesia Haas provided optimistic guidance for the third quarter. July transaction revenue is expected to reach about $360 million, while subscription and services revenue could hit a new high of $665 million to $745 million.
The company’s previously announced $2.9 billion acquisition of crypto options exchange Deribit is expected to close by year-end. This deal aims to increase Coinbase’s market share in the crypto derivatives business.
Despite Thursday’s after-hours decline, Coinbase shares remain up more than 50% year-to-date through the close. The stock joined the S&P 500 benchmark index in May, reflecting its growing mainstream acceptance.
Stay Ahead of the Market with Benzinga Pro!
Want to trade like a pro? Benzinga Pro gives you the edge you need in today's fast-paced markets. Get real-time news, exclusive insights, and powerful tools trusted by professional traders:
- Breaking market-moving stories before they hit mainstream media
- Live audio squawk for hands-free market updates
- Advanced stock scanner to spot promising trades
- Expert trade ideas and on-demand support
