Coinbase reported its third consecutive quarterly loss, posting a net loss of $359 million for the second quarter of 2024. The result marks a sharp reversal from the $1.43 billion profit recorded in the prior-year period, though sources disagree on the exact timing of these comparative financial figures. Net loss per share stood at $1.36.
Total revenue for the quarter was $1.22 billion, an 18.5% decline from the previous year and below the $1.29 billion analysts had expected. Reports regarding transaction revenue, a key indicator of trading activity, differ among sources; while one figure cites $599 million, representing a 21% year-over-year decline, the exact value remains disputed. The consensus estimate was $628 million.
Trading volume and market share
Reports on trading volume differ among sources. One source states that total crypto spot trading volume declined more than 20% from the previous quarter, while another reports a 25% drop. Despite the slowdown, Coinbase stated it gained market share in both spot and derivatives trading, with its crypto trading market share reaching a record 10.3%.
Subscription and services performance
Subscription and services revenue totaled $555 million, a 12.2% decrease from the prior year quarter and a 5% drop from the previous quarter. This figure fell short of Coinbase’s own forecast range of $565 million to $645 million. The company attributed the miss to delayed USDC commercial agreements and lower staking revenue resulting from reduced crypto asset prices.
Stablecoin revenue reached $292 million, with average USDC held across Coinbase products representing more than 30% of all USDC in circulation at quarter-end. The average amount of USDC held reached a record $20 billion.
New revenue streams and outlook
Prediction markets revenue grew 106% from the previous quarter, exceeding a $100 million annualized net revenue run rate. Average Borrow/Lend balances also increased by more than $1 billion to $1.49 billion. The company noted that 88% of its net revenue came from sources other than Bitcoin spot trading in Q2 2024, compared to 45% in Q2 2020.
Looking ahead to the third quarter, Coinbase expects subscription and services revenue to be between $500 million and $580 million. Adjusted expenses are projected to range from $980 million to $1.08 billion. Transaction revenue through July 26 was approximately $130 million.
Stock reaction and capital management
Coinbase shares fell in after-hours trading following the earnings release. Reports on the magnitude of the decline vary, with one source citing a 5.3% drop and another reporting a 4.9% decrease. The stock has declined about 27.7% year-to-date as of the July 30 close.
During the quarter, Coinbase repurchased 814,000 Class A shares. Year-to-date, the company has repurchased nearly 7 million shares for $1.2 billion. It ended Q2 with $8.6 billion in cash and equivalents and $10 billion in total available resources.
In the broader market, competitor Robinhood Markets reported a 38% slump in its Q2 crypto transaction revenue. Coinbase also noted that conditions for its commercial agreement with Circle to automatically renew in August were met.