Coinbase shares fell about 5% in after-hours trading on August 1, 2024, after the cryptocurrency exchange reported second-quarter results that missed Wall Street expectations., this marks the third consecutive quarter the company has failed to meet revenue and earnings forecasts.
The company reported total revenue of $1.22 billion for the second quarter of 2024, falling short of the consensus estimate of $1.29 billion. Transaction revenue, a key metric for the platform, came in at $599 million, which was below analyst expectations that ranged between $628 million and $636 million.
Subscription and services revenue also trailed projections, totaling $555 million against estimates of $590 million to $599 million. Consequently, Coinbase posted a GAAP net loss of approximately $359 million, significantly wider than the expected loss of $122 million.
Market conditions and diversification
The financial results arrived during a period of decline for major cryptocurrencies. Bitcoin fell roughly 14% during the second quarter of 2024, while Ether lost about 25% over the same period. Competitor Robinhood also reported a downturn in its crypto segment, with trading revenue falling 38% year-over-year to $100 million.
Despite the revenue miss, Coinbase highlighted growth in its market presence. The company stated that its share of global crypto trading volume reached an all-time high of 10.3% in the second quarter, up from 9.1% in the first quarter. Additionally, it reported that 88% of its net revenue now comes from sources other than Bitcoin spot trading.
The company also noted that its prediction markets revenue doubled in the second quarter of 2024, a claim that remains unverified by independent sources. These results follow a profitable second quarter in 2023, when Coinbase reported a profit of $1.43 billion.