Coinbase Records $1.45 Billion in Q2 Revenue Despite Decline in Profits

Why Trust Tech Report

Tech Report is one of the oldest hardware, news, and tech review sites on the internet. We write helpful technology guides, unbiased product reviews, and report on the latest tech and crypto news. We maintain editorial independence and consider content quality and factual accuracy to be non-negotiable.

Coinbase, the largest crypto exchange in the United States, unveiled its second-quarter earnings. The company’s revenue soared to $1.45 billion for Q2 2024, beyond Wall Street analysts’ predictions of $1.4 billion.

It achieved a remarkable 104% increase compared to last year. This significant growth showcases the resurgence of crypto trading activity, propelling Coinbase’s stock to climb by 3-5% in after-hours trading.

Coinbase Revenue Summary

A key factor behind the substantial revenue increase was a notable rise in total trading volume, which surged 146% year over year to $226 billion. Institutional investors largely drove this growth, with institutional trading volume climbing 142% to $189 billion.

Retail trading also saw significant growth, reaching $37 billion, a 164% increase. These figures primarily illustrate the broad-based expansion in Coinbase’s trading activities.

Also, transaction revenue, the primary income source for Coinbase, soared by 138% to $780.9 million, propelled by a 130% rise in consumer transaction revenue.

Although this fell slightly below analysts’ projections of 141% growth, it still significantly contributed to the company’s overall financial results.

Coinbase’s subscription and services revenue also demonstrated strong growth, increasing to $599 million. This represents a 17% rise from the previous quarter and almost twice the amount from Q2 2023.

The growth in this segment was partly due to Coinbase’s custodial role for several asset managers issuing spot Bitcoin ETFs.

More Areas Experiencing Progress

Coinbase reported a net income of $36 million for the quarter, marking its third consecutive profitable quarter regularly. This also included its sixth profitable quarter when considering adjusted EBITDA.

However, it experienced $319 million in pre-tax losses on digital asset investments, mainly due to falling market prices from Q1 to Q2. Despite positive financial results, their adjusted EBITDA of $596 million fell short of the expected $607.7 million.

Meanwhile, the company’s earnings per share (EPS) were 14 cents, an improvement from a loss of 42 cents per share the previous year. However, it still stands below the expected 95 cents per share.

The company expects its services and subscription revenue to range from $530 million to approximately $600 million in the third quarter. This will be a significant increase from $334 million in the same quarter last year, showing the company’s optimism about continued growth and market expansion.

CEO Brian Armstrong identified the improvements and progress in regulatory clarity for the virtual currency industry in the U.S. and worldwide during Q2.

He highlighted that crypto legislation has gained mainstream attention in the U.S., with bipartisan support in the House and the Senate to pass significant laws.

Coinbase also plays a crucial role in the emerging crypto ETF market. It acts as the custodian for most U.S. spot Bitcoin ETFs launched in January and many spot Ethereum ETFs that began trading on July 23.

This custodial role boosts Coinbase’s revenue and strengthens its position as a significant player in the evolving digital asset space.