Coinbase posts $359.5M Q2 GAAP loss amid diversification

Coinbase reported that 88% of its second-quarter net revenue came from sources other than Bitcoin spot trading and recorded a $359.5 million GAAP net loss for April through June. Total revenue fell to $1.22 billion, a 14% decline from the prior quarter, marking the company’s third consecutive GAAP loss.

The industry saw lower activity during the quarter: spot volume declined about 25%, Bitcoin traded roughly 14% lower and Ethereum about 25% lower over the three months. Coinbase’s transaction revenue was $599 million, down 21% quarter over quarter. Subscription and services revenue totaled $555 million, down 5%. Consumer transaction revenue was $452 million, keeping retail trading as the single largest revenue line.

Coinbase reported a record 10.3% share of global crypto trading volume, up from 9.1% the previous quarter, while monthly transacting users fell to 7.6 million from 8.2 million. Adjusted EBITDA was $207.8 million, down 31% quarter over quarter. The company reported roughly $130 million of transaction revenue through July 26 and guided subscription and services revenue for the next quarter to $500 million–$580 million.

The company has expanded into derivatives, stablecoin services, custody, staking, lending, prediction markets and its Base layer. Derivatives volume was roughly flat even as the broader derivatives market declined, pushing Coinbase’s derivatives market share to a record level with trailing-12-month volume above $4.2 trillion. Coinbase acquired Deribit for $2.9 billion and received a CFTC no-action letter in May that opened a regulated route for U.S. customers into global perpetual futures markets.

Prediction markets posted the fastest growth on the platform, with contracts and revenue rising 106% quarter over quarter and the business passing an annualized $100 million run rate, helped by sports events. Coinbase excludes prediction market volume from its headline trading metric, so that activity appears within consumer transaction revenue.

Average stablecoin balances on the platform reached more than $20 billion, up 44% year over year and representing over 30% of USDC’s circulating supply. Stablecoin revenue fell to $292 million from $305 million in the prior quarter due to lower interest rates and weaker off-platform balances. CEO Brian Armstrong confirmed that auto-renewal conditions have been met and that the USDC partnership will renew in August.

Other subscription lines produced mixed results. Blockchain rewards contributed $83 million, reduced by lower token prices and protocol reward rates despite more units staked. Interest and finance fee income was $66 million, roughly flat as higher decentralized finance borrow and lend balances offset lower rates. Base registered a sevenfold year-over-year rise in stablecoin transaction volume and trailing-12-month transfer volume the company put at $32 trillion, while Base revenue declined because many on-chain transactions and app activity generate little direct fee income for the exchange.

Cost reductions included a 14% workforce cut in May, reducing headcount to 4,321 from 4,988 three months earlier, and a $52.4 million restructuring charge. Adjusted operating expenses fell about 9% to roughly $1 billion for the quarter. Full-year adjusted expense guidance was lowered to a range of $4.2 billion–$4.45 billion.

The GAAP loss contained $209.5 million of losses on crypto held for investment and $238.3 million of stock-based compensation. CFO Alesia Haas described a $105 million adjusted net loss as a better reflection of operating performance. Coinbase ended the quarter with $8.6 billion in cash and about $10 billion in total available resources after repaying a $1.3 billion convertible note on June 1, leaving about $2 billion of its share buyback authorization unused.

Company management said the performance of its various revenue streams over coming quarters will indicate how those businesses perform across different market conditions.