Coinbase recently announced their strong second-quarter revenue of $1.45 billion, surpassing market expectations despite a decline in transaction revenue. This is a significant improvement compared to the same period last year when their total income was $674.1 million. The exchange also reported a net income of $36 million for the quarter, a positive turnaround from a net loss of $97 million in 2023. Their earnings per share for the three months ending June 30 were $0.14 per share.
One of the key highlights of Coinbase’s performance in the second quarter was the adoption of their Layer-2 network Base, which saw transactions increase by 300% quarter-over-quarter. The company emphasized the improvements made to network efficiency, with median daily fees per transaction dropping below 1 cent, making Base one of the most cost-effective Layer-2 solutions available.
Despite the overall positive revenue figures, total revenue experienced an 11% decline quarter-over-quarter. Transaction revenue fell by 11%, amounting to $781 million, while subscription and services revenue increased by 17% to $599 million as Coinbase continued to diversify its revenue streams.
Bitcoin remained a significant contributor to Coinbase’s trading volumes in the second quarter, representing 35% of trading volumes and 31% of transaction revenues. However, total trading volumes decreased by 28% quarter-over-quarter, with consumer trading volume declining by 34% and institutional trading volume dropping by 26%.
Looking ahead to the third quarter, Coinbase expects subscription and services revenue to range between $530 million and $600 million. The company’s outlook takes into account factors such as a 3% decline in the average price of Ethereum in July, anticipation of a September rate cut, increased expenses related to the adoption of USDC as a compliant stablecoin, and a one-time $8 million revenue benefit from blockchain rewards recorded in the second quarter.
Coinbase also anticipates challenges ahead, including fluctuations in cryptocurrency prices and additional expenses aimed at driving global adoption of USDC. Despite these challenges, the exchange’s shares have shown a 20% increase year-to-date. Following the earnings report, the stock saw a 1.43% increase in after-hours trading, priced at $216 per share at the time of publication.