Coinbase Reports a 13% Decrease in Transaction Revenue in Second Quarter

2:06 am
August 4, 2023
  • Coinbase released its second-quarter financial results, revealing a decline in transaction revenue.
  • Analyst Mark Palmer predicts a downside for Coinbase stock.
  • Coinbase stock has experienced significant growth since the beginning of 2023.

Shares of Coinbase Global Inc remained relatively flat in after-hours trading, despite the crypto exchange reporting strong results for the second quarter.

Why is Coinbase stock not responding positively?

The stock is primarily influenced by the decline in transaction revenue, which amounted to $327 million, a decrease of nearly 13% compared to the previous quarter. Trading volume also decreased from $145 million to $92 million.

Another negative factor was the decrease in interest income, which dropped by about 17% from the previous quarter to $201 million. Berenberg analyst Mark Palmer commented on the earnings in an email, stating:

Interest income and staking revenue may face challenges in the future due to the decline in USDC’s market cap and regulatory issues related to staking programs.

In Q2, Coinbase earned $151 million in interest income from USDC holdings.

Key figures from Coinbase’s Q2 earnings report

  • Reported a loss of $79 million, compared to $430 million in the same period last year
  • Per-share loss reduced from $1.98 to 34 cents
  • Revenue dropped approximately 35% YoY to $773 million
  • Consensus estimate was a loss of 76 cents per share on $628 million in sales
  • Subscription and services revenue amounted to $335 million

In June, Coinbase Global Inc was sued by the SEC for allegedly violating U.S. securities laws (read more).

Is it a good time to buy Coinbase stock?

Coinbase also announced in a letter to shareholders that transaction revenue in July stood at $110 million.

The crypto exchange expects to generate at least $300 million in subscription and services revenue in the current financial quarter. According to Berenberg’s Palmer:

The guidance was conservative, and the adjusted EBITDA included a substantial adjustment for stock-based compensation, an area where management has expressed intentions to reduce expenses.

It is worth noting that Palmer has set a $39 price target for Coinbase stock, indicating a potential downside of more than 50%. He believes that the crypto company is not investable, at least in the near term.


More in this category ...

12:46 pm September 22, 2023

Biometric Verification: Exploring the Future of Identity Authentication

8:45 am September 22, 2023

Exploring the Pros and Cons of Decentralized Social Media Platforms

8:43 am September 22, 2023

The Significance of AI Skill Building and Partner Innovation Highlighted at IBM TechXchange

5:02 am September 22, 2023

Binance CEO and Exchange Seek Dismissal of SEC Lawsuit

Featured image for “Binance CEO and Exchange Seek Dismissal of SEC Lawsuit”
4:43 am September 22, 2023

Blockchain in Drug Supply Chain: Enhancing Transparency and Reducing Counterfeit Medications

12:41 am September 22, 2023

Data Privacy and Security: Ensuring Trust in the Age of Data Sharing

12:24 am September 22, 2023

Uniswap Introduces Uniswap University in Partnership with Do DAO

10:14 pm September 21, 2023

VeChain Launches VeWorld, a Self-Custody Wallet For Enterprise-Focused L1 Blockchain

9:02 pm September 21, 2023

Galaxy Digital Announces Expansion Plans in Europe

8:37 pm September 21, 2023

The Role of Blockchain in Enhancing Transparency in Government Contracts

7:03 pm September 21, 2023

Bitcoin Shorts Accumulate on Binance and Deribit, Potential Squeeze on the Horizon?

Featured image for “Bitcoin Shorts Accumulate on Binance and Deribit, Potential Squeeze on the Horizon?”
6:41 pm September 21, 2023

ASTR Price Surge Following Bithumb Listing, but Gains Trimmed

5:31 pm September 21, 2023

Tether Expands into AI with $420 Million Purchase of Cloud GPUs

4:32 pm September 21, 2023

Demystifying Blockchain Technology: A Primer for Logistics Professionals

4:07 pm September 21, 2023

Understanding the Difference Between Spear Phishing and Phishing Attacks

3:07 pm September 21, 2023

Chancer Surpasses $2.1 Million in Presale Funds Following First Product Update

12:47 pm September 21, 2023

Alchemy Pay Obtains Money Transmitter License in Arkansas, Expanding Global Presence

12:30 pm September 21, 2023

Blockchain-based Prediction Markets: Ensuring Transparency and Fairness

9:03 am September 21, 2023

Phishing Scam Nets Scammer $4.5M in USDT from Unsuspecting Victim

Featured image for “Phishing Scam Nets Scammer $4.5M in USDT from Unsuspecting Victim”
8:29 am September 21, 2023

Smart Contracts and Blockchain: Revolutionizing Intellectual Property Management

7:50 am September 21, 2023

Empowering AI at the Edge with Foundational Models

6:57 am September 21, 2023

Australian regulator ASIC sues Bit Trade, the Kraken subsidiary, for non-compliance with design and distribution requirements

4:28 am September 21, 2023

Transforming the Traditional Supply Chain with Artificial Intelligence

12:27 am September 21, 2023

Navigating the World of Regulated Digital Asset Exchanges: Key Considerations for Investors

11:33 pm September 20, 2023

IBM Partnership with ESPN and Eli Manning: AI-Powered Insights for Fantasy Football

11:04 pm September 20, 2023

BlackRock’s Reported Consideration of XRP as Bitcoin Alternative Sparks Debate

Featured image for “BlackRock’s Reported Consideration of XRP as Bitcoin Alternative Sparks Debate”
10:35 pm September 20, 2023

Cardano Price Stagnates as Bears Maintain Control

9:23 pm September 20, 2023

CHANCER Presale Price Expected to Reach $0.013 as Rollbit Coin Drops 21% in a Week

8:25 pm September 20, 2023

Demystifying Privacy Protocols: How Blockchains are Revolutionizing Data Privacy

8:13 pm September 20, 2023

Cryptocurrency Update: Dogecoin and Polkadot Price Analysis