Coinbase Q2 Earnings: Crypto Trading Slump Hits Revenue Estimates
Coinbase, the popular cryptocurrency exchange, is set to report its second-quarter results on Thursday. Analysts are largely in agreement that the quarterly numbers may not be as important as management's outlook for the second half of the year and the evolving regulatory landscape.
The consensus view among analysts is that Q2 was another challenging quarter for crypto trading. Spot trading volumes fell across the industry, with Bitcoin (BTC) and Ether (ETH) trading lower on average than in the prior quarter. Retail participation remained muted, and crypto markets were under pressure throughout most of the second quarter, with Bitcoin losing around 14% during the period and Ether dropping about 25%. While June showed some improvement, analysts say it wasn't enough to offset weakness in April and May.
Analysts at Barclays, Benchmark, Clear Street, and Compass Point have all cut their estimates ahead of earnings, citing lower spot trading activity. Barclays' Benjamin Budish estimates that Coinbase processed around $152 billion of trading volume during the quarter, well below the Street's expectation of about $178 billion. He expects adjusted EBITDA to come in roughly 3% below consensus, pointing to weaker blockchain rewards and institutional trading revenue.
Despite the challenges, analysts are more constructive on subscription and services revenue, which includes interest income from USDC, staking rewards, custody fees, Coinbase One subscriptions, and institutional services. These businesses are less tied to daily trading volumes and are expected to provide a cushion against weaker transaction revenue.