Coinbase Stock Craters on Missed Earnings Amid Crypto Market Weakness

Coinbase stock plummeted 6.9% in after-hours trading following the release of its second-quarter results, which fell short of analyst expectations on both revenue and earnings per share (EPS).

The company reported a net loss of $1.36 per share, significantly lower than the consensus estimate of a profit. Total revenue came in at $1.2 billion, below the expected range of $1.33-$1.35 billion.

The revenue shortfall was primarily driven by a 21% year-over-year drop in transaction revenue to $599 million, due to declines in Bitcoin and Ethereum prices during the April-June period. However, subscription and services revenue showed resilience, accounting for 48% of net revenue.

Management narrowed its full-year adjusted expense guidance to $4.2-$4.45 billion and ended the quarter with $8.6 billion in cash and cash equivalents. A U.S. district judge also dismissed 99.97% of claims in a customer lawsuit, but the news had little impact on investor sentiment.

The disappointing earnings report came amid a challenging crypto market environment, with Robinhood reporting a 38% year-over-year decline in crypto trading revenue the previous day. The combination of a steep EPS miss and revenue shortfall led to a sharp drop in Coinbase's stock price, pushing it back toward its 52-week low.