Coinbase posts $1.45 billion in second-quarter revenue despite profit drop

Coinbase, the largest cryptocurrency exchange in the United States, He revealed his second quarter profits. The company’s second-quarter 2024 revenue rose to $1.45 billion, exceeding Wall Street analysts’ forecasts of an increase to $1.4 billion.

Compared to last year, an impressive increase of 104% was achieved. This significant increase shows, resurgence of cryptocurrency trading activitywhich caused Coinbase shares to rise by 3-5% in after-hours trading.

Coinbase Revenue Summary

The key factor behind the significant increase in revenue was the noticeable increase in total trading volume, which increased dramatically 146% year-on-year to $226 billionThis growth was largely driven by institutional investors.with institutional trading volume increasing by 142% to $189 billion.

Retail trading also saw significant growth, reaching $37 billion, an increase of 164%. These numbers primarily illustrate the broad expansion in Coinbase’s trading business.

In addition, transaction revenues, which are Coinbase’s main source of income, increased by 138% to $780.9 milliondriven by 130 percent growth in consumer transaction revenue.

Even though this result was slightly below analysts’ forecasts of 141% growth, it still had a significant impact on the company’s overall financial results.

Coinbase’s revenue from subscriptions and services also showed strong growth, increases to $599 million. This represents a 17% increase compared to the previous quarter and almost double the amount in the second quarter of 2023.

Growth in this segment was due in part to Coinbase acting as a custodian for several asset managers issuing Bitcoin-based ETFs.

More areas experiencing progress

Coinbase reported net income of $36 million for the quarter, marking its third consecutive profitable quarter. It also includes its sixth profitable quarter on an adjusted EBITDA basis.

However, the company incurred $319 million in pre-tax losses on its digital asset investments, largely due to the decline in market prices between the first and second quarters. Despite the positive financial results, adjusted EBITDA of USD 596 million was lower than expected at USD 607.7 million.

Meanwhile, the company’s earnings per share (EPS) came in at 14 cents, an improvement from a loss of 42 cents per share in the prior year. However, it still fell short of expectations of 95 cents per share.

The company expects revenue from its services and subscriptions to be between $530 million and about $600 million in the third quarter. This will be a significant increase compared to $334 million in the same quarter last year, which shows the company’s optimism about further growth and market expansion.

CEO Brian Armstrong cited improvements and progress in regulatory clarity for the virtual currency industry in the U.S. and globally during the second quarter.

He emphasized that cryptocurrency legislation has gained mainstream attention in the U.S. and there is strong bipartisan support in Parliament. The House of Representatives and the Senate will pass important bills.

Coinbase also plays a key role in the growing crypto ETF marketIt acts as a custodian for most of the US spot Bitcoin ETFs launched in January, as well as a number of Ethereum spot ETFs that began trading on July 23.

This caring role increases Coinbase’s revenue and strengthens its position as a significant player in the emerging digital assets market.