Coinbase reported a staggering net profit of $1.43 billion—seven times higher than the previous year—yet its stock plummeted over 10% as revenue fell short of expectations. Analysts had projected $1.587 billion in revenue, but the exchange delivered only $1.42 billion, marking a slight decline year-over-year. Despite the profit jump from $140 million to $1.43 billion, investors focused on the disappointing top-line performance, sending shares tumbling to $343 in after-hours trading. Adjusted earnings per share of $0.12 also missed estimates by 92%, revealing reliance on one-time gains like a $1.5 billion book profit from strategic investments.
Trading Volumes and Security Breaches Weigh Heavy
The platform’s consumer trading volume crashed 45% to $43 billion, while institutional activity dropped 38%, reflecting broader challenges. A May security incident costing $307 million further eroded trust. Though Bitcoin gained 6%, declining crypto volatility (-16%) hurt Coinbase’s core business. Despite the bleak fundamentals, shares edged up 1.36% post-market, suggesting investors had priced in the weak Q2 results. CEO optimism for Q3 targets $360 million in transaction revenue, but structural hurdles remain.
