TLDR
- Coinbase reported $1.4 billion in revenue for Q2 2024, with trading volumes up 145% year-over-year.
- The company’s shares rose 3.2% after hours following the earnings report.
- Coinbase marked its third consecutive profitable quarter, with a net income of $36 million.
- Subscription and services revenue nearly doubled from Q2 2023, partly due to Coinbase’s role as custodian for Bitcoin ETFs.
- The company highlighted progress in advocating for clearer crypto regulations in the US.
Coinbase, the leading cryptocurrency exchange, reported strong financial results for the second quarter of 2024, surpassing Wall Street expectations.
The company’s shares rose 3.2% in after-hours trading following the announcement.
For Q2 2024, Coinbase reported total revenue of $1.4 billion, marking a significant increase from the previous year. Trading volumes reached $266 billion, representing a 145% jump compared to Q2 2023.
However, this figure was lower than the $312 billion reported in Q1 2024.
The company’s performance was particularly notable in its subscription and services revenue, which nearly doubled from the same period last year.
This growth was partially attributed to Coinbase’s role as a custodian for several asset managers issuing spot Bitcoin exchange-traded funds (ETFs).
Transaction revenue, derived from crypto trading activity, doubled from Q2 2023 to $780.9 million. Of this amount, $664.8 million came from consumer-based transactions, while institutional transactions accounted for $63.6 million.
Coinbase reported a net income of $36 million for the quarter, marking its third consecutive profitable quarter and sixth on an adjusted EBITDA basis.
However, the company also noted $319 million in pre-tax cryptocurrency losses in its investment portfolio, mostly unrealized due to lower market prices at the end of Q2 compared to Q1.
CEO Brian Armstrong highlighted the company’s progress in advocating for clearer crypto regulations in the United States.
“We are increasingly optimistic that the next administration, whether Democrat or Republican, will be constructive on crypto. The rhetoric has shifted,” Armstrong stated during the post-earnings conference call.
Coinbase has been actively supporting the “Stand With Crypto” campaign, which has garnered over 1.3 million supporters.
The company views recent developments, such as the approval of Ethereum ETFs in the US and USDC’s compliance with the European Union’s MiCA framework, as significant steps toward a more defined regulatory landscape for the crypto industry.
In terms of product innovation, Coinbase reported a 300% quarterly increase in transactions on Base, its layer two (L2) solution.
The company also expanded its services with the addition of smart wallets, aiming to reduce friction in on-chain transactions and promote wider crypto adoption.
Despite the overall positive results, Coinbase faced some challenges. The company experienced a 27% quarter-over-quarter decline in transaction revenue to $781 million.
Additionally, the fluctuating value of crypto assets resulted in $319 million in pre-tax crypto asset losses, though the majority were unrealized.
