Coinbase posted a second-quarter loss amid cryptocurrency collapse. Shares fell

Cryptocurrency exchange Coinbase reported a loss for the second quarter in a row, and it was larger than analysts had predicted. At the same time, revenue declined - and also more than Wall Street expected. One of the company's key revenue sources - spot trading of digital assets - suffered. At the same time, Coinbase showed growth in other sources: this suggests that the cryptocurrency exchange is on the way to diversify its business. Coinbase shares were cheaper by more than 5% after the publication of the statements.

Revenue of the largest U.S. crypto exchange Coinbase in the first quarter fell by 31% compared to the same quarter last year and amounted to $1.41 billion. Analysts surveyed by LSEG, predicted $1.52 billion, writes CNBC. At the same time, the company reported a net loss of $394.1 million - or $1.49 per share against an expected $0.27.

Coinbase's net income is often distorted by accounting rules that require the company's large cryptocurrency assets to be revalued at the market price at the end of the quarter. Because of this, reported profits can fluctuate wildly even without asset sales, CNBC recalls.

The company reported transactional revenue of $755.8 million versus analysts' expectations of $805.2 million. Subscription revenue totaled $583.5 million versus a forecast of $619.3 million. Falling cryptocurrency prices reduced trading activity in digital asset markets, the company said. Bitcoin fell in price by 22% at the end of the first quarter. In an effort to cut losses, Coinbase this week said it was laying off about 14% of its staff. The company attributed the layoffs to part of a broader AI-related restructuring and also cited a downturn in the crypto market.

Shares of Coinbase on the postmarket on Thursday after the publication of reports fell by about 6%. The securities ended the main trading on Ma 7 with a 2.5% decline to $192.96.

"They fell short of expectations on either revenue or adjusted EBITDA (earnings before interest, taxes, depreciation and amortization." - Oninvest), even though we expected the quarter to be weak. The results are not good enough on their own, despite the lower guidance," said Clear Street analyst Owen Lau in a Bloomberg statement.

Coinbase is trying to diversify its revenue sources through subscriptions and services, which include revenue from stablecoins and stacking (placing cryptocurrency to provide liquidity for a fee), CNBC explains. Stablecoin revenue totaled $305 million compared to $274 million a year earlier. The growth was driven by an increase in USDC stackablecoin capitalization and a record average volume of USDC placed in Coinbase products. Investors are waiting for confirmation that Coinbase can make money even when trading activity dries up, the channel writes.

"We're trying to expand the set of instruments that users can trade so that as markets and investor behavior changes, we always have something in demand to trade," Coinbase CFO Alesia Haas told CNBC. - This diversification will help reduce some of the volatility we've seen in a business that relies solely on crypto trading."

The effort to reduce reliance on crypto trading reflects Coinbase's attempt to create a "universal exchange," an initiative unveiled in 2025 by CEO Brian Armstrong, CNBC writes.

Although revenue and profit fell short of analysts' expectations, Coinbase showed strong growth in event contracts (bets), as well as in services for trading crypto derivatives and tokenized real assets. Coinbase recorded derivatives trading volume of around $4.2 billion in the first quarter - up 169% from a year earlier. Despite falling cryptocurrency prices this year, the exchange increased its share of both the spot and global cryptocurrency market, reaching a record market share of 8.6%.

Coinbase also predicts that its prediction markets business will reach $100 million in annual revenue by the end of this year. This business was launched in late January in partnership with Kalshi.

Most analysts tracking the cryptocurrency exchange's securities recommend buying them: 24 out of 38 analysts have issued Buy and Overweight ratings, another ten hold a neutral stance with a Hold rating, and four advise selling the stock (Sell rating), MarketWatch shows.

The stock has an average target price of $239.27, implying a potential upside of 24% from the stock's closing level on May 7.

This article was AI-translated and verified by a human editor