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Coinbase tops consensus estimates, but trading volumes drop almost 50%

Published 08/04/2023, 08:18 PM
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Coinbase (NASDAQ:COIN) topped consensus earnings and revenue expectations in the second quarter, the company revealed after the close on Thursday.

Coinbase shares are down around 1.5% in premarket trading.

The cryptocurrency exchange reported Q2 a loss per share of $0.42, $0.34 better than the analyst estimate of $0.76 loss per share. Revenue for the quarter came in at $707.9 million, down 8% compared to Q1 but above the consensus estimate of $628.98 million.

However, the company acknowledged that crypto asset volatility declined in Q2 to multi-year low levels. As a result, the macro drivers saw Coinbase's global spot market trading volumes decline 48% quarter-over-quarter.

"Over the past year, we have seen multiple events cause short-term spikes in volatility, but overall we have seen lower absolute levels of volatility as compared to the prior five years," Coinbase said in its shareholder letter.

Coinbase's transaction revenue also fell, down 13% from Q1.

Reacting to the report, BofA analysts said while there were some positive metrics, "underlying questions persist."

"While some 2Q metrics were positive and the 3Q outlook contained no surprises (details on page 2), the print did little to address critical questions around retail volumes and revenue diversification. This, coupled with the lingering regulatory overhang, keeps us cautious. Maintain Underperform," the analysts wrote.

Barclays analysts also maintained an Underweight rating on the stock, telling investors that Coinbase's "Q2 Adj. EBITDA beat Street estimates, driven by a higher take rate on retail transactions and lower operating costs."

In addition, they noted that "the company struck a confident tone in their ability to win the case with the SEC and will be filing a note to dismiss tomorrow."

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