Coinbase Stock Falls as Q2 Earnings Miss Estimates Despite Revenue Growth

Coinbase (COIN) shares fell 7% in post-market trading Thursday after reporting weaker-than-expected second-quarter earnings. The cryptocurrency exchange posted $1.5 billion in total revenue, slightly up from $1.45 billion a year earlier but below FactSet estimates of $1.59 billion. Adjusted EBITDA declined to $512 million from $596 million year-over-year.

Despite bitcoin (BTC) and ether (ETH) reaching new yearly highs during Q2, Coinbase reported a sharp drop in transaction volume compared to the previous quarter. Transaction revenue came in at $764 million, marking a 39% decline from Q1. The figures highlight Coinbase’s continued sensitivity to crypto market cycles, where trading activity remains its primary revenue driver.

The results follow a stronger earnings report from rival Robinhood (HOOD), which posted $28.3 billion in crypto trading volume and exceeded analyst expectations. Robinhood shares have surged 160% year-to-date, further intensifying competition in the retail crypto trading space.

Coinbase continues to diversify beyond retail trading by building institutional infrastructure. The company has launched custody services for spot bitcoin ETFs, expanded staking products, and advanced its Base layer-2 network. While these initiatives aim to reduce reliance on trading revenue, they remain secondary contributors for now.

In its earnings release, Coinbase emphasized efforts to “bring the financial system onchain” through new derivatives, additional spot listings, and global market expansion. Still, declining transaction activity underscores the company’s challenge to stabilize revenues amid volatile crypto market conditions.

The mixed results come as investors watch closely whether Coinbase’s institutional pivot and product diversification can offset trading downturns in upcoming quarters.