Coinbase’s stock took a hit after hours on July 31, dropping 8.4% as second-quarter results failed to meet Wall Street expectations. The stock closed at $377.76 and fell to $346.01 immediately after the release, but later recovered to around $354.77.
In the second quarter, Coinbase reported total revenue of $1.5 billion, falling short of the $1.59 billion consensus. Trading volume came in at $237 billion, missing the $252.76 billion expected. Transaction revenue was $764.3 million, below the $810 million forecast, while subscription and services revenue reached $655.8 million, falling short of the $715.2 million estimate.
A significant balance sheet shift was noted in the second quarter, with Coinbase ending with $9.3 billion in dollar resources, a decrease of $590 million from the first quarter. This decline can be attributed to purchases for its crypto asset investment portfolio, including a $222 million increase in Bitcoin holdings through weekly purchases.
As of June 30, the fair value of digital assets held for investment stood at $1.8 billion, with an additional $951 million held as collateral. The total available resources amounted to $12.1 billion. Additionally, Coinbase incurred $307 million in costs due to the May 2025 data theft incident.
The quarter also saw mixed underlying trends across the business, with record assets under custody supported by ETF flows and corporate uptake. However, softer market activity impacted fee realization. Management noted the impact of one-time costs related to the data incident, offset by gains on the company’s crypto investment portfolio.
In other news, Coinbase announced plans to offer tokenized equities on its platform, but did not provide specific details on timing, scope, or structure. This initiative was not elaborated on in the shareholder letter.
Overall, Coinbase’s second-quarter results fell below expectations, leading to a drop in stock value. The company’s balance sheet shift and plans for tokenized equities signal a continued focus on expanding its offerings and investments in the crypto space.