Coinbase announced a net loss in the second quarter of CY2025, marking the third consecutive quarter of declining revenue. The cryptocurrency exchange's revenue rose by only 3.3% year-on-year to $1.5 billion, which missed Wall Street's analyst estimates of $1.56 billion. The company's non-GAAP adjusted earnings per share (EPS) came in at $0.12, significantly lower than the analyst consensus of $1.49, representing a 91.9% miss. Analysts had anticipated a stronger performance, but general weakness in the crypto market severely impacted Coinbase's financial results.
Adjusted EBITDA for the quarter was $512.1 million, falling short of analysts' estimates of $588.7 million. This represents a 13% miss and an adjusted EBITDA margin of 34.2%. Analysts like Benjamin Budish from Barclays estimated Coinbase processed approximately $152 billion in trading volume, well below the Street’s expectation of $178 billion. Owen Lau from Clear Street also lowered estimates, projecting roughly $160 billion in trading volume and anticipating only $301 million in adjusted EBITDA due to weaker subscription and retail activity.
Looking ahead, Coinbase's guidance for Q3 CY2025 subscription and services revenue is projected at $705 million, which missed analyst estimates of $742 million by 5.0%. This forward-looking miss further contributed to investor concerns. The stock reacted negatively, trading down 7.6% to $349 immediately after the earnings report. The overall crypto market downturn has significantly affected the firm, with spot trading volume on centralized exchanges dropping 27.9% between Q1 and Q2 CY2025, according to Benchmark Equity Research. Coinbase's stock itself is down about 55% in the past 12 months.
Subscription and services revenue, which includes stablecoin USDC revenue, was a relative bright spot, with analysts expecting $599 million for Q2 CY2025. This is slightly up from Q1 but still down from $656 million in Q2 CY2025. However, this positive area was not enough to offset the overall declines. Analysts generally revised their EBITDA forecasts downwards, with Benchmark’s Mark Palmer reducing his to $377 million, highlighting broad concerns about the company's profitability in the current market environment.
