Coinbase Global Inc. shares tumbled 8.66% in after-hours trading on Wednesday, dropping to $345.06 from the regular session close of $377.76. The decline came despite the company posting record quarterly net income, as mixed earnings results left investors focused on weaker-than-expected trading volumes.
The cryptocurrency exchange reported total revenue of $1.5 billion for the second quarter, representing growth from $1.45 billion in the same period last year. Net income soared to $1.43 billion, a massive jump from just $36.13 million in the prior year quarter. However, trading-related revenue came in at $764 million, falling short of StreetAccount’s $787 million forecast.
Strong Profits Mask Underlying Trading Weakness
The impressive net income figures included a substantial $1.5 billion unrealized gain tied to Coinbase’s stake in Circle, plus $362 million from the company’s cryptocurrency portfolio holdings. When adjusted for these one-time items, earnings per share reached $1.96, easily surpassing analyst estimates of $1.26 compiled by LSEG.
Retail trading volumes showed year-over-year growth of 16%, reaching $43 billion for the quarter. Despite the increase, these figures fell short of analyst projections of $48.05 billion. Institutional trading activity failed to compensate for the shortfall as speculative retail behavior cooled during the three-month period.
Coinbase Q2 FY2025: From Crypto Chaos to Profit Monster 💰🪙$COIN didn’t just beat expectations, it annihilated them. Despite flat revenue, explosive gains from crypto holdings flipped the quarter from mediocre to meteoric.
Total Revenue: 🟢 $1.45B → $1.50B, up 3.3%
Operating… pic.twitter.com/cF9lilCc7v— Ondrej 🎯 (@ondrejslunecko) July 31, 2025
Subscription Services and Stablecoin Revenue Show Steady Growth
Coinbase’s subscription and services segment generated $655.8 million in revenue, marking a 9% increase compared to the same quarter last year. Stablecoin revenue climbed to $332.5 million, representing a 38% year-over-year gain and 12% growth from the first quarter.
The company continues to benefit from its revenue-sharing arrangement with Circle, collecting full earnings on USDC held directly on its platform while receiving approximately half the revenue from USDC transactions occurring on external platforms. Circle’s successful June IPO and broader stablecoin adoption have contributed to this revenue stream’s consistent performance.
Recent platform integrations include making USDC available on Shopify through Base, Coinbase’s layer-2 blockchain solution. These developments support the company’s efforts to expand stablecoin utility beyond traditional crypto trading applications.
Platform Diversification Efforts Continue
Beyond core trading services, Coinbase is expanding into real-world assets, derivatives trading, and token launch services. The company recently introduced U.S. perpetual futures and announced the acquisition of Deribit to enhance global options market access.
Coinbase’s Base App entered open beta with more than 700,000 users on the waitlist, while the company maintains custody of over 80% of U.S. Bitcoin and Ethereum ETF assets. Strategic partnerships include crypto integration with PNC Bank and J.P. Morgan’s deposit token pilot program running on the Base network.
Despite Wednesday’s after-hours decline, Coinbase shares have gained more than 50% year-to-date, outperforming the broader S&P 500 index that the company joined in May.
Market Sentiment Analysis
The negative after-hours reaction suggests investors remain focused on core trading metrics despite record profitability driven largely by investment gains. Continued weakness in transaction volumes could weigh on near-term sentiment until trading activity shows more consistent improvement.
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