Coinbase Share Price Drops 15% After Q2 Revenue Misses $1.5B Estimate

Coinbase’s share price plummeted nearly 15% following the release of its second-quarter 2025 earnings, as the firm fell short of revenue expectations and reported a sharp decline in adjusted profits. The company reported Q2 revenue of $1.5 billion, which was below the $1.59 billion Wall Street forecast and marked a 26% decrease from the first quarter of the same year [1]. Transaction revenue dropped 2% year-on-year to $764.3 million, reflecting weak trading activity, while subscription and services revenue rose 9.5% to $655.8 million, driven largely by its stablecoin operations [1].

Adjusted earnings per share came in at $0.12, far below the expected $1.49, highlighting the significant gap between Coinbase’s performance and investor expectations [1]. On a GAAP basis, the firm posted a net income of $1.43 billion, primarily from investment gains, but the non-GAAP figure underscored the underperformance of its core trading business. In response to the earnings report, Coinbase’s stock fell 6.8% in extended trading on July 31 and dropped further on the following Friday, closing at a 15% decline from the previous week’s close [1].

The sell-off wiped out approximately $14.3 billion of market capitalization, as analysts and investors questioned whether the company’s valuation was misaligned with its current business fundamentals. Morningstar described the stock as “significantly overvalued” in light of its slowing growth and reduced trading volumes [1]. This decline in value has reduced Coinbase’s 2025 year-to-date gains to roughly 40%, down from a peak of nearly 50% [1].

The broader cryptocurrency and fintech landscape also reflected mixed results. Rival exchange Kraken is preparing a $500 million funding round at a $15 billion valuation ahead of a potential 2026 IPO, signaling continued interest in crypto listings following clearer U.S. regulatory guidance [1]. Meanwhile, Robinhood’s crypto trading revenue fell to $160 million in Q2 from $252 million in Q1, illustrating a broader slowdown in trading volumes despite a year-over-year increase due to a recovering crypto market [1].

Coinbase executives emphasized recent legislative developments in the U.S., including the GENIUS and Clarity Acts, which support stablecoins and digital assets. The firm also previewed a new “everything exchange” platform that will offer tokenized stocks and derivatives, positioning itself for future growth [1]. However, near-term challenges remain, as rising interest rates and regulatory scrutiny continue to dampen retail trading activity.

The firm projected subdued Q3 trading revenue, forecasting July trading revenue at $360 million, with subscription and services revenue expected to rise to $665–$745 million. Despite these forward-looking metrics, investors are currently focused on Coinbase’s flat trading performance and growing operational costs, rather than its $9.3 billion cash reserves or long-term plans [1].

As the market digests these results, the immediate outlook for Coinbase will depend heavily on trading volume trends and the company’s ability to manage costs effectively. The broader crypto exchange sector, however, remains in a growth phase, with regulatory clarity and increased public listings likely to continue shaping investor sentiment [1].

Sources:

[1] Coinbase Share Price Drops 15% After Q2 Revenue Misses $1.5B Estimate

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