Coinbase Shares Drop 8.66% After Q2 Revenue Misses Estimates Despite Record Net Income

Coinbase Global Inc. (COIN) shares fell sharply in after-hours trading on Thursday following the release of its second-quarter 2025 results, which revealed mixed performance and missed analyst expectations in key revenue areas. Despite reporting a record net income of $1.43 billion—up significantly from $36.13 million in the same quarter the previous year—the firm's total revenue of $1.5 billion, while higher than a year ago, still came in below the $1.6 billion forecast by analysts [1]. Transaction-related revenue, a core part of Coinbase’s business model, totaled $649.9 million, missing estimates of $710 million [2].

The decline in trading volumes further pressured the stock. Total trading volume for the quarter dropped by 40% quarter-over-quarter to $237 billion, a significant slowdown in the company’s primary revenue driver [2]. Analysts had anticipated a weaker second quarter following a surge in optimism in Q1, fueled by expectations of regulatory clarity under the Trump administration. However, as Washington shifted focus to tariff negotiations, speculative trading activity among retail investors waned [3].

One of the main contributors to Coinbase’s strong net income was a $1.5 billion unrealized gain from its stake in Circle, along with an additional $362 million gain from its broader crypto portfolio. These gains helped push adjusted earnings per share to $1.96, surpassing the $1.26 estimate by LSEG [1]. However, the earnings beat failed to offset the underperformance in transactional activity, prompting a sharp sell-off in the stock.

Stablecoins emerged as a bright spot, with revenue from the asset class reaching $332.5 million—up 38% from a year earlier and 12% from the first quarter. This growth was partly driven by the June IPO of Circle, which issues the USDC stablecoin, and Coinbase’s favorable revenue-sharing agreement with the firm [4]. The company also reported a 9% increase in subscription and service revenue, including stablecoin services, staking, and custody, to $655.8 million, though still below analyst projections of $705.9 million [1].

Looking ahead, Coinbase announced plans to expand its offerings beyond cryptocurrencies to include tokenized real-world assets, derivatives, prediction markets, and early-stage token sales, starting with U.S. users. Recent moves, such as the launch of U.S. perpetual futures and the acquisition of Deribit, are expected to enhance its global options market presence [1].

Despite these strategic initiatives, the market remains cautious. The Q2 revenue miss has raised questions about the sustainability of Coinbase’s growth, particularly amid ongoing regulatory uncertainty and declining trading volumes. While the firm continues to lead in U.S. BTC and ETH ETF custody and has formed partnerships with major institutions, investors are reassessing the company’s short-term momentum [5].

As of the close of the trading day, Coinbase’s stock fell to $345.06, down 8.66% from the session close of $377.76. Year-to-date, the stock remains up more than 50% against the S&P 500, but the recent decline signals a shift in investor sentiment following the earnings report.

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Sources:

[1] [Investor's](https://www.investors.com/news/coinbase-stock-earnings-q2-2025-cryptocurrency-bitcoin-jpmorgan/)

[2] [Investing.com](https://au.investing.com/news/transcripts/earnings-call-transcript-coinbase-misses-q2-2025-forecasts-stock-stable-93CH-3954269)

[3] [financialcontent.com](https://www.financialcontent.com/article/marketminute-2025-8-1-coinbase-navigates-volatile-waters-investment-gains-mask-core-trading-challenges-in-q2-2025)

[4] [CoinCentral](https://coincentral.com/coinbase-global-coin-stock-slides-8-after-hours-despite-record-1-5b-net-income-and-stablecoin-surge/)

[5] [Sherwood](https://sherwood.news/crypto/coinbase-dives-on-mixed-q2-earnings-report/)