HOOD, COIN and MSTR Earnings: Three Different Crypto Stock Stories

Summary

Robinhood, Coinbase and Strategy all reported second-quarter earnings this week, but their results showed three very different business models.

Robinhood delivered the strongest operating performance because growth in stocks, options and prediction markets offset weaker crypto trading. Coinbase produced the weakest report, with both trading revenue and subscription revenue declining. Strategy reported a huge loss.

Robinhood: Strong Growth Outside Crypto

Robinhood reported record revenue of $1.31 billion, up 32% year over year. Net income rose to $573 million, while diluted earnings per share reached $0.62.

The company's strongest growth came from outside crypto. Equities revenue rose 95%, and prediction-market revenue grew more than tenfold. These gains helped offset a 38% decline in crypto transaction revenue.

Robinhood also reported strong net deposits, higher platform assets and continued growth in Gold subscribers.

The results show that Robinhood is no longer only a crypto trading platform. Its broader mix of stocks, options, subscriptions and prediction markets gives it more protection when crypto activity weakens.

However, the stock reaction was limited because investors had already priced in strong growth and remained concerned about valuation.

Coinbase: Weakness Across the Business

Coinbase reported revenue of about $1.22 billion, down 19% from a year earlier and below expectations. The company recorded a net loss of roughly $360 million, while the stock fell in after-hours trading.

Transaction revenue declined as lower crypto prices and weaker trading volumes reduced investor activity. More importantly, subscription and services revenue also fell.

This was a negative sign because Coinbase has spent years trying to reduce its dependence on trading fees through stablecoins, custody, staking and other recurring services. The decline in both areas suggests that the business remains highly exposed to crypto market conditions.

Coinbase is expanding into stocks, derivatives, payments and prediction markets, but these businesses are not yet large enough to fully offset weakness in crypto trading.

Among the three companies, Coinbase reported the weakest underlying quarter.

Strategy: A Huge Loss Driven by Bitcoin

Strategy reported a net loss of more than $8 billion. Most of the loss came from an unrealized decline in the value of the company's Bitcoin holdings. Under fair-value accounting, Bitcoin price movements directly affect Strategy's reported earnings.

Its software revenue remained relatively stable, but the software business now plays only a small role in how investors value the company.

Strategy holds more than 840,000 Bitcoin, making the stock closely tied to Bitcoin prices. Investors therefore focus less on quarterly EPS and more on Bitcoin's direction, the company's debt, financing costs and ability to continue raising capital.

The stock's relatively small reaction showed that the market had already expected a large accounting loss.

Conclusion

Robinhood reported the best quarter because it has built meaningful businesses outside crypto. Coinbase reported the weakest results because lower crypto activity hurt both trading and subscription revenue. Strategy posted the largest loss, but the result mostly reflected Bitcoin price movements.

These three stocks should not be treated the same. Robinhood is becoming a broader financial platform, Coinbase remains a direct bet on crypto trading activity, and Strategy is essentially a leveraged Bitcoin investment.

During a crypto recovery, all three could benefit. During a downturn, Robinhood currently has the strongest protection because its revenue is the most diversified.