Coinbase Tank is 11% ahead of the market after a second quarter revenue error of $1.5 billion

Coinbase shares fell sharply after the company reported second quarter revenue that it missed out on forecasts. Total quarterly revenue was $1.5 billion, down 26% from the previous quarter.

The shortfall was driven primarily by weaker trading revenues than expected, down 39% quarterly to $764 million.

Lack of expectations

In its official release, Coinbase revealed that its subscription and service revenues also fell 6% to $656 million. Despite efforts to reduce variable costs, operating expenses increased 15% to $1.5 billion. Coinbase was primarily attributed to a $307 million hit related to the data breaches disclosed in May.

Crypto Exchange’s net profit recorded $1.4 billion, including unrealized pre-tax profits from strategic investments, including Circle, and pre-tax profits of $362 million from Crypto Investment Portfolio. On a adjusted basis, net income was only $33 million, with adjusted EBITDA reaching $512 million.

Coinbase’s trading activity also saw performance in the broader crypto spot market decline as global and US crypto spot volumes fell by 31% and 32%, respectively. Meanwhile, total trading volume fell 40% to $237 billion, while the consumer segment fell 45% to $43 billion.

Consumer trading revenues plummeted from 41% to $650 million as they shifted to simple trading amid low volution. Institutional trading revenues saw a similar pattern, falling 38% in both volume and revenue.

Basic chain activity grew, but other trading revenues fell by 21% as average revenue per transaction decreased.

At the end of the previous trading day, Coinbase (Coin) shares rose just $0.28, at $377.76. However, pre-market trading has declined sharply, with stocks down $42.30 (-11.20%) to $335.46. This sudden drop suggests a strong negative response from investors, perhaps in response to recent revenue outcomes.

Despite working on lower revenues and rising costs, Coinbase is doubling product innovation.

“All Apps”

Earlier this month, Coinbase rebranded its wallet as a base app and launched “all apps” focused on crypto-based merging transactions, social media, USDC payments, mini apps and tokenized posts.

Announced at the “A New Day One” meeting, the app runs on Coinbase’s Ethereum Layer 2 Network and integrates post-tokenization and encrypted XMTP chat with Farcaster, Zora for social feeds. Users can get from tips, interact with AI agents and make one-tap payments.

The platform also introduced Shopify merchant base salary and planned a 1% USDC cashback in the US. The app is in beta, with full public releases and developer tools coming soon.