Coinbase (COIN) Stock Dips 1% after Beating Analysts’ Expectations But Reporting Narrower Loss in Q2 2023

Coinbase told shareholders that it is working towards improving its adjusted EBITDA in absolute dollar terms versus full-year 2022 as it navigates the uncertainty of regulatory scrutiny.

Coinbase Global Inc (NASDAQ: COIN) reported its Q2 2023 financial results on August 3, 2023, which beat Wall Street’s expectations. According to the announcement, the company reported a borrower net loss of about $97 million during the second quarter, and raised a total revenue of approximately $708 million, down 8 percent QoQ. Additionally, the company noted that its adjusted earnings per share for the second quarter came in at a loss of 42 cents. During the second quarter, the cryptocurrency exchange added $156 million to its balance sheet, thus holding $5.5 billion in USD resources.

Worth noting that the company beat analysts’ expectations with respect to revenue of about $628 million and earnings per share of a loss of about $0.76. As a result, COIN shares closed Thursday trading at. $90.75, up only 0.35 percent from the day’s opening price. The gains were, however, negated during the after-hours market session after COIN shares dropped approximately 1 percent. Nonetheless, COIN shares have gained more than 156 percent to a market capitalization of approximately $21.22 billion.

Coinbase Q2 2023 Financial Statement

During the second quarter, the company announced net revenue of about $663 million, down 10 percent quarter over quarter basis. The company highlighted that its recurring operating expenses collectively declined by about  1 percent quarter over quarter basis to $664 million. Amid low crypto trading volume compared to bull markets, Coinbase announced that its second-quarter transaction revenue from consumers and institutional investors amounted to about $310 million and $17 million respectively, which represented a decline of about 13 percent from the previous quarter.

The crypto exchange told its shareholders that the total subscription and services revenue came in at about $335.4 million down from $361.7 million during the first quarter. Moreover, Coinbase has a strong portfolio of institutional investors seeking to have exposure to digital assets in the long term.

“Our institutional clients remain committed to their long-term plans around digital innovation. Coinbase Prime trading volume growth was driven by continued elevated institutional onboarding, and ongoing recognition by our clients that Coinbase offers the high quality, trusted platform with a comprehensive suite of products – from custody and trading to financing – that they increasingly seek,” the company noted.

By the end of the second quarter, the crypto exchange announced that it held about $1.8 billion in USDC, up from $1.2 billion at the end of the first quarter. Notably, the customers’ fiat balance on Coinbase declined by $3.8 billion by the end of the second quarter, down from about $5.4 billion.

With several products already launched and others in the pipeline, Coinbase highlighted that it expects at least $300 million in subscription and services revenue during the third quarter.

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