Coinbase Revenue Declines, Delivers Net Loss of $1.1 Billion

Coinbase (NASDAQ:COIN), the first and only publicly traded crypto exchange in the US, has announced its Q2  2022 financial results, which delivered a decline in both the top and bottom line. Shares in after-hours trading declined by over 4% in an overall down market day.

Along with the broader crypto market, Coinbase has been impacted from a decline in crypto valuations and overall trading. Net revenue during Q2 2022 was $803 million, a drop from the same quarter year prior from over $2 billion and a decline from $1.165 billion in Q1 2022.

Net income generated a net loss of $1.094 billion when last year; during the same quarter, Coinbase reported a positive net income of $1.6 billion. The losses accelerated from Q1 when Coinbase lost $403 million.

Trading volume, for both retail and institutional, tanked to just $217 billion in Q2, a dramatic decrease compared to Q2 2021 of $462 billion and a decline from Q1 of 2022 when trading topped $309 billion.

As of the end of the 2nd quarter, assets on the platform stood at $96 billion, down dramatically from $256 billion at the end of Q1.

Coinbase said the results were consistent with its outlook.

Coinbase tried to put a positive spin on the results stating:

“despite crypto market capitalization declining $1.3 trillion or ~60% in Q2, primarily driven by macroeconomic conditions and shocks to the crypto credit environment, we remain as bullish as ever on the future of this technology. Coinbase is an all-weather company with experience in navigating through crypto asset price cycles. We continue to take a long-term view and remain focused on building for the future.”

The company said it was adjusting to the market conditions and streamlining costs while prioritizing certain projects. Coinbase reported $6.2 billion in cash or dollar resources while adding they have not experienced the blocking of client withdrawals nor access to credit like some other crypto platforms. Coinbase reported that it had no exposure to Terra/LUNA, Celsius Network, Three Arrows Capital, and Voyager.

Coinbase provided guidance indicating that Q3 will be lower compared to Q2 if “these trends continue.”

Coinbase added that they are “working hard” to hit the $500 million adjusted EBITDA for the full year.

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