Coinbase Q2 Earnings and Revenues Miss Estimates, Volumes Rise Y/Y

Core Insights - Coinbase Global, Inc. reported second-quarter 2025 net operating earnings per share of 12 cents, missing the Zacks Consensus Estimate by 89.9%, and reflecting an 88.8% year-over-year decrease [1][8] - The company experienced lower crypto volatility and transaction revenue, while operating expenses increased significantly [1] Operational Update - Total trading volume increased by 4.9% year over year to 237 million, surpassing the Zacks Consensus Estimate of 235 million [2] - Total revenues reached $1.5 billion, missing the Zacks Consensus Estimate by 0.5%, but increased by 3.2% year over year due to higher transaction, subscription, and service revenues [2] - Total transaction revenues decreased by 2.1% year over year to $764.3 million, falling short of the Zacks Consensus Estimate of $795 million [3] - Total subscription and services revenues increased by 9.5% year over year to $655.8 million, driven by higher stablecoin revenues, but missed the Zacks Consensus Estimate of $692 million [3] Financial Update - Total operating expenses surged by 37.5% to $1.5 billion, attributed to increased transaction expenses, technology and development costs, sales and marketing, and general and administrative expenses [4] - Adjusted EBITDA was $512 million, a decline of 3.2% from the previous year [4] - As of June 30, 2025, cash and cash equivalents stood at $7.5 billion, down 11.8% from the end of 2024, while long-term debt increased by 62.6% to $2.9 billion [5] - Shareholders' equity rose to $12.1 billion, up 17.7% from the end of 2024, with net cash provided by operating activities dropping by 83.7% year over year to $145.7 million in the first half of 2025 [5] Q3 2025 Outlook - Coinbase anticipates subscription and services revenues to range between $665 million and $745 million, primarily driven by higher average crypto prices and stablecoin revenues [6] - Expected transaction expenses are projected to be in the mid-teens as a percentage of net revenues [6] - Technology and development, along with general and administrative expenses, are expected to be between $800 million and $850 million, driven by headcount growth for international expansion and new product initiatives [7] - Sales and marketing expenses are expected to increase quarter over quarter to between $190 million and $290 million, influenced by performance marketing variability and customer USDC balances [9]