Coinbase reported second-quarter revenue of $1.22 billion, below the $1.30 billion consensus estimate, as weaker crypto trading drove a $359.5 million net loss. Yet prediction markets revenue more than doubled.
Revenue fell 14% from the previous quarter and 19% from a year earlier. Adjusted EBITDA dropped 31% sequentially to $208 million, far below the expected $327 million. The net loss compared with a $1.43 billion profit one year earlier. It included a $209.5 million unrealized markdown on crypto assets that Coinbase held for investment.
Transaction revenue declined 21% to $599 million as broader spot trading volume fell 25%. Subscription and services revenue also dropped 12% to $555.1 million. This result missed Coinbase’s original target range of $565 million to $645 million. The company now expects third-quarter subscription and services revenue between $500 million and $580 million.
A 14% headcount reduction lowered costs, although those savings did not fully offset weaker activity. Coinbase shares fell after hours following the revenue miss and third consecutive quarterly loss.
Prediction markets delivered one of Coinbase’s strongest operating results. Annualized revenue from the business rose 106% from the previous quarter and moved above $100 million. Users entered event contracts tied to politics, sports, economic releases and other real-world outcomes. Coinbase also expanded into stocks, derivatives, tokenized assets and stablecoin-based payments.
Can prediction markets scale quickly enough to reduce Coinbase’s reliance on spot crypto trading? The business now supports Coinbase’s plan to develop an ‘everything exchange.’
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Coinbase increased its share of global crypto trading volume to a record 10.3%, up from 9.1% in the previous quarter. It marked the company’s third consecutive record quarter. Derivatives volume remained steady even as the broader market contracted 12%. Average USDC balances across the Coinbase ecosystem also climbed 44% year over year to $20 billion.
Management expects clearer US regulation, including progress on the proposed CLARITY Act, to support broader institutional participation. However, near-term performance remains closely linked to crypto prices and market activity.
Coinbase faced weaker revenue, lower transaction income and a third consecutive quarterly loss. At the same time, prediction markets revenue doubled, market share reached a record and USDC balances rose. The key takeaway remains Coinbase’s effort to build broader income sources while crypto trading stays cyclical.