Shares in Coinbase Global Inc. fell more than 5% in extended trading today after the cryptocurrency exchange missed Wall Street targets on both revenue and earnings, with falling token prices and multi-year lows in volatility gutting its trading business.

For its second quarter that ended on June 30, Coinbase reported an adjusted loss of 40 cents per share, down from adjusted earnings of 12 cents per share in the same quarter a year earlier, on revenue of $1.22 billion, down 19% year-over-year. Analysts had been expecting a loss of 11 cents per share on revenue of $1.32 billion. On an unadjusted basis, the company lost $359.5 million, or $1.36 per share, compared with net income of $1.43 billion, or $5.14 per diluted share, in the same quarter last year.

Transaction revenue of $599 million dropped 21% sequentially and 22% year-over-year. Consumer transaction revenue fell 20% to $452 million on a 24% decline in consumer spot trading volume, while institutional revenue slid 26% to $100 million. Total market crypto spot trading volume was down 25% quarter-over-quarter and total crypto market capitalization fell 11%, with double-digit declines in Bitcoin, Ether and Solana.

Subscription and services revenue came in at $555 million, down 5% sequentially and short of the company’s own May guidance range of $565 million to $645 million, though it still accounted for 48% of net revenue. Stablecoin revenue contributed $292 million, blockchain rewards $83 million and interest and finance fee income $66 million.

Chief Financial Officer Alesia Haas pinned the shortfall on two things: on-platform USDC deals that landed later in the quarter than expected and steeper-than-anticipated declines in crypto asset prices that hit staking revenue.

There were bright spots. Coinbase’s share of global crypto trading volume reached an all-time high of 10.3%, up from 9.1% in the first quarter and the third consecutive quarter of share gains. Prediction markets revenue more than doubled, rising 106% quarter-over-quarter to pass $100 million on an annualized basis. Average USDC held in Coinbase products hit a record $20 billion, up 44% year-over-year and more than 30% of all USDC in circulation. The company also said its revenue-sharing agreement with Circle Internet Group Inc. will auto-renew in August on the same terms, having already met the conditions.

Assets on the platform tell the other side of the story. They fell to $246 billion from $294 billion in the first quarter, a decline Coinbase attributed mostly to bitcoin exchange-traded fund outflows given its role as primary custodian. Excluding ETFs, it said native units on the platform rose sequentially.

“Coinbase is no longer a bet just on the price of Bitcoin,” co-founder and Chief Executive Brian Armstrong said in the company’s earnings presentation, noting that 88% of net revenue now comes from something other than bitcoin spot trading.

Launches over the past year back that up. They include stock trading, prediction markets, equity and pre-IPO perpetual futures and, in June, Coinbase for Agents, a platform that lets artificial intelligence assistants such as Claude and ChatGPT trade crypto and move money on a user’s behalf under spending limits set by the account holder.

Cost discipline was the quarter’s clearest win. Adjusted expenses fell 9% sequentially to $1.03 billion after a 14% headcount reduction announced in May cut staffing to 4,321 from 4,988 at the end of March, at a restructuring cost of $52.4 million. Technology and development, general and administrative and sales and marketing expenses all came in below the midpoint of guidance. Adjusted EBITDA landed at $208 million, 59% below the same quarter a year earlier but enough to keep alive a run of positive quarters that now stands at 14.

A $1.3 billion convertible note came due June 1 and was repaid. Coinbase still finished the quarter with $8.6 billion in cash and equivalents. Buybacks have retired nearly 7 million shares this year at a cost of $1.2 billion, and about $2 billion of the authorization is unused.

The outlook offers little sign of a trading rebound. Third-quarter transaction revenue stood at roughly $130 million through July 26. Subscription and services revenue is guided to a range of $500 million to $580 million, which at the midpoint is close to where the second quarter landed. Full-year adjusted expenses were cut and narrowed to $4.2 billion to $4.45 billion, $100 million lower at the midpoint than its initial 2026 outlook.

Analysts had been trimming numbers into the print. Oppenheimer & Co. Inc. lowered its second-quarter trading volume estimate by 13% on July 16, citing a crypto market sell-off driven by macro concerns and persistent ETF outflows. Even after that cut, its adjusted EBITDA forecast of $284 million sat well above what Coinbase delivered.

“Coinbase is continuing to evolve into a diversified financial infrastructure company rather than a cyclical crypto exchange,” David Bartosiak, stock strategist at Zacks Investment Research Inc., said in commentary provided to SiliconANGLE. He compared the shift to what Robinhood Markets Inc. has been doing with its own revenue base and argued that if crypto adoption keeps widening across trading, payments, lending and stablecoins, Coinbase stands to benefit from several growth drivers instead of bitcoin price swings alone.

Photo: Coinbase