Coinbase Shares Rise After Q2 Revenue Beats Wall Street Estimates Amid Falling Trading Volume

The crypto exchange posted better-than-expected revenue mostly due to its sales diversification strategy.

Coinbase (COIN) stock rose on Thursday after the crypto exchange reported second-quarter revenue that beat Wall Street analysts' estimates, even as the industry recovers from the crypto winter.

Coinbase's total revenue for Q2 was $1.45 billion, compared to an average estimate of about $1.4 billion, according to FactSet. However, the exchange's adjusted Ebitda for the quarter was $596 million, lower than the consensus of $607.7 million.

The crypto exchange's largest source of income is transaction fees, which slipped 27% from the previous quarter as trading volume fell 28%. But subscription and services revenue grew 17% from the first quarter.

"On a Q/Q basis, subscription and services revenue benefited from higher average USDC on-platform balances and USDC market capitalization, as well as higher average crypto asset prices - notably SOL and ETH," the firm said in a shareholders letter.

Coinbase has been trying to diversify its revenue streams by becoming a crucial part of the spot bitcoin and ether (ETH) exchange-traded funds (ETFs) business, listing some of them and also acting as custodian.

Most recently, CoinDesk reported that the exchange is pivoting into real-world assets (RWA) by planning on creating a tokenized money-market fund, a corner of finance that has become popular for asset managers.

Asset management giants BlackRock and Franklin Templeton have both tokenized one of their funds earlier this year. BlackRock's BUIDL token surpassed $500 million in market value in less than four months of existence.

Coinbase stock rose about 2% in the minutes following the report. The stock has gained about 48% since the beginning of the year and has traded little changed over the past month.

The stock closed up 1.04% on Thursday at $98.9.

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