Coinbase revenue beat estimates, executives expect to win battle with SEC
Technology
Coinbase expects third-quarter subscription and services revenue of at least $300 million
(Reuters) - Coinbase Global beat second-quarter revenue expectations on Thursday on higher interest income while its executives said the crypto exchange expects to win its legal battle with the U.S. securities regulator.
The company and its rival Binance were sued by the U.S. Securities and Exchange Commission in June. It alleged that Coinbase traded at least 13 crypto assets that are securities without registering them with the regulator.
The SEC action marked a dramatic escalation of a crackdown on the crypto industry.
"With respect to the litigation with the SEC, I want to be very clear, we do think we can win. We expect to win," said Chief Legal Officer Paul Grewal in a post-earnings call.
Shares in Coinbase were last down 1.2% in volatile extended trading. The stock has seen a blistering rally this year, gaining 156% amid renewed retail interest and sector-wide tech rebound.
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Oppenheimer analyst Owen Lau said the initial investor enthusiasm over the results got subdued as they dug deeper and realized guidance was in line with expectations.
The crypto exchange expects third-quarter subscription and services revenue of at least $300 million, compared with estimates of $336.15 million.
Coinbase reported revenue of $707.9 million in the second quarter, beating estimates of $663 million, according to Refinitiv data.
Interest income in the quarter surged to $201.4 million from $32.5 million a year ago.
"In Q2, crypto volatility, which is a key input into our trading business, continued to decline, and it reached multi-year lows," said finance head Alesia Haas.
Trading volumes in the quarter dropped to $92 billion from $217 billion a year ago, while its loss narrowed to $97 million from $1.09 billion in the same period in 2022.
