Coinbase Global Inc’s stock ended flat in extended hours today despite the crypto exchange reporting market-beating results for its fiscal second quarter. The results showed a per-share loss of 34 cents, revenue of $773 million, and a subscription and services revenue of $335 million.
Transaction revenue was weaker, however, at $327 million – down 13% sequentially, and interest income decreased 17% on a quarter-over-quarter basis to $201 million. In response, Berenberg analyst Mark Palmer wrote in an email: “Interest income and staking revenue appear to be at risk going forward given the ongoing declines in USDC’s market cap and regulatory challenges to staking programs.” USDC holdings brought in $151 million in interest income to Coinbase in Q2.
Coinbase further revealed in a letter to shareholders that transaction revenue stood at $110 million in July and forecasted at least $300 million in subscription and services revenue in its current financial quarter. However, Mark Palmer has a $39 price target on Coinbase stock, warning of more than 50% downside from here, and said that shares of the crypto company are “uninvestable” in the near term.
The crypto exchange has seen a nearly three-fold increase in its stock price since the beginning of 2023, but it was recently sued by the SEC for allegedly violating the U.S. securities laws.
