Coinbase shares drop on billion-dollar loss in second quarter and revenue miss

After the exchange reported a loss of over $1 billion in the second quarter, shares of the company dropped in extended trading.

The company did what it was supposed to.

• Earnings: Loss of $4.98 per share, vs. loss of $2.65 per share as expected by analysts, according to Refinitiv.
• Revenue: $808.3 million, vs. $832.2 million as expected by analysts, according to Refinitiv.

After last year's run, investors left the market. Retail transaction revenue came in at less than half of what analysts had expected.

According to a letter to shareholders, the company had a net loss of $1.1 billion in the most recent quarter. A $377 million impairment charge was one of the factors. At the end of June, the company's own assets were worth $428 million, down from $1 billion at the beginning of the year.

The company said in the letter that Q2 was a test of resilience for thecryptocurrencies. The dramatic market movements shifted user behavior and trading volume, which impacted transaction revenue, but also highlighted the strength of our risk management program.

The company said it had 9 million monthly users, down from 9.2 million in the first quarter but still more than the StreetAccount consensus. The company said that the lower trading volume was caused by macro economic and cryptocurrencies credit.

It was a challenge for the company.

The prices of cryptocurrencies were pushed down in the winter. The price ofcryptocurrencies plunged during the second quarter. The company said it was cutting 18% of its workforce. The quarter saw the highest level of transaction revenue since the first quarter of the year.

The platform's assets fell from $256 billion to $96 billion due to pressure on prices of cryptocurrencies.

According to the shareholder letter, the majority of the net outflows in Q2 were institutional clients de-risking and selling their digital currency for the US dollar. Our market share fell to 9.9% from 11.2% in the first quarter.

The outlook was changed for the full year. It now expects 7 million to 9 million monthly users, down from a previous range of 5 million to 15 million. The management expects transaction revenue to be in the low $20 range.

The company is trying to reduce marketing spending by not using paid media and incentives. The forecast for technology, development and general and administrative expenses has been reduced from a quarter ago.

The regular trading session on Tuesday saw a decline in the shares of the company.

The results will be discussed on a conference call by executives. There is an hour and a half later.

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