Coinbase, a trading platform for Bitcoin and other cryptocurrencies, delivered better-than-expected second quarter financial results on Tuesday. The company, which relies heavily on the market value of digital currencies to generate income, reported net profit of $1.6 billion -- up nearly 4,900% from a year earlier. Its non-GAAP earnings came to $6.42 per share on revenue of $2.03 billion.
Wall Street was expecting earnings of $2.24 per share on revenue of $1.77 billion. Shares of Coinbase were up after hours.
Elsewhere on the balance sheet, Coinbase said its total transaction revenue came to $1.9 billion in the second quarter. Subscription and services revenues were $103 million, up 82% compared to Q1.
The company said retail Monthly Transacting Users (MTUs) increased to 8.8 million, up 44% from last quarter. The company's Verified Users total clocked in at 68 million. Overall, Coinbase said adoption continued at a rapid pace throughout the quarter despite market volatility.
From the company's shareholder letter:
"Q2 illustrated the volatility we have anticipated in these still-early days in the cryptoeconomy. In Q2, we saw many crypto asset prices reach new all time highs. For example, the price of Bitcoin surpassed $64,000 in April, while Ethereum prices more than doubled during the quarter to over $4,200 in May. Later in the quarter, we saw a steep decline in crypto asset prices with Bitcoin and Ethereum falling over 45% each to ~$30,000 and ~$1,700, respectively, resulting in exceptionally high levels of volatility. As volatility and crypto asset prices are highly correlated with trading revenue, the crypto market environment heavily influenced our Q2 financial results.
Coinbase declined to publish third quarter guidance. Analysts expect the company to report third quarter earnings of $1.42 per share and revenue of $1.39 billion.