Messari: Coinbase Q2 revenue expected to drop 9% to about $670 million

Odaily Planet Daily News Messari released Coinbase Q2 revenue forecast report. The report predicts that Coinbase’s revenue is expected to decline by 9% to approximately $670 million in the second quarter of 2023, driven by a 36% drop in spot transaction volume. The decline was attributed to a shift in its strategy to focus on margins rather than market share. Non-trading revenue is expected to exceed trading revenue for the first time, illustrating the company's successful shift to more sustainable revenue streams. Coinbase’s staking revenue is expected to grow by 13%, due to higher average ETH prices and new support for Polkadot in its staking product. Additionally, Coinbase custody revenue is expected to grow by 20%, offsetting expected outflows of 5%-15% due to higher cryptocurrency prices. Interest income, a significant source of Coinbase’s non-trading income, is expected to decline by 19% due to the massive drop in USDC supply. Although higher interest rates boosted yields on USDC deposits, the decoupling event in March 2023 had a negative impact on its market perception, leading to massive outflows. According to previous reports, analysts predict that Coinbase’s second-quarter financial report may be better than expected, but regulatory risks and the threat of declining transaction volume will continue to exist. Coinbase will report its second-quarter 2023 earnings after the market closes on Thursday. The FactSet consensus expects Coinbase’s revenue to fall to $629 million from $773 million in the previous quarter. Transactions in the quarter ended June 30 are expected to fall to $114 billion from $145 billion in the first quarter. Earnings per share are expected to be a loss of $0.76, compared with a loss of $0.34 in the first quarter. "We expect adjusted EBITDA to come in well ahead of expectations," Barclays analysts wrote in a note on Tuesday. Berenberg analyst Mark Palmer also warned of risks from the USDC stablecoin, which generated $199 million in interest income in the first quarter, accounting for 27% of Coinbase's Q1 net income.