Coinbase Global beat expectations for second quarter revenue, reporting $708 million versus the $663 million forecast by Wall Street analysts. The cryptocurrency exchange saw revenue boosted by a surge in interest income, which soared to $201 million from just $32 million last year.
The strong quarterly results come as Coinbase battles the Securities and Exchange Commission in court. The SEC sued Coinbase in July, alleging it improperly allowed trading of crypto assets that should have been registered as securities.
“We do think we can win. We expect to win,” Coinbase Chief Legal Officer Paul Grewal stated on the company’s post-earnings call. The positive revenue surprise initially lifted Coinbase shares after hours before gains faded as investors parsed the details.
While topping revenue estimates, Coinbase saw declines in monthly transacting users and trading volumes amid continued crypto market volatility. CEO Brian Armstrong said Coinbase remains focused on managing costs and expanding its product lineup beyond trading.
For the third quarter, the company projected subscription and services revenue of at least $300 million. Some analysts noted this guidance was in line with expectations, muting the positive reaction from beat on second quarter sales.
The high-profile SEC lawsuit alleges Coinbase improperly listed numerous crypto assets as commodities when they should have been registered as securities. The case represents a major escalation in the regulator’s crackdown on the crypto industry.
