Coinbase posted dismal results Tuesday as the crypto powerhouse got slammed by a downturn that “came fast and furious.”
Coinbase reported second-quarter financials that missed Wall Street estimates as the company swung to a loss and posted a 64% year-over-year drop in revenue. Coinbase shares, which fell about 11% in regular trading, tumbled more than 5% in after-hours trading. The stock has dropped more than 60% year-to-date.
The company’s report highlighted the magnitude of the crypto crash, which has erased $2 trillion in value in the past eight months.
“The current downturn came fast and furious,” Coinbase said in a letter to shareholders. Coinbase said the second quarter was “a test of durability for crypto companies and a complex quarter overall.”
Coinbase’s revenue tumbled to $808 million from $2.2 billion in the year-ago quarter. The company posted a loss of $1.1 billion, or $4.98 a share, compared to a profit of $1.6 billion in the same quarter last year.
Wall Street analysts had expected a loss of $2.65 a share on revenue of $832 million.
Coinbase said it was impacted by big drops in trading volume and transaction revenue, which were “influenced by a shift in customer and market activity, driven by macroeconomic and crypto credit factors.”
The market slump has forced the company to rein in costs. Coinbase announced in June that it was slashing 18% of its workforce. The company said it has embraced a “pause, maintain, and prioritize” approach to product development.
“Overall, it will take some time to fully realize the financial impact of our actions,” Coinbase told shareholders.
But the company also pointed to recent gains, saying it now has more than 100 million verified users and its institutional clients now total more than 14,500.
“Coinbase is an all-weather company with experience in navigating through crypto asset price cycles,” the company also said.