Coinbase posted $1.22 billion in total revenue for the second quarter, down from $1.5 billion in the same quarter a year earlier.

Shares of Coinbase (COIN) fell approximately 5% in after-hours trading Thursday after the crypto exchange delivered quarterly results that highlighted continued weakness in digital asset trading. Lower cryptocurrency prices affected one of the company’s biggest revenue contributors.

The company’s revenue came in below the $1.29 billion analyst consensus estimate. Transaction revenue totaled $599 million, missing expectations of $628 million.

Subscription and services revenue reached $555 million, below the projected $599 million, as investors evaluated whether Coinbase’s recurring income streams could help cushion the impact of declining trading activity.

During the quarter, Coinbase added 819 BTC to its balance sheet, increasing its total Bitcoin holdings to 17,211 BTC — a 5% increase from the previous quarter.

The earnings report arrived after a challenging stretch for crypto markets. Bitcoin declined roughly 14% in Q2, while ether dropped about 25%, resulting in weaker spot market volumes and reduced volatility. Analysts had anticipated a slowdown across the sector after trading activity weakened in April and May, though momentum improved slightly in June. Robinhood also experienced pressure, reporting a 38% year-over-year decline in crypto trading revenue, which fell from $160 million to $100 million.

In a post on X, Coinbase CEO Brian Armstrong emphasized the company’s expanding operations beyond spot trading, including stablecoins, Base, and prediction markets. He noted that Coinbase reached a record 10.3% share of global crypto trading volume during the quarter.

CFO Alesia Haas acknowledged the difficult conditions facing the industry, pointing to a more than 20% decline in overall spot trading volumes and a double-digit drop in total crypto market capitalization. She said these factors drove a 14% quarter-over-quarter decrease in Coinbase’s total revenue.

Several Wall Street analysts lowered their earnings projections and EBITDA estimates before the report, citing weaker crypto prices and their impact on institutional trading, blockchain rewards, and retail participation.

Investors remained focused on Coinbase’s strategy to diversify revenue sources and lessen its dependence on transaction fees.

The company’s subscription and services business — which includes USDC-related interest income, staking, custody solutions, Coinbase One memberships, and institutional services — has become a crucial indicator of its ability to generate more consistent revenue across crypto market cycles.

Analysts also tracked developments in Coinbase’s newer growth segments, including derivatives, prediction markets, and Base, the company’s Ethereum-based layer-2 blockchain.