It is the earnings report season and Wall Street companies have been releasing their reports one after the other. Owing to the choppy price action and the halving event that took place in April, the earnings of most crypto companies took a hit.
As reported a day back, Mike Novogratz's digital asset finserv company Galaxy Digital registered a net loss of $177 million for the second quarter. Meanwhile, BTC miner Riot noted a Q2 net loss of $84.4 million, while Marathon Digital recorded a net loss of $199.7 million
Two other companies — Coinbase and MicroStrategy — also unveiled their reports. In this article, we will delve into how the two crypto-giants fared.
Coinbase managed to beat Wall Street analysts' estimates this quarter by a slight margin. Brian Armstrong’s firm netted a total revenue of $1.45 billion. The average estimate hovered around $1.4 billion.
Transaction fees accounted for the largest piece of the source pie. However, owing to the not-so-appealing market conditions, traders and investors did not overly indulge in transactions. Volume dipped 28% resulting in a 27% QoQ shrink in transaction fees.
Nevertheless, in the letter to shareholders, the company affirmed,
"On a Q/Q basis, subscription and services revenue benefited from higher average USDC on-platform balances and USDC market capitalization, as well as higher average crypto asset prices - notably SOL and ETH.”
Coinbase’s share price did note an uptick after beating analysts’ estimates. However, it closed at $204.44 on Friday, down 3.86%.
MicroStrategy, another company that is all-in on Bitcoin, registered a net loss of $102.6 million in the second quarter. The firm, notably, bore an impairment charge of $180.1 on its BTC stash.
Impairment charges chalk out the loss or gain of the company’s BTC holdings when weighed against the price at which it was bought.
The latest accounting guidelines green-flag companies to adjust the value of their crypto holdings to reflect their current market value, a practice known as "mark to market." However, it is not mandatory for firms to adopt this practice yet.
The company further unveiled its plans to raise up to $2 billion via the sale of its class A shares. According to the official filing, the funds raised would be allocated for “general corporate purposes, including the acquisition of Bitcoin.”
With respect to operations, the business intelligence company amassed $111.4 million in revenue vs. analyst estimates of $122 million.
MicroStrategy's shares closed Friday’s trading session at $1,447.99, down 4.22% on the daily.
Here, it is worth recalling that MicroStrategy’s board of directors also recently called for a 10-for-1 stock split to make the company’s shares more accessible to investors and employees. Trading will commence on a split-adjusted basis this week.
