The prominent crypto exchange in the United States, Coinbase, issued its Q1 2025 financial earnings this week. The company delivered a whole assortment of results that underscored its part as a player in a digital asset market that is maturing rapidly.
While the company missed total revenue and earnings targets, it unearthed some gems in terms of trading volume increases and an expanding global footprint.
For the first quarter of 2025, Coinbase registered total revenue of $2.03 billion, which is below the Street’s consensus of $2.2 billion. Transaction revenue, which is a key metric for the company, came in at $1.26 billion and missed the expectation of $1.33 billion. The good news was that subscription and services revenue has been increasing nicely and was up 37% year-over-year and 9% quarter-over-quarter to $698 million, just slightly below the expectation of $702.5 million.
EPS adjusted were $0.24, which is a far cry from the target set by analysts of $2.09. The company remains strong, however, with an adjusted EBITDA of $930 million and a net income that certainly made its balance sheet look better at $66 million. Add in an adjusted net income of $527 million, and you clearly see the company standing tall and remaining very profitable despite going through some market dynamics that are swaying it back and forth.
Trading Volume Strength and Strategic Growth Shape the Quarter
Even though it missed revenue expectations, Coinbase showed impressive trading activity strength. The total trading volume came in at around $393 billion this past quarter—just slightly above what they were projecting ($392.7 billion).
A phenomenal metric was the 49% increase in USDC balances in Coinbase products since the end of the previous quarter, now totaling $12.3 billion. This figure reflects a demand from our users for stablecoin-based services and suggests that the platform in general, including our lending business, is seeing more adoption of recently launched products using USDC.
The trust from both retail and institutional users is increasing, as evidenced by our custody asset base growing to $212 billion, up $25 billion from last quarter. We are seeing much-improved regulatory clarity combined with a much-expanded set of service offerings.
In the future, Coinbase projects subscription and service income to be between $600 million and $680 million for the second quarter of 2025. At the same time, the company expects underlying operating expenses (technology and general administration) to range from $700 million to $750 million. Sales and marketing expenses are projected to come in between $215 million and $315 million, but with the sale of actual transactions already projected to be $240 million for the month of April.
$COIN | Coinbase Q1’5 Earnings Highlights
🔹 Revenue: $2.03B (Est. $2.2B) 🔴
🔹 Adj. EPS: $0.24 (Est. $2.09) 🔴
🔹 Transaction Revenue: $1.26B (Est. $1.33B) 🔴
🔹 Subscription & Services Revenue: $698M (Est. $702.5M) 🔴; UP +37% YoY, +9% QoQ
🔹 Trading Volume: $393B (Est.…— Wall St Engine (@wallstengine) May 8, 2025
During the quarter, Coinbase also seized the opportunity to reinforce its leadership in the derivatives markets. It announced a $2.9 billion acquisition of the crypto options exchange Deribit, structured in both cash and stock. This puts Coinbase in a dominant position in crypto options and futures, broadening its reach into more sophisticated trading products. In their press release, Coinbase emphasized that this acquisition aligns with their mission of “building the most secure and compliant trading venue in the world” and that they are now working on an “orderly integration plan” for Deribit.
From a regulatory perspective, the company had a really major legal win when the SEC lawsuit that had been hanging over the company for quite some time was dismissed—”with prejudice,” no less. That was a huge hurdle the company had to face, and now it has investor confidence on board, too. The company registered internationally as well, with both Argentina and India now recognizing it as a Virtual Asset Service Provider (VASP). Regulatory operations across the globe continue to expand.
Coinbase’s long-term vision is primarily centered around product development. Initiatives in place, like the Base Layer 2 network—a blockchain scaling initiative—saw $4 billion in stablecoin balances this past quarter. The company also shafted new products into the ecosystem, among them, Flashblocks, a solution that utilizes Ethereum to enable finality of transactions in less than a second. At the same time, Coinbase continued its work scaling its other products, namely, Coinbase One Premium and Verified Pools, for retail and institutional customers, respectively.
In addition, there was an external development that fit neatly with Coinbase’s strategy. A U.S. Executive Order was issued that formally established a Strategic Bitcoin Reserve. Although this wasn’t a Direct hit for Coinbase, it was widely interpreted as a sign that the U.S. government was starting to recognize Bitcoin as an asset of sufficient quality that they might hold it in reserve, right alongside gold.
Even though the miss on earnings could have some impact on sentiment in the near term, I think this could be an opportunity to accumulate shares in Coinbase. Why? Because I still believe that this company’s strategic long-term initiatives are positioning it much better in the space to lead well into the next era of cryptocurrency adoption.
Disclosure: This is not trading or investment advice. Always do your research before buying any cryptocurrency or investing in any services.
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Source: https://nulltx.com/coinbase-misses-on-revenue-beats-on-volume-as-strategic-bets-begin-to-pay-off/