In This Article:
Blockchain infrastructure company Coinbase (NASDAQ:COIN) missed Wall Street’s revenue expectations in Q1 CY2025, but sales rose 24.2% year on year to $2.03 billion. Its non-GAAP profit of $1.94 per share was 0.7% above analysts’ consensus estimates.
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Coinbase (COIN) Q1 CY2025 Highlights:
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Revenue: $2.03 billion vs analyst estimates of $2.11 billion (24.2% year-on-year growth, 3.6% miss)
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Adjusted EPS: $1.94 vs analyst estimates of $1.93 (0.7% beat)
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Adjusted EBITDA: $929.9 million vs analyst estimates of $932.4 million (45.7% margin, in line)
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Operating Margin: 34.7%, down from 46.4% in the same quarter last year
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Free Cash Flow was -$182.7 million, down from $964.6 million in the previous quarter
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Monthly Transacting Users: 9.7 million, up 1.7 million year on year
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Market Capitalization: $52.58 billion
StockStory’s Take
Coinbase’s first quarter results reflected ongoing momentum in core trading and subscription businesses, driven by international derivatives expansion and stablecoin adoption. Management highlighted the strategic acquisition of Deribit, a global crypto options leader, as a key move to consolidate Coinbase’s position in derivatives and enhance cross-selling opportunities, especially for institutional clients. CEO Brian Armstrong emphasized the company’s focus on integrating spot, futures, and options trading, and pointed to strong growth in USDC (the U.S. dollar-backed stablecoin) balances as a source of recurring revenue.
Looking ahead, management cited macroeconomic uncertainty and volatile crypto asset prices as factors likely to impact trading activity and revenue in the near term. CFO Alesia Haas noted that lower asset prices in the early part of the second quarter could pressure blockchain rewards and subscription revenue. However, the leadership team maintained confidence in the company’s long-term product roadmap, continued international expansion, and the durability of its business model, stating that regulatory clarity and new product initiatives position Coinbase well for future growth.
Key Insights from Management’s Remarks
Coinbase’s management attributed the quarter’s performance to advances in derivatives trading, stablecoin utility, and expansion in international markets. Deviations from Wall Street expectations were largely due to a shift in trading volume mix and lower institutional fee rates.
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Derivatives Trading Expansion: Coinbase gained market share in global spot and derivatives, with over $800 billion in derivatives trading volume, fueled by its international exchange and recent acquisition of Deribit, which strengthens its position in options trading.
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Stablecoin Growth: USDC’s market cap reached an all-time high, with average balances in Coinbase products up 49% quarter-over-quarter. Management stated this growth supports recurring revenue and increases platform liquidity.
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International Licensing and Market Access: The company secured regulatory approvals in Argentina and India, enabling access to fast-growing crypto markets and extending the international playbook used for expansion.
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New Business Lines: Coinbase launched business accounts for stablecoin payments targeting startups and small businesses, and expanded on-chain lending with Bitcoin-backed USDC loans, a product that saw rapid uptake during the quarter.
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Policy and Regulatory Wins: Management highlighted legislative progress in the U.S. toward crypto market structure and stablecoin regulation, and noted the favorable resolution of the SEC lawsuit as a significant milestone for the industry.