Financial Performance - Coinbase Global, Inc. reported quarterly earnings of $1.94 per share, exceeding the Zacks Consensus Estimate of $1.85 per share, and up from $1.65 per share a year ago, representing an earnings surprise of 4.86% [1] - The company posted revenues of $2.03 billion for the quarter ended March 2025, which missed the Zacks Consensus Estimate by 4.12%, compared to year-ago revenues of $1.64 billion [2] - Over the last four quarters, Coinbase has surpassed consensus EPS estimates three times and topped consensus revenue estimates two times [2] Stock Performance and Outlook - Coinbase Global shares have declined approximately 20.8% since the beginning of the year, while the S&P 500 has decreased by 4.3% [3] - The company's future stock performance will largely depend on management's commentary during the earnings call and the earnings outlook [4][6] - The current consensus EPS estimate for the upcoming quarter is $1.49 on revenues of $1.85 billion, and for the current fiscal year, it is $6.75 on revenues of $7.83 billion [7] Industry Context - The Zacks Industry Rank for Financial - Miscellaneous Services, to which Coinbase belongs, is currently in the bottom 43% of over 250 Zacks industries, indicating potential challenges for stock performance [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

Core Insights - Coinbase's first-quarter revenue fell short of Wall Street expectations despite an increase in stablecoin revenue [1][2] Financial Performance - In Q1, Coinbase reported earnings of $65.6 million, or 24 cents per share, a significant decline from $1.18 billion, or $4.40 per share, a year earlier [2] - Adjusted earnings, excluding crypto investments, were $527 million, or $1.94 per share [2] - Revenue increased to $2.03 billion from $1.64 billion year-over-year, but was below the consensus estimate of $2.12 billion [2] Revenue Breakdown - Transaction revenue for the quarter was $1.26 billion, while subscription and services revenue reached $698.1 million [3] - Consumer trading volume decreased by 17% from the previous quarter to $78.1 billion, influenced by elevated volumes at the end of last year due to political events [3] Market Trends - Institutional trading volume fell 9% from the fourth quarter to $315 billion [4] - Despite a record high for Bitcoin on January 20, volatility caused by concerns over tariff policies dampened investor interest in cryptocurrencies [4] Future Outlook - For Q2, Coinbase anticipates subscription and service revenue between $600 million and $680 million [5] - The company expects stablecoin revenue growth to be offset by lower blockchain rewards due to declining asset prices [5] Strategic Developments - Coinbase announced plans to acquire Dubai-based Deribit, a major crypto derivatives exchange, for $2.9 billion, marking the largest deal in the crypto industry to date [6] - The acquisition aims to expand Coinbase's presence outside the U.S. and its derivatives business continues to gain market share [6]

Part I - Financial Information [Financial Statements (Unaudited)](index=7&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) The company's Q1 2025 financial statements show total revenue increased to $2.03 billion, but net income sharply declined to $65.6 million due to a significant loss on crypto assets, with total assets slightly decreasing and operating cash flow turning negative [Condensed Consolidated Balance Sheets](index=7&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of March 31, 2025, total assets decreased to $21.7 billion, total liabilities decreased to $11.3 billion, and total stockholders' equity increased to $10.5 billion Balance Sheet Summary (as of March 31, 2025 vs. December 31, 2024) | Metric | March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | | :--- | :--- | :--- | | **Total Assets** | **$21,731,006** | **$22,541,951** | | Cash and cash equivalents | $8,051,169 | $8,543,903 | | Customer custodial funds | $5,369,865 | $6,158,949 | | **Total Liabilities** | **$11,262,766** | **$12,265,109** | | Customer custodial fund liabilities | $5,369,865 | $6,158,949 | | Long-term debt | $4,237,090 | $4,234,081 | | **Total Stockholders' Equity** | **$10,468,240** | **$10,276,842** | [Condensed Consolidated Statements of Operations](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) For Q1 2025, total revenue increased to $2.03 billion, but net income significantly decreased to $65.6 million due to a substantial loss on crypto assets, leading to a drop in diluted EPS Statement of Operations Summary (Three Months Ended March 31) | Metric | 2025 (in thousands) | 2024 (in thousands) | | :--- | :--- | :--- | | **Total Revenue** | **$2,034,295** | **$1,637,570** | | Net Revenue | $1,960,319 | $1,587,677 | | **Total Operating Expenses** | **$1,328,489** | **$877,109** | | Operating Income | $705,806 | $760,461 | | Losses (gains) on crypto assets held for investment, net | $596,651 | $(650,429) | | **Net Income** | **$65,608** | **$1,176,245** | | **Diluted EPS** | **$0.24** | **$4.40** | [Condensed Consolidated Statements of Cash Flows](index=11&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) In Q1 2025, net cash used in operating activities was $182.7 million, a reversal from the prior year, with increased cash used in investing and financing activities Cash Flow Summary (Three Months Ended March 31) | Activity | 2025 (in thousands) | 2024 (in thousands) | | :--- | :--- | :--- | | Net cash (used in) provided by operating activities | $(182,727) | $411,485 | | Net cash used in investing activities | $(231,653) | $(125,681) | | Net cash (used in) provided by financing activities | $(893,802) | $1,927,721 | | **Net (decrease) increase in cash** | **$(1,308,182)** | **$2,213,525** | [Notes to Condensed Consolidated Financial Statements](index=12&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Notes detail revenue concentration, $4.24 billion in long-term debt, dismissal of an SEC lawsuit with ongoing state actions, and a subsequent agreement to acquire Deribit for $2.9 billion Revenue Breakdown (Three Months Ended March 31) | Revenue Category | 2025 (in thousands) | 2024 (in thousands) | | :--- | :--- | :--- | | Total Transaction Revenue | $1,262,208 | $1,076,741 | | Total Subscription and Services Revenue | $698,111 | $510,936 | | **Total Net Revenue** | **$1,960,319** | **$1,587,677** | - As of March 31, 2025, the company had approximately **$4.24 billion** in long-term debt, consisting of various convertible and senior notes with maturities ranging from 2026 to 2031[64](index=64&type=chunk) - The SEC lawsuit filed in June 2023 was jointly stipulated for dismissal with prejudice in February 2025, however, the company continues to face legal actions from several U.S. state securities regulators regarding its staking services[108](index=108&type=chunk)[109](index=109&type=chunk) - On May 8, 2025, the company signed a definitive agreement to acquire Deribit, a crypto derivatives exchange, for an aggregate purchase price of approximately **$2.9 billion** in cash and stock, expected to close by December 31, 2025[122](index=122&type=chunk) [Management's Discussion and Analysis (MD&A)](index=28&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Q1 2025 net revenue grew to $2.0 billion, but net income dropped to $65.6 million and Adjusted EBITDA decreased, despite growth in MTUs and trading volume, with expense adjustments planned for Q2 [Key Business Metrics](index=29&type=section&id=Key%20Business%20Metrics) Q1 2025 key business metrics show MTUs increased 21% to 9.7 million and Trading Volume grew 26% to $393 billion, while Assets on Platform remained flat at $328 billion Key Business Metrics (Q1 2025 vs Q1 2024) | Metric | Q1 2025 | Q1 2024 | Change % | | :--- | :--- | :--- | :--- | | MTUs (in millions) | 9.7 | 8.0 | 21% | | Assets on Platform (in billions) | $328 | $323 | 1% | | Trading Volume (in billions) | $393 | $312 | 26% | | Net income (in millions) | $66 | $1,176 | (94)% | | Adjusted EBITDA (in millions) | $930 | $1,014 | (8)% | - The growth in Trading Volume outpaced the overall U.S. spot market, indicating an increase in market share for the company[141](index=141&type=chunk) [Results of Operations](index=32&type=section&id=Results%20of%20Operations) Q1 2025 total revenue increased 24% to $2.03 billion, driven by transaction and subscription revenue growth, but profitability was significantly impacted by a $1.25 billion negative swing in crypto asset gains/losses - Transaction revenue increased by **17% YoY**, driven by a **39% rise in consumer trading volume**, although this was partially offset by a lower average blended fee rate due to a shift towards Advanced trading[144](index=144&type=chunk)[147](index=147&type=chunk) - Subscription and services revenue grew **37% YoY**, primarily due to a **$100.2 million (51%) increase in stablecoin revenue** and a **$45.7 million (30%) increase in blockchain rewards**[146](index=146&type=chunk) - Sales and marketing expenses surged **151% YoY to $247.3 million**, mainly due to higher digital advertising spend and a **277% increase in USDC rewards payouts** to enhance customer acquisition and engagement[157](index=157&type=chunk)[159](index=159&type=chunk) - The company recorded a **$596.7 million loss on crypto assets** held for investment in Q1 2025, compared to a **$650.4 million gain** in Q1 2024, a key driver of the sharp decline in net income[166](index=166&type=chunk) [Liquidity and Capital Resources](index=39&type=section&id=Liquidity%20and%20Capital%20Resources) As of March 31, 2025, the company maintained a strong liquidity position of over $10.2 billion in cash and USDC, with approximately $4.3 billion in long-term debt and compliance with $1.6 billion in regulatory capital requirements Liquidity Resources (as of March 31, 2025) | Resource | Amount (in thousands) | | :--- | :--- | | Cash and cash equivalents | $8,051,169 | | USDC | $2,225,054 | | **Total Liquidity** | **$10,276,223** | - The company's primary contractual obligation is its long-term debt, which stood at an aggregate principal amount of **$4.3 billion** as of March 31, 2025[179](index=179&type=chunk) - Certain subsidiaries are subject to regulatory capital requirements totaling approximately **$1.6 billion**, with which the company was compliant as of March 31, 2025[185](index=185&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=43&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risk is crypto asset price volatility, with a hypothetical 50% price change impacting investments by $634.0 million as of March 31, 2025 - A hypothetical **50% change in crypto asset prices** would result in a **$634.0 million gain or loss** on the company's crypto assets held for investment as of March 31, 2025[194](index=194&type=chunk) [Controls and Procedures](index=43&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of March 31, 2025, with no material changes to internal control over financial reporting during the quarter - The CEO and CFO concluded that as of March 31, 2025, the company's disclosure controls and procedures were effective at a reasonable assurance level[196](index=196&type=chunk) - No changes occurred during the quarter that have materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[197](index=197&type=chunk) Part II - Other Information [Legal Proceedings](index=44&type=section&id=Item%201.%20Legal%20Proceedings) The company faces various legal proceedings and regulatory investigations, including ongoing subpoenas from the SEC and state agencies regarding its business practices and product offerings - The company is subject to ongoing regulatory oversight and has received investigative subpoenas from the SEC and various state agencies regarding its business practices, customer programs, and product offerings[201](index=201&type=chunk) [Risk Factors](index=44&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant risks from crypto market volatility, revenue concentration, intense competition, operational vulnerabilities, an uncertain regulatory landscape, and concentrated voting control due to its dual-class stock structure [Business and Financial Risks](index=45&type=section&id=Business%20and%20Financial%20Risks) Business and financial risks include significant operating result fluctuations due to crypto volatility, substantial revenue dependence on Bitcoin, Ethereum, and USDC, and intense competition from less-regulated entities - Operating results fluctuate significantly due to the highly volatile nature of the crypto economy and crypto asset prices[203](index=203&type=chunk) - Total revenue is substantially dependent on crypto asset prices and transaction volumes, with a meaningful concentration from Bitcoin and Ethereum transactions and USDC-related stablecoin revenue[206](index=206&type=chunk)[209](index=209&type=chunk) - The company competes with unregulated or less-regulated companies that may have lower compliance costs and greater flexibility in product offerings[236](index=236&type=chunk)[237](index=237&type=chunk) [Operational and Security Risks](index=51&type=section&id=Operational%20and%20Security%20Risks) Operational and security risks include cyberattacks, reliance on third-party service providers, the critical need for secure private key storage, and potential disruptions to the platform or blockchain networks - Cyberattacks and security breaches on the platform, or those impacting customers or third parties, pose a significant risk to the company's brand, reputation, and financial condition[218](index=218&type=chunk) - The business relies on third-party service providers for payment processing, cloud computing, and customer service, making it vulnerable to disruptions from these partners[265](index=265&type=chunk) - The theft, loss, or destruction of private keys required to access crypto assets held in custody is a critical risk, as such losses may be irreversible and could lead to significant financial liability[284](index=284&type=chunk)[285](index=285&type=chunk) [Regulatory and Legal Risks](index=52&type=section&id=Regulatory%20and%20Legal%20Risks) Regulatory and legal risks include operating in an uncertain landscape, potential classification of crypto assets as securities, exposure to material litigation and enforcement actions, and complexities of international compliance - The business is subject to a complex and uncertain regulatory landscape, where adverse changes or failure to comply with laws could significantly harm the business[226](index=226&type=chunk) - There is a high degree of uncertainty regarding whether a particular crypto asset, product, or service could be deemed a "security," which could lead to penalties and require the company to cease offering the asset or service[256](index=256&type=chunk)[261](index=261&type=chunk)[262](index=262&type=chunk) - The company is, and may continue to be, subject to material litigation and enforcement actions by regulators, which are expensive and time-consuming[250](index=250&type=chunk) [Ownership and Stock Risks](index=102&type=section&id=Ownership%20and%20Stock%20Risks) Ownership and stock risks include concentrated voting control due to the dual-class structure, limiting Class A stockholder influence, and high volatility in the Class A common stock market price - The dual-class common stock structure concentrates voting control with a small group of stockholders, including the CEO, who controls a majority of the voting power, limiting the influence of Class A stockholders on corporate matters[437](index=437&type=chunk) - The market price of the Class A common stock is highly volatile and can be influenced by factors such as crypto market performance, analyst coverage, and broad market fluctuations[434](index=434&type=chunk) - The company's board authorized a **$1.0 billion share repurchase program** in October 2024, but there is no guarantee it will be fully consummated or enhance long-term stock value, with no shares repurchased as of March 31, 2025[447](index=447&type=chunk)[457](index=457&type=chunk) [Other Disclosures](index=105&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%2C%20Use%20of%20Proceeds%2C%20and%20Issuer%20Purchases%20of%20Equity%20Securities) Other disclosures include no share repurchases under the $1.0 billion program as of March 31, 2025, and no Rule 10b5-1 trading plan adoptions or modifications by directors or officers during the quarter - As of March 31, 2025, no shares have been repurchased under the **$1.0 billion Share Repurchase Program** authorized in October 2024[457](index=457&type=chunk) - During the first quarter of 2025, none of the company's directors or officers adopted, modified, or terminated a Rule 10b5-1 trading plan[458](index=458&type=chunk)

First Quarter 2025 May 8, 2025 Fellow Shareholders, We delivered strong financial results in Q1, generating $2.0 billion in total revenue, $66 million in net income, $527 million in Adjusted Net Income (excluding the tax-effected impact of crypto investment asset gains/ losses), and $930 million in Adjusted EBITDA. Total transaction revenue was $1.3 billion and subscription and $ $ services revenue was nearly $700 million, driven by growth in stablecoin revenue and Coinbase One. With $9.9 billion in total $ ...

About this content About Angela Harmantas Angela Harmantas is an Editor at Proactive. She has over 15 years of experience covering the equity markets in North America, with a particular focus on junior resource stocks. Angela has reported from numerous countries around the world, including Canada, the US, Australia, Brazil, Ghana, and South Africa for leading trade publications. Previously, she worked in investor relations and led the foreign direct investment program in Canada for the Swedish government ...

Core Insights - Coinbase has announced an agreement to acquire Deribit, the world's largest cryptocurrency options and futures trading platform, for nearly $2.9 billion, with the transaction expected to be completed by the end of this year [1] Company Strategy - The acquisition is aimed at accelerating Coinbase's global derivatives strategy, indicating a strategic move to enhance its offerings in the cryptocurrency derivatives market [1]

Core Viewpoint - Coinbase Global (COIN) is expected to report its first-quarter 2025 results on May 8, with a history of earnings surprises in the last four quarters [1] Trading Volumes - Increased asset volatility and improved crypto asset prices are likely to have boosted trading volumes in the first quarter, which remains a major revenue driver for Coinbase [2] - The Zacks Consensus Estimate for total trading volume is 404 million, reflecting a 28.5% increase year-over-year. The estimate for Consumer trading volume is 83 million, indicating a 48.2% rise, while Institutional trading volume is pegged at 321 million, showing a 25.4% increase [3] Transaction Revenues - Transaction revenues are expected to benefit from higher fees for both Consumer and Institutional segments, with the Zacks Consensus Estimate for total transaction revenues at $1.325 billion, a 23% increase from the previous year. Consumer transaction revenues are estimated at $1.2 billion, and Institutional revenues at $127 million, suggesting a 49.4% year-over-year increase [4] Market Share and Product Growth - Revenues are anticipated to be supported by market share gains in U.S. spot and derivatives trading products, as well as growth in custody, staking, USDC assets, and Coinbase One subscribers [5] Earnings Prediction - The quantitative model does not predict an earnings beat for Coinbase this quarter, with an Earnings ESP of -5.23% and a Zacks Rank of 3 (Hold) [6][7]

Core Viewpoint - Coinbase Global Inc. is expected to report improved financial results for the first quarter of 2025, with significant increases in both revenue and earnings compared to the previous year [1][2]. Revenue Estimates - The Zacks Consensus Estimate for Coinbase's first-quarter revenues is $2.2 million, reflecting a 33.4% increase year-over-year [1]. - The consensus estimate for transaction revenues is $1,325 million, indicating a 23% increase from the year-ago quarter [8]. - Subscription and services revenues are projected to be between $685 million and $765 million, with the consensus estimate at $707 million [10]. Earnings Estimates - The consensus estimate for earnings per share (EPS) is $2.06, which represents a year-over-year increase of 23.6 [2]. - The most accurate estimate for EPS is $1.93, resulting in an Earnings ESP of -5.23% [5]. Performance History - Coinbase has a history of beating earnings estimates, achieving this in three of the last four quarters with an average surprise of 46.15% [3]. Factors Influencing Results - Increased trading volume due to higher volatility is expected to benefit Coinbase's performance, with trading volume estimated at 404 million, a 29.4% increase year-over-year [6]. - The focus on international expansion, growth in derivatives and spot trading, and integration of USD Coin are likely to enhance revenue streams from trading fees and Stablecoins [7]. Expense Projections - Coinbase anticipates transaction expenses to be in the mid-to-high teens as a percentage of net revenues [9]. - Technology and development expenses are expected to be between $750 million and $800 million, reflecting increased variable expenses [11]. - Sales and marketing expenses are projected to be between $235 million and $375 million due to increased digital marketing spending [12]. Valuation Metrics - Coinbase's stock is trading at a price-to-earnings ratio of 22.47, which is higher than the industry's average of 15.29 [16]. Investment Thesis - The company is positioned to benefit from higher crypto asset volatility and prices, along with increased adoption of its services in a pro-crypto environment [19]. - Investments in infrastructure and foundational platforms are expected to optimize operations and drive revenue growth [20].

Core Insights - Analysts expect Coinbase Global, Inc. to report quarterly earnings of $2.04 per share, reflecting a year-over-year increase of 23.6% [1] - Revenue projections stand at $2.19 billion, indicating a 33.4% increase from the previous year [1] - The consensus EPS estimate has been revised down by 8.7% over the last 30 days, showing a reevaluation of initial estimates by analysts [1][2] Revenue Estimates - Analysts predict 'Net Revenue' to reach $2.03 billion, a 28% increase from the prior-year quarter [4] - The estimate for 'Net Revenue- Total Subscription and services' is $707.49 million, reflecting a 38.5% year-over-year change [4] - 'Net Revenue- Transaction revenue' is expected to be $1.32 billion, up 23.1% from the previous year [5] - 'Other revenue' is projected at $72.47 million, indicating a 29.2% increase year-over-year [5] Subscription and Services Revenue - 'Net Revenue- Subscription and services- Other subscription and services' is estimated at $97.51 million, a 53.1% increase from the prior-year quarter [6] - 'Net Revenue- Subscription and services- Blockchain' is projected to reach $232.09 million, suggesting a 53.8% year-over-year change [6] - 'Net Revenue- Subscription and services- Custodial fee' is expected to be $46.00 million, reflecting a 42.4% increase from the previous year [7] Trading Volume and User Metrics - Analysts forecast 'Trading Volume' to reach $404.23 billion, compared to $312 billion in the same quarter last year [7] - 'Trading Volume - Institutional' is expected to be $320.94 billion, up from $256 billion year-over-year [7] - 'Trading Volume - Consumer' is projected at $83.29 billion, compared to $56 billion in the same quarter of the previous year [8] - The consensus for 'Monthly Transacting Users' is 9.17 million, up from 8 million year-over-year [8] Market Performance - Coinbase shares have returned +27.6% over the past month, outperforming the Zacks S&P 500 composite's +0.4% change [8] - The company holds a Zacks Rank 3 (Hold), indicating expectations to mirror overall market performance in the near future [9]

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