Coinbase(US:COIN)2025-05-08 20:17Financial Performance - For Q1 2025, Coinbase reported net revenue of $2.0 billion, a 25% increase from $1.6 billion in Q1 2024, with transaction revenue at $1.3 billion and subscription and services revenue at $0.7 billion[126]. - Net income for Q1 2025 was $65.6 million, a significant decrease of 94% from $1.2 billion in Q1 2024, while Adjusted EBITDA was $930 million, down 8% from $1.0 billion[127][142]. - Subscription and services revenue increased to $698.1 million for the three months ended March 31, 2025, up 37% from $510.9 million in 2024, driven by a $105.1 million increase in stablecoin revenue[146]. - Other revenue increased to $74.0 million, up 48% from $49.9 million, reflecting higher average cash and cash equivalents balances[149]. - For the three months ended March 31, 2025, net income was $65.6 million, a decrease from $1.18 billion in the same period of 2024[173]. - Adjusted EBITDA for the same period was $929.9 million, down from $1.01 billion year-over-year[173]. User Engagement - Monthly Transacting Users (MTUs) increased to 9.7 million in Q1 2025, up 21% from 8.0 million in Q1 2024, driven by higher trading activity[129][132]. - Total Trading Volume for Q1 2025 reached $393 billion, a 26% increase from $312 billion in Q1 2024, with consumer trading volume growing by 39% and institutional trading volume by 23%[138][139]. Expenses - Total transaction expenses increased to $303.0 million, a 39% rise from $217.4 million in 2024, primarily due to higher blockchain rewards fees and payment processing costs[151]. - Technology and development expenses slightly decreased to $355.4 million, down 1% from $357.9 million, mainly due to lower personnel-related costs[155]. - Sales and marketing expenses surged to $247.3 million, a 151% increase from $98.6 million, driven by higher digital advertising spend and USDC rewards payouts[157]. - General and administrative expenses increased to $394.3 million, up 37% from $287.2 million, primarily due to higher customer support and professional services costs[160]. Assets and Cash Flow - Assets on Platform (AOP) as of March 31, 2025, totaled $328 billion, a slight increase of 1% from $323 billion in March 2024, with Bitcoin holdings increasing by 40%[129][134]. - Cash and cash equivalents totaled $8.05 billion as of March 31, 2025, compared to $8.54 billion at the end of 2024[176]. - USDC holdings increased to $2.23 billion, up from $1.24 billion at the end of 2024, with $1.86 billion not loaned or pledged as collateral[176]. - Net cash used in operating activities was $(182.7) million for the three months ended March 31, 2025, compared to $411.5 million provided in 2024[186]. - Cash used in investing activities increased by $106 million year-over-year, reflecting higher investments[188]. - Customer custodial cash decreased by $1.5 billion, attributed to increased average customer USDC balances in higher-yield products[191]. Tax and Income - The provision for income taxes decreased to $16.8 million, down 94% from $261.2 million, primarily due to lower pretax income[168]. - Losses on crypto assets held for operations were $34.4 million, a significant change from gains of $86.4 million in 2024, attributed to declining crypto asset prices[162]. - Interest expense rose to $20.5 million, an 8% increase from $19.1 million in 2024[164]. Market Strategy and Risk - The company plans to adjust its expense base dynamically in response to market conditions and revenue opportunities[128]. - The company does not plan to engage in regular trading of crypto assets, focusing instead on a buy-and-hold strategy for long-term investments[180]. - The company has not made material changes to its market risk exposures, except for the crypto assets held for investment[193]. - The historical volatility of Bitcoin and Ethereum is approximately 50% based on the annualized standard deviation of daily price returns over the past 24 months[194]. - A hypothetical 50% increase or decrease in crypto asset prices would impact the value of crypto assets held for investment by $634.0 million and $776.5 million as of March 31, 2025, and December 31, 2024, respectively[194]. - The decrease in hypothetical gain or loss since December 31, 2024 is primarily due to decreases in Bitcoin and Ethereum prices, despite an increase in the units held[194]. - The company has increased its investment in crypto assets during the quarter by deploying available cash[194].