Coinbase’s first quarter results drew a negative response from the market after both revenue and non-GAAP profit fell short of Wall Street expectations. Management attributed the miss primarily to lower transaction revenues and a shift in trading activity, with increased incentives to grow derivatives volume weighing on margins. CEO Brian Armstrong noted that while consumer and institutional trading volumes declined, the company gained market share, especially in derivatives, and continued to expand internationally. CFO Alesia Haas explained that investments to attract liquidity and customer acquisition in derivatives led to reduced transaction revenue, while a mix shift toward lower-fee market makers also contributed to pressure on top-line growth. "We are offering trading rebates and incentives to build liquidity and acquire customers," Haas said, pointing to the long-term strategy of building a comprehensive global trading platform.
Is now the time to buy COIN? Find out in our full research report (it’s free).
Coinbase (COIN) Q1 CY2025 Highlights:
- Revenue: $2.03 billion vs analyst estimates of $2.11 billion (24.2% year-on-year growth, 3.6% miss)
- Adjusted EBITDA: $929.9 million vs analyst estimates of $943.4 million (45.7% margin, 1.4% miss)
- Operating Margin: 34.7%, down from 46.4% in the same quarter last year
- Market Capitalization: $90.02 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions Coinbase’s Q1 Earnings Call
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Kenneth Worthington (JPMorgan) asked about the rationale and cross-sell potential of the Deribit acquisition. President Emilie Choi described the deal as a way to combine spot, futures, and options for institutional clients, while CFO Alesia Haas confirmed it is expected to be immediately accretive to adjusted EBITDA.
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James Yaro (Goldman Sachs) questioned the commercial logic behind adding Binance as a USDC partner and its impact on revenue sharing. Haas explained the partnership expands USDC’s total addressable market and provides Coinbase with 100% of reserve income for USDC held in eligible products, with shared economics off-platform.
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Devin Ryan (Citizens) asked about opportunities with traditional financial institutions entering crypto and potential competition. CEO Brian Armstrong said Coinbase aims to power infrastructure for new entrants, offering custody, trading, and stablecoin services as more banks integrate crypto solutions.
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Patrick Moley (Piper Sandler) inquired about the timeline for offering Deribit products in the U.S. and regulatory hurdles. Armstrong said Coinbase is working closely with the CFTC on approvals but expects it will take time to offer such products domestically.
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Benjamin Budish (Barclays Capital) asked why Deribit dominates crypto options and about the user base. Haas attributed Deribit’s market share to product expertise and serving a diverse mix of advanced traders, mostly outside the U.S., while Armstrong emphasized the importance of trust for institutional clients.
Catalysts in Upcoming Quarters
In the coming quarters, the StockStory team will focus on (1) tracking the integration and revenue impact of the Deribit acquisition, (2) monitoring the growth and monetization of USDC and B2B stablecoin payment offerings, and (3) assessing Coinbase’s ability to secure additional international licenses and regulatory clarity. Developments in crypto asset prices and transaction volumes will also serve as key indicators of execution.
Coinbase currently trades at $357.20, up from $206.50 just before the earnings. At this price, is it a buy or sell? The answer lies in our full research report (it’s free).
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