UPDATED 20:09 EDT / MAY 08 2025

BLOCKCHAIN

Coinbase reports Q1 revenue below expectations with 19% drop in transaction revenue

Shares in Coinbase Global Inc. declined nearly 3% in late trading today after the cryptocurrency exchange provider missed on revenue in its fiscal first quarter, reported a decline in transaction revenue, and said subscription and service revenue would fall.

Before its earnings report, Coinbase had announced it plans to acquire cryptocurrency derivatives exchange Deribit FZE for $2.9 billion.

For the quarter ended March 31, Coinbase reported adjusted earnings per share of $1.94, down from $2.53 per share in the same quarter of 2024, on revenue of $2.04 billion, up 24% year-over-year. The results were mixed, as earnings per share came in just ahead of the $1.93 expected by analysts, but revenue fell short of an expected $2.1 billion.

The quarter stood out for not the right reasons for Coinbase, with the company seeing widespread falls compared to its previous quarter, although it was always unlikely that Coinbase could replicate the massive growth it saw in its fiscal 2024 fourth quarter. Transaction revenue in the quarter fell 19%, to $1.26 billion, in parallel with consumer revenue falling at about the same rate, to $1.1 billion. Institutional revenue plunged even more off a much smaller base — almost 30% — to $99 million.

The numbers were not all doom and gloom, however, as subscription and services revenue saw healthy quarter-over-quarter growth of 9% to $698 million.

Business highlights in the quarter included Coinbase’s expansion of its consumer offerings, notably enhancing the Coinbase One subscription service. The enhancements included new benefits such as free gas fees on Base, boosted staking rewards and exclusive partnerships for crypto tax filing assistance.

Coinbase also launched a feature allowing users to borrow USDC against their bitcoin holdings directly within the app, powered by the Morpho lending protocol on Base. The borrowing feature has already facilitated over $160 million in loans since its inception.

On the institutional front, Coinbase expanded its International Exchange, adding 39 new perpetual contracts and increasing collateral types from three to eight assets. Portfolio Margin 2.0, also announced during the quarter, allows institutional clients to trade on margin without pre-funding, using existing portfolios as collateral, enhancing capital efficiency.

“This quarter, we made meaningful progress against our 2025 priorities of driving revenue, driving utility and building the foundations to power the next decade of growth,” Coinbase said in a letter to shareholders.

For its second quarter, Coinbase expects subscription and services revenue to come in between $600 million and $680 million, a potential decline from the first quarter as a result of lower blockchain rewards revenue tied to falling asset prices.

The company generated about $240 million in transaction revenue in April and projects transaction expenses to be in the mid-teens as a percentage of net revenue. Operating costs are expected to remain stable, with technology, development and general administrative expenses ranging from $700 million to $750 million, and sales and marketing between $215 million and $315 million, depending on market conditions and USDC-linked incentives.

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