TLDR
- Coinbase reported Q1 revenue of $2.03 billion, missing Wall Street estimates of $2.12 billion
- Earnings were $65.6 million (24 cents per share), down from $1.18 billion a year ago
- Trading volumes declined: consumer volume fell 17% and institutional volume dropped 9% from Q4
- Coinbase announced plans to acquire Dubai-based Deribit for $2.9 billion
- The company saw growth in stablecoin revenue while transaction revenue declined 19% from Q4
Coinbase shares fell in after-hours trading Thursday following the release of its first-quarter financial results, which showed revenue missing analyst expectations despite growth in certain segments.
The cryptocurrency exchange reported revenue of $2.03 billion for the quarter ended March 31. This represented a 24% increase from the $1.64 billion reported a year ago.
However, the figure fell short of the $2.12 billion consensus estimate from analysts tracked by LSEG.
Earnings came in at $65.6 million, or 24 cents per share. This marked a steep decline from the $1.18 billion, or $4.40 per share, earned in the same period last year.
On an adjusted basis, excluding the impact of crypto investments, Coinbase reported earnings of $527 million, or $1.94 per share.
The company’s transaction revenue totaled $1.26 billion for the quarter. This represented a 19% decrease from the fourth quarter of 2024.
🚨 Coinbase Q1 Earnings Miss
🔹 Revenue: $2.03B (missed estimates)
🔹 EPS: $1.94, down from $2.53 YoY
🔹 Stock dips 3% after-hours despite Bitcoin rally, now trading at $203
🔹 Q2 outlook lags: $600M–$680M services rev. vs. $704M expected
💥 Coinbase confirmed its $2.9… pic.twitter.com/yT304aDObJ
— Trader Edge (@Pro_Trader_Edge) May 9, 2025
Trading Volumes Show Downward Trend
Consumer trading volume fell 17% from the fourth quarter to $78.1 billion. The company noted that volume at the end of last year was elevated by Donald Trump’s election and expectations of a more favorable regulatory environment for cryptocurrencies.
Institutional trading volume also decreased, falling 9% from the fourth quarter to $315 billion.
The first quarter saw some positive developments for cryptocurrency markets. Bitcoin reached an all-time high of nearly $110,000 on January 20.
However, market conditions deteriorated in April. Concerns about President Trump’s tariff policy created volatility that dampened investor appetite for riskier assets like cryptocurrencies.
Bitcoin prices plunged from their January peak to below $75,000 by early April following the “Liberation Day” tariff announcement.
Despite these challenges, Coinbase reported generating approximately $240 million in transaction revenue in April alone.
For the second quarter, the company expects subscription and service revenue to range between $600 million and $680 million.
The company warned that growth in stablecoin revenue in the second quarter will likely be offset by lower blockchain rewards due to decreased asset prices.
Strategic Expansion Through Acquisition
In a major strategic move announced Thursday morning, Coinbase revealed plans to acquire Dubai-based Deribit for $2.9 billion.
Deribit is a major crypto derivatives exchange. The acquisition represents the largest deal in the crypto industry to date.
The purchase is expected to help Coinbase broaden its footprint outside the United States and strengthen its derivatives business.
Anil Gupta, vice president of investor relations for Coinbase, stated that the deal will help the company gain more market share in the crypto derivatives market.
Greg Tusar, Coinbase’s vice president of institutional product, said the acquisition “complements the record growth we’ve already seen in our own derivatives business.”
Coinbase highlighted that its derivatives business continued to grow market share during the first quarter even before the acquisition announcement.
The company is working to diversify beyond trading, as it remains somewhat subject to the volatility of Bitcoin prices.
Subscription and services revenue rose 9% from the fourth quarter to $698.1 million. This growth was “driven primarily by stablecoin revenue,” according to the company.
CEO Brian Armstrong expressed optimism during the earnings call, stating that Coinbase is “financially better positioned than ever to capitalize on opportunities” and that the “business has been resilient even in an uncertain macro environment.”
The company also expressed hope that the Trump administration’s favorable views on crypto will benefit the industry, particularly through potential regulatory clarity around stablecoins.
Coinbase stock finished regular trading Thursday up 5.1% as Bitcoin prices rose above $100,000, but shares fell approximately 3% in after-hours trading following the earnings announcement.
Year-to-date, Coinbase shares are down nearly 17%.
