Coinbase Global, Inc. (COIN) Q4 2025 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
The earnings call summary indicates mixed signals: strong financial performance with $11 billion in cash and a focus on buybacks and M&A, but also uncertainty in guidance and market conditions. The Q&A section reveals management's cautious approach to predictions and reluctance to provide specific forecasts, which could temper investor enthusiasm. While there are positive elements like early interest in prediction markets and a solid financial position, the lack of clear guidance and potential market uncertainties balance out the overall sentiment, leading to a neutral prediction.
Key Financial Performance
Total Revenue (2025) $7.2 billion, a 9% year-over-year increase. Reasons for change: Growth in subscription and services revenue and diversification of revenue streams.
Subscription and Services Revenue (2025) $2.8 billion, up 23% year-over-year. Reasons for change: Expansion of products generating $100 million+ in annualized revenue and scaling of these products.
Q4 Total Revenue $1.8 billion, down 5% quarter-over-quarter. Reasons for change: Softer market conditions and an 11% decline in crypto market cap.
Q4 Transaction Revenue $983 million, down 6% quarter-over-quarter. Reasons for change: Softer market conditions and lower crypto prices.
Q4 Subscription and Services Revenue $727 million, down 3% quarter-over-quarter. Reasons for change: Lower average crypto price environment and lower staking protocol rewards rates.
Adjusted EBITDA (Q4) $566 million. Reasons for change: Diversified revenue streams and operational efficiency.
Adjusted Net Income (Q4) $178 million. Reasons for change: Positive adjusted EBITDA and diversified revenue streams.
GAAP Net Loss (Q4) $667 million. Reasons for change: $718 million unrealized loss on crypto investment portfolio and $395 million loss on strategic investments.
Cash and Cash Equivalents (End of 2025) $11.3 billion. Reasons for change: Strong capital and liquidity position.
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Operating Highlights
Everything Exchange: Launched in Q4 2025, offering trading of crypto, equities, prediction markets, and commodities. Achieved all-time highs in derivatives volume and revenue. Prediction markets rolled out to all customers, and equities with nearly 10,000 tickers live. Acquired Echo to enable efficient onchain capital formation and working on tokenized equities.
Stablecoins and Payments: USDC stored in Coinbase products hit an all-time high, contributing to a $75 billion market cap. Focused on expanding stablecoin utility, integrating deeper product features, and scaling payments infrastructure. Stablecoins are being adopted by AI agents for payments.
Onchain Strategy: Focused on DeFi, self-custodial wallets, and decentralized technology. Plans to integrate more DeFi features into the Coinbase app, scale adoption of the base app, and increase transaction volume on the base chain.
Global Market Expansion: Doubled trading volume and market share year-over-year. Expanded internationally as regulatory clarity improved globally.
Revenue Diversification: 12 products generating over $100 million in annualized revenue. Subscription and services revenue reached $2.8 billion in 2025, up 23% year-over-year.
Financial Performance: 2025 total revenue was $7.2 billion, a 9% year-over-year increase. Adjusted EBITDA profitability for 12 consecutive quarters. Ended 2025 with $11.3 billion in cash and cash equivalents.
Stock and Bitcoin Buybacks: Repurchased $1.7 billion in stock, offsetting 2025 dilution from stock-based compensation. Continued to buy Bitcoin to build positions in the market.
Focus on Financial Services Transformation: Positioned to capitalize on the transformation of financial services through crypto. Highlighted expertise in crypto storage, trading, and innovative product offerings.
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Risk or Challenges
Regulatory Clarity: While regulatory clarity is emerging globally, there is still uncertainty in the U.S. regarding the path to tokenized equities and other crypto-forward initiatives. This could impact the company's ability to expand its Everything Exchange and other offerings.
Market Volatility: Crypto market cap declined 11% quarter-over-quarter, and the company experienced softer market conditions in Q4. This volatility could impact transaction revenue and overall financial performance.
Dependence on Stablecoins: The company is heavily focused on scaling stablecoins and payments. However, competition from offshore or unregulated stablecoin offerings could pose a challenge to maintaining competitiveness.
Operational Costs: Operating expenses increased 9% quarter-over-quarter, driven by acquisitions and higher USDC rewards. This could strain profitability if revenue growth does not keep pace.
Crypto Investment Portfolio: The company reported a $718 million unrealized loss on its crypto investment portfolio, which could impact financial stability if crypto prices remain volatile.
Strategic Investments: A $395 million loss on strategic investments, including Circle, highlights risks associated with the company's investment strategy.
Stock-Based Compensation: The company repurchased $1.7 billion in stock to offset dilution from stock-based compensation, which could limit financial flexibility for other strategic initiatives.
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Guidance & Outlook
Revenue Projections: For Q1 2026, subscription and services revenue is expected to range between $550 million and $630 million, reflecting the current lower average crypto price environment, lower interest rates, and lower staking protocol rewards rates.
Expense Projections: Technology and development plus general and administrative expenses are expected to remain flat quarter-over-quarter, ranging between $925 million and $975 million. Sales and marketing expenses are also expected to be flat to down quarter-over-quarter, ranging between $215 million and $315 million.
Market Trends and Business Segment Performance: Coinbase anticipates continued growth in stablecoin utility and adoption, with stablecoins becoming the default payment method for AI agents. The company also expects increased adoption of self-custodial wallets and onchain activity, with more DeFi integrations and scaled adoption of the base app for trading.
Strategic Plans for 2026: Coinbase plans to grow the Everything Exchange by expanding its offerings to include tokenized equities and prediction markets, and by rolling out these services to more countries. The company also aims to scale stablecoins in payments and bring more financial services onchain, increasing the percentage of onchain activity powered by Coinbase infrastructure.
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Shareholder Return Plan
Stock Buyback: Coinbase has deployed $1.7 billion to repurchase shares, fully offsetting 2025 dilution from stock-based compensation. Additionally, the Board approved an additional $2 billion share repurchase authorization to be deployed opportunistically to manage future dilution from stock-based compensation.
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Key Q&A
Q:Are you making any headway on positive outcomes regarding the CLARITY Act?
A:Brian Armstrong expressed optimism about progress on the CLARITY Act, highlighting efforts by the Senate and administration. He emphasized the importance of preserving crypto benefits and creating a level playing field for all stakeholders, with hopes for a positive outcome in the next few months.
Q:With Base TVL and sequencer revenue growing strongly in late 2025, what percentage of overall subscription and services revenue do you expect Layer 2 activity from Base and partners to contribute in 2026? Are there plans to further incentivize builders there?
A:Alesia Haas clarified that Base revenue is monetized directly through sequencer fees (recorded in transaction revenue) and indirectly through other products like USDC. No forecast was provided, but the goal is to drive quality and user engagement. Brian Armstrong added that incentives for builders include Base grants, improved developer tools, and exploring a Base token.
Q:What product or platform initiative are you most excited about that investors may be underestimating today?
A:Brian Armstrong highlighted the 'Everything Exchange' for onchain tradable assets and stablecoin payments as key initiatives. He emphasized their potential to democratize access, create global markets, and significantly grow crypto's share of global GDP.
Q:Please discuss line of sight to Everything Exchange monetization. What are your thoughts on the timing about revenue diversification?
A:Alesia Haas noted that diversification is a focus, with derivatives expected to drive growth in 2026. Recent additions like prediction markets and equities show early promise. The goal is to scale products to higher revenue tiers and drive asset accumulation on the platform.
Q:Could your economic relationship with Circle change depending upon language in a market structure bill?
A:Brian Armstrong stated that the relationship with Circle would not change due to market structure legislation. He noted that some proposed amendments could ironically increase Coinbase's profitability but emphasized the importance of maintaining customer rewards for competitiveness.
Q:How does Coinbase think about the opportunities in larger-scale buybacks and M&A?
A:Alesia Haas highlighted Coinbase's strong financial position, with over $11 billion in cash. The company is focused on buybacks, Bitcoin purchases, and opportunistic M&A, with 10 acquisitions completed in 2025 to accelerate the product roadmap.
Q:What have you seen in terms of prediction market adoption to date among Coinbase customers? Do you have plans to build your own prediction market venue?
A:Brian Armstrong reported strong early interest in prediction markets, launched in partnership with Kalshi. While no plans for an exclusive venue were announced, Coinbase is open to launching its own markets in the future.
Q:Do you think we're heading into another crypto winter? How long until the cycle could begin to recover?
A:Brian Armstrong avoided making predictions, emphasizing Coinbase's focus on building products. He noted that market corrections are often psychological and not tied to fundamentals, with traders on the platform currently being net buyers.
Q:Can you talk about your 2026 spending plans? Where is there most flex in the cost base?
A:Alesia Haas stated that 2025 was an investment year, with significant spending on sales, marketing, and M&A. For 2026, the focus is on maintaining flat expenses in Q1 while being nimble with opportunities. Flexibility exists in marketing and other discretionary areas.
Q:Was the Coinbase issue just a tech mishap and not a more severe issue?
A:Alesia Haas confirmed that a recent issue was a technical mishap unrelated to trading volume or market conditions. The problem was resolved, and investments have been made to mitigate such events.
Q:As you work to scale the Everything Exchange, can you describe the strategy for bringing customer assets to Coinbase?
A:Brian Armstrong described the 'asset accumulation flywheel,' which starts with trust, leading to asset storage and integration with various products. This strategy aims to attract traditional investors and enhance product value for existing users.
Q:Can you help us think through your M&A strategy at this point?
A:Emilie Choi stated that Coinbase is focused on M&A opportunities that accelerate the product roadmap, particularly in advancing the Everything Exchange, onchain infrastructure, and stablecoin/payment bundling.
Q:What's Coinbase's view on the Base L2 value prop going forward?
A:Brian Armstrong emphasized Base's broad utility for payments, trading, and DeFi. He highlighted its speed, scale, and potential for novel features like privacy. He also noted that the line between L1s and L2s could blur over time.
Q:Why has stablecoin market cap flatlined, and what gives you confidence around growth in 2026?
A:Alesia Haas attributed the flatline to reduced risk appetite and higher velocity of stablecoin payments. She expressed confidence in growth due to deeper integration of stablecoins in Coinbase products and the GENIUS Act's impact on adoption.
Q:Can you provide an update on how much USDC market cap is currently on the Coinbase platform?
A:Alesia Haas declined to provide January or February data, referring to the Shareholder Letter for end-of-year balances and revenue details.
Q:Can you quantify the effective take rate compression from simple to advanced and Coinbase One users?
A:Alesia Haas noted a mix shift towards advanced products and Coinbase One users, which impacts take rates. She emphasized the focus on growing Coinbase One membership but did not provide specific take rate forecasts.
Q:How do you work with Circle and USDC on real-world volume commercialization?
A:Alesia Haas stated that Coinbase works on its own products to drive USDC payments adoption, partnering and competing with Circle. The focus is on building APIs and driving customer growth.
Q:How should we think about the strength of the casual crypto trader in this winter?
A:Alesia Haas observed that most retail consumers hold through price declines and are more active during volatility. She noted a net buying trend among active users and emphasized diversification efforts to attract broader trading activity.
Q:Review of Unclear Management Responses
A:Management avoided providing specific forecasts for Base's contribution to subscription and services revenue, USDC market cap on Coinbase, and take rate compression. Additionally, they did not announce plans for their own prediction market venue or provide a timeline for crypto market recovery.
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Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
AI agent
AI balance
Alesia
Assets platform
Coinbase Full
Coinbase ability
Coinbase manifest
Coinbase transition
Coinbase world
Crypto system
DEX trading
DeFi base
DeFi integration
DeFi self
Echo capital
Everything Exchange
USDC
base chain
dollar
generation
market commodity
market condition
path
prediction market
priority Everything
priority stablecoins
reason Number
self wallet
sign
stablecoins payment
transformation
volume market
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