Coinbase Q1 financial report: profit falls but revenue capacity continues to expand

On May 8, Coinbase announced its Q1 2025 financial report. Here are a few key points worth following from the report:

1. Net profit in the first quarter decreased by 94.4% year-on-year

2. The number of trading users in the first quarter increased by 21% year-on-year

3. Stablecoin revenue significantly increased, up 51% year-on-year

4. The company announced the acquisition of Deribit for 2.9 billion to expand its derivatives trading capabilities.

The decline in Coinbase's profits is more due to the drop in the value of the cryptocurrencies it has invested in, while behind the profit decline, its operating expenses are continuously expanding, and the growth of its stablecoin business is significant, as it will also expand into new sectors to cover its shortcomings. All of this indicates that Coinbase will have stronger revenue capabilities in the future.

Next, Jinse Finance will provide a detailed interpretation of the specific content of this financial report:

Financial Report Highlights

**1.**Revenue Growth

Coinbase demonstrated a positive revenue growth trend in the first quarter of 2025. Net revenue increased from $1.588 billion in the same period of 2024 to $1.960 billion, a growth rate of 23.4%. This growth was driven by a dual boost from trading revenue and subscription service revenue. Trading revenue grew by 17% to $1.262 billion, primarily due to a 39% increase in consumer trading volume. Subscription and service revenue grew by 37% to $698 million, with stablecoin revenue significantly increasing due to the rise in average USDC balances in Coinbase products and improved off-platform balance yields, while blockchain rewards and other subscription service revenue also saw an increase.

**2.**User Metric Improvement

Monthly Trading Users (MTU) grew by 21%, reaching 9.7 million, significantly influenced by the sentiment and activity in the cryptocurrency market. Assets on the platform (AOP) reached $32.8 billion, remaining relatively stable compared to the same period in 2024. The growth driven by the increase in Bitcoin units and price was offset by the decline in prices of Ethereum and other crypto assets, while the growth of USDC AOP benefited from reward programs and product integration. Trading volume increased by 26%, reaching $393 billion, reflecting the overall market improvement and Coinbase's market share increase in the U.S. The volatility of crypto assets and the growth in average total market capitalization also facilitated trading activities.

Key user metrics are improving, reflecting an increase in Coinbase's competitiveness in the market.

Challenges Shown in the Financial Report

1. Decline in Net Profit

Despite revenue growth, Coinbase experienced a significant decline in net profit in the first quarter of 2025. Net profit dropped from $1.176 billion in the same period of 2024 to $65.6 million, a decrease of 94.4%. This was mainly due to the net gains from crypto assets held for investment purposes turning from a profit of $650 million in the same period of 2024 to a loss of $597 million in 2025, caused by a decline in crypto asset prices leading to a decrease in investment value. Additionally, the increase in operating expenses also negatively impacted net profit, with transaction fees rising by 39%, sales and marketing expenses increasing by 151%, and general and administrative expenses up by 37%.

2. Operating expenses increased significantly

The increase in operating expenses has put significant cost pressure on Coinbase. The rise in operating expenses mainly involves the following aspects: website hosting and infrastructure costs have risen due to increased platform activity. Sales and marketing expenses have surged, primarily due to increased spending on digital advertising and USDC rewards. The increase in general and administrative expenses is due to the rise in customer support costs, professional service fees, and other national policy expenditures.

Beyond the decline in profits, those financial report details that are more worthy of being seen

In the future, what is particularly important for Coinbase is to continue expanding its business. Coinbase plans to achieve business growth by expanding its derivatives business and broadening its global user base. For example, the acquisition of Deribit is expected to enhance its influence in the cryptocurrency derivatives trading field and expand its market share. According to the financial report, Coinbase will also continue to upgrade its infrastructure, promote the large-scale adoption of stablecoins, and provide users with a wider range of financial services.

The financial report highlights several noteworthy points, first of which is the significant increase in operating expenses. Coinbase's primary operating costs in the first quarter of 2025 covered multiple aspects, having a substantial impact on its financial condition and operating results. Among them, transaction fees totaled $303 million, a 39% increase compared to the same period in 2024; sales and marketing expenses reached $247 million, a dramatic increase of 151% compared to 2024; and general administrative expenses totaled $394 million, a 37% increase compared to 2024. The substantial growth in operating expenses actually indicates that the company is actively expanding its business in 2025, which is why there has been a significant increase in operating expenses.

On the other hand, the income from stablecoins has increased significantly, with the growth of stablecoin revenue being an important reason for the growth of subscription and service revenue. In the first quarter of 2025, stablecoin income reached $297.535 million, an increase of $100.218 million compared to $197.317 million in the same period of 2024, representing a growth rate of 51%. The substantial expansion of USDC not only demonstrates the current prosperity of the stablecoin market but also shows that as the second-largest stablecoin supplier, Coinbase will have stronger revenue capabilities alongside the rapid expansion of the stablecoin market.

The above financial report information further demonstrates that Coinbase has the ability to achieve stable and continuously growing revenue as the cryptocurrency industry continues to develop. This ability is independent of the price fluctuations of the tokens it invests in.