Coinbase (COIN -16.57%), a leading cryptocurrency exchange and platform, released results for fiscal Q2 2025 (ended June 30, 2025) on July 31, 2025. The most important news from this earnings release was a significant miss on analyst revenue and earnings expectations, with GAAP revenue of $1,497.2 million—$90.1 million (5.7%) below the analyst consensus estimate of $1,587.3 million. GAAP revenue totaled $1.50 billion, below the $1.587 billion GAAP consensus, and non-GAAP diluted earnings per share (EPS) was $0.12. GAAP net income surged to $1.43 billion due to large unrealized investment gains rather than core business operations. At the same time, adjusted earnings and core operational profits declined, while operating expenses grew mostly because of a $308 million charge tied to a major data breach. Overall, the quarter showed setbacks in key financial metrics, but also showcased progress in regulatory compliance and product initiatives amid a challenging environment for crypto trading activity.
| Metric | Q2 2025 | Q2 Estimate | Q2 2024 | Y/Y Change |
|---|---|---|---|---|
| EPS (Non-GAAP, Diluted) | $0.12 | $1.25 | $1.10 | (89.1%) |
| Revenue (GAAP) | $1.50 billion | N/A | $1.45 billion | 3.4% |
| Net Income (GAAP) | $1.43 billion | $36 million | 3,870% | |
| Adjusted EBITDA | $512 million | $596 million | (14.1%) | |
| Total Operating Expenses | $1.52 billion | $1.11 billion | 36.9% |
Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q1 2025 earnings report.
Business overview and recent focus
Coinbase operates a platform for buying, selling, transacting, and storing a wide range of digital assets such as Bitcoin, Ethereum, and other cryptocurrencies. It serves both retail and institutional customers, providing core services like crypto trading, wallet storage, custody for large clients, and digital payment tools.
Recently, Coinbase has concentrated on five areas: compliance with global regulations, strengthening platform security, diversifying its product offerings, staying competitive in the crypto space, and driving technological innovation. Compliance is important as governments define rules for digital money. Security is vital for protecting customer assets and trust. Diversifying with new products and services helps the company reduce reliance on trading revenue. The crypto market remains competitive, requiring frequent innovation to remain relevant and attract a broad range of customers.
Quarterly highlights and notable developments
The period was notable for transaction revenue, which comes from customer trading, dropping to $764 million, down 39% sequentially, as volatility and trading activity declined throughout the market. Subscription and services revenue, reflecting stablecoin earnings, custody fees, and financing, declined 6% quarter-over-quarter but proved more resilient relative to trading, as subscription and services revenue grew 9% quarter-over-quarter to $698 million in fiscal Q1 2025. Stablecoin revenue rose 12% quarter-over-quarter to $332 million, with average USDC stablecoin balances reaching $13.8 billion, up 13% quarter-over-quarter. This indicates that alternative revenue streams cushioned the company as trading volumes shrank.
GAAP net income reached $1.43 billion, but this jump is not reflective of ongoing business performance. The bulk was due to one-time unrealized investment gains, including a mark-up on Coinbase’s stake in Circle and a gain from its crypto investment portfolio. Without these, adjusted net income (non-GAAP) fell sharply to $33 million, signaling much weaker underlying profitability.
Operating expenses saw a large increase, rising to $1.52 billion (GAAP). Operating expenses rose 37.6% year over year. The main driver was a $308 million non-recurring charge for cybersecurity remediation following a data breach in May. The event, in which hackers accessed customer data, did not result in lost customer passwords, but marked a substantial hit to trust and required high-cost remediation efforts. Excluding this, general operating expenses were controlled, with the company noting a slight decline in core expense categories.
Coinbase made significant progress in regulatory compliance. Lawmakers passed the GENIUS Act, the first U.S. digital assets law, in July 2025, and the CLARITY Act, which creates a U.S. market structure framework for digital currencies and stablecoins. Internationally, Coinbase secured a MiCA license in Luxembourg in June 2025, enabling operations across 30 European countries. These regulatory steps will likely enable further growth and open opportunities for new business lines with both individual and institutional clients. Product innovation also continued with new launches such as the Coinbase One Card (a payments card), the Base App (with over 700,000 users on the waitlist), and continued international expansion in derivatives trading. The company also reported all-time high assets under custody at $245.7 billion and record institutional lending balances in Prime Financing, reflecting growing demand from corporate and institutional customers.
Looking ahead and financial guidance
Coinbase management provided specific guidance for fiscal Q3 2025, including expected subscription and services revenue of $665 million–$745 million, transaction expenses in the mid-teens as a percentage of net revenue, technology and development plus general and administrative expenses of $800 million–$850 million, and sales and marketing expenses of $190 million–$290 million. It expects July 2025 transaction revenue of approximately $360 million, signaling a subdued start as trading activity continues to soften. For subscription and services, management forecasts subscription and services revenue between $665 million and $745 million, expecting this to benefit from stronger crypto asset prices as July began. Total core operating expenses are projected to remain elevated, with technology and development plus general and administrative outlays set for $800 million to $850 million, and sales and marketing spending between $190 million and $290 million.
While management pointed to new regulatory clarity and product launches as positive, it also warned that many key metrics remain tied to external crypto market valuations and volatility. Expense growth was mainly due to a one-time security incident, raising pressure on profitability should revenue not rebound. COIN does not currently pay a dividend.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
