Coinbase Global (COIN 1.82%) is set to report its fourth-quarter fiscal 2025 earnings results on Feb. 12, 2026.
Do clearer U.S. crypto regulations and accelerating institutional adoption of cryptocurrencies make this stock a buy ahead of its earnings results? Let's find out.
Improving financials
In the third quarter, Coinbase generated $1.9 billion in revenue, $801 million in adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA), and $433 million in net income. The company's subscription and services segment generated $747 million in revenue, accounting for nearly 40% of the total revenue.
NASDAQ: COIN
Key Data Points
Management expects fourth-quarter subscription and services revenue to be in the range of $710 million to $790 million. This implies that the company's revenue mix is shifting toward higher-quality, recurring streams, rather than relying primarily on volatile trading activity.
Improving business mix
Coinbase Institutional has positioned itself as a custodian for the majority of U.S. spot Bitcoin and Ethereum exchange-traded funds (ETFs). The company served as a custodian for nine out of 11 Bitcoin ETFs and eight out of nine Ethereum ETFs in 2024. Major institutional players such as BlackRock (BLK 2.59%) and Pantera Capital have also shifted large amounts of cryptocurrency to the Coinbase Prime platform. All this is translating into higher custody, settlement, and prime brokerage fees for Coinbase, regardless of short-term swings in cryptocurrency prices.
Coinbase's Ethereum Layer-2 blockchain network, Base, is emerging as a new revenue source. The Ethereum Layer-2 network is built on top of the main Ethereum blockchain (Layer-1) to move transactions away from the congested base network and process them faster and at lower cost, while relying on the underlying security and decentralization features of the main Ethereum network. Base had become one of the largest L2 networks based on total value locked as of January 2025.
Image source: Getty Images.
Coinbase monetizes the Base network in several ways. It earns revenue directly through sequencer fees, which are charges for processing and bundling transactions on the L2 network. The company also benefits indirectly as developers and users building applications on Base often rely on its other services, such as custody, trading, and stablecoins. This generates additional fee-based revenue for the company across the broader ecosystem.
New opportunities
Derivatives can represent another solid growth avenue, accounting for 80% of total crypto trading volume, far larger than spot trading. In August 2025, the company completed the acquisition of Deribit, one of the world's largest crypto options platforms with more than 75% share in the non-U.S. options market. In the third quarter, Deribit contributed $52 million to Coinbase's revenue, and the company aims to integrate spot, futures, and options more closely over the coming quarters. Coinbase also plans to leverage this acquisition to expand its share of the U.S. options market over multiple quarters.
Valuation
Coinbase trades at nearly 36.1 times forward earnings, which appears rich. However, the valuation seems justified as revenue is not tied only to spot trading. Instead, the revenue mix is shifting toward more recurring sources, including custody, stablecoins, prime brokerage, subscriptions, and derivatives.
Yet, the stock remains sensitive to cryptocurrency prices, trading volumes, and regulatory changes.
Considering all these factors, long-term investors who are confident about continued cryptocurrency adoption and can tolerate share price volatility can pick a small stake in this stock ahead of mid-February.
