To The Moon

$Coinbase Global, Inc.(COIN)$ is scheduled to publish its Q1 2025 shareholder letter and financial results on Thursday, 08 May 2025, after the market closes. A question and answer session will be held the same day at 2:30 p.m. PT (which is 5:30 a.m. Singapore Time on Friday, 09 May 2025).

Revenue: Analysts expect total revenue to be around $2.14 billion. This would represent significant growth (approximately 30%) compared to the $1.64 billion reported in Q1 2024. This anticipated increase is largely attributed to higher cryptocurrency prices and increased trading volumes during the first quarter.

Transaction Revenue: Expected to increase to around $1.36 billion, up significantly from Q4 2024 ($1.077 billion).

Subscription and Services Revenue: This area, which includes staking and custodial fees, is also expected to show strong growth, potentially reaching around $704 million (up from $511 million in Q4 2024).

Earnings Per Share (EPS): The consensus forecast among analysts is around $2.09 to $2.12 per share for Q1 2025. This is notably higher than the $1.65 reported in Q1 2024, although one source noted it might be a slight decrease from a different Q1 2024 figure ($2.15), potentially indicating slowing momentum compared to the previous year's surge.

Coinbase (COIN) Last Positive Earnings Call Saw Share Price Declined By 26.19%

COIN had a positive earnings call on 13 Feb 2025 but its share price had declined by 26.19% since.

The earnings call for Coinbase Global, Inc. was largely positive, with strong revenue growth, increased trading volumes, and favorable regulatory developments. However, there were some concerns about declining stablecoin revenue and rising expenses.

Coinbase (COIN) Guidance

During the Coinbase Global, Inc. fourth quarter and full year 2024 earnings call, the company provided optimistic guidance for 2025, highlighting several key metrics and strategic priorities. Coinbase achieved a total revenue of $6.6 billion in 2024, more than doubling from the previous year, with an adjusted EBITDA of $3.3 billion, marking two consecutive years of positive adjusted EBITDA. Subscription services revenue increased by 64% year-over-year to $2.3 billion, driven by USDC, staking, and Coinbase One. The company's international revenue share reached 19% in Q4, thanks to improved payment rails and localization efforts. Looking ahead to 2025, Coinbase aims to grow revenue through existing products, expand into international markets, and capitalize on regulatory tailwinds. Priorities include enhancing derivatives trading, driving USDC's market cap growth, and increasing subscription services revenue.

Additionally, Coinbase plans to accelerate crypto payments integration, lower transaction fees on Base, and support landmark crypto legislation, while maintaining a strong focus on operating discipline and opportunistic investments.

Key Factors to Watch For Coinbase (COIN) Fiscal Q1 2025 Earnings

Total revenue in 2024 more than doubled to $6.6 billion, with $3.3 billion in adjusted EBITDA, marking two straight years of positive adjusted EBITDA.

Q4 adjusted EBITDA was $1.3 billion, and net income was also $1.3 billion, with significant gains from crypto asset investment portfolio.

Cryptocurrency Market Conditions:

BTC/ETH Price Trends: Coinbase’s transaction revenue is heavily tied to crypto asset prices (e.g., Bitcoin, Ethereum). A bull market driven by factors like Bitcoin ETF adoption, institutional inflows, or macroeconomic conditions (e.g., rate cuts, inflation hedging) could boost trading volumes and fees.

Market Volatility: Higher volatility typically increases trading activity, benefiting transaction revenue. Conversely, prolonged bear markets or stable prices could suppress volumes.

Stablecoin revenue declined by $21 million or 9% due to the lower interest rate environment and new USDC ecosystem participants.

Market Dependence: Coinbase's results are highly sensitive to cryptocurrency price fluctuations and overall market trading volume.

Q4 total trading volume was $439 billion, up 137% quarter-over-quarter, with consumer trading volume at $94 billion, up 176%.

Regulatory Environment:

U.S. and Global Regulations: Regulatory clarity (or crackdowns) on crypto exchanges, staking services, or stablecoins (e.g., USDT, USDC) could impact operations. For example:

A favorable regulatory framework (e.g., crypto-friendly legislation) could spur growth.

Hostile actions (e.g., SEC lawsuits, bans on staking) might increase compliance costs or limit revenue streams.

Regulatory environment becoming more favorable, with new pro-crypto legislation and support from the US government.

Global Expansion: Success in international markets (e.g., EU, Asia) could offset U.S. regulatory challenges if Coinbase expands its licensing and partnerships abroad.

International revenue share reached 19% in Q4 due to improved payment rails and localization.

Competitive Landscape:

User Metrics: Information on customer acquisition trends and user engagement will provide insight into the sustainability of growth.

Subscription services revenue increased by 64% year-over-year to $2.3 billion, driven by USDC, staking, and Coinbase One.

Exchange Rivalry: Competition from centralized (e.g., Binance, Kraken) and decentralized platforms (e.g., Uniswap) could pressure trading fees. Coinbase’s ability to retain market share through superior UX, security, or new products (e.g., derivatives, institutional services) will be critical.

Fee Compression: Aggressive pricing by rivals might force Coinbase to lower fees, impacting margins.

Company-Specific Initiatives:

Revenue Diversification: Continued growth in the Subscription and Services segment is important for reducing reliance on volatile transaction fees.

USD resources grew to $9.3 billion by the end of the year, providing flexibility for investments and acquisitions.

Subscription & Services Revenue: Growth in recurring revenue streams (e.g., staking rewards, custodial fees, Coinbase One subscriptions) could stabilize earnings amid volatile trading income.

Product Launches: Success of new offerings like derivatives trading, wallet services, or blockchain infrastructure tools (e.g., Base L2 adoption) may diversify revenue.

Cost Management: Layoffs in 2022–2023 aimed to streamline operations; efficiency gains could improve profitability if sustained.

Q4 operating expenses were $1.2 billion, up 19%, primarily driven by higher transaction expenses and increased marketing spend.

Macroeconomic Factors:

Interest Rates: Lower rates might incentivize risk-on investments in crypto, boosting Coinbase’s volumes. Higher rates could dampen speculative activity.

Questions from analysts regarding the impact of market volatility on user activity, though management downplayed significant impact.

Global Adoption: Mainstream adoption of crypto for payments, DeFi, or tokenized assets could expand Coinbase’s addressable market.

Coinbase (COIN) Price Target

Based on 27 analysts from Tiger Brokers offering 12 month price targets for Coinbase Global in the last 3 months. The average price target is $271.77 with a high forecast of $400.00 and a low forecast of $169.00. The average price target represents a 33.95% change from the last price of $202.89.

COIN price is correlated to Bitcoin price move, at time of this writing, we could be looking for upside movement in the price target, but do note that if Bitcoin go below 93K, then COIN would react accordingly.

Technical Analysis - Exponential Moving Average (EMA)

At time of this writing, we are seeing Bitcoin holding the 95K level, so whether Bitcoin could continue to go stronger, and whether there will be an increased trading volume and also fund inflow into Bitcoin.

RSI is showing increased momentum, and COIN responded well with a daily uptrend build up, trading above the 50-day period, we need the bulls to be in continued control and attempt for a daily uptrend expansions, together with Bitcoin pushing towards 100K, then we could see a potential gap up on COIN.

COIN could go on a Bull Case if Bitcoin surpasses $100K (post-2024 halving cycle), ETH ETF approvals drive altcoin demand, and regulatory clarity boosts institutional participation. Subscription revenue grows 50% YoY, and derivatives trading gains traction. Earnings beat estimates by 20%+.

Otherwise COIN might suffer a Bear Case: Crypto winter persists due to macroeconomic headwinds (recession, high rates), regulatory crackdowns limit staking/stablecoin revenue, and competition erodes market share. Transaction revenue drops 30% YoY, leading to an earnings miss and margin contraction.

There is low short interest, which could signal some good news for bulls, as COIN exhibit potential momentum for upside, so now we will need to see more trading volume as Bitcoin trend around 95K. I think we could see some nice movement as we moved closer to its earnings.

Summary

Coinbase’s Q1 2025 earnings will hinge on the interplay of crypto market cycles, regulatory outcomes, and execution of its diversification strategy. While the company is positioned to benefit from long-term crypto adoption, its near-term performance remains tethered to speculative trading activity and regulatory risks.

I think we as investors, should continue to monitor the macro-crypto trends and monitor Coinbase’s ability to reduce reliance on transaction fees through subscriptions and infrastructure services. There should be more demand for Coinbase other existing products.

Appreciate if you could share your thoughts in the comment section whether you think COIN could continue to push for demand of its existing products to reduce its reliance on transaction fees..

@TigerStars @Daily_Discussion @Tiger_Earnings @TigerWire appreciate if you could feature this article so that fellow tiger would benefit from my investing and trading thoughts.

Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.