Shares of Coinbase (COIN) plunged in after-hours trading after the cryptocurrency exchange reported earnings for its second quarter of Fiscal Year 2025. Earnings per share came in at $0.12, which was a big miss compared to analysts’ consensus estimate of $1.25 per share. This was also worse than last year’s figure of $0.14 per share.
Elevate Your Investing Strategy:
- Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence.
In addition, sales increased by 3.3% year-over-year, with total revenue hitting $1.5 billion. When breaking down the numbers further, Subscription and Services revenue came in at almost $656 million, while Transaction revenue was $764 million. However, total revenue also missed analysts’ expectations of $1.59 billion.
It is worth noting that the revenue was driven by growth in USDC balances, staking activity, and record-high Prime Financing balances. The firm also recorded a record average market share of crypto assets on its custody platform and ended the quarter with $9.3 billion in resources and $1.8 billion in crypto investments, which was fueled by weekly Bitcoin purchases. Still, trading volume came in at $237 billion, which was a 40% decline from the previous quarter, as per the image below.
Q3 2025 Outlook
For the third quarter of 2025, Coinbase expects subscription and services revenue to range between $665 million and $745 million. At the same time, Transaction expenses are projected to be in the mid-teens as a percentage of net revenue, depending on the revenue mix.
The company also anticipates combined technology, development, and general and administrative expenses of $800 million to $850 million, which includes roughly $210 million in stock-based compensation. Additionally, sales and marketing expenses are expected to come in at $190 million to $290 million, with about $15 million of it being stock-based compensation.
Is COIN a Good Buy Now?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on COIN stock based on 14 Buys, 11 Holds, and one Sell assigned in the past three months, as indicated by the graphic below. Furthermore, the average COIN price target of $383.29 per share implies 1.5% upside potential. However, it’s worth noting that estimates will likely change following today’s earnings report.
