Tiger Rearch | Coinbase:; Maintain HOLD but Decrease PT to $170
By Tiger Rearch
Coinbase Global, Inc. (COIN, HOLD) - 4Q25: Everything Exchange Progress Continues as Near-Term Crypto Headwinds Emerge; Maintain HOLD but Decrease PT to $170
Coinbase reported 4Q25 net revenue of $1.71B (3%/2% below Tiger/Street), down 5% sequentially, with transaction revenue of $983M, down 6% Q/Q. While trading volumes softened modestly during the quarter, the more notable dynamic was pressure on retail monetization.
Consumer transaction revenue declined 13% Q/Q compared to a 6% decline in consumer spot trading volume, reflecting mix shift toward Advanced trading and higher Coinbase One penetration.
Adjusted EBITDA was $566M in 4Q (24%/15% below Tiger/Street) versus $801M in 3Q. Subscription and services revenue declined only 3% Q/Q to $727M, supported by record USDC balances and $364M in stablecoin revenue during the quarter.
Nearly one million paid Coinbase One subscribers highlight continued progress toward recurring monetization. Stablecoin revenue remains sensitive to rates and balances, and staking and financing revenue are influenced by asset prices, but diversification is gradually increasing.
The business today is structurally more balanced than in prior cycles, even if transaction revenue remains the primary driver of incremental profitability.
On the cost side, technology & development, G&A, and sales & marketing collectively rose 14% Q/Q in 4Q. Management continues to invest behind the “Everything Exchange” strategy, including derivatives expansion via Deribit, scaling stablecoin distribution, launching prediction market & equities, and accelerating Base infrastructure.
While this higher cost base reduces short-term operating leverage, it also reflects a deliberate decision to build through the cycle rather than manage purely for near-term margins.
For 1Q26, management guided subscription and services revenue to $550–$630M, reflecting lower average USDC market capitalization, lower effective interest rates, and softer crypto asset prices versus 4Q averages.
Transaction revenue through February 10 was approximately $420M, though management cautioned against extrapolating early-quarter trends.
On the cost side, technology & development plus G&A are guided to $925–$975M and sales & marketing to $215–$315M. While this expense range is modestly lower sequentially at the midpoint, the implied revenue step-down is more pronounced, suggesting operating leverage could compress in the near term.
The guidance indicates Coinbase remains in investment mode, continuing to fund product expansion and infrastructure buildout despite softer top-line conditions. That said, if bear market dynamics persist for several quarters, we would expect a reassessment of cost intensity and investment pacing to preserve margin flexibility.
Our view remains constructive but measured. We continue to like Coinbase’s long-term strategic positioning, particularly the Everything Exchange buildout, stablecoin payments expansion, institutional derivatives leadership, and Base/onchain optionality.
That said, near-term financial performance remains closely tied to crypto asset prices (which we expect to remain under pressure) and retail activity.
While 4Q did not yet reflect a clear bear market environment, recent crypto price weakness suggests operating trends could moderate in coming quarters if prices remain under pressure.
We therefore expect earnings variability in the near term, but believe Coinbase enters this phase with a stronger product portfolio and more diversified revenue base than in prior cycles.
Estimate revisions. Lowering 1Q revenue estimate by 15%, and adjusted EBITDA estimate by 44%.
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