Key Takeaways From Q3 2025 Coinbase Earnings

Summary Coinbase remains a 'buy' after strong Q3-25 results, with net revenue up 83% year-over-year and robust institutional transaction growth. COIN's acquisition of Deribit has made it a dominant player in crypto derivatives, boosting institutional transaction margins significantly last ￰0￱ network showed mixed user growth but led speed-focused peers in stablecoin transfer volume, outpacing Solana and even Ethereum in recent ￰1￱ a high valuation, COIN is a compelling speculative long due to its central role in digital assets, ETFs, and crypto ￰2￱ it has been roughly six months since I last covered Coinbase ( COIN ) for Seeking Alpha, I think now is as good a time as any to update my views on the company and on the ￰3￱ last Coinbase article came during the depths of the April selloff in ￰4￱ that time, I called COIN a 'panic in the streets' buy: Data by YCharts It has proven to be a terrific call, with COIN outperforming broad market equities, Bitcoin ( BTC-USD ), and notable DAT high fliers like Strategy ( MSTR ).

With the combination of the recently announced Q3-25 earnings report as well as a fresh look at usage data from the company's Ethereum ( ETH-USD ) scaling network Base, I'll detail why I'm reiterating the stock as a 'buy.' Q3-25 Earnings Takeaways For the quarter, total revenue came in just shy of $1.9 billion, with over $1 billion of that coming from transaction revenue and subscription/services generating revenue of $746.7 ￰5￱ figures reflected sequential gains of 37% and 14%, respectively, as well as year-over-year gains of 83% and 34%. All told, it was a great quarter in my ￰6￱ Revenue Breakout (Coinbase, Analyst's Table) While stablecoin revenue generated its 7th consecutive quarter of sequential gains, that 6.7% sequential growth is lagging every other segment.

Notably, transaction revenue has been the largest driver of net revenue growth, with a 122% sequential spike coming from ￰7￱ is clear from this earnings report that transactions continue to be the largest driver of revenue for the ￰8￱ are a couple of angles from which we can view this ￰9￱ one hand, shareholders could benefit from better growth in subscription and services revenue purely for diversification purposes. A high amount of transaction-based revenue does theoretically put Coinbase more at risk of cyclical declines due to investor sentiment changes in digital assets during risk-off periods. Coinbase's share of aggregated spot transaction volume each month has generally been between 5-7% over the last three years, with recent peak months not exceeding peaks from Bitcoin's prior halving ￰10￱ the other hand, the company's acquisition of Deribit makes it a powerhouse in the derivatives game with 90% of OI market share as of October: OI Share (TheBlock) If the company can continue to grow margins on its institutional cohort, the growth in transaction volume as a percentage of total revenue might not be a bad ￰11￱ the historical gap between institutional and consumer margin on transaction volume, Q3 was a hugely successful quarter for Coinbase's monetization of institutional activity: Transaction Margin Breakout (Coinbase, Analyst's Chart) Despite consumer margin falling from 1.51% in Q2 to 1.43% in Q3, margin on institutional volume nearly doubled in the last ￰12￱ attributed this to the Deribit purchase, which accounted for $52 million in the quarter.

However, a potential risk to consider is the growing reliance on 'other assets' for transaction ￰13￱ revenue breakout (Coinbase) At just 24% of transaction revenue in the quarter, the company continues to see revenue from Bitcoin losing share to other crypto ￰14￱ 17%, Ethereum's share of transaction revenue was its largest figure since Q3-23 but still well below 'other.' The point is, with more digital assets becoming available to investors through spot ETFs in the United States, consumer capital leaving Coinbase's spot or futures products could migrate to lower margin ETF ￰15￱ Network Data & Stablecoin Activity Network growth for Base through Q3 was ￰16￱ an average of 1 million daily active addresses in the month, September was the third consecutive month of declines in average DAAs on Base.

Still, on a quarterly average Base DAAs grew year over year from 873k to 1.2 ￰17￱ growing year over year was total quarterly transactions on Base; that figure improved from 368 million in Q3-24 to 923 million in ￰18￱ real showstopper, though, was stablecoin transfer volume: Quarterly Stablecoin Transfer Volume (Artemis) At $4.6 trillion during the quarter, Q3 was the third consecutive quarter that Base stablecoin transfers bested low-fee competitor Solana ( SOL-USD ) despite Solana having a sizable advantage in stablecoin ￰19￱ Transfer Share by Chain (Artemis) While it has admittedly pulled back to 26% through 30 days in October, stablecoin usage share for Base hit 33% in ￰20￱ was the 2nd time in four months that Base beat Ethereum in stable transfer ￰21￱ the company's shareholder letter, Coinbase noted that Base revenue growth was driven by higher average ETH prices and growth in transactions; each of which was partially offset by declines in average transaction ￰22￱ company noted that lower average fees are part of a broader network scaling ￰23￱ Thoughts With the exception of the digital asset industry itself and its history of cycles, Coinbase's biggest risk arguably remains its valuation: Data by YCharts At 41x earnings and 11x sales, this is not a company that I think we could reasonably call ￰24￱ that valuation, I think COIN continues to be a compelling speculative long given its importance to the digital asset ￰25￱ company is a major custodian for spot ETFs, operates one of the leading exchanges by spot volume, owns the biggest player in the crypto derivatives game, maintains the sequencer for the top scaling chain on Ethereum, and benefits from supply growth of Circle Internet Group's ( CRCL ) flagship ￰26￱ you're bullish on digital assets and tokenization long term, COIN is one of the better wagers in the market, in my estimation.