A quick look at Coinbase's latest financial report: Crypto investments drag down performance, resulting in a net loss of $667 million in Q4.

Compiled by: Felix, PANews

Despite a 1.5-fold increase in transaction volume and a slight rise in revenue throughout the year, Coinbase suffered a net loss of $667 million in Q4 due to large investment expenditures, putting renewed pressure on its stock price.

Coinbase, the US cryptocurrency exchange, released its audited financial results for the fourth quarter (Q4) and full year of fiscal year 2025 on the evening of February 12. Q4 total revenue was $1.78 billion, lower than the previously expected $1.83 billion; adjusted earnings per share were $0.66, lower than the market consensus of $0.86; and net loss was $667 million. Following the release of the financial report, the stock price plummeted by as much as 7.9% in after-hours trading.

Despite short-term pressure on performance, Coinbase's total trading volume exceeded $5.2 trillion in 2025, a year-on-year increase of 156%. Net profit for the full year was approximately $1.26 billion. Meanwhile, Coinbase's market share in the spot market more than doubled, jumping from 3.2% at the end of 2024 to 6.4%.

Quarterly revenue declined, while full-year revenue increased by 9.6%.

Q4 total revenue was $1.78 billion, down 5% quarter-over-quarter and below the previously expected $1.83 billion. For the full year, revenue in 2025 is expected to be approximately $7.18 billion, up from $6.56 billion in 2024, representing an increase of approximately 9.6%.

1. Trading revenue decreased by 6% month-over-month, with both retail and institutional spot trading showing a month-over-month decline.

Total transaction revenue in Q4 was $983 million (down about 6% sequentially), lower than the expected $1.02 billion, as well as $1.046 billion in Q3 and $1.556 billion in Q4 before 2024.

Retail spot trading volume was $56 billion, down 6% quarter-over-quarter. Retail trading revenue in Q4 was $734 million, down 13% quarter-over-quarter, partly due to trading shifts to lower-fee premium trading and an increase in Coinbase One subscribers (approaching 1 million, more than three times the number in three years).

Institutional spot trading volume was $215 billion, down 13% quarter-over-quarter. Institutional trading revenue was $185 million, up 37% quarter-over-quarter. In contrast to the weak spot market trading volume, the derivatives business, especially Deribit (which achieved record revenue in Q4), continued to maintain strong performance.

In addition, other transaction revenue was $64 million, down 6% quarter-over-quarter, due to reduced instant transfer activity caused by weak market conditions.

Looking at the full year, revenue still saw growth. Total transaction revenue for 2025 was approximately $405 million. Compared to 2024 ($3.98 billion), revenue remained stable due to a doubling of total transaction volume.

2. Subscription and service revenue declined slightly by 3%, while stablecoin revenue remained strong.

Excluding trading revenue, subscription and service revenue reached $727 million, down slightly from $746.7 million in the previous quarter (a 3% decrease), but up from $641.1 million in the same period last year. This was primarily due to lower crypto asset prices.

Stablecoin-related revenue continued its strong performance. Stablecoin revenue reached $364 million, a 3% increase quarter-over-quarter, primarily driven by the growth in average USDC holdings, which increased by 18% quarter-over-quarter to $17.8 billion, a record high. Average USDC balances outside the platform also increased by 11% to $58.4 billion, a relatively smaller increase. The average market capitalization of USDC in Q4 increased by approximately $8.4 billion quarter-over-quarter to $76.2 billion.

Blockchain rewards revenue was $152 million , down 18% quarter-over-quarter. This decline was primarily due to lower average prices for crypto assets (especially ETH and SOL, which fell 13% and 16% quarter-over-quarter, respectively) and a quarter-over-quarter decrease in the reward rate of the Solana protocol (approximately 17%).

Looking at the full year, subscription and service revenue reached $2.8 billion, a 5.5-fold increase from the peak of the previous bull market in 2021.

Q4 net loss of $667 million, increased BTC holdings by $39 million.

Total operating expenses in Q4 were $1.5 billion, a 9% increase quarter-over-quarter. Technology and development, general and administrative, and sales and marketing expenses combined increased by $156 million, a 14% increase quarter-over-quarter.

Transaction fees totaled $219 million, a 14% decrease quarter-over-quarter. The main reasons for the decrease were lower blockchain reward fees due to falling asset prices, and reduced payment processing and account verification fees.

Technology and R&D spending was $497 million, a 16% increase quarter-over-quarter. The increase was primarily driven by higher personnel-related expenses, including the overall quarterly impact of the Deribit and Echo acquisitions, as well as higher transaction-related amortization.

General and administrative expenses were $453 million, up 8% quarter-over-quarter. Sales and marketing expenses were $315 million, up 21% quarter-over-quarter. Stock-based compensation expenses were $230 million, up 4% quarter-over-quarter.

The company reported a net loss of $667 million in Q4, primarily due to a $718 million loss in its crypto asset portfolio (most of which remains unrealized) and a $395 million loss on strategic investments (including the investment in CRCL). Adjusted net income was $178 million, and adjusted EBITDA was $566 million.

As of the end of 2025, the company held $11.3 billion in cash and cash equivalents and continued to repurchase shares. As of February 10, it had repurchased approximately $1.7 billion worth of shares.

Furthermore, the Q4 financial report also disclosed that Coinbase increased its Bitcoin holdings by $39 million through regular weekly purchases in the fourth quarter of last year. As of December 31, 2025, the fair market value of Coinbase's crypto assets used for proprietary investments and crypto assets used as collateral was $2 billion and $823 million, respectively.

For the full year, operating expenses for 2025 were $5.7 billion, a 35% increase year-over-year. Technology and development, general and administrative, and sales and marketing expenses totaled $4.3 billion, a 27% increase year-over-year. The number of full-time employees increased by 31% year-over-year to 4,951, with the customer support and product teams seeing the largest increase in staff.

CEO sells over $500 million worth of stock in nine months

Coinbase's stock price plummeted after the earnings report was released.

Its shares fell about 4% in after-hours trading to around $135, a near two-year low. As investors digested the earnings report, the stock rebounded in after-hours trading, rising as high as around $141, but is still down 37.61% year-to-date.

However, the stock price decline may not be entirely attributed to the financial report falling short of expectations, as the earlier continuous sale of shares by Coinbase's founders also sparked market dissatisfaction.

According to VanEck, Coinbase CEO Brian Armstrong sold over 1.5 million Coinbase shares in the past nine months (April 2025 to January 2026), cashing out approximately $550 million. This continued cashing out by executives not only undermines market confidence and puts significant pressure on the stock price, but may also raise questions about the long-term alignment of interests among executives.

However, Coinbase remains "optimistic" about the long-term prospects of cryptocurrencies and will continue to expand its product offerings. "The cryptocurrency market is cyclical, and experience tells us it's never as good as it seems, nor as bad as it seems. While asset prices may fluctuate, beneath the surface, technological change and the undercurrent of cryptocurrency product adoption continue."

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