Coinbase's Subscription Gains, Deribit Acquisition, Blockchain Revenue Strength Prompt Analyst Support

Wall Street analysts rerated Coinbase Global, Inc COIN on Friday after the company reported disappointing first-quarter results on Thursday.

Rosenblatt analyst Chris Brendler maintained Coinbase Global with a Buy and a $260 price target.

Needham analyst John Todaro reiterated Coinbase Global with a Buy and lowered the price target from $330 to $270.

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Rosenblatt: Revenue of $2.03 billion missed consensus of $2.10 billion by ~3% but came in slightly higher than Brendler’s estimate.

Despite multiple attempts to anticipate trading weakness, transaction revenue still missed the analyst’s below consensus estimate ($1.26 billion versus his $1.30 billion) as high-yielding Consumer volumes were in line, but take rates declined more than expected in both Consumer and Institutional.

On a positive note, MTUs of 9.7 million exceeded expectations (consensus 9.2 million), showing strength in platform engagement even as spot trading volumes declined sequentially.

In Brendler’s recent initiation, expanding opportunities outside the core trading business represented a key component of his thesis, as these largely recurring revenue streams should boost the multiple. This quarter, the analyst saw trading weakness more than offset by strength in Subscription and Services Revenue as Stablecoins were even better than anticipated and Other beat due to growth in premium offerings (Prime).

The biggest positive surprise versus Brendler’s estimates was in Blockchain revenue, as despite a 35+ % decline in token prices, staking revenue only fell 8.5% sequentially versus the analyst’s -20% estimate.

Coinbase Global’s acquisition of Deribit is expected to close by year-end and should be immediately accretive to adjusted EBITDA. The deal is perfectly timed as it cements Coinbase Global’s leadership in the high-growth derivatives market and turbocharges its international exchange. Even better, Deribit’s $1 trillion+ in trading volumes are all outside the U.S., and with domestic regulatory clarity coming soon, Brendler noted the synergies could be substantial. Combined with a lower-than-expected price tag of $2.9 billion, this is one of the most compelling acquisitions the analyst noted in a long time.

Brendler projected second-quarter revenue of $1.78 billion and adjusted EPS of $2.48.

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Needham: Coinbase Global reported a narrow top-line Street miss but modestly beat analyst Todaro’s estimates. The take rate modestly declined in the crypto transaction segment for both retail and institutional customers. Positive call-outs in the quarter were around USDC and the recently announced Deribit acquisition, which is expected to close by year-end 2025.

The $2.9 billion deal consists of $700 million in cash and 11 million shares of Coinbase Global stock.

The analyst noted the offering, which will be primarily geared for international markets, allows Coinbase Global to become a major player in derivatives and internationally. Additionally, Coinbase Global’s international exchange launched 39 new perpetual contracts and expanded the asset collateral type to 8 assets from 3.

Coinbase Global’s volume mix has recently been more Bitcoin and Ethereum than alt-coins, suggesting a greater shift towards institutional volume than retail for the second quarter. This negatively affects revenues as Coinbase Global has a significantly higher take rate on retail than institutional.

Additionally, April and May volumes are trending notably lower than average monthly volumes for the first quarter.

The good news is crypto asset prices recently inflected with Bitcoin rising back over $100k and a strong performance among alt-coins.

Historically, crypto asset prices find a bottom before volumes do, which suggests that with prices already inflecting, volumes should start seeing a bottom in the next one to two months. Nonetheless, Todaro lowered his fiscal 2025 and 2026 estimates to reflect lower volume estimates than his prior forecast.

Todaro projected second-quarter revenue of $1.56 billion and EPS of 80 cents.

COIN Price Action: Coinbase stock is up 5.74% to $210.76 at publication on Monday.

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