GM. This is Milk Road PRO, where we read “missed estimates” headlines like they’re movie spoilers: annoying, loud, and not the whole plot.
Q4 earnings season is almost wrapped up.
On the surface, it wasn’t pretty.
Coinbase missed.
Robinhood disappointed.
Galaxy printed a massive net loss.
The headlines were brutal - and the stocks reacted accordingly.
This does not exactly give us the optimism we could really use right now, does it?
I shared my thoughts in real time with our PRO community as the earnings came out.
And for this report, I will go a bit deeper. I’ll walk you through some of the key numbers:
- What I like about each company’s earnings.
- What concerns me.
- Which metrics will I keep a close eye on going forward?
- And what I think the market might be overlooking.
You can think of this as revisiting my bullish take on these companies and adjusting my thesis based on the latest data.
Let’s dig in.
Coinbase Q4 earnings
In case you are not familiar with Coinbase, you should read this report first.
Coinbase’s Q4 2025 looked like a disaster on the surface. But underneath the headline numbers, the business continues to evolve into something much more than a simple crypto exchange.
Here are the numbers that grabbed attention.
Coinbase missed Wall Street estimates:
- Revenue came in at $1.7B, about $70M below expectations.
- EPS was $0.66 versus $1.05 expected.
- The company reported a $667M net loss, and the stock dropped around 8% after hours.
That sounds bad. But most of the misses came from paper losses on crypto assets held on Coinbase’s balance sheet, along with investment write-downs. The core operating business did not fall apart.
Meanwhile, the parts of Coinbase that don’t rely purely on trading hype - subscriptions, stablecoin fees, custody, derivatives - grew 23% year over year to $2.83B in 2025. That is real growth.
Coinbase also doubled its share of global crypto trading volume in just one year, from 3.2% to 6.4%. That’s a meaningful competitive gain in a tough industry.
Yes, expenses are rising faster than revenue. That is the real pressure point. But the spending appears intentional, tied to building a broader platform rather than reacting to weakness.
What happens next depends on crypto prices, interest rates, and whether these newer product lines begin contributing more meaningfully by mid-2026.
Let’s break down what actually changed - and what didn’t.
Remember: Coinbase holds a big pile of crypto (like we all do 🤣) on its own balance sheet.
Bitcoin. Ethereum. Other tokens.
When prices fell in Q4, the company had to mark those holdings down:
- That created a $718M paper loss.
- On top of that, Coinbase booked $395M in losses from strategic investments. That includes its stake in Circle, the company behind USDC.
Add those together, and a solid operating quarter suddenly looks like a disaster.
It is like saying someone is broke because their home value dipped last month. The house did not disappear. The price tag just moved.
Now let’s look at what actually happened inside their business.
✅ Subscription and services revenue came in at $727M for the quarter.
That includes stablecoin fees, blockchain rewards, lending, custody, interests, and premium memberships. Steady.
This is the revenue line that actually matters for Coinbase’s long-term story. It is money the company earns, whether crypto is flying high or having a terrible day.
Back in 2021, this part of the business brought in $518M.
✅ In 2025, it hit $2.83B. That is a 53% annual growth rate.
That is not a temporary spike. That is compounding.
👉 And compounding businesses are the ones that quietly become very powerful over time.
✅ The company also completed 10 acquisitions in 2025, including Deribit, the largest deal in crypto history.
And there is one thing that almost no one noticed.
✅ Institutional trading revenue jumped 37% quarter over quarter. This happened even while regular crypto trading volumes were falling.
But there is more to that story.
Crypto trading market share is still climbing.
In fact, it doubled in 2025.
✅ Coinbase went from controlling 3.2% of global crypto trading volume to 6.4% in just one year.
That is not a small improvement. That is a land grab.
👉 In a competitive industry, doubling your share usually means someone else is losing theirs. And in this case, a lot of competitors lost ground while Coinbase quietly pulled ahead.
Another number that matters for Coinbase: Average USDC held on the exchange reached $17.8B in Q4, an all-time high, up 18% quarter over quarter and roughly double year over year.
Coinbase earns a share of USDC economics both on-platform and off-platform through its partnership with Circle. At current balances, that equates to roughly $1.8B in annualized stablecoin-related revenue.
This is recurring, rate-sensitive revenue that is far less volatile than trading activity - and one of the most important structural shifts in Coinbase’s business model.
Great, this brings us to the part we did not love. And where we see real risks going forward.
What are the risks for Coinbase
It is never all good and smooth. If it looks that way, something is probably being ignored.
So here are the things we did not really like.
1. Expenses are rising much faster (35%) than revenue (9%)
That gap cannot keep widening forever. At some point, either revenue accelerates, or costs need to slow down. If neither happens, margins will keep shrinking.
2. Hiring is still aggressive
Headcount grew 31% in 2025 and is still increasing. That is a strong signal that management is in build mode. But if the revenue environment stays soft, that fixed cost base becomes heavy.
3. Margins are compressing
Profit margins dropped from 51% in 2024 to 39% in 2025. That is a big squeeze.
Management says this is part of the plan. They are spending heavily now to build what they call the “Everything Exchange”. The idea is to offer it all in one place: stocks, prediction markets, perpetual futures, and 20M crypto tokens.
It is a bold move. The gamble makes sense, but only if these new products start bringing in serious money soon.
4. Stablecoin revenue depends on interest rates
If rates fall faster than expected, the earnings power of USDC drops. Yes, growth in balances can offset that. But that is not guaranteed.
5. A lot of the future story depends on new products
Derivatives. Equities. Prediction markets. The full “Everything Exchange” vision. If these products do not gain traction quickly, the return on all this spending gets pushed further out.
None of these risks is fatal. But they matter.
And that brings us to what we should watch in the next quarter.
Uh, Oh… 😧 The rest of this report is exclusive to Crypto PRO or PRO All Access members!
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WHAT’S LEFT INSIDE? 👀
- What I’m watching closely with Coinbase.
- What concerns me about Robinhood.
- Why I’m so bullish on Galaxy.
- How I’m thinking about my positions right now.
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