Earnings call transcript: CoinCheck Group reports Q1 2025 revenue drop

CoinCheck Group (COIN), currently valued at $599 million in market capitalization, reported a significant decrease in revenue for the first quarter of 2025, with a total revenue of 84 billion yen ($583 million), marking a 27% decline from the previous quarter. The company faced a net loss of 1.377 billion yen ($9.5 million). Despite these challenges, CoinCheck saw a 16% increase in customer assets, reaching 1 trillion yen ($6.9 billion). The company also highlighted growth in verified user accounts and a strategic partnership with Mercoin. According to InvestingPro analysis, the stock appears undervalued based on its Fair Value estimate, despite a challenging YTD return of -48.48%.

Key Takeaways

• Total revenue fell by 27% quarter-over-quarter.
• Net loss amounted to 1.377 billion yen ($9.5 million).
• Customer assets grew by 16% to 1 trillion yen ($6.9 billion).
• Ethereum staking program launched, boosting staking revenue sixfold.
• Strategic partnership with Mercoin to enhance market position.

Company Performance

CoinCheck Group experienced a challenging quarter, with a notable decrease in revenue and a net loss. However, the company reported positive growth in customer assets and user accounts. The partnership with Mercoin and the launch of an Ethereum staking program indicate strategic moves to strengthen its market position and diversify revenue streams. Despite subdued global crypto trading conditions, CoinCheck remains one of Japan’s largest crypto trading platforms. InvestingPro data reveals the company maintains a healthy current ratio of 1.07 and has achieved impressive revenue growth of 71.09% over the last twelve months. For deeper insights and additional ProTips about CoinCheck’s financial health, explore the comprehensive Pro Research Report available on InvestingPro.

Financial Highlights

• Revenue: 84 billion yen ($583 million), down 27% from the previous quarter.
• Net Loss: 1.377 billion yen ($9.5 million).
• Customer Assets: 1 trillion yen ($6.9 billion), up 16% quarter-over-quarter.
• Verified User Accounts: 2.35 million, a 3% increase from the previous quarter.
• Marketplace Trading Volume: Declined by 33%.

Outlook & Guidance

CoinCheck anticipates that Ethereum staking will become a more significant revenue driver in the future. The company expects trading activity to increase, driven by potential tax reforms in Japan. With a notably low beta of 0.1, indicating lower volatility compared to the market, CoinCheck plans to continue its global expansion strategy, focusing on product innovation and enhancing user engagement. Analysts maintain a consensus price target of $6.01, suggesting potential upside from current levels. Get exclusive access to detailed valuation models and comprehensive financial analysis with an InvestingPro subscription.

Executive Commentary

CEO Gary Simonson emphasized the company’s commitment to product innovation and global expansion. He stated, "We believe our continued product innovation and sustained user engagement through related product offerings, global expansion, and segment diversification will make us less impacted by market volatility." Simonson also welcomed regulatory initiatives that promote transparency and investor protection.

Risks and Challenges

• Regulatory changes in global crypto markets could impact operations.
• Declining trading volumes may affect revenue growth.
• Increased expenses related to public company infrastructure could pressure margins.
• Market volatility remains a concern for future performance.
• Potential delays in realizing benefits from strategic partnerships and product launches.

Q&A

During the earnings call, analysts inquired about the potential of the Mercoin partnership and the context of share-based compensation. CoinCheck highlighted its strategic growth initiatives and consistent customer acquisition costs, aiming to reassure stakeholders about its long-term growth prospects.

Full transcript - Content Checked Holdings Inc (CNCK) Q1 2026:

Conference Call Moderator: Afternoon and welcome to CoinCheck Group’s N. V. Fiscal Year twenty twenty six First Quarter Earnings Conference Call covering the period from 04/01/2025 through 06/30/2025. With us today are Cary Simonson, Chief Executive Officer of CoinCheck Group and Jason Sandberg, Chief Financial Officer of CoinCheck Group. Before we begin our prepared remarks, I’d like to remind everyone that our discussion today will include forward looking statements.

Such forward looking statements are not guarantees of future performance. Actual results may differ materially from those expressed or implied in the forward looking statements due to a variety of factors. These factors are discussed in more detail in our filings with the SEC, including our filings related to the 2026. Such factors may be updated from time to time in our periodic filings with the SEC, and we do not undertake any obligation to update forward looking statements. Additionally, throughout this conference call, we will also present and discuss non IFRS financial measures.

Reconciliations of our non IFRS financial measures to their most directly comparable IFRS financial measures appear in today’s earnings press release, which are available on our Investor Relations website and on the SEC’s website. Our functional currency is the Japanese yen. During today’s call, we’ll be referring to certain rounded figures and certain figures that we’ve translated from yen to U. S. Dollars solely for the convenience of the reader into the U.

S. Dollar. For more details on these figures and the convenience foreign currency translation we have used, please see our earnings release that was issued earlier today and furnished on a Form six ks as well as our fiscal twenty twenty six first quarter financial statements and MD and A, which we will furnish with SECs on a Form six ks. I would now like to turn the conference over to your first speaker for today, Gary Simonson. You may begin.

Gary Simonson, Chief Executive Officer, CoinCheck Group: Good afternoon, and thank you for joining us on our fiscal twenty twenty six first quarter earnings call. I appreciate your interest in Coincheck Group. I am very pleased to be here and for the opportunity to share our story and provide some further color regarding our fiscal twenty twenty six first quarter. A lot has happened in the crypto space globally and with our company since our last quarterly report. From the Trump administration’s further embrace of crypto and the regulatory agencies and Congress’s efforts to provide regulatory and legal clarity in its development, use and adoption, leading to an accelerated pace of change both in The U.

S. And globally to new avenues of ways for investors to invest in the space, such as expanded ETFs, publicly traded Capital Act treasury strategies, a number of newly listed public or soon to be publicly traded crypto focused operating companies, and the blending of offering both TradFi and DeFi crypto products on mainstream exchanges such as Coinbase and Robinhood. And an abundance of both high level and low level mergers and acquisitions as companies look to enhance their products and standing to improve their global competitiveness in the space. We have seen an incredible and unprecedented rate of change in a very short period of time. On our prior earnings call in February 2025, we made our corporate strategy as a newly NASDAQ listed public company headquartered in The Netherlands quite clear, to be a leading global crypto financial services and Web3 holding company through core growth and the expansion of the Coincheck franchise in Japan and mergers and acquisitions globally.

Consistent with the strategy, we acquired Next Finance Tech, a staking and node operator headquartered in Japan offering its services globally in March 2025 and began offering staking to Coincheck Inc. Customers in our fiscal twenty twenty five fourth quarter. A few days ago, we announced CoinCheck Inc. Has entered into a partnership with Mercoin, a group company of Makari, a leading C2C platform in Japan, to provide crypto services to Merkoin’s customers through the Mercari app platform. With Mercari currently having over 23,000,000 monthly active users, 3,000,000 of which have Mercoin accounts, we believe this to be a game changer in delivering enhanced crypto services to a broader segment of Japanese consumers.

We continue to look for opportunities outside of Japan and are hopeful the strategic efforts will continue to pay off in the near future. We are especially pleased with the strategic results to diversify and expand given the recent softening in crypto trading globally during our fiscal twenty twenty six first quarter and the improved monthly KPIs we recently reported for July 2025. Here are a few more business highlights for the quarter. Firstly, we didn’t make money. In the 2026, Coincheck Group reported total revenue of 84,000,000,000 yen or $583,000,000 a 27% decrease from the previous quarter, primarily reflecting a subdued cryptocurrency trading environment globally that led to a 33% decline in marketplace trading volume.

This downturn in trading activity materially impacted transaction based revenues and along with increased holding company expenses resulted in a net loss of JPY 1,377,000,000.000 or USD 9,500,000.0. While our selling, general and administrative expenses continue to remain fairly constant from the prior quarter to this quarter and pursuing the above strategy and incurring its execution costs, combined with the additional costs of being a public company and building out our corporate infrastructure, we had higher overall expenses for the quarter. This combined with lower revenues as detailed above led to a negative adjusted EBITDA of $399,000,000 yen or $2,800,000 Despite this, the company achieved strong momentum in key growth indicators. Customer assets exceeded 1,000,000,000,000 yen or $6,900,000,000 a 16% increase quarter over quarter, while verified user accounts rose to 2,350,000, 3% quarter over quarter growth. We believe our continued product innovation and sustained user engagement through related product offerings, global expansion and segment diversification will make us less impacted by market volatility and better positioned to weather future volatility over time.

Ethereum staking, a strategic growth initiative, also delivered meaningful progress with revenue increasing to $381,000,000 yen or $2,600,000 than six times the previous quarter. This sharp increase was fueled by heightened customer participation and favorable staking yields. As briefly mentioned above, earlier this week CoinCheck Inc. Announced a strategic partnership with Mercoin Inc, a group company of Makari, Japan’s largest marketplace app. Again, we are very excited about this partnership.

With 23,000,000 active users, Makari is one of the most recognized C2C platforms in Japan. By combining Coincheck’s strong trading system, the Makari’s large user base, this partnership enables users of Makari to open a Coincheck account and trade a wide range of crypto assets in addition to Bitcoin, Ethereum, and XRP directly with the Mercari app. Here are some facts. As of July 2025, Coincheck manages over 1,200,000,000,000.0 yen or 8,300,000,000.0 in customer assets. Over 3,000,000 Makara users have tried Bitcoin trading through Mercoin since its launch in 2023.

In 2024 alone Mercoin opened 1,720,000 new accounts, about 58% of all new crypto accounts in Japan that year. The favorable U. S. Regulatory tailwinds, Genius Act being signed, Stable Clarity Act now before Congress, are driving a race to rapid adoption and change around the world with strong momentum that is not likely to be reversed as TradFi moves deeper into the crypto space. We anticipate that Ethereum staking through NEXT Finance Tech will become a larger driver of revenue going forward as Coincheck begins to onboard NEXT Finance Tech’s staking services for its customers.

Finally, let me briefly touch on the regulatory environment in Japan. In June, the Financial Services Agency released a policy proposal that could mark a significant step forward for the digital asset industry. The proposal calls for the reclassification of certain crypto assets under the Financial Instruments and Exchange Act, aligning them with the same regulatory framework as traditional securities. This would introduce enhanced disclosure, governance, and investor protection standards. We believe we are well positioned to take advantage of this opportunity.

In parallel, Japan’s ruling coalition is also reviewing potential changes to the tax treatment of crypto asset gains. Under current rules, individual investors may face a marginal tax rate of up to 55%. The proposal under discussion would shift to a flat 20% rate consistent with the treatment of capital gains on listed securities and introduce a three year loss carry forward provision. We believe the natural impact of this change would be to dramatically increase the velocity of trading crypto in Japan. While these reforms may remain under consideration and most likely would not take effect until early twenty twenty seven, we view them as a constructive signal toward greater regulatory clarity.

As one of the largest crypto asset trading platforms in Japan, Coincheck continues to engage with regulators and industry participants. We welcome initiatives that promote transparency, investor protection and responsible innovation and we believe we are well positioned to benefit from these changes. I will now turn it over to Jason Sandberg, our Chief Financial Officer to provide commentary on the numbers and to provide some more detailed color.

Jason Sandberg, Chief Financial Officer, CoinCheck Group: Thank you, Gary. I’m Jason Sandberg, Coincheck Group’s CFO and I appreciate the opportunity to share with you today our fiscal twenty twenty six first quarter financial results. I will start with some year over year comparisons. Total revenue increased 12% to JPY 84,000,000,000 or USD $583,000,000 in the 2026 from JPY 75,300,000,000.0 or USD $522,000,000 in the first quarter fiscal twenty twenty five. Gross margin decreased 13% to 2,700,000,000.0 yen or nineteen million dollars in the 2026 from $3,100,000,000 or $22,000,000 in the 2025, mostly as a result of a decrease in marketplace trading volume.

Our verified accounts increased 14% to 2,350,000 accounts as of 06/30/2025, up from 2,000,000 accounts as of 06/30/2024. Our customer assets increased 34% to 1,000,000,000,000 yen or 6,930,000,000.00 USD as of 06/30/2025 from 747,900,000,000.0 yen or $5,180,000,000 as of 06/30/2024. Our marketplace trading volume decreased 16% to $61,500,000,000 or $427,000,000 for the 2026 from 73,000,000,000 yen or $5.00 $6,000,000 for the 2025. Please note that fluctuations in our marketplace trading volume are usually driven a lot by crypto asset industry market volumes and conditions generally, and that was no different in the 2026. Our net loss was 1,370,000,000.00 yen or $9,500,000 USD in the 2026 compared to a net profit of $436,000,000 yen or $3,000,000 in the 2025.

Components contributing to net loss results in the first quarter included share based compensation, a new expense for us of $298,000,000 yen or $2,100,000 a loss from the change in the fair value of warrant liability of $223,000,000 yen or $1,500,000 and total transaction expenses of JPY 143,000,000 or $1,000,000 Adjusted EBITDA was negative JPY $399,000,000 or $2,800,000 the 2026 compared to 1,000,000,000 yen or $7,000,000 in the 2025. Please note that as explained in more detail in our earnings release published this morning, we decided to take a different approach to adjusted EBITDA beginning with the fiscal twenty twenty six first quarter, mainly by taking into account further adjustments, share based compensation and the change in the fair value of our warrant liability. Let’s look at these results in greater detail. As I mentioned, our total revenue increased 12% year over year. We saw our verified user accounts grow by 14% and our customer assets grow by 34%, which we believe helped drive our total revenue growth despite the market volatility throughout the year.

Our total revenue consists of transaction revenue, staking revenue, commission received and other revenue. Our primary revenue stream is from our marketplace platform, where 35 different types of cryptocurrencies can be traded, including BTC, Ethereum, XRP, as well as many other Altcoins. Transaction revenue from our Marketplace platform business is derived from transactions with users and covered counterparties in which we buy and sell cryptocurrencies to users with the spread, which includes the total size of the trades, including the spread. This is why the trends in our Marketplace platform trading volume show a level of correlation with trends in our transaction revenue. Our spread is typically set in a range of 0.1% to 5% for each cryptocurrency.

We hold the discretion to use a spread higher than that spread range, which we sometimes do based on market conditions, including liquidity. As Gary mentioned, we provide our customers with the ability to stake their Ethereum through a staking rewards program. When our customers choose to stake their Ethereum, we function as principal to the transaction and recognize revenue for the staking reward fees received from the Ethereum blockchain. As the process is completed, we then remit fees to our customer, typically being 70% of the total rewards received. Our staking revenue for the first quarter increased to $381,000,000 yen versus 0 yen for the 2025, with $255,000,000 yen of related costs this quarter.

Those costs essentially being the amounts remitted to our customers. Staking revenue is primarily driven by the amount of Ethereum our customers elect to be staked and the existing market rate for staking rewards. Moving on now to our operating expenses, total selling, general and administrative expenses increased to 3,500,000,000.0 yen or $25,000,000 in the fiscal twenty twenty six first quarter compared to 2,470,000,000.00 yen or $17,000,000 in the fiscal twenty twenty five first quarter. Selling, general and administrative expenses in the fiscal twenty twenty six first quarter included non cash share based compensation expenses of $298,000,000 yen or 2,100,000.0 USD from RSUs that were awarded during the quarter. Approximately 60% of that expense was attributable to awards granted in connection with the merger transaction in December 2024 that made us a public company.

We ended the fiscal twenty twenty six first quarter with cash and cash equivalents of 10,600,000,000.0 yen or $73,800,000 summary, while we would have liked to see better market volumes and net profit or loss results, we are pleased with our continued growth traction of our relatively new staking rewards program and our new strategic partnership with Mercari, which should help us expand our customer base and customer assets further. I’d now like to hand the call back to Gary.

Gary Simonson, Chief Executive Officer, CoinCheck Group: Thank you, Jason. In closing, while the quarter was not everything I might have hoped for, given the strategic developments and the growth numbers that we achieved, we are pleased with our fiscal twenty twenty six first quarter financial and operating results. And I’m deeply grateful for the hard and tireless work that our teams around the globe have put in to make this happen. Thank you again for your interest in Coincheck Group and your continued support. I look forward to future opportunities for open dialogue and to share with you our evolving financial results in Starry.

I would like to now open the call up to your questions.

Conference Call Moderator: Thank you. We’ll take our first question from Alex Mark Graf with KeyBanc Capital Markets. Please go ahead.

Alex Mark Graf, Analyst, KeyBanc Capital Markets: Thanks. Hi, Gary. Hi, Jason. A few questions if I can and I’ll go sort of one by one. Gary, first on the Mercoin partnership, I’m curious how

Gary Simonson, Chief Executive Officer, CoinCheck Group: many

Alex Mark Graf, Analyst, KeyBanc Capital Markets: of these sort of opportunities are out there? I mean, sounds very scaled as you described it. Just sort of curious what that opportunity looks like for Coincheck beyond Mercoin and Mercari?

Gary Simonson, Chief Executive Officer, CoinCheck Group: And then just as a sort of

Alex Mark Graf, Analyst, KeyBanc Capital Markets: follow on to that, should we think about the monetization of that sort of trading volume any differently than marketplace volume? Thank you.

Gary Simonson, Chief Executive Officer, CoinCheck Group: Thanks, Alex, for taking the time to join the call. So there are additional opportunities one can imagine in Japan and outside of Japan that could come up. I wouldn’t want to make a prediction or a projection. But you can see from the dynamics in the space and what’s going on globally that there is a need and desire for, enhanced collaboration and growth and leveraging relationships and customer relationships, be it cross product, offerings or, enhanced offerings. So we do believe there’s that opportunity and extremely pleased with the Merkoin relationship.

The US Makari is in The US. It’s a name known by some in their platform, but it truly is a very recognizable name in Japan, we think there’s some real opportunity there. So as far as how to look at the revenues, it would be more than likely, I would think, driven as the marketplace relationships would come from that direction. And at this point, it’s too early to tell or give guidance on to what those numbers will be. We did disclose that, you know, Makari overall has 23,000,000 daily active users on their platform and about 3,000,000 users, or that that have the, Mercoin app.

And so that’s kind of the base we’re starting with, and and we will, on a quarterly basis, keep, the market, apprised of the developments.

Alex Mark Graf, Analyst, KeyBanc Capital Markets: Awesome. Thank you. Jason, SG and A, the marketing spend component of that, anything you could offer? Just color around that in the quarter and how CAC sort of trended relative to prior quarters?

Jason Sandberg, Chief Financial Officer, CoinCheck Group: Yeah, I’ll probably start at the second part of the question. Our CAC, we were able to hold relatively consistent even year over year quarter versus preceding quarter. Our marketing spend was relatively consistent year over year and we actually decreased it by approximately 130,000,000 yen versus the preceding quarter, just based upon the way the market was moving with trading volumes.

Alex Mark Graf, Analyst, KeyBanc Capital Markets: Okay, great. One more quick one just on SBC. How should we think about that going forward? Maybe as sort of like a percentage of gross profit, if that’s a fair way to look at it?

Jason Sandberg, Chief Financial Officer, CoinCheck Group: Sorry, Alex, could you repeat that?

Alex Mark Graf, Analyst, KeyBanc Capital Markets: Just the share based compensation level in the quarter, just how to think about that for the balance of fiscal twenty twenty six, maybe in relation to gross profit or by any other measure that you would look at it?

Jason Sandberg, Chief Financial Officer, CoinCheck Group: I think we spoke about it in our press release that approximately 76% or so was attributable to awards that were granted related to the SPAC transaction. So obviously, in the future, there could be other discrete transactions, which relate to additional share based awards. But we just wanted to point out that there’s a relatively high percentage that was directly correlated to the transaction that took us public in December 2024.

Gary Simonson, Chief Executive Officer, CoinCheck Group: Okay. Yeah. I might add it. It makes for a very lumpy quarter in that way because you have to book them when you when they’re done and that this was the quarter that they happened in addition to some hiring and build outs as a public company. So it’s not something that one would imagine would occur every quarter at that Okay.

Alex Mark Graf, Analyst, KeyBanc Capital Markets: Okay. Understood. Thank you both. Appreciate the answers.

Conference Call Moderator: Thank you. And we have no further questions. I will now turn the call back over to Gary Simonson for closing remarks.

Gary Simonson, Chief Executive Officer, CoinCheck Group: Well, thank you for joining our earnings call. We appreciate your support and interest in CoinCheck and look forward to further conversations and dialogue. We’re excited about the opportunities that we see ahead of us this year and welcome the opportunity to share further in our next call. Thank you.

Conference Call Moderator: Thank you. And that does conclude today’s conference. We appreciate your participation. Have a wonderful day.

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