Coinbase Global, Inc.

Good afternoon. My name is Erica, and I will be your conference operator today. At this time, I would like to welcome everyone to the Coinbase first quarter 2021 earnings call. All lines have been placed on mute to prevent any background noise. If you would like to ask a question during this time, simply press star, then the number one on your telephone keypad. If you would like to withdraw your question, press the pound key. Thank you. Anil Gupta, Vice President, Investor Relations. You may begin your conference.

Thank you. Good afternoon, and welcome to the Coinbase first quarter 2021 earnings call. Joining me on today's call are Brian Armstrong, co-founder and CEO, and Alesia Haas, CFO. I hope you've all had the opportunity to read our shareholder letter, which was published on our investor relations website earlier today. Before we get started, I'd like to remind you that during today's call, we may make forward-looking statements. Actual results may vary materially from today's statements. Information concerning risks, uncertainties, and other factors that could cause results to differ from these forward-looking statements is included in our SEC filings and shareholder letter available on our IR website at investor.coinbase.com. Our discussion today will include references to adjusted EBITDA, a non-GAAP financial measure. We believe that certain non-GAAP measures of financial results provide useful information to management and investors regarding trends relating to our financial condition and results of operations. Non-GAAP financial measures should be considered in addition to, not as a substitute for or in isolation from, GAAP measures. You can find additional disclosures regarding adjusted EBITDA, including a reconciliation to net income, the comparable GAAP measure, in our shareholder letter and current report on Form 8-K, which are posted on our IR website. Last week, we announced that we will use SAVE technologies to enable all Coinbase shareholders the opportunity to submit and upvote questions for our management team. Thank you to everyone who participated in this process. We will start today's call by answering some of the most upvoted questions. We will also take live questions from Wall Street analysts, many of whom have done significant amounts of work to understand our business, which we are very appreciative of. So with that, let's dive into the first question. Jordy Y asks, when will users be able to trade Doge? All right, I'll take that one. Thank you for the question, Jordy. And asset addition is something that's near and dear to my heart. There's more and more assets being created in the crypto economy. I think it's going to be something kind of like apps in the App Store or on the iPhone where there's eventually millions of these assets created over time. And so We're putting a lot of work and thought into how do we accelerate our pace of asset addition. And one of those is Doge, as you mentioned, which has been getting a lot of attention recently. So to answer your question directly, we plan to list Doge in the next six to eight weeks. And then more broadly, we're going to be focused on how we can accelerate asset addition in the future. Our next question comes from Garrett H., who asks, as volatility increases with the crypto market, Can we expect to see a continuous profit and revenue growth as with the most recent quarter? In addition, can we look forward to additional ventures to cover the potential fee-less future of crypto trading?

Thanks, Anil. I'll take this one. Garrett, thanks. This is a great question, and there's a lot to unpack here. I want to start by saying that we do not believe in a fee-less future of crypto trading, at least in the near term. That said, we are definitely focused on building new products and services and to diversify our revenue streams. Many of these new revenue streams are reported as subscription and services revenue, which generated $56 million of revenue in the first quarter. Our goal is to become the primary financial account of crypto economy for our users. And to achieve that goal, we're focused on introducing our customers to new products, services, adding new assets, as Brian just mentioned. And over time, we believe all of this will drive diversification of our revenue. But going back to the first part of your question as to whether we can expect to see continuous profit and revenue growth when volatility increases, I think it's really important to understand crypto volatility and crypto asset prices can and have fluctuated meaningfully quarter to quarter. And historically, when we're in a period where we see a high Bitcoin price and higher crypto asset price volatility, those two factors have driven to higher trading volume and therefore higher transaction fee revenue periods for Coinbase. However, those are not assured. of increase, stability, or decrease. In our shareholder letter, we included an outlook for Q2 along with full year 2021 outlook. Quarterly date for the second quarter, we have seen a continuance of the strong crypto price cycle with high levels of volatility, both in retail and institutional. We expect our trading volume to meet or exceed the Q1 levels if our performance continues at the current pace. and we have seen growth in MTUs since the end of Q1 driven by the deepening strength in the crypto market. So just to remember, to close, I think it's important to remind you all that our revenue and growth can be volatile and we could see periods of growth, we can see periods of stability and we could see a decline in our revenue.