Coinbase Global, Inc.

Good afternoon. My name is Krista and I will be your conference operator today. At this time, I would like to welcome everyone to the Coinbase second quarter 2024 earnings conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you'd like to ask a question during that time, simply press star followed by the number one on your telephone keypad. If you'd like to withdraw that question, again, press star one. Thank you. Anil Gupta, Vice President, Investor Relations. You may begin your conference.

Good afternoon and welcome to the Coinbase Second Quarter 2024 Earnings Call. Joining me on today's call are Brian Armstrong, co-founder and CEO, Emily Choi, President and COO, Alicia Haas, CFO, and Paul Grewal, Chief Legal Officer. 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 these results to differ is included in our SEC filings. Our discussion today will also include references to certain non-GAAP financial measures. Reconciliations to the most directly comparable GAAP financial measures are provided in our shareholder letter on our investor relations website. Non-GAAP financial measures should be considered in addition to, not as a substitute for, GAAP measures. We are once again using the Say Technologies platform to enable our shareholders to ask questions, and in addition, we will take some live questions from our research analysts. And with that, I'll turn it over to Brian for opening comments.

Thanks, Anil. I'm excited to share an update on our 2024 priorities. Let's start with driving regulatory clarity, given the significant progress here in Q2. First, advancing crypto legislation has emerged as a mainstream issue in Washington, DC. Standwithcrypto.org has amassed over 1.3 million crypto advocates globally, many in swing states. And these advocates are making their voices heard as an important voting block. Politicians on both sides of the aisle have taken notice and there is growing momentum to pass comprehensive crypto legislation, potentially even this year. Beyond legislation, we saw major wins both in the judicial and executive branches. The Supreme Court overturned the Chevron deference precedent in a case argued by our newest board member, Paul Clement. This case is significant for Coinbase as it removes a longstanding precedent that courts should defer to an agency's interpretation of ambiguous statutes. We see this case as a sign of Supreme Court skepticism to agency overreach, which we view as a positive overall for our industry. In the executive branch, the SEC dropped multiple investigations against the industry and also formally approved the Ethereum ETFs, which began trading last week. We are also increasingly optimistic that the next administration, whether Democrat or Republican, will be constructive on crypto. The rhetoric has shifted. To continue to advance progress on crypto policy and capitalize on this momentum, we contributed an additional $25 million to FairShake in Q2 to help elect pro-crypto candidates. Since we went public, we have reiterated the need for regulatory clarity. Why does it matter? Well, clear rules would be a major unlock for innovation in our financial system and it would ensure that this industry is built here in America. Many entrepreneurs and companies that want to build in the crypto space are sitting on the sidelines or going overseas until there is this clarity, given the regulation by enforcement environment. 90% of institutional investors say regulatory clarity would boost their confidence in investing more in crypto. For these reasons, Coinbase will continue to push for clear rules in the courts, in Congress, and in the November elections. While we're heavily invested in driving clarity in the US and abroad, the vast majority of our resources, time, and attention as a company is focused on building great products. So let's talk about how we're driving utility. To bring a billion people on-chain, crypto transactions need to be cheap and fast, and it needs to be so easy to use that people don't even know they're using crypto. We're investing on the frontier to make crypto seamless for both consumers and developers. Most of the building blocks for utility like payments are now here. Layer twos like base enable one second, one cent global transactions and it's here today. Stablecoins like USDC enable global transfer and settlement in dollar terms today. And smart wallets offer seamless onboarding. So users no longer need to remember 12 word passphrases. In short, the components are coming together for us to see more and more global transaction flow on crypto rails. And I'm excited to report that we're now seeing almost $20 billion per week in USDC transaction volume on base. We're also seeing startups build on-chain versions of major web two apps like Spotify, Instagram, YouTube, and X. Building new versions of these applications on-chain gives creators new ways to monetize and remix content while fully controlling their own data. This is the vision for the future of the internet, commonly called Web3. Coinbase Developer Platform, or CDP for short, is our developer product similar to what AWS did for the internet, which we believe will help more on-chain apps be created by offering developers best-in-class tools. Last but not least, let's move to how we're driving revenue. Q2 was another strong quarter, and it was our sixth consecutive quarter of a positive adjusted EBITDA. Subscription and services revenue reached an all-time high with transaction revenue declining versus Q1. Coinbase is now an all-weather company with increasingly diversified revenue streams, and I'm proud of our discipline managing expenses. In closing, Q2 was another great quarter across the board. Whether the market is up or down, we're driving the industry forward, building more predictable revenue streams and creating long-term shareholder value. Now I'll pass it over to Alicia for a more detailed view of our Q2 financials.