Coinbase Global, Inc.

Good afternoon. My name is Sarah and I will be your conference operator today. At this time, I would like to welcome everyone to the Coinbase fourth quarter and full year 2024 earnings 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. And to ask a question, please press star one on your telephone keypad. Anil Gupta, Vice President, Investor Relations. You may be in your conference.

Thank you. Good afternoon and welcome to the Coinbase fourth quarter and full year 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 Graywell, 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, which may vary materially from actual results. 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 certain non-GAAP financial measures. Reconciliations to the most directly comparable GAAP financial measures are provided in the 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 Say to enable our shareholders to ask questions. In addition, we'll take live questions from our research analysts. And with that, I'll turn it over to Brian for opening comments.

All right. Thanks, Anil. Crypto's voice was heard loud and clear in this recent U.S. election, and it's the dawn of a new era for crypto. President Trump is moving fast to fulfill his promise of making the U.S. the crypto capital of the planet. And the most pro-crypto Congress we've ever seen is now leading the charge on stablecoin and market structure legislation. Given the US's leadership here, the rest of the world is taking notice and will be under pressure to embrace crypto adoption. So it's hard to overstate the significance of this change that's happened in the last few months. We have a number of new opportunities in front of us now to go build in 2025. Let's talk about our financial performance in 2024, though, just to get started here. And it's incredible. I mean, Coinbase had an amazing 2024. I'm very, very optimistic on this next few years. In 2024, our total revenue more than doubled to 6.6 billion with 3.3 billion in adjusted EBITDA making two straight years of positive adjusted EBITDA. By the way, if you look back five of the last six years, we had positive adjusted EBITDA now. So we're completing this transition to being an all weather company that can show positive adjusted EBITDA. Our subscription and services revenue had an outstanding 64% year over year to 2.3 billion driven by USDC staking and Coinbase One. Our international revenue share reached 19% in Q4, and this is due to improved payment rails and localization. We've got a repeatable playbook now that we can launch in these new markets and get them to contribution margin positive. And so we're going to keep doing that in more markets. And finally, we're just so well positioned to capitalize on these new regulatory tailwinds. It's been incredibly validating of this long-term strategy we've taken at Coinbase to be the most trusted and compliant, and it's finally paying off. All right. So let's talk for a minute about how crypto is now going mainstream the regulatory environment. There's there's clarity on the horizon. Every time you think about that, you should think that this is really ham expansion for Coinbase. Coinbase is going to be the platform that's going to power many of these companies that are coming in and trying to integrate crypto. And we like to say that on chain is the new online. It's a little bit like the early 2000s when every company had to figure out how to adapt to the Internet. Up to 10% of global GDP could be running on crypto rails by the end of this decade. And Coinbase is going to be the preferred partner to come in and build this for many of the companies out there because we have the most trusted and scalable infrastructure with the longest track record. Let's talk a little bit about our priorities in 2025. So 2025 is going to be about growing revenue with our existing products. It's going to be about driving utility in these new categories where crypto is getting to scale. And it's going to be about building the foundations to power this next decade of growth. So first, we're going to be driving more revenue in our core businesses. Let's deep dive into that. Trading is often where we start with here. That's the earliest thing that we got into in crypto with Coinbase. And we're going to continue to expand on that leadership position. So we'll be delivering best in class derivatives trading as part of our global offering. We're going to be accelerating asset addition as clarity emerges there. We're winning more and more advanced traders on our platform. And I'm really proud to share actually that we reached an all-time high for both US spot and global derivatives market share in Q4. An incredible outcome due to the hard work of the team. So 2025 is looking very good. It's off to a very good start here. We also have a stretch goal to make USDC the number one dollar stable coin. We're very bullish on stable coins. We think USDC has a network effect behind it and the compliant approach that they've taken is, I think, going to be really defensible long term. So we'll be accelerating the market cap growth of USDC with more partnerships and leaning into new use cases like adding payments support across our product suite. We'll be accelerating our international expansion by replicating that successful playbook that I mentioned in these new high growth markets. and growing subscription services revenue by going on offense with Insto and retail staking, growing our assets under custody for our custody business. I expect it will be a banner year for Coinbase One as well, especially in our international markets. So that's our first prong of growing revenue with our existing products. Next, we really want to drive utility to get this next wave of mass adoption going for crypto. We think crypto is much, much more than just an asset class that people want to trade. There's going to be daily use cases for everybody in the world as crypto updates the global financial system. And one of those big categories is payments. You know, we're already at scale, I'd say, on stablecoin payments. There was $30 trillion of crypto stablecoin volume last year. That was up 3x year over year. And so we're moving with haste to integrate crypto payments across our entire suite of products. We think that'll be a big business over time. And we're also solidifying base as the number one chain for building for startups to build on chain and large companies. We're going to continue to lower transaction fees on base. We're going to accelerate the flywheel with retail users. And there's a really nice tie in here where CDP or Coinbase developer platform can provide a lot of the tools to help these companies integrate with base. And so that's been a great time on CDP specifically. We're going to keep making sure that it's the leading platform for any company to develop applications on chain. And I think that'll allow hopefully thousands of companies to come integrate and Coinbase can power a lot of that behind the scenes for them. Okay, so we talked about growing revenue. We talked about driving utility. The third prong here for 2025 is about scaling our foundations. And we've got a world-class policy team. They're laser focused on getting some landmark crypto legislation passed. We're going to continue to support standwithcrypto.org, hopefully get that to 4 million advocates by the 2026 midterms. So we're not taking our foot off the gas there. We're also, we announced further donations to Fairshake, SuperPAC to support pro-crypto candidates in 2026 and beyond. So there'll be lots of policy efforts continuing and not just in the US, by the way, this will be taking place in a number of countries. And then we're also going to continue to scale our backend services as crypto continues to reach new all-time highs and transaction volumes. Every time we hit a new order of magnitude, we have to re-architect our backend systems. And this is what supports our own products, but it also is supporting many, many third parties now. So all the above is how we're going to expand our lead and define the future of crypto. And in closing, I just want to remind everybody, I hope everybody appreciates this. I mean, we're really entering a golden age for crypto here. The opportunity in front of us is unprecedented to update the financial system and increase economic freedom around the world. The regulatory overhang is lifting. Governments are leaning in and we're shaping the next chapter of crypto from trading to payments to consumer apps and beyond. 2025 is going to be a very good year. I'll turn it over to Alicia now.