Coinbase Global, Inc.

During today's discussion, we may make forward-looking statements that may vary materially from our actual results. Please refer to our SEC filings and earnings presentation for information concerning risks, uncertainties, and other factors that could cause these results to differ. In addition, our discussion today may include certain non-GAAP financial measures. Reconciliations to the most directly comparable GAAP financial measures are provided in the earnings presentation on our Investor Relations website.

Hey, everyone. Thanks for joining us live on X today. I'm Alesia Haas, CFO of Coinbase, and I'm here with our co-founder and CEO, Brian Armstrong. We are also joined today by a group of independent and institutional research analysts. We're excited to connect directly with you, our customers, our community, our shareholders, to talk about our quarter and answer your questions. So we're going to take our first question from an independent analyst named Eric Pan. Eric, over to you.

Hey there, Eric Pan, Eric Domics here. Great to see you guys again since the systems update in New York. My question is around clarity. As clarity is at the one-yard line and now out for the Senate floor vote, prediction markets and galaxy research have odds of it passing around roughly 30%, and August recesses right around the corner. Now, I really want to be optimistic about this, but also imagining a scenario of a world where it doesn't really get passed. So my question is, what's going to happen with one, Coinbase? Are you guys just going to be more careful while kind of being in this limbo between CFTC and the SEC? And then two, us, the everyday consumers, if it doesn't get passed?

Yeah, I'll take that one. Thank you so much for joining us. and many more. But your question was about what happens if it doesn't pass. And I think in that world, it's actually kind of just business as usual for Coinbase for a few reasons. One is that, I mean, we already do many of the things that would be required by the Clarity Act as just sort of a good best practice. But more importantly, maybe, you know, Chair Atkins and Selig at the SEC and the CFTC, respectively, they have publicly said that they're poised to pass clear rules whether Clarity passes or not. I think they've been kind of in a holding pattern. I don't speak for them, but I think they're in a bit of a holding pattern waiting to see what happens with clarity. And if it doesn't go through for some reason, then they would come out with their own rules that would allow businesses like Coinbase to continue to operate and have more clarity. So we still think on margin it's better if the Clarity Act passes. It creates durability through multiple administrations. People can make longer-term investments. But it's really the American consumers, as you mentioned, who would lose if clarity doesn't pass. I think Coinbase would be fine. Thank you.

All right. We are moving to our next question. And this is going to come from institutional research analyst Owen Lau at ClearStreet.

Thank you, Alesia, and also Brian. Could you please talk about the reason Coinbase joined OpenUSD? Some people think OUSD is a major threat to USDC. Obviously, OUSD is not even launched yet, so there are no hard figures you can compare with. But why does Coinbase participate in a competing stablecoin platform? And in relation to that, does it increase your leverage to negotiate the contract with Circle? I actually saw that it is auto-renewed on the same terms, but I keep getting this question. Do you need to self-partnerships for negotiation? Thanks.

Can I address the partnership with Circle first, Brian, and then we can talk about our platform if that's okay with you? Sure. So we have already met the conditions for the Circle contract to renew, so it will renew on the same terms. I want to take away any ambiguity about that for the market, Owen. So we will continue to work on growing USDC, partnering with Circle. and driving that ecosystem. Now, why OUSC? Brian, over to you.

Yeah, I mean, the short reason is that we're a multi-stablecoin platform. We want to provide the stablecoins that all of our customers want to use. And where possible, we want to strike good economic arrangements with that. Now, we have a great partnership with Circle and USDC. We have arguably the strongest economics from that point of view, but We want to make sure that we strike economic deals with every major stablecoin out there and support everything. So we actually already support other stablecoins, things like PayPal, PYUSD, USDT, Tether, right? So anyway, we're excited about this OpenUSDC consortium and we'll keep investing in that. I think this just creates additional business opportunities and revenue opportunities for us to be a multi-stablecoin platform. Not to mention, I guess, you know, FX trading, things like that. Thank you.

All right, next question, Brian Jung.

Hey, Brian. Hey, Lisa. It's good to see you guys again. I am really curious about your relationship right now that you have with retail. You know, you had your appearance on Market Bubble. You announced Kobio was taking over the base app. I feel like these are some early signals that Coinbase here wants to really reconnect with the crypto native users. Can you just tell me more about your thoughts on this and what made you really take this kind of pivot recently?

Yeah, so we have lots of different groups that like to use Coinbase and build on top of the base chain. It's even probably a broader group. And so, you know, we try to make an effort to connect with all of them. It's really a pretty diverse group of people that use Coinbase, right? There's the largest, like, G7 banks in the world are building on our infrastructure. We also... are having AI agents spin up wallets on top of our architecture. We have fintechs and payments for providers. We have a huge segment of retail. We have simple traders. We have advanced traders. And, of course, there is this crypto-native community that you mentioned. So that's a very important constituency that we go connect with. They're more Internet-native. You know, sometimes I have to make sure I – you know, I'm 43 now, so I have to get in the weeds on some of the lingo and the norms and whatnot. But we have great people on our team to go speak to all of these different constituencies with more depth than I have. And, you know, you mentioned Kobe. He's one of the folks that just joined recently. I think he comes from that community, which is really good. And I'll continue to go on podcasts that speak to all these different groups, including the crypto native community.

I appreciate that. Thanks.

Yeah.

Thank you. All right. Next question from Ken Worthington.

Brian and Alesia, nice seeing you both, and thank you for letting me participate here. There were a number of departures from your senior leadership team this quarter. Why did you have these high-profile teams in a short period of time? What is the strategy with regard to HR, faith, legal, and institutional?

Yeah, you broke up there for a little bit, but I think I got the gist of it, and You mentioned strategy. There's nothing that's changing about the strategy. But I guess what I'd say is that one of the things I'm most proud about Coinbase is we have a really deep bench of talent and we have a really good succession planning process. And so we've had lots of folks that are long tenured. It's normal for people to turn over at different points. But what I'm really bullish about is we just have amazing talent that's been at the company a while that is ready to go step up into these roles. and I think it's really a strength of ours. So yeah, I'm excited. I'm excited to see what that turns out to be.

Yeah, I just want to underpin my excitement around the bench of talent that we have and all of the folks that you have been introduced to, Dominique that will lead our people function, Molly leading our new legal function or Liz Each of them has been groomed by the outgoing leaders, and I think that we are just excited for next generation of talent. But these are all individual decisions, so there's nothing from a strategy standpoint to read into these changes. All right, next question, Austin Hankwitz.

Hey, y'all. How's it going? Austin Hankowitz here, co-host of the Rich Habits Podcast and head analyst at Grid Capital. Thanks again so much for letting me tag along. Brian, you all said last quarter that customers don't choose Coinbase because you're the cheapest. They choose you because you're the most trusted. You also said over 90% of agentic stablecoin transaction volume settles on base. But an agent has no brand loyalty. It simply optimizes for cost and latency. So as agents become a larger share of volume, does that trust note transfer to them, or does agentic commerce structurally now push Coinbase toward competing on price in a way that maybe the consumer business never had to? Would love to get your take.

Yeah, well, I'm glad you're thinking about how we're going to serve AI agents as customers, along with humans, which I've been thinking a lot about as well. I think the short answer to your question is that, actually, I think AI agents are probably going to care about a similar set of things that humans would. certainly price is one of those factors and you know BASE actually delivers like subsense and sub one second settlement so it's like very competitive from that point of view but I also think AI agents are going to choose infrastructure that is reliable and safe and liquid and compliant and has good uptime just like they might choose AWS or some kind of cloud vendor for different types of infrastructure you could imagine so Long way of saying I think trust will continue to be important in that world. And we're going to be rolling out the red carpet for AI agents and make sure that we're serving them appropriately. Love it.

All right. Our next question, Alex Markgraf from KeyBank Capital Markets.

Hey, Brian. Hey, Alesia. Thanks for doing this and including me. Coinbase has launched many new products since December 25. I think the product velocity has certainly stepped up. I'm curious to understand how the team is thinking about driving cross-product adoption and specifically bringing new users in through various entry points that are newer products to the platform. So it would be helpful just to understand the strategy there and then if there's any detail on sort of marketing dollar allocation as you think about that approach would be helpful. Thanks.

All right. Why don't I start on this one? So our whole strategy starts with providing safe storage of customer assets. and driving our assets on platform. We find when customers store with us, they transact with us. So then when we get to our growth marketing strategy, it really looks to what product is meeting the market need and where do we see activity coming from in our retail customer base. Currently, we are seeing a lot of success with growth marketing efforts around prediction markets and also crypto trading, some of the new products that we've offered in derivatives as well. We are typically seeing a one-year payback on both marketing efforts, but recently we've outperformed this benchmark. We have also early signals that customers who are engaging with these new products, for example, prediction markets, are also driving incremental spot trading volume. So we're not seeing cannibalization. These early days are actually indicating that we're seeing incremental trading coming as we then cross-sell and have more customers adopt more products on our platforms.

Yeah, just to underscore that, I mean, the asset accumulation is a core part of the strategy there. When we see customers trust us, we have the most trusted brand in crypto. We store more crypto than any other company out there. If they're willing to store their assets with us, then whenever they come back for the one product that they are using today, we have a chance to put something in front of them. And over time, they can adopt additional products. And it tends to be Good for user retention, the more products they use and the more assets they store with us. So we have various incentives set up to encourage more of that. For instance, you can get a higher rate on the Coinbase One card the more assets you're storing with us. So we look at tiers like that to get people incentivized to store more assets with us over time.

All right, now we're going to go back to the top. So Eric Pan, question number two.

Thank you. So Coinbase continues to diversify and decouple your revenue streams as Bitcoin-related transactions used to comprise more than half the entire company's revenue, and now it's at staggering 12% of the business. So what other revenue verticals are you guys really focusing on? I know you guys are making a big push on the agendic commerce side, so we'd love to hear more about that along with other verticals.

Thanks for noticing that. We're diversifying revenue both on the trading fee side and on subscription and services with non-trading fees. On the trading fee side, we're seeing good adoption of things like prediction markets, perpetual futures. You're seeing our overall trading volume share grow. We added stock trading. There's various things we've talked about on the horizon like stock options trading. I think that the diversity of revenue on trading will continue to happen. And I think Bitcoin will come back in a big way too, by the way. It keeps going through these cycles. So at any given time in trading, there's always something that's up and something that's down. And so you have to have really, that's part of the everything exchange strategy. You've got to have all the shelves stocked so you have the inventory when that thing trends that week. And then on the non-trading fee side with subscription and services, we've seen good growth of that over the past years as well. And it just allows our business to be a bit more So, yeah, Alesia, anything you want to add on that?

One thing I wanted to share that maybe people looked past is that we saw an all-time high in paid Coinbase One subscribers this quarter. And what that's really indicating to us, this is during a down market, obviously, we saw crypto trading volumes down, but growth in Coinbase One memberships. So it really speaks to, then, the value of the subscription product. And these tend to be our most deeply engaged customers that try out the most products and services we offer. So that's another important growth sector that we think we can really drive membership and engagement for our platform through that subscription product.

Thank you. Yeah, I think you asked about a Gen Tech question. I think it's still very early days on that. I'd say Coinbase has an early lead. You know, from an agentic finance point of view, we are seeing the majority of the transactions happening with USDC and BASE and X402. And Coinbase developer platform has been a really great resource for people on that. But it's still quite early. So I don't think we have any specific numbers or forecasts to share on that at the moment.

All right, Owen.

Thank you, Alicia.

Last month, Coinbase started to offer pre-IPO perpetual futures for non-U.S. traders to gain access to private companies. The first one was SpaceX. Could you please talk about the next step and the pipeline you're building? When should we expect to see more private companies, and do you have a timeline for when this product can be offered to U.S. customers? Thanks a lot.

Yeah, so the early traction is definitely encouraging on the pre-IPO perks, and there's a lot of customer demand for it. In terms of U.S. access, that is on the roadmap, and we'll keep pushing on that. But yeah, I think it's important to get people access to these kinds of things that they historically couldn't get access to. It's a good part of democratizing the financial system. So we'll keep pushing on that from a U.S. approval point of view. Thanks a lot.

All right. Brian Chung, back over to you.

Yeah, thanks guys.

So Brian, I'm particularly interested in the evolving competitive landscape right now in crypto, especially with Robinhood. They announced that they were expanding deeper into crypto. They recently launched their own L2. How do you view them as a competitor? And particularly, how do you view them in relation to the whole base ecosystem?

Stablecoins and there was a belief that we all have to have our own. And then it turned out that despite all of those new stablecoins being announced, the market share of, say, USDC and Tether has not really shrunk by almost any amount over the last year or so. So maybe a very de minimis amount. So I think what people found out in stablecoins is that there's an actual network effect to stablecoins. and customers. If you're spending and receiving between platforms, which is a big part of the utility of it, then you want to keep it all in a stablecoin that you know. You don't have to be paying sort of an FX or conversion fee every time you use a stablecoin. So my guess is we're going to see something similar happen with blockchains. And, you know, Stripe has launched one and Robinhood has launched one. Some of them are a little bit more special purpose, I guess, in what they're targeting. And then the largest blockchains out there, Ethereum and Solana, are still kind of more general purpose. So it's an interesting question about when the consolidation phase will start to happen. And of course, BASE has been doing really well as the largest L2 on Ethereum. You know, it's the most liquid market, for instance, like with crypto spot trading. Bitcoin and Ethereum. I think it's number one now in terms of stablecoin transfer volume. I think it did about $32 trillion in the last 12 months of stablecoin transfer volume. It's also the leader in agentic finance. We've seen, like I mentioned earlier, the payments that are happening with X402 and those kinds of things. They're happening predominantly on base. I'm very excited about base. I think it's an incredible innovation. I think There's a path to decentralize it over time, which we said publicly in the past, where we want lots of companies to be able to build on it as neutral infrastructure. And we've been making good progress of that through the different stages of decentralization. So we've got really like a two-year head start, I would say. We're going to continue to invest in base. We're going to make sure everyone can build on top of it. And then We probably will see more companies launch their own. And then the question is, when will that consolidation phase happen? And how might there be sort of an M&A type process in the world of blockchains? We've seen small examples of that in the past, but who knows? We might have to become a bit of a specialist in that area. I love it. Thank you.

All right. Ken Worthington from J.P. Morgan.

Hi. Hi. The relationship with hyperliquids seems to demonstrate that if a third party has enough USDC, it can leverage the position into commanding the majority of the USDC economics. How do you continue to invest in the USDC network, bring in new participants, and still protect the longer-term economics as the network strengthens?

Maybe I'll start with this one, Ken. So, Thank you so much for joining us. and we believe that this partnership will drive broader network effect, broader USDC adoption by deeply embedding it in an important player that has a lot of its own market maker activity. With stable claims, with underlying protocols, even base, liquidity network effects are critically important and so bringing USDC deeply into this ecosystem just further drives USDC growth and adoption throughout the ecosystem. So that was our strategy. This is what we think is the right Long-term strategy for stablecoins, and we're happy to share economics to drive this network effect.

Yeah, just to underscore that, yeah, we're going to keep investing in USDC to keep growing it. And, you know, it's actually, it's already number one if you look at stablecoin transaction volume, which is great. It's already number one, the number one regulated stablecoin in the world. The only one that hasn't achieved the number one on it is if you look at regulated and under-regulated, and then you say, what's the The market cap or the assets under management, but then, you know, you could say it's number two compared to Tether. So I do think it's important for us to continue sharing economics to grow USDC and get it to be number one across all those categories, not just two out of three. And, you know, there's disproportionate gains to being the number one in the market. So we're going to keep doing that to try to help it out.

Absolutely. All right. Awesome hand quotes. Over to you.

Hey, Alesia. So you already alluded to this earlier, but I kind of want to linger on it for a little bit, which is Coinbase One passed a million subscribers. Now you just said, you know, new all-time highs. You've also said that members trade more and generate higher revenue per user. But that said, members do get these zero fee trading. And you've noted that you can still capture a spread that books, you know, that retail transaction revenue. But as more volume shifts under this Coinbase One umbrella, is revenue per dollar traded higher or lower for a Coinbase One member than a non-member? So should investors read this Coinbase One as accretive or as take rate compression? Thank you.

Great question. I'm going to give an unsatisfying answer because when I look at the data, on average, Coinbase One subscribers trade more and have higher unit economics. But there's always examples on the edges. And so I think that what you'll see, obviously, is the revenue will not just all accrue to the trading revenue area because those Coinbase One users, they're also staking. They're also using their Coinbase One credit card. So we're earning revenue in multiple ways to the Coinbase One membership. But what we see is it's an accretive relationship because it's just driving activity up and down the product stack. So I think overall, this will be more net unique economic positive to us. We also see better retention rates and better engagement rates. But you will see the revenue shift through the P&L if we see broad adoption and a shift from just a la carte users to Coinbase One subscribers.

That makes a ton of sense to me. Thank you so much for walking me through that.

All right. Next, we have Alex Markrath.

Alex, we're not able to hear you. If you want to try something with your mic.

All right, we'll give him a minute. If we lost him, then I think then we will have ended the call for this quarter. Give him two more seconds. All right. Well, that wraps up our Q2 2026 earnings call on X. Thank you all for joining us, and we look forward to seeing you next quarter.

Thanks, y'all.