Coinbase Global, Inc. (COIN) Earnings Call Transcript & Summary

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.

Eric Pan, ericnomics, here. Great to see you guys again since the systems update in EURC. My question is around CLARITY. As CLARITY is at the 1-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 recess is 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 past. 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?

Yes, I'll take that one. So first off, I am pretty optimistic that it will get to a full Senate floor vote. There's a lot of last-minute negotiations happening, which to me is a sign that everyone has invested in getting something over the line. I mean, there's just thousands and thousands of hours that have been spent by the Senate staff and the senators themselves on getting a really good work product. And like every good negotiation, there's a lot of last minute details to get right. But having a deadline or a forcing function with this August recess for the Senate is actually a good thing. It tends to get people to the table at the last minute. So there's been lots of phone calls happening this week. Now of course, there's more steps that would need to happen for it to become a law after the Senate floor vote, and you can never say 100% with these things. So anyway, I'm optimistic it can get done, by the way, a big shout out to the Stand With Cypto advocates who sends, I think, over 1 million e-mails and phone calls to their representatives to help get that through. 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 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 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.

All right. We are moving to our next question, and this is going to come from institutional research analysts, Owen Lau at Clear Street.

Could you please talk about the recent Coinbase joining Open USD? Some people think, OUSD, it's a major threat to USDC. Obviously, OUSD is not even launched yet. So there are no hard figures we can compare with. But why does Coinbase participate in a competing stable point? 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 have partnerships for negotiation?

Can I address the partnership with Circle first, Brian, and then we can talk about our platform, if that's okay with you?

Yes. 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 before the market, Owen. So we will continue to work on growing USDC, partnering with Circle and driving that ecosystem. Now why OUSD? Brian over to you.

Yes. 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, that's been -- we have arguably the strongest economics on that -- from that point of view. But we want to make sure that we strike economic deals with every major stablecoin out there and work everything. So we actually already support other stablecoins, things like PayPal, PYUSD, USDT Tether, right? So anyway, we're excited about this open USDC consortium, and we'll keep investing in that. I think this just creates additional business opportunities and revenue opportunities for us to be a multistate platform. Not to mention, I guess, FX trading, things like that.

All right. Next question, Brian Jung.

I am really curious about your relationship right now that you have with retail. You had your appearance on market bubble. You announced Cobie is 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?

Yes. So we have lots of different groups that like to use Coinbase and build on top of the Base chain is even probably a broader group. And so 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 G-SIB 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 payment service 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. Sometimes I have to make sure -- 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 mentioned Cobie, he's 1 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 podcast that speak to all these different groups, including the crypto-native community.

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

There were a number of departures from your senior leadership team this quarter. Why do you have these high profile within a short period of time? What's the strategy with regard to HR, [indiscernible], legal and institutional [indiscernible]?

Yes. 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 1 of the things I'm most proud of 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 yes, I'm exiting -- I'm excited to see what that turns out to be.

Yes, 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 were all individual decisions. So there's nothing from a strategy standpoint to read into these changes. All right. Next question, Austin Hankwitz.

Austin Hankwitz here, cohost of the Rich Habits podcast and head analyst at Grid Capital. 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 AI agent has no brand loyalty. It simply optimizes for cost and latency. So as agents become a larger share of volume, does that trust mode transfer to them? Or does Agentic commerce structurally now pushed Coinbase toward competing on price in a way that maybe the consumer business never had to? Would love to get your take.

Yes. 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 1 of those factors and Base actually delivers like subsent -- 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 a 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 red agent or for AI agents and make sure that we're serving them appropriately.

All right. Our next question, Alex Markgraff from KeyBanc Capital Markets.

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 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.

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 1-year payback on growth 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 platform.

Yes. 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 use to store their assets with us, then whenever they come back for the 1 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 Coinbase One Card, the more that -- 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 #2.