Coinbase Global (COIN) 10 Nov 212021 Q3 Earnings call transcript

Good afternoon. My name is Celine and I will be your conference operator today. At this time. I would like to welcome everyone to the Coinbase Third Quarter 2021 Earnings Call. All lines have been placed on mute to prevent any background noise. there a remarks, session. speakers the will question-and-answer be After [Operator Instructions]. that Please being today's recorded. advised is conference be [Operator Instructions]. President now conference speaker Vice over would to Relations. I like your today, to Anil hand the Investor Gupta,

conference. You may begin your

you. Earnings XXXX afternoon Third Call. welcome the to Thank Coinbase Good Quarter and

President our hope read on Choi, on you was Relations had opportunity call to have shareholder today. CEO; today's Alesia letter published and me Brian Armstrong, all COO; Joining and website earlier Haas, our which Co-Founder Investor are Emilie and CFO. I the

we to our from other Before and make remind that forward-looking these filings during statements. may get coinbase.com. SEC Actual vary today's investor. included letter shareholder and differ uncertainties, statements. risks, factors our may statements is we that available you Information started, I'd concerning on from materially could like today's cause IR at in forward-looking results to call, Website results

post on the regarding you management report Website. our Say current to IR to, and isolation once reconciliation to that to which financial can financial GAAP will financial non-GAAP on GAAP be using adjusted we're in note to including condition to Our a include our EBITDA, our our to useful provide a and regarding to Form disclosures find results non-GAAP letter for discussion certain measures, posted and substitute technologies trends information to shareholder net enable relating are addition of measures non-GAAP measure references additional should today as in again financial team. our investors EBITDA, considered operations. management believe a adjusted I not shareholders income measures in that results or We measure. of from that X-K, platform want questions comparable

research In Alicia will questions comments. to it turn some some over addition, our for And Brian from and take that, analysts. with introductory I'll live we

to the another strong be going joining actually this solid it in markets. and All now never quarter adoption really shared as mirrors what's doubled XX some that happening this out that Internet adoption the this that we some In which XXX and insights there had first in years to this ago. on crypto growth year, letter, in We've we but crypto third-party have pace indicates crypto of for of of well. is pace half million crypto, we quarter users how of accelerating looked to at admit right. Thanks, happening the accelerating. Anil. people and in the We us research And exactly globally. in over is seeing are Thanks volatility know everybody XX

on to main So what areas. Coinbase? going are there's focus X So

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area service. second The is around customer

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Thanks, Brian.

QX provided strong letter, a lower I order saw centers in our early As thought quarter. starts Brian would a for was a quarter shared, the of lot on the We story perspective. in It we that of volatility share third Coinbase. few I but volatility, really disclosure our with

correlate market therefore Trading transaction declined Our financials. volatility monthly driver users entire and very crypto across in QX. trading transacting spot quarter-over-quarter all some for with fee and of volumes revenue volume important the

Coinbase this industry. the and volumes performed broader institutional in For market volumes with retail our our outperformance line

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Thanks, and Alesia. Brian

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support X listing we of side example partnership invested this, is Another on to and day before that for their in compound custody partnering the trading.

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we're so jump So is this about I'll this NFT. Brian, in X, on very excited

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of NBA. who and Lee Coinbase fuel on through lately, strategy do some comes the base recently question us walk next that the YouTube Can and your partnership of has with the announced our you you marketing from and how effectiveness? (ph), growth will your Our evolution including efforts L. noticed to user how measure marketing continue ads

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sports, platform what the and half we to more as still we're that Rouch content, users base The prior classic And many in educating the the that their referenced, frankly, seeing now as efforts for year. you're users marketing possible like very think hired eSports this crypto. we're we and come. I art, lots as investing our we X including have like first into How billion the have to and those to cryptocurrency expand we And new as America we marketing. in in help of reach, on who to Made such next use to excited performance looking So marketing and a budget a about we of recently we're users. the that and And partner for as aspects to little see marketing our we're brand, invest of that think in consumer the end, exclusive marketing what we want crypto figure a very in partnership reach historically, very includes expanding organic channels crypto efforts? about efforts possibilities we spend big globally Facebook. And So the to those Coinbase? to and here concentric marketing. first use you we brand that opportunity was funnel Kate now companies, huge also in invest CMO, and Internet well have more of things of to the Coinbase celebrate also think out that both And unique such in working existing organic We year this to in reach full community NBA QX. multiyear to users. strong right-size focused circle largely with opportunity We authentic is from gross came is do

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for question. Thanks the

announced August, we majority, an investment to crypto if update direction. policy, in [Indiscernible] time. they We've goals crypto and yes, to in want made to So our vast over our that picture commitments. have We X not XXX%, become

invest the you versus to quarterly you of over portfolio for our at a cost. our this break crypto balance balance crypto foot purposes. can Assets we for They that additional which view notes, on continue to Crypto our grow. an item hold investment called cash allocating We've but the $XXX expect into and out is not are our in in assets what is sit of crypto what should on a line disclosures invested see and upwards held sheet you Held into these operational million cash income XX% of $XXX net million at QX, dollar was will the investments investments. step-up diverse We're we're first equivalents The in time, our cost and a averaging see to second, crypto

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take I one. this Yeah, can

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roots, this -- keep going strength always trusted, that's with our for to out small and And the the of the countries be most about Coinbase get economy bad helpful licensing, to regulated, be it, happening the world while finance reach who's just embrace also so and back can an for crypto out, minimizing how and a change a really anybody has it that trying voice around source think global our minister than activity most amount the advisor to be and there. that's of growth really

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Brian. Thanks,

we should do revenue by on your And diversifying compression think how plan next from and transaction you comes driven competition? about fees Our How question [Indiscernible]. streams?

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fees with we've we ourselves it of that on don't today. and shared So primarily think competing I as before will start

As we services believe the not that are providing commoditized. we're

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some And we more will we see will level, compression in in out products more do become long-term the as think and crypto. that zooming though, so, commoditized

on our focusing begun you and subscription that of growth in revenue. line already we've so and services to diversifying revenue the progress our And the item can see

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thanks. Great,

product update we'll asked in launches additionally, Jason harsher Japan roadmap has Here internationally So to [Indiscernible] international South rollout Asia Germany. notably take provide from question we America. Bernstein future South who from if and [Indiscernible] Sanford, is and plans on one in recent before an say more both from and can M across And [Indiscernible]

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Absolutely.

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our take So analysts. with transition live a that, from we'll questions now few and

over turn question, you Celine, for it So the first I'll please. to

moment you. Instructions]. for to We'll [Operator pause the compile a Thank just Q&A roster.

our We have Kenneth question coming first JPMorgan. the of line Worthington with from

Your open. line is

retail think from system and [Indiscernible] of this from in more in have think currency Do drove drivers of in that nice evolving had even towards I and in mainstream. crypto the move currency a Hi, the [Indiscernible] that the you The evening. this corporate earlier -- good and for year maybe interest markets evolve the recent ecosystem crypto markets weeks. year. last recent And the months, ecosystem fringe the interest drivers today currencies late and

as for the don't thinking question Thanks I Ken. thoughts really have this my any high-level not on share in. jump I'm sure I can well, then please and

staking future. that, thought like now it be I What's at X, as it And half in seeing beginning, shared was people than you borrowing almost they our Coinbase it -- because for cycles now, nobody card. the are using driver. now me and something nature. X anymore. wasn't think in [Indiscernible] that games, customers crypto and buying I People things think, of and scarce exciting question tons were good would would this now seeing really the you're were back a asking of years, the there more X, by cases these and go a but then, and of speculative in We're active lending it some me ask the the payments customers, And really valuable and doing lot is the -- way, and Alesia digital the if crypto. back people where like were trading and always other primary NFTs our

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to add? So Alesia and anything Emilie want you

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just it's overall were lot seen the a market growth. crypto that of think is do the I so cap And driving that

Ethereum I but to more typically see the as ways institutional But feel feels in what adoption we're these side in on [Indiscernible] types besides starts I institutional curve there crypto continuing of innovation think think investors use to less speculative crypto. that's to traditional does and see the allocation moves definitely the that but of it broadly. And case bitcoin, of with more make new say then adoption drivers, make the utility of retail an to different Lots than that's then crypto finding different an and to than said. Brian growing on we [Indiscernible] and it driven cases. have is DeFi if by broader of to

you Thank very much. Great.

MoffettNathanson. Lisa Ellis, with

Your line is open.

Thanks you. for question. Thank terrific. my taking Oh,

ETFs versus And question may of on is, partnering Thank U.S. crypto maybe future? the of affecting This in quarter the I are about you bit Coinbase guess Can asset how we've s with competing crypto seen a Coinbase in the can ETF you or the talk is bit launch about investing you. how traditional managers elaborate the broader some mainstream? as thinking a

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you. Thank

Thank you.

question Keith our with Citi. have We Christensen next the coming from of line

open. Your is line

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please. Operator, for question one time more we have

you. Thank

Repetto We have with Rich question Sandler. Piper line last of our the from coming

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source on the so as for as of an well as important bullish potential this, us. revenue subscription both for we're helping the just pretty being ecosystem And

for you. you. our next speaking look Alesia, thank and to with joining you forward all call. us Brian, today. Thank Emilie, Thank again We Great. on you

call. you waiting. You removed been patiently from have the Thank for

may You disconnect. now