Coinbase Global (COIN) 11 May 222022 Q1 Earnings call transcript

Good afternoon. My name is Gino, and I will be conference operator today. At this time, I would like to welcome everyone to the Coinbase First Quarter 2022 Earnings Call. [Operator Instructions]. I would now like to hand the conference over to your speaker today, Anil Gupta, Vice President of Investor Relations.

begin. may You

welcome Call. and Coinbase Quarter First Good to Earnings XXXX afternoon, the

Joining Armstrong, IR CFO. are Emilie call is to me today's on letter, shareholder Brian today. all the and which and read our you've on Choi, CEO; Co-Founder earlier Alesia hope Haas, our I published had opportunity site President CEO; and

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

Our most shareholder our but Investor discussion for non-GAAP the directly certain comparable measures to Relations website. GAAP GAAP substitute letter measures. on Non-GAAP are also be to, today the addition include financial considered financial in references in not to financial measures. should a Reconciliations measures as will provided

using to to again platform the Technologies once questions. are post We Say shareholders our enable

questions addition, comments. I'll and opening take some In we'll to for Alesia from some it our over turn With Brian that, analysts. research live

Anil. Thanks, right. All

So the before room, is tech in our exception we down. are is I crypto no this a broader and market We're stocks which assets. to the of markets elephant that, course, the course, risk and just Coinbase worth seeing dive think it's growth that. of quarter, down into addressing results for And

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see be We also acquire opportunity when to pivot, big We during great greedy to others fearful. tend they others periods talent the as get to a able are because they discouraged. and get down period tend distracted, we're those

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down, of this the during period. think highly which really resilience being instance, had We're speaks despite of EBITDA market the quarter, positive well our capitalized this business. For we I incredibly

we So on the sheet billion lots which opportunities. crypto, in us balance gives of cash have of over $X

doing something top of acquire are than trading actually active I to other As bring using in crypto in continue to talent, users variety -- they're companies. of in bring just crypto, XX% our a the ways. now said,

in are primary our majority of a the enabling trading. other well. The last few economy gained active than we've and core work. the talk been about we fee now trading about people, in Despite the being been volumes And ones XX%, but to the like the Etherium, and so were to that, the case. something of down including actually just is financial being share. but well, as moving really about starting trading entire down quarters being that yet that platform from we even doing really And support, compression, preferred trading itself and thesis crypto it's business that our we XX% doing away in users a assets past Bitcoin There's macroenvironment the lot hasn't seen in account the

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about And So I public ago of we anticipating -- well call our towards our this our think last and this some executing really that year, things it we're out a read of from S-X laid just earnings when actually year of a want to we kind goal. went I quote downturn. sort talked in about

cryptocurrency when given long-term So always the perspective doesn't the phase may cycles crypto high, quote We goal money the revenues are our us being. company are is that roughly as operate "You of smoothed we time time volatility earn because out is revenues a low. for over adoption. financials, But on in profit to This price our we're breakeven, a industry. can lose expect taking the may the when

who in to So and mission will the cycles." continue and believe hold course, invest. is investors price through We this this days early of are of are long-term to going our looking industry, for we

markets from you what in opportunities I this doing that's matures going being key we're to now, for consistently to going the seeing to be Alesia, we're real to very flip we're being going up a want industry exactly to But profitable over regardless as be scary whether of to or is the profitable. add? down, and pull As more keep mentally environment. building. the market think time, ahead company to and And actually down is anything

we conditions. is definitely would to market deliberate I and Brian. it in QX decade and be we of to down from of is volatility expected this said plan. to last want news that all of And manage is of how have type range good we to planning considers experience year. very in the approach a QX reiterate within just positions we managing Thanks, our this our considered market that that Brian through types XXXX the of And that

over want QX about to talk our I So switch and outlook.

the in particular, observed softness towards QX was continued saw letter compared So cap April, of has at Volatility in QX. its and down that tail crypto both we level that since lowest we've into volatility to with end market the we mid-XXXX. note our

April X.X MTU averages around users. million Our

volume trading lower as transaction result, MTU a to approximately Our both billion, the QX is expect lower than levels. QX volumes we have and and $XX

terms our subscription anticipate In similar QX to modestly of and services, the we as this lower being levels.

Sales expenses growth in On expense as transaction to the we teens the the are marketing recognize rewards anticipate will primarily be to mid- and side, by plan and markets, billion dev through and growth. to low XXs, G&A between $X.X that our $X.X certain the of volatile be driven to we revenue. navigating net continue in of to blockchain high long-term drive percent a tech we range invest and and to and revenue, We billion. in really prudently

getting million outlook a the As to XXXX $XXX maximum a aiming that period our our of building a for of focus to product our downturn. with building assist largely our even low we of manage well are its historically are of volatility. And EBITDA the experiences and conservative resources, we our in such, market and return on great user market. and if to ready brands unchanged. make is And continue assumption multiyear We are for we balance up our prolonged under we base operations believe capitalized sheet in to spending want loss, that I reiterate adjusted planned to a

to Anil, let's questions. So with that, go

Great. Thank both. you

wanted get before principles. our So we into to reiterate Q&A, I Q&A

First, number on that together most the upvoted the we the themes. touch and questions we'll by group same answer might determined shares of some questions

in to the related questions answer are to we'll plan past, the third, no And assets. potential we've don't answered we questions updates. Second, of there new if listing avoid

we issue For still dividend. a don't example, plan to

So here, investments a the exiting or George strategic about how think merging advantage asked there. in we're Noah Robin and asked two X combining we R. about is see first if or monetizing the we The about with question made Hood. M&A. ventures P. top questions. acquiring

This is Thanks the Emilie. question. for

So we on on speculation rumors don't comment transactions. specific any M&A or

the we that a in do we building securities think is traditional economy question platform. crypto of a is freedom. crypto in company, actually our service more increasing owning advantage I of about economic strategic Everything DNA. and And the are crypto the was

us offer also unless our I would about to more and a we opportunity great strategy traditional don't talk adoption. help invest crypto accelerate acquire is plan to this broadly. So securities, massively think somehow this

products world, side, the Dapper be venture of we've We date. we very made the Uniswap On to than differentiated potential, metaverse. with overall support TaxBit, to the and grow goal we crypto infrastructure, Labs, we're investments a OpenSea, are teams and in look companies tons to ventures lot companies and protocols, for Alchemy, will of more get including insights. in, one XXX WebX The CeFi, positions time in their and the economy to of think working ecosystem we corporate these the in best and active have and NFTs great the is and DeFi, of proud the and spend that minority Compound, to investors We invest support growth. most and take

that we're XXXX. care the generated with returns also we've ROI, We about and since happy

we Google of or be crypto Facebook pillar, monetizing most companies through the the plans. it are portfolio Dev, me have those whole the our in which focused that can on any supplement because in just most accelerate back would That selling companies them me, of or we're acquiring To second having promising don't periods. great For having sector. part, like we held the and intention stakes Corp long just large a then bet takes tech long and on day very the to is or

of goal and/or pipeline secondary ventures partnership. Another is M&A

is Coinbase have like of of then the entrepreneurial running Tagomi, well and as great The foundation example us all the of companies this So them out important as Cloud. the of place Xapo also Ventures. We've Coinbase in who so to we parts an are #X prime Bison the turned teams space Trails. a the through foundation our helped become invested of custodian as that and for final We this business. offering. acquired acquired in benefit which They early is be we crypto company, incredible

was mute. on I Sorry,

their can been NFT far a is for share on of The progress? investors sense metrics about second activity the question to the our pleased Have thus we marketplace. Any get platform? we with

Yes. Happy to share an update.

are the strategic I've gotten engaging think I social-first from There opens customers customers. lot -- results so some reaction in our really on approach for with interesting with really future. opportunities being sale listed We've general, the up far. really to a positive inventory of in and that NFTs, really So been pleased site the

opened been waitlist of to slowly really recently in invites So terms our from we've while. just And up the rolling a adoption, we then out beta. public for

which Coinbase course, Wallet. channel of app, actually NFT our is haven't and through connected our yet though, distribution into product We the main main retail really

metrics enormous. about do then be of bets we're the And a just in we'll -- initiatives. So new I don't lot our to to share venture future. any our looking NFT of build near But space there's the is that really any the and not that we internally can opportunity say in

So And have want to to do in lot the the directly features a own add, Coinbase planning there's NFT buy in or possible communities NFT credit account, your ability token-gated tokens, we piece with of to any for today there's their drops, which mint people we're funds card just that the currently to option isn't your app. main support. even you

centralized NFTs want to really sure more decentralize and chains experience embrace minting we NFT don't the native support People become across and time. the to We more over want and on-chain NFTs also and a change to are protocols make experience. continue more

it's overall, a mentioning we're I've collectibles, space. long everyone, in also small think just beginning how the is journey. it's just reminding not at NFT happy I And gone the that collectibles. So it's a to digital only this probably of fraction what still We've artwork going or do think really and been NFTs worth I of with

role in in I proof to in digitizing attendance world, the even play the metaverse, And events, identity. world. real music, items NFTs are going decentralized think big and like real estate tickets of a in in real to even gaming, maybe

it. do really We're the to to keep Content space. investing in lot a in going is NFT NFT So exciting.

how Coinbase c, you and from investors the meaningful to comes Coinbase's shrinking; a what's related the N. competitors? can How clarifying also biggest narratives who revenue. question Tom then a, competition to next Patrick asked vision job better And as that? would our major W, public? He Our competitive we therefore growing; asks, are fees other moat versus trading no has respond do is observes general b, and

Yes.

So question. this big is a

turn over off me Let Alesia. to start and then it I'll

be I economic we to really out, believe world. infrastructure the been of fair can and vision increase Coinbase, mission, to just invented. So people world zooming freedom word, the is that's mission with good is enable more what we is to over technology different And new the but world. for this our use the create the economy well, and that Internet-native, in And it this unique global use a all for financial used free along cellphone, cryptocurrency

sell are So crypto want if creating lending novel active mentioned kinds music, is as Coinbase ways. and the also doing with the that's then And spending crypto. opportunities. And and there's of seeing primary play They're and probably And to brokerage, and financial using people assets, account, yield all help earning the ecosystem that now money in crypto, the to to increasingly, economy. there's of other use with merchants primary people of you going accomplish. all over users use earning and but earlier, of kinds for are games of already our store crypto are them that all art, what them on buy we're out. to it's wondering, these with than going it of vision they It's they're apps, decentralized their third-party I and trend And new Coinbase be and something things access card. of X,XXX or stuff applications doing, social course, things. XX% what borrowing They're money that all this DApps, a you're more. we world, huge with as trading now it for that in not way just the crypto

So in XX economy e-commerce, like birth forward Internet, e-commerce this is of where fast XX% that, global XX like my probably like forward you of years the crypto And days to the saw represent or early think, a is portion here, I late the of a is bit and global XX% little the early from going you now years, I the GDP. mind, in if 'XXs GDP. fast large something of XXXXs, think

can that create so reality And in Coinbase and a world. help it make vision the

our of I moat, question So competitive main about, the a terms think there's that of in about. which also couple things asked

comes effort ease it comes our big and crypto more work Trust we're is of for securely -- use down trust us. concerted storing around compliance, world. go It down moats So really for customers. with to to cybersecurity, the are policymakers a to

us, they a crypto crypto amount trust go think and moat. the in only go of they use I Because of ways. store people coming that with industry, Coinbase us, whenever so has that really And most by It's crypto trusted are company Coinbase this the new environment. and people they longest. variety into then when starting a the users. one we're generally want when such the a around that's crypto public that's the basically, of a has their us, then been crypto store large in with they defensible use to And with a to people number most is

it nice defensible kind so a position of there. has And

is use. ease other of The piece

want of still is really bring then crypto billion it help complicated what and in the do eventually, and to people very world. the people So X is to majority we

that benefit make And how people Internet don't to so to it -- either, most they're don't keys -- people applications it underneath, private or anyone. how electricity because understand built but understand the able work they have there from or exactly but accessible works

platform we're use. it's And I the so doing, that And really big thing piece I'll say multiproduct of company. way. trust other last guess a is that's Coinbase that in the and a is a ease

over They'll many better integrated. products even be our of So time. are integrated well

buy use so easy -- you Coinbase products, to like us with later and of with and suite you that start NFT it's it crypto us things makes then think, have out other you a us our see starting. of the and in If those stages, be will unique little I bit maturing some in that you'll revenue-wise, will just ones there sense be

that narratives point and you, other fees types over pretty a me and these about company unique to competition around Alesia, mentioned view makes that some well. it were some maybe it talk of as trading turn us so from And let of revenue. of

Brian. just we that and is what bases, users, Thanks, our want to products platform our said, and suites you institutions of user just I are a that around each our services and retail underscore building which of we're developers.

do largely we and solutions which for the increasing against is offering. adopted while we competing out we out competition, we there, so our have one crypto no welcome, platform And be every to is every human business see But competition breadth of want the point by there.

our have if with of route institutions, price I you smart custody, our solution. suite that's through we in and trading, for products across route compete exchange. provides exchanges, come at then include ability ability exchanges panel orders custody settlement from integrated others example, and all that your So an see Coinbase we to on XX back you offering our that Coinbase Prime look the broker the our storage Prime solution. you're That integrated venues. more the Broker trading to always means XX the when because can to if [indiscernible] But being Coinbase and platform. want on to different trade trade that to than This routers through to find best you're price our is best our to from liquidity guaranteed and just order cold direct go There's a other where different

example So our on in our our use many how offerings both this of that. and people Not experience of crypto. started we we buy differentiated to we serve sell with retail, compete simple is ways. the breadth customers a very Similarly product app really and an to retail offer

different of platforms. number crypto You exposure a can get on

talking users use be benefit utility really you their who once that was as buy However, by able seen what that to Brian crypto about. to our want we've

receive then transaction Coinbase, all spend card, those can time in using we have can our a those with these really a looking assets. to of on us they into assets, transferring seeing loan [indiscernible]. experiences and we're differentiate credit point-to-point bringing and they we're they're one what users assets an of that And increasingly, provide they will So believe now we platform, their yields, that against assets easy-to-use is their wallets stake against easy-to-use into their way. earning a competitors. single And so over platform on We're those can all XX% on

be why focused that that Now, to so diversification. growing to to brand to to we're want it on I then and promise speaks us our speaks and to fees. [indiscernible] trading back use bring

our fees actually, Just actually not have declined.

In fact, rate blended X over quarters. is up fee last the our

Our transaction and previously revenues on market, the we crypto absolute volatility surprising in we're But weakness not that are talked down basis which not competition seeing fees. reflects price QX, broader on cycles, is about. an in which the given and

and We to we're we focused seeing platform. speaks different Coinbase and product, serve a are products about want more on to more We've to users and our models the And to we're excited that announced structures. that use that on why best they One, as with the find work experiment price our subscription lastly, opportunity continue diversification. price revenue

We and invest are streams. to diversifying to products drive new differentiated our services We're continuing revenues. in revenue

net XXX% roughly services our and million accounted XX% of year-over-year. for revenues increased $XXX-plus revenues in total QX subscription Our or revenue, which of

new staking, XX% mentioned, we with just The add those where to I continue of beyond Cardano are largest As in assets, this and April. is additional driver added products users of engaged we'll investing.

the think excited NFT driver but growth. it, future we're we the a we launch release, Lastly, Beta, and will of general be opened of on to this which by touched

using will We're for Brian we to more trusted platform. conclude, we adding So to said. ways new are assets enable by products and platform, this users compete being as in to and engage a

shareholders from would is biggest question value know to next we see next the opportunities as what to several like drive Emilie? over the shareholder Our who years.

Sure.

term growth and often to how the get base the our over long allocation and So we do that. how from from investors, we question we're drive about think resource going revenue expense

invest wallet type financial map take as investment, me as time also of given speaking. pillars. things strategic moment we We custody X first more another allocate This as those around like let the any would crypto payment our of in new rails. budget and system at and core expansion. So products we pillars, and before, our crypto to activities talk and XX% mentioned platform. a assets include Then to about a roughly crypto international investment pillars And as X new expanding a such to trading, such listing XX% an as

users for We to would in monetization. eventually in entering is we which made map our roughly Wallet, as to Cardano we which So on And listen strategic products expect longer-term and QX, of long-term market gateway to in of that. customers then allocate XX% and impact see we growth coming we should to most understand we the example, also best NFT Staking that are features quarters bets for important retail users, and WebX, engagement to the from finally, revenue a and make to our and available such budget the the then marketplace. products. drive those

leads which of This for example bet I is be an over Xapo during to knew began good that a crypto to several crypto made then public product. us Coinbase we So was regulated helped an We what the a this institutional think years become building important only this we been the a and ago, Custody, going acquiring custodian. last point, on is which is has a winter. And important little largest now year. has this

incredible for be than of real seen. crypto terms lesson first And the following strategy signed at that is the on of things point. this about the through the in thinking this cycles. What through others slowdown we letter might company a which do in the which Coinbase and It's many focus peak last me started personally around able December attribute long-term and has for was for a XXXX, not offer of So think we you been Brian power weather can crypto in to market my how kind rare cycle. story, to falling. promptly, of helped decade you've and we is was It this for overreact. that's market And the execution. think why And an you control, more being I storm. me I

we business. our like is that the decisions our onboard and more users, don't on great focused underinvest we executive We future and maintain build product the That's jeopardize We're strategy. business So grow vectors products. making Wallet. We those and short-term growth team in big what need We generally. on. we make investments. conviction to foresight don't

that we to Now pursue. be imperative recognize it's said, that prudent on the opportunities we

in so that, And going we're rest resources. to going fixed to want And of other if always build headcount do anything itself. or we to of on flexibility add is care that? all the Alesia, around you take

everything But have and Coinbase you Thanks, with proven it's that important we've We've Emilie. strong little economics, unit can demonstrated I unit we profitability our and economics. profitable. that about agree think share be I products a core also said. that

delivered XXXX. For in adjusted billion $X of we EBITDA example, over

the we that in choose over business. confident highly profitability are We reinvesting could

investment. However, we chose

our As to with multiproduct XXXX quarter, investment base. we that's investing that year. of is shared a choosing an we becoming are to you diverse key believe make because serving a now platform, last future customer we And

profitability, could key chose on of derivatives, the NFTs And focused these have more slowly large this as we we could is have and process We examples. have on but some bets expanding growth we international and to and make resources. done deep Wallet Coinbase the on more functionality sequentially, so going year moved

we managing confident through a diversification revenue at and will investing have now, valleys, our the conditions engagement [indiscernible] business platform on are go disciplined the peaks market and to opportunities and in We and change. our future the and through expand approach

to that investors do do we we've and profitability, that on the focus think the made really important the growth consciously I ability so to And but it's understand have chance diversification. have

next is India. about Our question

on halting recent the So have there? about in you some Brian? And impact Can the transfers shareholders the are your expansion explain what market? of in will UPI India. plans developments curious that

an Yes, on sure. that. I can give update

the lot -- on There's and launched in ramps of may news, in missed in X, you India. economy. those So crypto Coinbase we there the amongst for have India interest of into in so the this people crypto who a April includes

was And had example strategy. international our we called So UPI. what's an great a this with of integration just

days that pressure in the the So a can't the there, including there. And up positive a Treasury Court few Bank on some of market, Supreme who UPI Reserve be India, there Reserve crypto, the we of ruled disabling to of is from ban elements India but kind is sense because don't launching, which government are ended has after as they that at unique seem the Bank informal it. of in India, equivalent

press, called And go preference there. ban," interesting UPI. that pressure work disable so if it on it's have focus try through behind and might to the they out be to just -- think our these they is in which But to with relaunching. may be be I to been actually them I would the in guess "shadow they're a basically, going concern violation applying of of the were which Supreme Court to scenes find soft some we payments, really a ruling,

And other to going methods the number path there. think I have with that's that default path there's forward. of we a payment relaunch

theories So with live along a will a hope relatively of that number be produces where zoom our in my action minute, back is my here we short of to out expansion India we're order, other that information. theory guess in one similarly. and just pursuing is I countries, for international

of really of AML or everybody about lack in are thereof there's to people of So countries teach what kind over as of benefits. The go states the of meet a these are to with about policymakers education it's go capabilities and world around not and lot positive is crypto. them want these world, the all clear kind varying And what we the crypto. always work countries the generally

to the exactly not discussion world push that taking we're time so by going way we is why action. how comfortable received, go free we're democracies, launch, it's be going the with it this. to but is had. launch to And if the eventually to because is to to forces and we're going regulated be most says legal, get and -- me, places in that sure the that crypto to forward And take them be reaction the to going conversation That's it's going going even for to

Now talking is the in India. it about press

Now to are we the going step. there's to how next about meetings happening talk that get

generally expansion. with our approach So that's international

Our is hurdles anything there principal we growth, the are Coinbase provide next shareholders to What Are update functionality Cloud. for principal question education, What Brian? can there? or else? hurdles? about other

Yes.

if That space. neobanks, I'm you Cloud, fintech Coinbase just customers zoom startups. are to they're about by new of nonfinancial even it. such service mean, how I companies, means funded not a in it's And service financial market. their existing about. there's are really to actually There's Their WebX applications build a companies, being that they asking just So startups accept the crypto excited integrating in this want coming traditional way, for is crypto companies, lot again into who And just all is or crypto. companies. integrate thinking crypto they're payments out,

of time like reinvent to need building the like some way companies lot to and way, the using use I Internet or end technologies, needs needs lot XX in store make up how core don't NFTs think of all index way securely, most mints and it's the of and most analytics sync, It's it. energy help shape a need and stake has think, accessing to how out that last sure a another compliant there. almost into form actually a they're the in I and blockchain segment to companies spent to done that now, to the like the in to they of -- that's metadata staying all the years And going do the Internet connect crypto how over these wheel. sure future. crypto So same make are in to how in companies trade be crypto Coinbase and blockchain to

we're they so to a do center, And going to can for want of they're going not cloud hope want Coinbase their same services they're in of use externalizing they decoupled had use Coinbase these products makes architected many competency, the about many through actually and the product. data so over any crypto and going but cleanly also for can a way, basically, crypto the in like And that to companies, -- I The in them. run integrate it's process vendor. to things of transition many to years, third through also education them Well, way use my unless question is robust. core now that's services to think that asked the where of products, growth want we've is competency, core them, product to our them and internally our It not don't party building these our Cloud they have their their is own way better that that. use that in in internal for a a

developers. common are everyone. from engaging interest the elective get need to the computer product see exciting there's a ones. in science of sponsoring we it's -- first, is the developer amount community hackathons, first indications, course, the around various good and we most of So today step. world, the to countries I like X functionality biggest the some just with that's to mean, AI in started crypto programs By pretty But

existing and picks as crypto integrate shovels rush. So think we're going to and during the this companies more keep companies just more it, built being I gold sell and

Great.

some let's please? up, start our Well, questions you analysts. live Operator, switch from Okay. gears can and take

comes line Your of first the Pete Christiansen question from Citi. from

acquisition color if there. of is I hoping was just could cost qualitatively account looking on you funded how retention some give in

look are what know year-to-date cash is a sheet differed there's from balance where And is cap reserved and I you now. finally, like generally, now your its seeing of year? looks right there. X/X Just market more there than lot I they stock? last firepower repurchasing trends But point of and your then consider how would Coinbase at And perhaps a

the Pete. for questions, Thanks

letter So is look let funded that metric to We start way on funded at give on but shareholder color could the at look assets specific in platform. our with don't accounts, think accounts. me our on just a best I you

$XXX So were $XXX of we and $XXX billion with platform, were billion retail billion ended on of QX which our institutional. assets

down QX is QX. roughly million, to that Now $XXX off flat of but it's of

XXXX funded of well beyond. between had as in and and QX see QX is in of earlier higher you'll so what And growth from there materially XXXX, XXXX as accounts we retail

about market continue on crypto. to lending our in your for With the about borrow margin, to question using of on on buckets. off sheet cash of we for balance retail use growth eventually the retail institutions use We crypto and sheet, funding to portion providing balance facilitate to total X for cash allowing we're the trade So to we regards the essentially bootstrapping, see second our funded by think our it we accounts. cash needs, potential lens operating our users for platform, for it our backed our loans risks a self-insurance,

is of that a that growth for And us so vector cash.

made capital to the shareholders any have that prepared to a of not I'm return form share dividends to or either today, buyback. in commitments We share

All right.

the Ken JPMorgan. queue Worthington is one Next from on

My question to love extending on can NFT maybe platform effect it at on least the network by and be up would opinion I users building to and earlier follow inventory. here. the getting measured the is success,

up And So doing maybe list be you're mentioned it. marketing hoping see flesh to I more users. on attract the of are that to social strategy inventory e-mails part can things trades. a to customers projects commission-free We fleshing But sole engaging together you each now big you're other minting, steps on you how to to was then to taking get with trading, users you then maybe build with the And out. inventory? can common crypto seem the hoping network getting that developing the to drivers with platform cleaning flesh effects to projects a the what powerful Wallet globally? the on I'm up list platform, to something talk of lots could of the crypto about Coinbase So we your NFT here, together but be are here, going build users? the and platform and platform the the also of side, on there could seems the be either are you the platform? out It out, those the to existing would

Thanks question. Alesia, and then free anything. the feel I'll Yes. off for start add

features correct. traditional social and There think to the NFTs. in I we've that a So is effect added both network here, sense you're

ranking And get there's basically we prior that's there. coming But activity there's available and -- they one that put a where And permitted and there's want integration, if and would I'm better pointed sure -- on may customers a on algorithm but crypto chain people time, data will really, over it you that is recommending as has basically where liking out in there, already in discussing to their I that are it so also it content which site many, is on then Coinbase NFT better not which and today, call their publicly and a be they see network that, there. many bought customers is network that's that's out, would certainly it. you store it and also where but effect effect, based could which vertical call

much or so their to, extension if crypto an like application, and if Chrome easier then then move it's just crypto another a to click easier it would a And than that. third-party was store using there, be something having they buy connect NFT to one wallet much their more say, just to it that

is we your already crypto think you're more piece, existing road absolutely and buy one will on we powerful. map. I click leveraged then really -- so our distribution, where products And it, natively actually Coinbase, If to just fully We the the integrate actually that our part correct. app haven't was this be NFT this our just can it's on it's into

Olympics, there's You a some instance. number and really touched cool I during for the product marketing mean, efforts there. of on we certainly ran ads

the of our around some I certainly cool. it. launch think really I was marketing liked

matures. like even really But also marketing, the of functionality want. majority that think more haven't feel can with I there's especially we do the we I built lot we a as the product

And marketing is leverage base. existing you to a alluded is And add? bit. so product matures we'll want you user do Alesia, let's can marketing as the going powerful. I we just what dial anything which Emilie, best to really of little up think the be to our kind That's earlier,

said. No, that's think I all

Yes.

right. All

line comes question the Lisa from Ellis of MoffettNathanson. Next from

Terrific.

position, a meaning much through downturn coming is, competitive year actually stronger further, this now, having it? just as the a you position seems you'll you you discuss in downturns competitive a sheet, mean, or how sitting lived from cash a than Can a other much like players very these unique painful market, balance how before, elaborate the of look in the talent, out a et anticipate as out, bit say, that emerge stronger in Coinbase As one cetera. given on like I of in they're lot

off jump in. I feel can start to free Yes. and then

quarter people So the the this in been then And we enough I mean, just of are in of through down the look, markets, exuberant. kind I And think pulled are people like young had we've remember, these is irrationally pessimistic, irrationally market markets, X right? where where back.

invest. cash continues something that. kind balance something will mistake. we distracted. a I a We've seen been running can -- be unrelated. past, X real like And people sense if it or pivot get that to street we've we or that for discouraged. seen companies think actually do here, in seen our of big there'll that the quarters say in like In blood does I give We've get us the to it's something continue advantage generally And to the people try

like different environment. how it's honestly, So somehow to I and we're allocate periods. pull long-term like us It's -- we down focus I the how ahead better rigor plan in the we this feel in operating allowed in in scenarios, really capital

upmarket. they've joined when in And that so team I on lot is really important, of team has -- since joined the think only was mindset our an a crypto coaching because too,

first get cycle, have their and ones the And less level they to less of see it are oftentimes kind so and at deeper a then people scary. future

that that that, was already is in we just I think expand scenarios want for. this [indiscernible] planned important I that to range of the on

do outcome of so the products regardless And When expand when for our sitting we committed be to to market acquisitions than market to a are powder alluded winter. last is then we blinder we'll build to right think in we dry is. Emilie the bought and products, our companies of prepared strong the well, the they're other exits, both the at us because then down Xapo needing that be gives that users We hope are long-term serving We're will be and committed And end great put little the as we building Coinbase. great day, of earlier. a map. what strategic on to that road bit organically product crypto inorganically. And

market in between last private multiples just company a and for revenue that mention what I investments a gap big we're us pretty is seeing Yes. crypto thing guess as I'll there's currently. public

And think so middle to reality probably I the in needs gap that of somewhere close. is probably

directions, see the so for that anticipate in so both corrections or we'd And over that private in probably next frankly. or markets year we

M&A So kind will of take through as and move outlook as could I markets, to some on time that the that the front private well. change think the

Next from Will Sachs. of question comes Nance Goldman from the line

you the all business a color on on on have managing question this the in done. the that appreciate guys ask I your thoughts wanted -- macroenvironment. hiring the just I

of year, the then losses quarter was obviously $XX to provide So to know any additional I'm exactly guess this -- related, around How no have helpful. the a wondering people I color the something the part where you the at number bit these kind a the they this off, guidance to? strategy the for -- X,XXX question have? I'm large this kind run very I what investments out you for people plan earlier just what was think stood and relative around is rate EBITDA more being mean, than guys of like are for could all the like little where the And talk One get on doing? we the think of the that about -- XX-XX-XX, diverted started ARPU which I lot you're more you stats of mistaken. we million, negative I in Could But on just X,XXX if beginning million report year. looked investment talked color quarter you And it's of it in allocating? are are you and me not just It the Emilie I $XXX guys the actually the but could strikes if a know added. is exit

the how just of where close take So loss? those of kind from remainder to actions to mitigate color are would year? to on And the having the any for we come

Alesia, I Thanks then can the you in. and don't and Brian, question, you Why for put start Will. -- can

given to thinking matters products be think So we're time design. goals any And about we the and through of headcount we offer. at because that we reason possible, as at roughly composition done way is company, about suite about the headcount, XX% the And nimbly in what when adding -- then level, highest our of headcount. them aiming being the amplify a we product think product we -- headcount, the we're for engineering how about technology when of of in do automated speaking, addition and want we how things and as a we the are think

if as we use then trading to the folks then as we and able build map and layer to and be to that of we And example, possible. do retail as want trading design institutional such rest those about power them to of we one you those them, services, how XX-XX-XX mentioned, engineering X,XXX of efficient kind services trading product be the think split against things. For

us the grown and just we up of things right invest requirements as other that mention, The on is regulators. ever building know think relationship in scale I'll pretty one us sure And it heavily making reliability is the thing have new pipe company, with regulated other in, as solidify our is and we thing customers we increasing compliance. important our to and I we're that, the and we've that infrastructure is, helps then a because Alesia, scalability. that that And

matters. that And Alesia, so that's another piece of add? headcount anything to

just the address of Will. part the ARPU question, I'll

you're So correct.

there's at, been can heading we're date, XXXX into our on what that which the sense gives that look hit you shared to on and a has and chart letter lot of ARPU has high high exception fluctuated that. we XX kind we it XXs annual And the As month-to-month but XXs times, everyone in shareholder between a of of look Page with recent of on of you was of kind a levels. all-time XXXX, the basis, take at can average, a volatility, see a XXs, an kind

expenses amount has levels BPO volumes kind down, materially crypto at obviously we in the our costs, but our winter of disposal hasn't high So we've slow changed and We we it at have given hiring trended from is other QX, very spent that the of seen. levers can ramp. which The the CX were that a XXXX it period. time our in fair

as those down And temper. costs will so come volumes

EBITDA spend around need ensure we We adjust that's also what do. hit cap will that can to we have other levers variable we cost other try million if that and then $XXX to that

we one time for Operator, more question. have

All right.

Our final from Lau question will Owen Oppenheimer. be

two quick questions. have I

adoption and the Lightning talk Can first the like Lightning And you for step is potential Coinbase The penetration? about is, Wallet. Coinbase So one the Coinbase of measure the next one on How and exchange how Wallet? and will success the Network? participate potentially Network the in Network then the second do Wallet. progress into of integrating you

Yes. on can off start I that.

X it's support. a we of a innovation layer Lightning that to across X Lightning lower would don't we layer Bitcoin, is solution like with for of those blockchains. really for course, variety payment know, for improved So think solutions Network And a fees, Network, important There's, who capabilities.

we're well. And lot of X a interest has solutions Etherium just so say X some in seeing Layer And customers broadly, solutions. layer from as I'd

dial-up it important of in as -- utility and broadband Internet could I the moving think terms the be of as could that unlock. think to it You it applications as from will new

every Network out X have date but our one of working share layer it's ones specifically, solution to you that really about our map. with to integrate Lightning a certainly specific customers don't road we're on hard want. We So the there

about measure see, we success. Let's Coinbase Wallet and how asked you

in like business. a at that. of crypto to monthly transacting Wallet, lot that Coinbase things we on amount at give we So our rest at doing And there's look we're Wallet. of revenues, we at similar MTUs, Coinbase if metrics look look look the users, that's custodied we

now, link We so that extension mobile that's can out Chrome your a directly wallet. have to

can it. You Coinbase your Wallet. connect ledger supporting new to We're blockchains through

browser for process without making the seamless up out desktop there. making want the crypto people it science We and on doing Wallet to buying it have app secure. go similarly, connecting topping then applications it's then of to it whole web making third-party that sort connect -- to using to mobile through are needing a and of an app, they your the to on to wide new sure like or and access both to world computer through easier degree that And

clear. less regulatory don't their exchanges forget environment like to And even things custodial people we the that, a to crypto or in of Coinbase first decentralized It's use self-custodial people way, in out on first it's including is Wallet. our going for the is like of coming happening very lose there. that or Wallet, lot Wallet do to us to in NFTs, accidentally allow functionality because the and working retail allow where support stuff DeFi wallets, funds and the think wallets lot a I is important so their to the launched emerging going things firstly and stuff decentralized password services offer Coinbase and a with we're more same Coinbase Dow's only one latest self like NFT, with markets, Coinbase anything And most app of we

a investment that. making So big we're in

and focus MTUs a that use the be trust all anticipate like we think bigger core on, you to I and time. of are ease just our products anything of want add? things to that over Emilie, share of our

have the investment WebX, only to thing do that I that's that think a the long why the making it and will to thing the end is think gateway we really the and that term. I'd we do for is just belief with such is right strong

Great. call. you you on to joining look today, next and we all Well, thank again speaking for forward our us to

concludes today's call. conference This

disconnect. may You now