From Nasdaq
February 13, 2025 10:00:15 pm:

Coinbase Global held its Q4 2024 earnings call on Feb 13, 2025, with key executives discussing the company’s financial performance. In 2024, total revenue doubled to $6.6 billion, with $3.3 billion in adjusted EBITDA. Subscription and services revenue grew by 64% to $2.3 billion, with international revenue share reaching 19% in Q4.

CEO Brian Armstrong highlighted the growth opportunities in 2025, emphasizing Coinbase’s positive adjusted EBITDA for two consecutive years. The company plans to focus on revenue growth, driving utility in new crypto categories, and building a foundation for future growth. Priorities include expanding trading offerings and being a preferred partner for companies entering the crypto space.

Armstrong expressed optimism about the mainstream adoption of crypto and the regulatory clarity ahead, positioning Coinbase to capitalize on new opportunities. The company aims to be a key player in powering the integration of crypto into various industries. With up to 10% of global GDP potentially running on crypto rails by the end of the decade, Coinbase sees significant growth potential in the coming years. Coinbase had a strong Q4 with an all-time high in U.S. spot and global derivatives market share. They plan to accelerate asset addition and make USDC the top dollar stable coin. The company aims to drive utility and scale foundations to lead the future of crypto. Q4 total trading volume was $439 billion, up 137%. Institutional transaction revenue for Coinbase was $141 million, up 156% in Q4. Prime financing product had all-time high loan balances due to strong market conditions. Subscription and services revenue reached $641 million, up 15%, driven by higher asset prices and USDC market cap. Expenses were $1.2 billion, up 19% due to higher transaction expenses.

Adjusted EBITDA for Q4 was $1.3 billion, with net income also at $1.3 billion. USD resources grew to $9.3 billion by the end of the quarter. Coinbase One exceeded 600,000 paid members. Outlook for Q1 predicts transaction revenue to be around $750 million. Subscription and services revenue expected to be between $685 million to $765 million.

Volatility in February had no meaningful impact on Coinbase users, as retail users tend to hold for long periods. Regulatory headwinds are shifting to tailwinds for Coinbase. International business is booming, with Coinbase potentially being included in the S&P 500 soon. Brian Armstrong, CEO of Coinbase, highlights the diverse revenue streams and growth drivers of the company. Mentioning the retail, institutional, and developer platforms, he hints at upcoming projects without giving specifics. He emphasizes the increasing utility of crypto beyond just an asset class and discusses international expansion and M&A opportunities.

Under the new regulatory regime, Brian Armstrong is excited about exploring perpetual futures, tokenized securities, and equities. He sees potential in bringing trading volume back to the U.S. and making trading more accessible globally. He also mentions prediction markets as a way to uncover truth and discusses partnership opportunities and M&A possibilities.

In response to a question about market share, Armstrong mentions hitting an all-time high in market share for U.S. spot and global derivatives in Q4. He emphasizes the importance of integrating crypto into various platforms to drive global GDP on crypto rails. Coinbase aims to power this integration globally, distinguishing itself from other platforms. Coinbase’s developer platform is seeing growth, reflecting trust in the platform and a focus on expanding the market by 100 times. The company aims to increase user experience, platform stability, and effective marketing to gain share in the long term, despite short-term fluctuations in share due to market trends.

International derivatives are gaining traction with lower fees to boost liquidity and trading volume. Coinbase is focused on building scale and market position before adjusting fees. The company aims to be competitive with the market while maintaining a lower-priced product than spot trading.

New and resurrected users on Coinbase are attracted by new coin listings and effective marketing, with a strong return on investment in customer acquisition. Resurrected users reengage during peak market conditions, while Coinbase One users are more active and engaged across all platform products. The company sees opportunities to offer additional products and services to customers who may not be actively trading but hold crypto assets. Coinbase CEO Brian Armstrong discusses the importance of market structure legislation and token classification for the crypto industry. He emphasizes the need for clear regulations on stablecoins and a strategic Bitcoin reserve in the U.S., as well as fair access to banking services and self-custody rights for American citizens.

Armstrong highlights Coinbase’s consumer acquisition strategy, focusing on the platform’s trusted brand and traditional marketing efforts. He notes that users often start with basic crypto trading and then explore additional products like payments, staking, and borrowing. Armstrong envisions Coinbase becoming a primary financial account for users participating in the global economy, as crypto adoption grows. Coinbase President Emilie Choi emphasizes the company’s competitive edge as a crypto-native platform that prioritizes regulatory compliance, security, and user experience. CEO Brian Armstrong acknowledges the growing number of tokens being created weekly and the need for integrating decentralized exchanges into Coinbase’s platform.

Armstrong likens the token creation surge to the early days of the internet, requiring platforms like Coinbase to adapt and provide customers with access to a wide range of assets while ensuring consumer protection. He envisions Coinbase expanding beyond a crypto brokerage to include stablecoins and tokenized real-world assets for more efficient value transfer.

Coinbase aims to build trust through compliance, security, and user-friendly design, positioning itself as a leader in the crypto space. The company sees stablecoins and tokenized real-world assets as key growth areas for the future, aiming to simplify access to these assets for users while maintaining high standards of consumer protection. Coinbase aims to simplify decentralized finance for the average user, partnering with companies like Stripe and Yellow Card to drive stablecoin adoption. Offering rewards for holding USDC, Coinbase wants to become the primary financial account for many globally, potentially surpassing traditional institutions like banks and brokerages.

Prediction markets highlighted as a valuable source of truth in society, with real skin in the game providing more accurate information than traditional media. Coinbase interested in exploring prediction markets further over time, seeing crypto as a solution to the challenge of misinformation and bias in society.

Coinbase not always first to market with cutting-edge products but comfortable with that position, monitoring international markets for successful products to adopt in the U.S. Coinbase Ventures allows them to invest in multiple opportunities, potentially acquiring or partnering with successful products over time.

Retail trading fee rate increased slightly despite tripling trading volume, driven by growth in both simple and advanced trading. No disproportionate contribution from either, leading to a similar fee rate quarter over quarter. Competition in the crypto trading environment growing, with online platforms reporting significant year-over-year growth in trading volume.

Coinbase aims to attract everyone to crypto, wanting to update the global financial system and shift more of the global GDP onto crypto rails for a more efficient and fair world. Striving to make crypto accessible to all users, Coinbase envisions a future where the majority of financial transactions occur through their platform. Coinbase is confident in its position as the leading cryptocurrency platform, welcoming competition in the industry. The company’s focus on being crypto-native gives it a competitive advantage. They anticipate more companies entering the crypto space will benefit the ecosystem. Coinbase aims to expand its total addressable market and drive adoption of crypto solutions.

The company is optimistic about the future of tokenizing traditional securities and real-world assets. As the on-chain economy grows, Coinbase expects to include more asset classes and financial products. They emphasize a long-term vision of integrating crypto into various sectors, beyond just cryptocurrencies, to revolutionize the financial system.

Coinbase’s sales and marketing outlook reflect current market conditions, with a wider range due to post-election opportunities. The company anticipates volatility in the next six weeks of the quarter but remains flexible to capitalize on marketing opportunities. This approach allows Coinbase to adapt to changing market conditions and acquire new customers effectively.

Brian Armstrong envisions non-crypto native companies, including Fortune 500 firms, adopting cryptocurrency for treasury management, payments, and other financial solutions. Coinbase aims to facilitate the integration of crypto into various aspects of businesses, from holding Bitcoin on balance sheets to issuing rewards points on-chain. The company sees potential for widespread adoption of crypto services across different industries and use cases. Coinbase Global held its quarterly earnings call, with executives like CEO Brian Armstrong and CFO Alesia Haas discussing financial performance. Analysts like Owen Lau and Devin Ryan also participated. The Motley Fool provided a transcript, but urges readers to verify information independently. The Motley Fool discloses its positions in Coinbase Global. No views expressed reflect Nasdaq, Inc.

Read more at Nasdaq: Coinbase Global (COIN) Q4 2024 Earnings Call Transcript