Q3 2025 Coinbase Global Inc Earnings Call

October 30, 2025

[music].

Good afternoon and welcome to the coinbase. Third quarter 2025 earnings call. My name is Anil Gupta and I'm vice president of investor relations at coinbase.

Joining me on today's call are Brian Armstrong. Co-founder and CEO Emilie Choi president and coo Alicia hos CFO and Paul Grewal Chief legal officer.

During today's call, we may make forward-looking statements which may vary materially from actual results.

Information concerning risks, uncertainties and other factors that could cause these results to differ is included in our SEC, filings our discussions. They also include certain non-gaap Financial measures reconciliations to the most directly comparable. Gaap Financial measures are provided in the shareholder. Letter on our investor relations website. Non-gaap Financial measures should be considered in addition to not as a substitute for gaap measures.

We'll start today's opening, calm, our research analyst.

With that, I'll turn it over to Brian for opening comments.

Thank you. Neil, have a great course for coinbase. We continue to drive strong financial performance and build the everything exchange that we announced last course financially. Coinbase is core, business is incredibly strong and we're very well positioned for the opportunities ahead of us.

Our strong financial performance in Q2 is driven by continued process, increasing regulatory Clarity, we're uniquely positioned to lead and capture the upside of this paradigm shift.

In Q2, we introduced the everything exchange, a 1-stop shop to trade every asset class.

Customers want, 1 venue to trade spot crypto assets, derivatives and options but also equities prediction markets, Commodities and more.

In Q3 we executed on that Vision by expanding spot coverage growing our derivatives offering and laying the groundwork for new asset classes on our platform.

In terms of stock coverage, we turbocharged our trading platform Q3 by adding decentralized exchange or Dex Integrations, which expanded access to tradable assets from about 300, to over 40,000 assets in the US.

With Dex integrated into the hood. Customers get day 1, access to new tokens as they are created and capture the outside of 1 of those takes off.

We also made strong products and grew our derivatives product.

Over time because they allow you to send money anywhere in the world in under 1 second for less than 1 cent. No other payment match. This adoption is already well underway. As coin market cap hit 300 billion driven by companies, and financial institutions, using them payments and Treasury. And we expect policy Tailwind like, the genius act to continue to accelerate this.

In Q3 coinbase, customers held on average, 50 billion US making us the largest contributor all-time high 74 billion market cap.

USDC continues to be the top-performing major stablecoin in the crypto ecosystem, growing more than 2x as much as the last competitor.

In closing with regulatory, clerics Clarity, accelerating crypto rails are set to power more and more of global GDP for trading payments in every Financial Service.

[music].

Coinbase is well positioned to be the partner of your companies and financial institutions, including see, which we announced last week we're looking to come on chain.

Through the end of the year, we're heads down building the Everything Exchange and scaling stablecoin payments with USDC. Speaking of which, I'm super excited to share that on December 17th, we're hosting our H2 product event where we'll go through everything we've built in the second half of this year.

Tune in to the live stream for a closer look at the next phase of these in exchange.

I'll now turn it over to Alicia.

Thanks Brian and good afternoon everyone.

Strong quarter for coinbase.

3 million, adjusted EA was $801 million, and adjusted net income was $421 million.

3 results.

As always, any comparison I'll share is going to be on a quarter-over-quarter basis unless I know it. Otherwise.

In the third quarter, our us and Global spot. Sorry Global spot market trading volume increased 29 and 38% respectively. This is global markets.

Against that, our Coinbase Q3 consumer spot trading volume grew 37% to $59 billion.

And consumer, transaction, Revenue grew 30% to 844 million.

The main difference between the growth rate and volume and revenue was due to a higher mix of advanced trading volume, which has a lower fee rate.

A couple of callouts on what growth this drove this growth. First is Brian mentioned you made progress on growing the number of assets available to our customers, both in terms of spots and derivatives assets?

second, our Advanced trading volumes were supported by price increases in the long tail of assets, as well as our concerted effort to attract and retain high priority, Traders through a new white glove service offering

Our institutional business had strong results, AC the board.

Total institutional transaction. Revenue was 135 million up. 122%

The primary growth driver was derivatives.

We closed airbit on August 14th, which contributed 52 million.

To revenue driven by continued growth options trading, which led to the all-time high notional volumes.

Additionally, we saw Revenue growth in both our exchange and coinbase Prime businesses in the third quarter.

Now turning to SNS Revenue, which grew 14% quarter of a quarter to 747 million.

we saw strong native unit inflows, a cross usdc, balances in coinbase products, average loan balances across our institutional financing products and assets under custody

We ended the third quarter with 516 billion dollars in assets on platform.

Total operating expenses decreased 9% to 1.4 billion.

Technology and development, General and administrative and sales and marketing expenses. Collectively increased 14% to 1.1 billion, largely driven by headcount and usdc rewards growth.

I note that the D bit contributed $30 million to total operating expenses in the third quarter, including $16 million in deals related to amortization.

The.

Was recorded in sales and marketing.

We ended the third quarter with 4,795 full-time. Employees up, 12%.

I want to turn your attention to 2 below the eye line. Items that affected our gaap profitability. First 120, ongoing fair value or measurement.

Of our crypto Investment Portfolio.

Second, we had a $381 million expense in other expenses, largely driven by unrealized losses related to our investment in Circle, as their stock price was lower as of the third quarter compared to the end of the second quarter.

Including both of these items, net income was $433 million.

Excluding both of these items adjusted net income was 421 million.

Now, let's turn to our Q4 outlook.

Yeah.

Good afternoon, and welcome to the client base third quarter 2025 earnings call. My name is <unk> and I am Vice President of Investor Relations at Coinbase.

The fourth quarter is off to a strong start and we expect October transaction Revenue to be approximately 385 million.

Joining me on today's call are Brian Armstrong co founder and CEO, Emily Choi President and CEO, Alicia horse CFO and Paul Great Wall, Chief Legal officer.

we expect subscription and services Revenue to be in the range of 710 to 790 million driven by higher average, crypto prices, and continued growth of the coinbase, 1 subscriber base

During today's call we may make forward looking statements, which may vary materially from actual results.

On the expense side, our expense range is higher quarter of a quarter for Tech and Dev and GNA.

Information concerning risks uncertainties and other factors that could cause. These results to differ is included in our SEC filings. Our discussions today will also include certain non-GAAP financial measures reconciliations to the most directly comparable GAAP financial measures are provided in the shareholder letter on our Investor Relations website.

In the range of 925 to 975 million.

Of approximately 100 million at the midpoint approximately half of this increase is due to the recent acquisitions of derb and Echo.

Is largely due to headcount growth?

non-GAAP financial measures should be considered in addition to not as a substitute for GAAP measures.

Which we expect to grow at a slower rate in the fourth quarter as compared to the third quarter.

We'll start today's call with opening comments from Brian and Alicia and then take calls take questions from our retail shareholders and our research analysts with that I'll turn it over to Brian for opening comments.

Sales and marketing is expected to be in the range of 215 to 315 million.

Where we land in this range? Will largely be determined by Performance Marketing. Spend opportunities and usdc. Balances in coinbase products, which Drive usdc Rewards.

Thanks Neil.

It was another great quarter for corn basis, we continued to drive strong financial performance and building everything exchange that we announced last quarter.

Financially claim basis core business is incredibly strong and we're very well positioned for the opportunities ahead of us.

Included within the above outlook ranges is approximately $70 million of total depreciation and amortization for Q4. This is an increase from historical averages, which has been driven higher due to the amortization of intangibles from our recent acquisitions.

Our strong financial performance in Q3 was driven by continued product execution total revenue was $1 9 billion. Adjusted EBITDA was $801 million. We ended Q3 with $11 9 billion and USD resources and another $2 6 billion in long term crypto investments.

Over the course of 2025. We've made a significant investment in headcount to capitalize on the many opportunities. We see and accelerate our vision on the everything Exchange.

So just a quick refresher our mission is to increase economic freedom in the world at Coinbase and Crypto is the technology that we're gonna harnessed to get their crypto rails will power more and more of a financial services over time, because they are faster cheaper and more global with.

As we look to early 2026, we plan to absorb the employees. We've brought into the company and focus on execution and anticipate that our sequential rate of operating expense growth will slow as compared to our Q4 rate.

With that. Let's go to questions.

Thanks. So let's begin with pre-submitted questions from retail shareholders.

With just a smartphone for instance, anyone in the world can access trading in payments raise money to start a business or get access to credit.

Many of the top questions touch on similar topics, so for efficiency, we'll group by theme.

The first topic is about competition.

Coinbase as the most trusted brand in crypto with deep technical expertise and his finance moves to these rails with increasing regulatory clarity, we're uniquely positioned to lead and capture the upside of this paradigm shift.

What's the plan to improve product Innovation and velocity and increase market share? How are you thinking about listing stocks and prediction markets? Given the success of others? Brian?

In Q2, we introduced the everything exchange a one stop shop to trade every asset class.

Customers want one venue to trade spot crypto assets derivatives and options, but also equities prediction markets commodities and more in.

In Q3, we executed on that vision by expanding spot coverage growing our derivatives offering and laying the groundwork for new asset classes on our platform.

In terms of spot coverage, we turbocharged our trading platform in Q3 by adding decentralized exchange, our decks integrations, which expanded access to tradable assets from about 300 to over 40000 assets in the U S.

With Jack's integrated under the Hood customers get day, one access to new tokens as they are created and we capture the upside when one of those takes off we.

<unk> also made strong progress in growing our derivatives product <unk>.

As a reminder, derivatives account for about 80% of all crypto trading volume.

And in Q3, we were the first to launch Cft's Deregulated 27 perpetual style features in the U S.

Yeah. So on this question, I'd say that we've spent a lot of time investing in policy and getting regulatory Clarity both in the US and a number of countries around the world. And that's starting to bear fruit, which it's great, it's growing The Tam of crypto, it's making it trusted and regulated. Um, even as more and more people come into the space, we're able to power a lot of the that with our infrastructure services, but it does mean that lots of new competition is coming in. So we need to make sure we're executing well, and we've talked since Q2 about this, everything exchange Vision we've made really substantial progress toward that already areas, where I think we're Best in Class. Like I mentioned the decks Integrations where we went from 300 trade assets, to 40,000 tradeable Assets in Q3. And the, we were the first to launch. These cfdc regulated us, uh, Perpetual style Futures contracts, which has been growing really well. So there's a lot to like that there. Now, we've been heads down working on the next pieces of that, because we think that every asset class is going to come on chain.

Early traction is strong for our U S style perks product, which helps drive all time highs in U S derivatives volumes and market share.

We closed the Durban acquisition, bringing the number one crypto options, then you coinbase and gigabit plus coinbase saw over $840 billion in total derivatives volume in Q3, driven by stronger participation from institutions and advanced traders.

Next let's touch on how we're accelerating stable queen adoption by improving payments.

The majority of global payments will shift to stable coins overtime, because they allow you to send money anywhere in the world in under one second for less than 1%.

And our customers are asking for this too, you know, prediction markets and tokenized stocks and every onchain asset you can imagine. So the everything exchange is really Central to the next chapter of what we're building. And I'm really excited that we'll have more to share on that on December 17th at our product showcase. So please tune in to the live stream for that. Um, and I'd say that everything exchange is really a perfect complement to all the other features that we've built into coinbase. Uh, including D5 borrow lend usdc, Global Payments. You know, coinbase card. People really love that product um base is having really strong momentum and so I think these are all going to come together to be. You know our go long term is to be the number 1 Financial app and um that's what we're working on.

No other payment rail can match this.

Adoption is already well underway as stable coin market cap hit $300 billion, driven by companies and financial institutions using them for payments and Treasury and we expect policy tailwind like the genius Act to continue to accelerate this.

Thanks Brian. So the second topic is base.

In Q3, Coinbase customers held on average $15 billion of U S. D C on platform, making us the largest contributor to USD six all time high $74 billion market cap.

Brian, can you elaborate on how you're thinking about a base Network token? And in particular, how shareholders could be beneficiaries of the distribution and Alicia? Can you talk about the monetization of the base Network and how that might evolve over time?

U S. D. C continues to be the top performing major stable coin and the crypto ecosystem growing at more than two acts as much as the largest competitor.

In closing with regulatory clarity clarity accelerating crypto rails are set to power more and more of global GDP for trading payments in every financial service.

Corn base is well positioned to be the partner of choice for companies and financial institutions, including city, which we just announced last week, we're looking to come on chain.

Yeah, so I'll start it off. Um you know we're still early on exploring a base Network token, but the high level goal is to help bring a billion people on chain and just to really grow the developer and create our ecosystem around base. So there's not any specifics that we're going to announce today on the governance or distribution model or the timing of it. Exactly. But we are going to build this in the open and just continue talking with our customers investors Regulators to make sure that we get it right. So

Alicia, is there anything you want to add?

Through the end of the year, we're heads down building everything exchange and scaling stable quint payments with U S. D C.

Speaking of which I am Super excited to share that on December 17th we're hosting our H two product event, but we'll go through everything we built in the second half of this year tune into the live stream for a closer look at the next phase of the everything exchange.

I'll just speak about monetization. So, on the base chain, we monetize through sequence repeats and we've talked historically about how we have direct. Monetization through sequencer views, but we also monetize indirectly as those who are building apps on base

I'll now turn it over to Alicia.

Often will then incorporate usdc. They will often need to be able to buy other crypto. They may need custody Solutions. And so we do monetize to the other products and services by the growth of the overall ecosystem and the growth of on-chain Developers

Thanks, Brian and good afternoon, everyone as Brian said it was a strong quarter for claim based yeah total revenue of $1 $9 million net income of $433 million adjusted EBITDA was $801 million and adjusted net income was $421 million.

Let's dive deeper into our Q3 results.

As always any comparison I'll share is going to be on a quarter over quarter basis, unless I note otherwise.

And the third quarter, our U S and global spot sorry, global spot market trading volume increased 29, and 38% respectively. This is a global market.

What I would share, though, is the base app that we are building. Then, on base, we will have other monetization opportunities. The base app is monetizing through trading fees. It is monetizing through advertising. And while it's early days, we see opportunities to have revenue profiles that look similar, honestly, to the Coinbase main app in terms of transaction fees—maybe some subscription fees, maybe advertising fees—some various different ways that we could monetize in that app. But we'll talk more about that if that grows over time.

All right, thank you both. So, we'll now take questions from the research analysts.

Against that our claim basis Q3, consumer spot trading volume grew 37% to $59 billion and.

In consumer transaction revenue grew 30% to $844 million.

The main difference between the growth rate in volume and revenue mix due to a higher mix of advanced trading volume, which has a lower fee rate.

A couple of callouts on like growth drove this growth first as Brian mentioned, we made progress on growing the number of assets available to our customers both in terms of spot and derivative assets.

Second.

Our advanced trading volumes were supported by price increases in the long tail of assets as well as our concerted effort to attract and retain high priority traders through a new white glove service offering.

Our institutional business had strong results across the board.

Total institutional transaction revenue was $135 million up 122%.

The primary growth driver was derivatives, we closed a bit on August 14th which contributed $52 million to revenue driven by continued growth of options trading, which led to all time high notional volumes.

Additionally, we saw revenue growth in both our exchange and Coinbase Prime business sits in the third quarter.

Now turning to SMS revenue, which grew 14% quarter over quarter to $747 million. We saw strong native unit inflows across U S. D C balances and claim based products average loan balances across our institutional financing products and assets under custody.

We ended the third quarter with $516 billion in assets on platform.

Total operating expenses decreased 9% to $1 4 billion technology and development general and administrative and sales and marketing expenses collectively increased 14% to $1 1 billion, largely driven by head count and U S. D C rewards growth.

I'd note that they are a bit contributed $30 million to total operating expenses in the third quarter, including $16 million in deal related amortization. The majority of which was recorded in sales and marketing.

We ended the third quarter with 4795 full time employees up 12%.

I want to turn your attention to two below the line items that affected our GAAP profitability first we had a $424 million gain from the ongoing fair value remeasurement of our crypto investment portfolio.

Second we had a $381 million expense and other expenses largely driven by unrealized losses related to our investments circle as their stock price is lower at the end of third quarter as compared to the end of second quarter.

Including both of these items net income was $433 million.

Excluding both of these items adjusted net income was $421 million.

Now, let's turn to our Q4 outlook.

The fourth quarter is off to a strong start and we expect October transaction revenue to be approximately $385 million.

We expect subscription and services revenue to be in the range of $710 million to $790 million driven by higher average crypto prices and continued growth of the claim baseline subscriber base.

Hard to get to this place of regulatory Clarity. And we think that that just generally provides more opportunities and key bets and more predictability with this type of m&a and these types of benefits. So, these companies just have more certainty than they did in an environment where there was regulation by enforcement. Um, when we look to the spectrum of opportunities,

On the expense side, our expense fringe is higher quarter over quarter for tech and Dev and G&A in the range of $925 million to $975 million.

Approximately $100 million at the midpoint.

Approximately half of this increase is due to the recent acquisitions of Durban and Echo.

The remainder of the quarter over quarter increase is largely due to head count growth, which we expect to grow at a slower rate in the fourth quarter as compared to the third quarter.

Sales and marketing is expected to be in the range of $215 million to $315 million, where we land in this range will largely be determined by performance marketing spend opportunities and USCC balance isn't quite based products, which drive U S. D C rewards.

We do look a lot to um some of the best tech companies of all time and how they were able to use m&a to massively acceleration. Um and so we're very excited about some of the opportunities on the Verizon in terms of the area that we're interested in. We're always kind of keying in on the priorities that the company had outlined. Um, what those those include trading and payments and these other areas are are very interesting to coinbase and then we also try to look ahead as there might be strategic opportunities that, um, present themselves. So we're all going to look out. And when we think we always look at buy builds partner invest, and then determine, which is the right nickel for us at that moment.

Included within the above outlook ranges is approximately $70 million of total depreciation and amortization for Q4. This is an increase from historical averages, which has been driven higher due to amortization of intangibles from our recent acquisitions.

I just say you're right, but this has picked up the political environment. Definitely helps with that. And all of these M&A is really in service of our core focus around trading and payments. So it's been great.

Our next city.

Over the course of 2025, we've made a significant investment in head count to capitalize on the many opportunities, we see and accelerate our vision on the everything exchange as.

As we look to early 2026, we plan to absorb the employees, we brought into the company and focus on execution and anticipate that our sequential rate of operating expense growth will slow as compared to our Q4 rate with that let's go to questions.

So let's begin with pre submitted questions from retail shareholders.

Of the top questions touch on similar topics so for efficiency what group by theme.

The first topic is about competition.

What's the plan to improve product innovation and velocity and increased market share. How are you thinking about listing stocks in prediction markets given the success of others Brian.

Uh, good evening. Thanks for the question. Um, and and, and nice. Execution, on on a bunch of partnership deals signed in the quarter. Uh, I I do want to ask about coinbase's, operational infrastructure. I mean, we've had some really busy trading days in the last quarter. Um, there's been, uh, cloud service providers multiple have had have had issues this year. I know that coinbase is is spent a lot this year, bulking up customer service. How would you ask you know, where coinbase is in terms of the operating infrastructure today? Um, Sunday and how are you thinking about Investments there going forward? That'd be helpful. Thank you.

Yeah. So on this question I would say that we've spent a lot of time investing in policy and getting regulatory clarity both in the U S. In a number of countries around the world.

And that's starting to bear fruit, which is great. When it's growing the Tam of crypto, it's making it trusted unregulated.

Even as more and more people come into the space, we're able to power a lot of.

That with our infrastructure services, but it doesn't mean that lots of new competition is coming in so we need to make sure we're executing well and we've talked since Q2 about this everything exchange vision, we've made really substantial progress toward that already areas, where I think we're best in class like I mentioned, the decks integrations, where we went from 300.

Yeah. I mean, I can start off, um, like many companies. Uh, we were impacted by WS outages could always raises this kind of, should we be pursuing a robot multi Cloud? So, you know, we are we already do multi multi clouds and a variety of ways, but we haven't made it. What would be a substantial investment to make every service in the company? Redundant to a certain Cloud outage. So

You know, it's always a trade-off. Um, now these clouds are also kind of working hard to build their own redundancy, and so you always have to factor that into other considerations.

Uh, priorities and investments that you could make and look at the cost-benefit analysis.

The glass is the 40000 treatable assets in Q3 and.

We were the first to launch these regulated U S P.

And I would just say, in terms of some of the things we're really excited about as well, we're very...

Perpetual style futures contracts, which has been growing really well so there's a lot to like there now we've been heads down working on the next pieces of that because we think that every asset class is going to come on Shane and our customers are asking for this to prediction markets and token high stocks in every entre and ask that you can imagine so.

Currently, 65% of our customer support interactions are fully automated. We're trying to push that number up rapidly. We are also rolling out deep reasoning LLM agents to automate the majority of compliance investigations in 2026. So, there's a lot of really interesting areas for automation over the next several years as well.

Everything's changed is really central to the next chapter of what we're building and I'm really excited that we'll have more to share on that on December 17th at our product showcase. So please tune into the live stream for that.

Everything is change is really a perfect complement to all the other features that we've built into coinbase.

Including <unk> learned USB C global payments Columbia's card people really love that product.

Base is having really strong momentum and so I think these are all going to come together to be our goal long term is to be the number one financial App and that's what we're working on.

Thanks, Brian So the second topic is base.

Yeah, and I guess you, you know your question may be think of actually on October 10th, you know, there was also a record level of cross crypto exchanges. And in that case, we actually operated very well without disruption. And we didn't have any downtime uh, or degraded latency around Market data or anything like that. So that was a result of investment. We did over the last year or 2 in doing load testing and making sure we didn't have any reversions as new software is being developed. Um, you know, several major exchanges experienced extended outages during that time and we didn't have any. And so I was really proud of how that part came came to be

Brian can you elaborate on how youre thinking about it based network token and in particular, how shareholders could be beneficiaries of the distribution.

Next question is from Ben Buddhist at barklay.

And Alicia can you talk about the monetization of the base network and how that might evolve over time.

Yeah, So I'll start it off.

We're still early on exploring a base network tokens, but the high level goal is to help bring 1 billion people on chain and just to really grow the developer and creator ecosystem around base. So there's not any specifics that we're going to announce today on the governance of our distribution model or the timing of it exactly but we are going to build this in the <unk>.

And just continue talking with our customers investors regulators to make sure that we get it right. So Alicia anything you want to add.

Hey uh, good evening. And thank you for taking the question, um, in your shareholder letter, if you talked about uh, a new sort of white glove Service, uh, for the advanced retail Trader. Um, just curious if you talk about that a little bit more and and is there anything to read in their, uh, regarding the state of competition among retail trading? Um, it seems like there are newly listed crypto, uh, exchange competitors. Other, you know, I would say Legacy competitors. Try to expand their offering and be more competitive. So, is there anything to read this to you there? How would you describe our? I can talk a little bit about this uh service. Thank you.

Maybe I'll start, and then feel free to add on, Brian.

I'll just speak about monetization so on the base chain, we monetize through sequencer piece and we've talked historically about how we have direct monetization sequencer fees, but we also monetize indirectly as those who are building apps on base.

All right. Club service has been made available to some of our high-value advanced traders.

Often will then incorporate U S. T C. They will often need to be able to buy other crypto. They may need custody solutions and so we do monetize the other products and services by the growth of the overall ecosystem and the growth of onshore wind developers.

Value Advanced Traders provides concierge-level support, a personal account manager, and makes commitments around resolving issues quickly. We ensure that they can trade seamlessly and do not run into any hiccups with our services.

What I would share though is the base app that we are building that on base will have other monetization opportunities. The based app is monetizing through trading fees. It is monetizing through advertising and while it's early days, we see opportunities to have revenue profiles that look similar honestly to the coinbase main app in terms of transaction fees, maybe some subscription.

With regards to our broader retail program, though we are really pleased to have our trading volume exceed overall U.S. volume in the quarter. So we're really seeing strong adoption of our products and services. There's more to do there, as Brian said, which is why we are building towards the Everything Exchange to continue to meet our customers where they are and provide broader access to all assets they would like to trade.

Fees, maybe advertising piece in various different ways that we can monetize in that app, but we'll talk more about that as that grows overtime.

Alright. Thank you both so we'll now take questions from the research analysts to ask a question press star one and each participant will be limited to one question.

Yeah, not much to add, I would just say that, um, in in trading, I mean, there are whales that are out there that drive a disproportionate amount of volume. And so, it's important for them to have a dedicated relationship manager that can help them resolve any issue. But also,

It has partially a sales function. So, I think it's just a good example of us maturing as a company.

according the best customers.

Our first question comes from Craig Siegenthaler at Bank of America.

Let's go now to Owen Lowe from Clear Street.

Good evening, everyone. Thanks for taking my question. Our question is on an echo So how will echo help expand your network by making it more easy for crypto companies to raise and invest via private sales or public sales with solar.

Yeah, I can start off and then Emily if you want add anything that'd be great.

Yes, I mean, one of our as I mentioned, we believe that every type of financial service is going to come on chain and Cryptos. This technology to update the financial system and so.

Uh, thank you for taking my question. Uh, could you please talk about innovation in Coinbase's business? It has global payout. I think it enables businesses to send and receive USDC with lower fees. Um, you also made an announcement with a city to develop digital asset payment capabilities. I know it's still early here, but I'm wondering what you have heard from the banks and merchants so far about these deal capabilities. And if you started to see more merchants?

Into blockchain or even considering moving into blockchain.

Capital formation is certainly a big piece of that right. We think that it can be much more efficient.

Yeah, well I'll start off. Um

The fees can be reduced people more around the world can have better access to it this will just accelerate the economy. So <unk>.

<unk> was a really.

Innovative I think company that we decided to go acquire to get a foothold here.

You know, so obviously we have our first-party business with retail and businesses and institutions, which is growing really well. But I'm also really proud that Coinbase has built out the infrastructure that can power other companies and...

And we're trying to make it easy for anyone to raise money and then the beauty of combining it with coinbase as that we have now over $500 billion of assets. We have a large number of retail institutional customers of credit investors that want to invest in unique assets and so you can you can just see like the double the two sided marketplace.

you know we we call that product coinbase developer platform or CDP. Um it's sometimes people think of as crypto as a service and what's great is that we've been able to close 6 264 um institutions now that are using that product.

Coming together here and a really powerful way as we think more and more about capital formation and how crypto can update that.

Including large companies like JP Morgan, BlackRock, PNC, and fintechs like Stride, PayPal, Revolut, and Webull. So, I think this is.

Yes, I agree.

We're really excited about it.

The management team for Echo has a great nose for what the most compelling companies will be the launch and so if echo launches. These these great companies and tokens and.

Going to increasingly be an important part of our business. Um, just to let us have different revenue streams and participate in the value creation as more and more companies come into integrate with crypto. Um, that's going to be all banks, all fintech, all payment service providers, but it's also going to be non-financial services related companies.

Our successful it helps us deeply because.

We're moving up the stack and.

We're we're coins are issued before they graduate to the exchange. So that's kind of a vertical integration that we think is quite powerful for the whole ecosystem of corn based products.

I mean, we're also working with, for instance, Shopify on powering payments for them. I think it's similar to what Amazon did with AWS. I think this third-party infrastructure can be a powerful business for us over time.

Yeah.

Let's take our next question from Ken Worthington at JP Morgan.

Hi, good evening, thanks for taking the question.

The pace of announced M&A seems to be rising for claim base versus what we may have seen in recent years, how is the more regulatory and political certainty in the U S impacting the pace of innovation and when you would expect this pace of innovation to drive client base to be more active in EM.

I mean, I could add on there for you, though. We've really been building various infrastructure layers, and I'm pleased to have a more vertically integrated payments product that we're bringing to market. It starts with Base, which is our layer 2 solution using USDC and other stablecoins. We've now built out payments APIs, and we're now bringing those forward to our customers via the Coinbase Base app, and then directly to businesses. So,

As we look forward.

And then in terms of the innovation that we're seeing are there certain themes that you were focused on.

Trying to capture as we look forward.

Thanks for the question I'll start and then Brian Alicia feel free to jump in so to take a step back we worked really really hard to get to this place of regulatory clarity and we think that that just generally provides more opportunities in key bets and more predictability with this type of M&A in these types of investments. So these companies just have more certainty.

What we're seeing here is: 1. We are a partner of choice. We continue to win mandates from large families and fintechs, as Brian shared. But we're also seeing small and medium-sized businesses really come to our platform as we enable them to more efficiently manage their capital and their liquidity through instant settlement by stablecoins, while we're earning rewards now on any idle funds that they hold, USDC. So we've seen great early traction with over a thousand businesses on board and waiting.

Let's go next to D, Ryan citizens.

Then they did in an environment, where there was regulation by enforcement.

Great. Uh, thanks so much. Just want to ask a question about, um, Dar bit. Obviously, um, you haven't had it on the platform for too long, but...

When we look to the spectrum of opportunities, we do look a lot to some of the best Tech companies of all time and how they were able to use M&A to massively accelerate adoption.

Seems like it's doing well here out of the gate for Coinbase. So, I'd love to kind of think about the integration thus far, and what that informs around potential future product development and cross-sell opportunities.

We're very excited about some of the opportunities on the horizon in terms of the areas that we're interested in we're always kind of keying in on.

Jason just uh more broadly. If you can just talk about another scaling plan, now that it's uh you know, fully integrated or part of coin, thanks.

Priorities that the company has outlined.

Whether this does include trading in payments and these other areas that are very interesting to point base and then we also try to look ahead as there might be strategic opportunities that present themselves. So we're always on the look out and when we say we always look at by the partner invest and then determine which is the right vehicle for us.

So, it officially just closed in August, and we onboarded 100 employees in September. They had record volume in the month of August. Their revenue has been growing, and where we are right now is we're really working to integrate their products seamlessly with our products so we can bring together spot derivatives and derivatives, meaning both perpetual futures, futures, and options, all under one roof.

At that moment.

Yeah, I would just say youre right. The pace has picked up the political environment definitely helps with that and all of this M&A is really in service of our core focus around trading and payments. So it's been great.

Our next question is from Pete Christiansen of Citi.

Good evening, Thanks for the question.

And nice execution on on a bunch of partnership deal signed in the quarter.

Or for our youth customers spot and derivatives cross margining and it enabled Capital efficiency where our customers really value the ability to get better, leverage better margin on their trading products. And so, we think that that is a future that we can bring forward to options as well. So the goal is going to be integrate for the next few quarters. So we can bring everything on 1st on both side-by-side trading of these products and services to our institutional clients.

I do want to ask about coinbase as operational infrastructure I mean, we've had some really busy trading days in the last quarter.

We'll take our next question from Patrick Moly at Piper Sandler.

There has been.

Service providers multiple or have had issues this year I know that corn basis.

Spent a lot of shared bulking up customer service.

How would you assess where corn bases in terms of its operating infrastructure today.

Good evening. Thanks for making the question. I just had one on the Everything Exchange. I was wondering if you could update us on the timeline or some of the milestones that we should be looking out for as you introduce new asset classes to that platform. Thanks.

Redundancy and how are you thinking about investments there going forward that'd be helpful. Thank you.

Yeah, I mean I can start off.

Like many companies we were impacted by AWS outages I think it always raises the question of should we be pursuing a more robust multi cloud.

Yeah, well, some of them are already live, but I mentioned the decks integration, the US-style pairs, and December 17th is going to be another milestone for us. We're hosting that H2 product event, where we'll be giving an update on everything we've been working on in the second half of this year. So, that'll be a good one to tune into on the live stream.

Approach.

Let's go next to James Yarrow from Goldman Sachs.

We already do use multi multi clouds.

A variety of ways, but we haven't made it what would be a substantial investment to make every service in the company of redundant to a certain cloud outage. So.

You know, it's always a trade off.

Now. These clouds are also kind of working hard to build their own redundancy and so you always have to factor that into other priorities.

Good afternoon, and thanks for taking the question. Could you help us think through the impacts of the crypto liquidations on October 10th on markets, as well as on the various market participants? Do you see any medium-term ramifications, and are there any lessons learned that you think could improve market function going forward?

Priorities and investments that you could make and look at the cost benefit analysis.

And I would just say in terms of like some of the things we're really excited about as well we're very invested in automation.

I'll start, and others can chime in. So obviously, the events of Q3 2025 led to some liquidation as folks had to de-lever to address the sharp sell-off in certain assets.

Currently 65% of our customer support interactions are fully automated we're trying to push that number up rapidly and then we're also rolling out the reasoning.

We are really pleased that we did not see significant liquidations on our platform. As Brian shared earlier, our platform really withstood the volatility quite well during that window.

As to automate the majority of compliance investigations in 2020, so theres a lot of really interesting areas for automation over the next several years as well.

In part, that's due to the design of our products and the approach that we've taken to leverage with our products.

Yeah, and I guess your question made me think of actually on October 10th There was also a record level of activity across crypto exchanges in that case, we actually operated very well without disruption and we didn't have any downtime or integrated latency around market data or anything like that so that was a result of a.

One of the observations that I would have broadly in the market is today. There's very few of us that are publicly traded that have as much transparency into our operations, our risk management, our balance sheets. And so we do have these risks throughout the overall ecosystem.

<unk> investment we've made over the last year or two in doing load testing and making sure. We didn't have any reversion as new software is being developed.

Operational errors that then lead to deleveraging events. Um, I think over time you'll see more and more companies come into a regulatory framework, more and more companies go public. And so this risk will reduce over time because transparency then.

Several major exchanges experienced extended outages during that time and we didn't have.

Helps all risks; the more sunlight, the better in some of these areas.

Any and so I was really proud of how that part came came to be.

But I would say that the market rebounded quite nicely from this, and I don't see any systemic, um, losses or any kind of continued fallout from that sell-off.

Next question is from Ben Buda at Barclays.

Hey, good evening and thank you for taking the question.

We'll take our next question from Jeffrey at William Blair.

In your shareholder letter you talked about a new sort of white glove service for the advanced retail trader just.

Curious if you could talk about that a little bit more and is there anything to read in there regarding the state of competition among retail trading it seems like there are newly listed crypto exchange competitors other.

Hi. I appreciate the, uh, the question, Brian. I definitely agree with your vision on stablecoins. I wonder if you can sort of dimensionalize for us.

I guess, you could say legacy competitors trying to expand their offerings and be more competitive. So is there anything to read into there or how would you describe the state of competition there and can you talk a little bit about this service.

sort of timing in your mind for more commercial adoption outside of crypto and and the role you think coinbase plays in that uh you know, cross-border Commerce and and whether or not it changes with whether or not your economics change with uh, with volume as

Maybe I'll start and then feel free to add on Brian Our White glove services, they've made available to some of our high value advanced traders. So this is not a service available to all of our retail traders, but to a very specific high value advanced traders and it provides some concierge level support personal account.

Yeah. Well, I mean, um, I think taking that last part first, I'm not seeing um,

<unk> and really makes commitments around time to resolve issues, making sure. They can trade seamlessly that they don't run into any hiccups with our services.

With regards to our broader retail program that we are really pleased to have our trading volume exceed overall U S spot volume in the quarter. So we're really seeing strong adoption of our products and services.

It's more to do there as Brian said, which is why we are building towards the everything exchange to continue to meet our customers, where they are and provide broader access to all assets say, we'd like to train.

Yes, not much to add I would just say that.

In trading I mean, there are wells that are out there that drive a disproportionate amount of volume and so it's important for them to have a dedicated relationship manager that can help them resolve any issue, but also it has partially a sales function. So I think it's just a good example of us are maturing as a company and.

According the best customers.

Let's go now to Owen Lau from clear Street.

Thank you for taking my question could you. Please talk about innovation in coin base business. It has global payout I think enable business to send and receive U S. Do you see with lower fees.

We're adding various products and services in there around invoices and how to pay contractors and vendors. A lot of its cross border, but even within country, it's it's powerful. We had a, since we announced that product just recently, we've had about a thousand businesses on boarded already. There's another thousand on the, on the wait list.

Also make an announcement with cities to develop digital asset payment capabilities I know, it's too early here, but I'm wondering what you have heard from the banks and merchants so far about the steel capabilities and have you started to see more merchants moving into blockchain or even considering moving into blockchain. Thanks.

Uh, we're also integrating payments into our retail app for Coinbase and into the new Base app.

so I think that'll be powerful and then we can be 1 of the I think we're really 1 of the only companies that can start to connect these businesses and consumers together, right? Uh, in the 2-sided market and Shopify, as an example of that, where we're powering

Yeah, well I'll start off.

So obviously, we have our first party business with retail and <unk> businesses and institutions, which is growing really well but.

I'm also really proud that corn basis has built out infrastructure that can power other companies.

We call that product developer platform or a CDP.

Sometimes people think of it as crypto as a service and what's great is that we've been able to close 264.

Institutions now that are using that product, including large companies like J P. Morgan Blackrock City P&C.

<unk> like stripe Paypal Revolute, we've also I think that this is.

Going to increasingly be an important part of our business. It just allows us to have different revenue streams and participate in the value creation as more and more companies come into integrate with crypto.

Uh, usdc checkout for their merchants, and you know, when you're for these Merchants, it's a big deal because they're they're used to paying 2 to 3% in fees for people to move money over the Internet. Um, there's no reason that that needs to exist. I don't think I mean, and, and we can do it in less than a second less than a cent tax fee regardless of the amount. Um, it just has a lot more value, you can give some of that back to the consumer. Like, in shopify's case, they're gonna they're giving 1% back to the people who pay with usdc, but the merchants also saves money. So it's just kind of a win for everyone and I think that when you lower friction in the economy like that, you see an order of magnitude more activity happening, uh, can it, it can really have a dramatic effect. So I guess 1 other just 1 other item to touch on in the payment space which I think is really Innovative that we're doing is

That's gonna be all banks, often techs all payment service providers, but it's also gonna be non financial services related companies.

We're also working with for instance.

Shopify on <unk>.

Powering payments for them.

So I think it's similar to what Amazon did with AWS I think this third party infrastructure can be a powerful business for us over time.

Well, maybe I could add on here for you, though we're really been building the various infrastructure layers and are pleased to have a more vertically integrated payments product that we're bringing to market. It starts with a base, which is our layer two solution.

You see another stable claims we've now built out payments API and we're now bringing those forward to our customers by a clean base the base App and then directly the businesses. So.

There's a protocol, we came out with called X42 and what, what this is, is it's a way to attach a stablecoin payment to any web request. You know, you you may be familiar with um, before which is uh, Internet. It's file not found, right? If you go to a page that doesn't exist, there's actually a another code called 402 in the HTTP spec, which was originally put in their required. So it was really implemented in most web browsers because the web browser became a place where you've been your credit card, you put it into the website. But anyway, we decided to go ahead and ship this and it's attracted a lot of attention in the last month or so um Partners at cloudflare and vercel and Google have started working with this. Um, it's it's, you know, caused a lot of people to go sign up for developer platforms to start building these Integrations. So it's still early days but um,

What we're seeing here is one we are a partner of choice. We continue to win mandates from large financial players they've been tax as Brian shared but we're also seeing small and medium size businesses really come to our platform as we enable them to more efficiently manage their capital and liquidity through instant settlement via <unk>.

For, you know, payments happening over the internet for AI agents, payments. Um, that's another big emerging area. We shipped an open-source toolkit called Agent Kit that lets any AI agent put a stablecoin wallet inside it. So we're starting to see a lot of things happen with payments on the frontier now. And yeah, I think this is going to be a big area for crypto and for Coinbase.

Claims, while earning rewards now on any idle funds that they hold in U S. T. C. So we've seen great early traction with over 1000 businesses on boarded and we have a growing waitlist.

Our next question comes from Bop. Pay at us, Tiger.

Let's go next to Devin Ryan at citizens.

Great. Thanks, so much I just wanted to ask a question about they're a bit obviously you.

Uh, good afternoon, and thanks for taking my question. Uh, in the shareholders' letter, you mentioned scaling validation incentives in derivatives. Could you quantify how this is affecting takeaway and whether you expect this to help margin expansion in Q4 of 2026?

You haven't had it on the platform for too long, but it.

It seems like it's doing well here out of the gate for Coinbase. So just wanted to kind of think about kind of the integration.

Thus far what that informs around potential future product development and cross sell opportunities for coinbase and just.

More broadly if you can just touch on kind of the scaling plan now that it's fully integrated or a part of <unk>. Thanks.

So it officially just closed in August and we on boarded 100 employees in September so they had record volume in the month of August their revenue has been growing.

And where we are right now is we're really working to integrate their products seamlessly with our products. So we can bring together spot.

And derivatives, meaning both perpetual futures futures and options all under one roof.

Uh, but it's a great question. So we are, we have scaled back those incentives and you can see that in the overall institutional growth, we did not attribute out any change in rate, and it's very difficult to look at take rate for the institutional business. Given the acquisition of verbit, given the growth of the derivatives platform, which is not ported in the underlying trading volume. So there's been no change to the overall pricing of any of the products and services in any material way quarter of a quarter. But there has been a lot of mixed shift in the drivers of the total institutional platform. Um we are pleased to be able to change things in more liquidity and just more solid sticky. Organic open interest growth in that platform, which is enabled more profitable growth for our International derivatives business.

In the quarter had brought forward if our U S customers spot and derivatives cross margining and it enables capital efficiency, where our customers really value the ability to get better leverage better margin on their trading products and so we think that that is a future that we can bring forward to options as well so the goal.

Our next question is from Alex at KeyBanc Capital Markets.

It's going to be integrated for the next few quarters. So we can bring everything under one roof and enables side by side trading of these products and services to our institutional clients.

Hey everyone. Thanks for taking my question. Alesia, maybe one for you. Just as we think about the many new products and elements of the Coinbase platform, I'm hoping we can sort of step back and maybe you can remind us how you're thinking about managing margins across these various products and platform elements. Anyway, sort of frame the...

The vision for her contribution margin across these new items.

We will take our next question from Patrick Moly at Piper Sandler.

Yeah.

Good evening, Thanks for taking my question.

Just had one on the everything exchange I was wondering if you could update us on the timeline or some of the milestones we should be looking out for as you introduce new asset classes to that platform. Thanks.

Yeah, well some of them are already live right I mentioned, the <unk> integration the U S style.

Our economics versus single product economics.

And December 17th Theres going be another milestone for us we're hosting that HQ product event, where we'll be giving an update on everything we've been working on in the second half of this year. So that'll be a good one to tune into on the live stream.

So we're focused on growing overall profits. We're focused on how to drive total adjusted EA dog growth at the company level, and that is how we think about it versus parting a small.

We'll take our next question from Dan Dolev at Meizu.

Let's go next to James Euro from Goldman Sachs.

Hey guys. Uh, great results here. I got...

Good afternoon, and thanks for taking the question could you help us think through the impacts of the crypto liquidations on October 10th on markets as well as on the various market participants.

Do you see any medium term ramifications are there any lessons learned that you think could improve market function going forward.

Uh, I guess 2 quick questions. Uh, on the take rates, I I appreciate you answering. Um, the institutional take rates, is there any any way you can help us? Think about sort of how this looks, you know, a couple quarters out. And then I have a very, very quick follow up. You don't

As we shared before, we don't focus on.

I'll start and others can add on so obviously the events of October 10th led to some liquidation as folks had to delever to address the sharp selloff in certain assets. We are really pleased that we did not see significant liquidations on our platform and as Brian shared earlier our platform is really.

Whats.

The volatility quite well during that window.

In part that's due to the design of our products and the approach that we've taken to leverage with our products.

One of the observations that I would have broadly in the market is today. There is very few of us that are publicly traded that have as much transparency into our operations our risk management, our balance sheets and so we do have these risks and <unk>.

Outlooks that far in our public comments. We are focusing on meeting our customers where they are, engaging them with products and services. And we are constantly experimenting with our pricing on the retail side to understand how best our customers engage. Right now, we're really pleased to see the growth of the Coinbase One subscribers. We introduced the new Basics here last quarter, and the Basic tier along with Coinbase Card is showing a lot of traction. So over time, we anticipate more and more customers will monetize through many products and services. And we're reducing the overall reliance on trading fees as a single monetization strategy, as it was many years ago.

Um, but we will adjust fees as needed by the market, and that has been our long-standing approach.

The overall ecosystem of.

Operational errors that then lead to deleveraging events.

We'll go now to Ed Angle from Compass.

And I think over time, you'll see more and more companies come into a regulatory framework more and more companies to go public and so this risk will reduce overtime because transparency then.

It helps the all risk on the more sunlight the better in some of these areas, but I would say that the market rebounded quite nicely from this and I don't see any systemic losses or any kind of continued fallout from that sell off.

We'll take our next question from Andrew Jeffrey at William Blair.

Um, hi. Thanks for taking the question. Um, Alesia, in the past, you've talked about how 25 bit over that. Um, I guess with the step up in Q4 OPEX, I'm just kind of thinking, are you still ramping up hiring for the end of the year, um, or is most of the headcount growth behind us? I guess I'm just trying to gauge whether this kind of forecast you guys have is a fully baked-in number for some of the reinvestment you made this year. Thanks.

Yeah.

Hi, I appreciate the question Brian.

I definitely agree with your vision on stable coins I Wonder if you can sort of dimensionalize for us sort of.

Timing in your mind for more commercial adoption outside of crypto and and the role you think coinbase plays in that.

Great question. As we shared in my opening comments, the outlook for Q4 on our Tech and Dev and GNA combined is up roughly $100 million. About half of that step up in cost is due to the two areas we made: one being there a bit, the second being Echo.

Cross border commerce, and whether or not it changes.

And then the other half is due to headcount growth. So we are still growing headcount in the fourth quarter, although at a much slower rate than we did in the third quarter.

Your economics change with.

With volume.

You STC takes off.

So now to Zack Gun at FTP Partners.

Yeah, well interesting I mean.

I think taking that last part first I'm not seeing.

Change in economics, yet I think we're still super early in this and.

It's growing really fast and so.

Just see how that plays out I mean, we we have different ways to monetize it like was based sequencer fees and.

With U S. D. C. You could of course charged directly for the payments themselves, but I think just just zooming out I mean payments or just very clearly the next big use case for crypto.

Hey there. Thanks for taking my question. I just want to ask about the payment side of things historically. When we think about driving adoption of the new payment modality of the world, we just talked about that. Thanks.

It started with trading.

Payments are really are growing enormously now and.

I would say just in general it's a massive market right like cross border payments are something like 40 trillion in volume annually <unk> is 75% of that which is and early use case.

For stable Queens, and we're now seeing about $100 billion in annual stable Quinn volume, which it's growing rapidly so.

We're gonna keep participating in this space across a number of different areas, where we're building payments for businesses.

There are a lot of helpful networks in payment. Um we don't want to be about the child of coming into these new markets um you know, luckily it's not just 1 company like coinbase going up against it, be here, thousands of companies participating all over the world. So um, it's a little bit different going up against us. Not just 1 company.

These businesses are account for small and medium sized businesses, we're adding various products and services in there around invoices and how to pay contractors and vendors a lot of its cross border, but even within a country. It's it's powerful we have.

Um, now that being said, a lot of people... I mean, there are something like...

Since we announced that product just recently, we've had about 1000 businesses on boarded already theres another thousand on the on the waitlist.

You know, $500 billion of assets that we have on platform. Um, there are people around the world now who use crypto and are holding crypto. We're starting to get into those categories where it can be meaningful. Now, it won't be for every type of merchant, right? I mean, if you go to...

We're also integrating payments into our retail for.

Coinbase and into the new base.

So I think that'll be powerful and then we can be one of the I think we're really one of the only companies that can start to connect these businesses and consumers together right.

Two sided market and Shopify is an example of that where we're powering.

U S D C check out for their merchants.

Um, like a Starbucks on the corner. Maybe, you know, that doesn't hit the threshold but, uh, for a certain type of e-commerce category, it could be that a large enough number of people actually, the only way they want to pay is with crypto, or it opens up, like, you know, microtransactions or new international markets where credit card penetration is low. So we'll see it first take off in areas where people's unmet needs are biased.

For these merchants, it's a big deal because they're used to paying 2% to 3% and fees for people to move money over the internet.

Um, and then eventually it'll eat into more and more of it just because it's faster and cheaper and more global. But yeah, this will take time for sure. And I guess,

There's no reason that that needs to exist I don't think I mean, and when you can do it in less than a second lesson ascent flat fee regardless of the amount.

You know, I mentioned this earlier as well that

A lot of times when people think about payments, they think about buying the proverbial cup of coffee at the corner store. But like the majority of...

It just has a lot more of the value you can give some of that back to the consumer like in Shopify case, there theyre, giving 1% back to the people who pay with U S. D C. But the merchant also saves money. So it's kind of a win for everyone and I think that when you lower friction in the economy like that you see an order of magnitude more activity happening.

We're seeing higher adoption for crypto right now. I mean, it's just growing like gangbusters, frankly, because that's just a very underserved part of the market where businesses want to get their money faster. They want to not be exposed to these FX risks.

It can really have a dramatic effect. So I guess one other just one other item to touch on in the payments space, which I think is really innovative that we're doing is.

So, um, those are some of the areas it'll take off in first, and I think actually get to the majority of all payments.

There is a protocol we came out was called X 402 and what.

Let's go next to Joseph Vafi from Canaccord.

What this is is it's a way to attach a stable point payment any web request.

If you're familiar with.

Anil Gupta: Good afternoon and welcome to the Coinbase Q3 2025 earnings call. My name is Anil Gupta, and I'm Vice President of Investor Relations at Coinbase. Joining me on today's call are Brian Armstrong, Co-founder and CEO; Emily Choi, President and COO; Alesia Haas, CFO; and Paul Grewal, Chief Legal Officer. During today's call, we may make forward-looking statements which may vary materially from actual results. Information concerning risks, uncertainties, and other factors that could cause these results to differ is included in our SEC filings. Our discussions today will also include certain non-GAAP financial measures. Reconciliations to the most directly comparable GAAP financial measures are provided in the shareholder letter on our Investor Relations website. Non-GAAP financial measures should be considered in addition to, not as a substitute for, GAAP measures.

<unk> hundred four which is on the Internet. It's file not found right. If you go to page it doesn't exist Theres actually another code called 402 in the http. Spec, which was originally put in there for payment required now it was never really implemented in most web browsers, because the web browser never became a place where you'd put in your credit card you put it into the.

Everyone uh good afternoon uh just uh as a quick side note just finishing lunch here on the West Coast that I bought with my coinbase 1 card. So uh thanks for a great product. Um

Website itself not the browser, but anyway, we decided to go ahead and ship this and it's attracted a lot of attention in the last month or so.

Partners like cloud flare and herself and Google have started working with us.

<unk>.

Caused a lot of people to go sign up for Colombia has developed a platform to start building. These integrations. So it's still early days, but.

But, uh, just maybe a double click on dab it here a little bit more and Alicia. I appreciate the commentary on, um, cross product, uh, margin capability and efficiency there. But, you know, as you look forward, you know, the distribution of the coinbase form is so big. Do do you see uh, this as a big share gain or a share Creator in options uh, in option transactions. And then if you just remind us on margin structure on a transaction margin basis, how your options and derivatives compared to spot. Thank you.

Four.

Payments happening over the Internet for AI agent payments, that's another big emerging area. We shipped an open source toolkit called agents picked it looks any AI agent put a stable coin wallet inside it. So we're starting to see a lot of things happened with with payments on the frontier now and I think this is going to be a big area for crypto in Brooklyn based.

Anil Gupta: We'll start today's call with opening comments from Brian and Alesia, and then take questions from our retail shareholders and our research analysts. With that, I'll turn it over to Brian for opening comments.

We'll start today's call with opening comments from Brian and Alesia, and then take questions from our retail shareholders and our research analysts. With that, I'll turn it over to Brian for opening comments.

All right. Um, so Derivative is already the market leader in options. They had over 75% market share for options, notably. This is all non-U.S., and so there are paths to grow the market for options in the U.S.

Brian Armstrong: Thanks, Anil. It was another great quarter for Coinbase. We continue to drive strong financial performance and build the Everything Exchange that we announced last quarter. Financially, Coinbase's core business is incredibly strong, and we're very well positioned for the opportunities ahead of us. Our strong financial performance in Q3 was driven by continued product execution. Total revenue was $1.9 billion. Adjusted EBITDA was $801 million. We ended Q3 with $11.9 billion in USD resources and another $2.6 billion in long-term crypto investments. So just a quick refresher, our mission is to increase economic freedom in the world at Coinbase, and crypto is the technology that we're going to harness to get there. Crypto rails will power more and more of financial services over time because they're faster, cheaper, and more global.

Our next question comes from Bo Pei of U S Tiger.

Okay.

Good afternoon, and thanks for taking my question.

In the shareholder letter you mentioned scaling battery pace and incentives in derivative could you quantify how that's affecting takeaway and whether it makes sense.

That is going to be a multi-quarter roadmap of bringing both the regular per licenses and product to bear in the U.S., but we think that's a huge opportunity for us. More importantly, we believe that bringing these products to trade all under one umbrella will be able to grow overall trading volume on all of our products on our platform, and we've already seen just by having their bid closed for...

Had this too.

To help margin expansion in Q4 and 2026.

Oh Boy that's a great question. So we are we have scaled back those incentives and you can see that in the overall institutional growth. We did not attribute out any change in take rate and it's very difficult to look at take rate for the institutional business given the acquisition of debate given the growth of the derivatives platform, which is not reported and underlying trading.

A few weeks on our platform, existing clients have more confidence in the combined balance sheet and are now bringing options to the Coinbase balance sheet. They are trading at higher volumes and holding more assets on our platform. So, the brand strength and balance sheet strength that we're able to now put behind there, a bit, and their strong product and risk management is having outside benefits to both of us.

Brian Armstrong: With just a smartphone, for instance, anyone in the world can access trading and payments, raise money to start a business, or get access to credit. Coinbase is the most trusted brand in crypto with deep technical expertise, and as finance moves to these rails with increasing regulatory clarity, we're uniquely positioned to lead and capture the upside of this paradigm shift. In Q2, we introduced the Everything Exchange, a one-stop shop to trade every asset class. Customers want one venue to trade spot crypto assets, derivatives, and options, but also equities, prediction markets, commodities, and more. In Q3, we executed on that vision by expanding spot coverage, growing our derivatives offering, and laying the groundwork for new asset classes on our platform.

With just a smartphone, for instance, anyone in the world can access trading and payments, raise money to start a business, or get access to credit. Coinbase is the most trusted brand in crypto with deep technical expertise, and as finance moves to these rails with increasing regulatory clarity, we're uniquely positioned to lead and capture the upside of this paradigm shift. In Q2, we introduced the Everything Exchange, a one-stop shop to trade every asset class. Customers want one venue to trade spot crypto assets, derivatives, and options, but also equities, prediction markets, commodities, and more. In Q3, we executed on that vision by expanding spot coverage, growing our derivatives offering, and laying the groundwork for new asset classes on our platform.

So theres been no change to the overall pricing of any of the products and services in any material way quarter over quarter, but there has been a lot of mix shift and just change in the drivers of the total institutional platform.

Um, we can follow up with you, um, about the margin. Obviously, there's no margin on spot trading. We do offer leverage.

On these assets, they’re very customized by products. So the, um,

We are pleased to be able to change the incentives and derivatives, because we've seen more liquidity and just more solid sticky organic open interest growth in that platform, which has enabled more profitable growth for our international derivatives business.

They look different in each market, and they look different to different customer groups. I don't have a simple way of answering that question for you.

We'll take our final question from Gus Gala at MES, Krispy and Heart.

Our next question is from Alex Mark Graf at Keybanc capital markets.

Hey, everyone. Thanks for taking my question, maybe one for you just as we think about the many new products and the elements of the claim based platform.

I was hoping we could just sort of step back and maybe you could remind us how you're thinking about managing margins across these various products and.

Brian Armstrong: In terms of spot coverage, we turbocharged our trading platform in Q3 by adding decentralized exchange or DEX integrations, which expanded access to tradable assets from about 300 to over 40,000 assets in the US. With DEX integrated under the hood, customers get day-one access to new tokens as they are created, and we capture the upside when one of those takes off. We've also made strong progress in growing our derivatives product. As a reminder, derivatives account for about 80% of all crypto trading volume. In Q3, we were the first to launch CFTC-regulated 24/7 perpetual-style futures in the US. Early traction is strong for our US-style perps product, which helps drive all-time highs in US derivatives volumes and market share.

In terms of spot coverage, we turbocharged our trading platform in Q3 by adding decentralized exchange or DEX integrations, which expanded access to tradable assets from about 300 to over 40,000 assets in the US. With DEX integrated under the hood, customers get day-one access to new tokens as they are created, and we capture the upside when one of those takes off. We've also made strong progress in growing our derivatives product. As a reminder, derivatives account for about 80% of all crypto trading volume. In Q3, we were the first to launch CFTC-regulated 24/7 perpetual-style futures in the US. Early traction is strong for our US-style perps product, which helps drive all-time highs in US derivatives volumes and market share.

Hey guys, thanks for taking my question. I wanted to talk a little bit about the competitive environment between September and October. September was a fantastic month in terms of outgrowing the market; October was the reverse. I'm just trying to parse out if this competitive pressure is like a presence in the system, maybe seeing more aggressiveness on the problems.

Platform elements.

Feeling away or just a mix issue. I just try to understand what's going on.

Way to sort of frame the division for contribution margin across these newer items.

Yeah.

So we do have a big mix of products than they do on monetize separately and in some cases, we have launched products with the sole growth of retention and acquisition in the case for example, if the claim based card.

So what we love to do is monetize the overall customer relationship for example on the institutional side, we have the many of our customers who are now engaged with three plus products and services and we look to the overall customer relationship and the customer economics versus single product economics.

Brian Armstrong: We closed the Deribit acquisition, bringing the number one crypto options venue into Coinbase, and Deribit plus Coinbase saw over $840 billion in total derivatives volume in Q3, driven by stronger participation from institutions and advanced traders. Next, let's touch on how we're accelerating stablecoin adoption by improving payments. The majority of global payments will shift to stablecoins over time because they allow you to send money anywhere in the world in under one second for less than $0.01. No other payment rail can match this. Adoption is already well underway as stablecoin market cap hit $300 billion, driven by companies and financial institutions using them for payments, and treasury, and we expect policy tailwinds like the Genius Act to continue to accelerate this.

We closed the Deribit acquisition, bringing the number one crypto options venue into Coinbase, and Deribit plus Coinbase saw over $840 billion in total derivatives volume in Q3, driven by stronger participation from institutions and advanced traders. Next, let's touch on how we're accelerating stablecoin adoption by improving payments. The majority of global payments will shift to stablecoins over time because they allow you to send money anywhere in the world in under one second for less than $0.01. No other payment rail can match this. Adoption is already well underway as stablecoin market cap hit $300 billion, driven by companies and financial institutions using them for payments, and treasury, and we expect policy tailwinds like the Genius Act to continue to accelerate this.

So we're focused on growing overall profits were focused on how do we drive total adjusted EBITDA growth at the company level and that is how we think about it versus targeting a specific margin byproduct at this time.

We'll take our next question from Dan <unk> at Mizuho.

Hey, guys great results here I guess.

I guess two quick questions on the take rates I. Appreciate you answering on the institutional will take rates.

Any way you can help us think about sort of how this looks.

A couple of quarters out and then I have a very very quick follow up if you don't mind.

As we shared before we don't focus on.

Look that far but in our public comments, we're focusing on meeting our customers, where they are engaging them with products and services and we are constantly experimenting with our pricing on the retail side to understand how best to our customers engaged right now we're really pleased to see the growth of the coinbase one subscribers, we introduced the new basic tier.

Brian Armstrong: In Q3, Coinbase customers held, on average, $15 billion of USDC on platform, making us the largest contributor to USDC's all-time high $74 billion market cap. USDC continues to be the top-performing major stablecoin in the crypto ecosystem, growing more than 2x as much as the largest competitor. In closing, with regulatory clarity accelerating, crypto rails are set to power more and more of global GDP for trading, payments, and every financial service. Coinbase is well positioned to be the partner of choice for companies and financial institutions, including Citi, which we just announced last week, who are looking to come on-chain. Through the end of the year, we're heads down building the Everything Exchange and scaling stablecoin payments with USDC.

In Q3, Coinbase customers held, on average, $15 billion of USDC on platform, making us the largest contributor to USDC's all-time high $74 billion market cap. USDC continues to be the top-performing major stablecoin in the crypto ecosystem, growing more than 2x as much as the largest competitor. In closing, with regulatory clarity accelerating, crypto rails are set to power more and more of global GDP for trading, payments, and every financial service. Coinbase is well positioned to be the partner of choice for companies and financial institutions, including Citi, which we just announced last week, who are looking to come on-chain. Through the end of the year, we're heads down building the Everything Exchange and scaling stablecoin payments with USDC.

Last quarter and the basic tier along with claim based card is showing a lot of traction. So over time, we anticipate more and more customers will monetize through many products and services and we're reducing the overall reliance on trading fees as a single monetization as it was many years ago.

But we will adjust fees as needed by the market and that has been our long standing approach.

We'll go now to Ed angle from Compass point.

Brian Armstrong: Speaking of which, I'm super excited to share that on 17 December 2024, we're hosting our H2 2024 product event, where we'll go through everything we've built in the second half of this year. Tune into the livestream for a closer look at the next phase of the Everything Exchange. I'll now turn it over to Alesia.

Speaking of which, I'm super excited to share that on 17 December 2024, we're hosting our H2 2024 product event, where we'll go through everything we've built in the second half of this year. Tune into the livestream for a closer look at the next phase of the Everything Exchange. I'll now turn it over to Alesia.

Hi, Thanks for taking my question Alicia in the past you've talked about how 2025 was a bit of a reinvestment year just as you capitalize on there.

Critical environment.

I guess with the step up in fourth quarter Opex I'm just trying to think are you still ramping up hiring through the end of the year, whereas most of that head count growth.

Alesia Haas: Thanks, Brian, and good afternoon, everyone. As Brian shared, it was a strong quarter for Coinbase. We had total revenue of $1.9 billion, net income of $433 million, adjusted EBITDA was $801 million, and adjusted net income was $421 million. So let's dive deeper into our Q3 results. As always, any comparison I'll share is going to be on a quarter-over-quarter basis, unless I note otherwise. In the third quarter, our US and global spot market trading volume increased 29% and 38%, respectively. This is global market. Against that, our Coinbase's Q3 consumer spot trading volume grew 37% to $59 billion, and consumer transaction revenue grew 30% to $844 million. The main difference between the growth rate in volume and revenue was due to a higher mix of advanced trading volume, which has a lower fee rate. A couple of callouts on what drove this growth.

Hi, guys I guess I'm, just trying to gauge whether this kind of <unk> guidance is a fully baked number for for some of the investment you made this year. Thanks.

Great question. So as we shared in my opening comments the outlook for Q4 on our tech and Dev and G&A combined it up roughly 100 million quarter over quarter.

Half of that step up in cost is due to the two acquisitions, we made one being Durban the second being eco.

And then the other half is due to head count growth. So we are still growing head count in the fourth quarter, although at a much slower rate than we did in the third quarter.

Let's go now because that gun at Ft partners.

Hey, there. Thanks for taking my question I. Just also wanted to ask on the payment side of things historically, when we think about driving adoption of the new payment modality or platform. It takes anywhere from 3% to 5% of overall transaction value to incentivize, either consumer or merchant or business.

Alesia Haas: First, as Brian mentioned, we made progress on growing the number of assets available to our customers, both in terms of spot and derivatives assets. Second, our advanced trading volumes were supported by price increases in the long tail of assets, as well as our concerted effort to attract and retain high-priority traders through a new white-glove service offering. Our institutional business had strong results across the board. Total institutional transaction revenue was $135 million, up 122%. The primary growth driver was derivatives. We closed Deribit on 14 August, which contributed $52 million to revenue, driven by continued growth of options trading, which led to all-time high notional volumes. Additionally, we saw revenue growth in both our exchange and Coinbase Prime businesses in the third quarter. Now turning to S&S revenue, which grew 14% quarter-over-quarter to $747 million.

First, as Brian mentioned, we made progress on growing the number of assets available to our customers, both in terms of spot and derivatives assets. Second, our advanced trading volumes were supported by price increases in the long tail of assets, as well as our concerted effort to attract and retain high-priority traders through a new white-glove service offering. Our institutional business had strong results across the board. Total institutional transaction revenue was $135 million, up 122%. The primary growth driver was derivatives. We closed Deribit on 14 August, which contributed $52 million to revenue, driven by continued growth of options trading, which led to all-time high notional volumes. Additionally, we saw revenue growth in both our exchange and Coinbase Prime businesses in the third quarter. Now turning to S&S revenue, which grew 14% quarter-over-quarter to $747 million.

Switching so can you just talk about what corn basis doing to incentivize adoption of its payments platform. Thanks.

Yes, I mean, you're right there are a lot of powerful network effects in payments.

So we don't want to be flippant about the challenge of coming into these new markets.

Luckily, it's not just one coinbase or one company like clean base going up against.

The powers that be here I think the beauty of crypto is that these are decentralized open networks.

With thousands of companies participating all over the world. So.

It's a little bit like the internet going up against some kind of a proprietary system.

Just one company.

Now that being said lots of people I mean, there's there's something like.

$500 billion of assets that we have on platform.

Alesia Haas: We saw strong native unit inflows across USDC balances in Coinbase products, average loan balances across our institutional financing products, and assets under custody. We ended Q3 with $516 billion in assets on platform. Total operating expenses decreased 9% to $1.4 billion. Technology and development, general and administrative, and sales and marketing expenses collectively increased 14% to $1.1 billion, largely driven by headcount and USDC rewards growth. I note that Deribit contributed $30 million to total operating expenses in Q3, including $16 million in deal-related amortization, the majority of which was recorded in sales and marketing. We ended Q3 with 4,795 full-time employees, up 12%. I want to turn your attention to two below-the-line items that affected our GAAP profitability. First, we had a $424 million gain from the ongoing fair value remeasurement of our crypto investment portfolio.

We saw strong native unit inflows across USDC balances in Coinbase products, average loan balances across our institutional financing products, and assets under custody. We ended Q3 with $516 billion in assets on platform. Total operating expenses decreased 9% to $1.4 billion. Technology and development, general and administrative, and sales and marketing expenses collectively increased 14% to $1.1 billion, largely driven by headcount and USDC rewards growth. I note that Deribit contributed $30 million to total operating expenses in Q3, including $16 million in deal-related amortization, the majority of which was recorded in sales and marketing. We ended Q3 with 4,795 full-time employees, up 12%. I want to turn your attention to two below-the-line items that affected our GAAP profitability. First, we had a $424 million gain from the ongoing fair value remeasurement of our crypto investment portfolio.

There's a huge number of people around the world now who have used crypto that are holding crypto.

We're starting to get into those categories, where it can be meaningful now it won't be for every type of merchant right. I mean, if you go to.

Like a starbucks on the corner maybe.

That doesn't hit the threshold, but.

For a certain type of e-commerce category it could be that a large enough number of people actually the only way they wanna payers with crypto or opens up Mike microtransactions or new international markets, where credit card penetration is low so we will see it firsthand often areas where peoples unmet need is the highest.

And then eventually it'll it'll eat into more and more of it just because it's it's faster and cheaper and more global but this will take time for sure and I guess.

I mentioned this earlier as well but.

A lot of times when people think about payments they think about buying the proverbial cup of coffee on the corner store, but like the majority of cross border payments are I really like <unk> transactions and that's the area, where we're seeing higher adoption for crypto right now I mean, that's just it's growing like gangbusters frankly, because that's just a very underserved part of the market where businesses.

Alesia Haas: Second, we had a $381 million expense in other expenses, largely driven by unrealized losses related to our investment in Circle, as their stock price was lower as of the end of Q3 as compared to the end of Q2. Including both of these items, net income was $433 million. Excluding both of these items, adjusted net income was $421 million. Now let's turn to our Q4 outlook. The fourth quarter is off to a strong start, and we expect October transaction revenue to be approximately $385 million. We expect subscription and services revenue to be in the range of $710 to 790 million, driven by higher average crypto prices and continued growth of the Coinbase One subscriber base.

Second, we had a $381 million expense in other expenses, largely driven by unrealized losses related to our investment in Circle, as their stock price was lower as of the end of Q3 as compared to the end of Q2. Including both of these items, net income was $433 million. Excluding both of these items, adjusted net income was $421 million. Now let's turn to our Q4 outlook. The fourth quarter is off to a strong start, and we expect October transaction revenue to be approximately $385 million. We expect subscription and services revenue to be in the range of $710 to 790 million, driven by higher average crypto prices and continued growth of the Coinbase One subscriber base.

To get their money faster they want to not have be exposed to these FX risks. So those are some of the areas. It will take off in first and I think eventually get to the majority of all payments.

Yeah.

Let's go next to Joseph <unk> from Canaccord.

Everyone. Good afternoon, just a.

Side note, just finishing lunch here on the West coast that I bought with Mike Coyne Big one card. So thanks for a great product.

But just maybe double click on jarraud bit here, a little bit more and Alicia I appreciate the commentary on cross product margin capability of inefficiency there but.

Alesia Haas: On the expense side, our expense range is higher quarter-over-quarter for tech and dev, and G&A in the range of $925 to 975 million, up approximately $100 million at the midpoint. Approximately half of this increase is due to the recent acquisitions of Deribit and Echo. The remainder of the quarter-over-quarter increase is largely due to headcount growth, which we expect to grow at a slower rate in the fourth quarter as compared to the third quarter. Sales and marketing is expected to be in the range of $215 to 315 million. Where we land in this range will largely be determined by performance marketing spend opportunities and USDC balances in Coinbase products, which drive USDC rewards. Included within the above outlook ranges is approximately $70 million of total depreciation and amortization for Q4.

On the expense side, our expense range is higher quarter-over-quarter for tech and dev, and G&A in the range of $925 to 975 million, up approximately $100 million at the midpoint. Approximately half of this increase is due to the recent acquisitions of Deribit and Echo. The remainder of the quarter-over-quarter increase is largely due to headcount growth, which we expect to grow at a slower rate in the fourth quarter as compared to the third quarter. Sales and marketing is expected to be in the range of $215 to 315 million. Where we land in this range will largely be determined by performance marketing spend opportunities and USDC balances in Coinbase products, which drive USDC rewards. Included within the above outlook ranges is approximately $70 million of total depreciation and amortization for Q4.

As you look forward the distribution of the coin base platform. It's so big do you see this as a big share gainer of share creator and option.

An option transactions and then could you just remind us on margin structure on the transaction margin basis. So your options and derivatives comparative spot. Thank you.

Yeah.

Alright.

So debit is already the market leader in options they had over 75% market share for options, notably this is all non U S and so there is tough to grow the market for options in the U S.

That is going to be a multi quarter roadmap of bringing both the regulatory licenses and product to bear in the U S. But we think that's a huge opportunity for us.

But more importantly, we believe that bringing these products to trade all under one umbrella will be able to grow overall trading volume.

Alesia Haas: This is an increase from historical averages, which has been driven higher due to amortization of intangibles from our recent acquisitions. Over the course of 2025, we've made a significant investment in headcount to capitalize on the many opportunities we see and accelerate our vision on the Everything Exchange. As we look to early 2026, we plan to absorb the employees we've brought into the company and focus on execution and anticipate that our sequential rate of operating expense growth will slow as compared to our Q4 rate. With that, let's go to questions.

This is an increase from historical averages, which has been driven higher due to amortization of intangibles from our recent acquisitions. Over the course of 2025, we've made a significant investment in headcount to capitalize on the many opportunities we see and accelerate our vision on the Everything Exchange. As we look to early 2026, we plan to absorb the employees we've brought into the company and focus on execution and anticipate that our sequential rate of operating expense growth will slow as compared to our Q4 rate. With that, let's go to questions.

Volume on all of our products on our platform and we've already seen just by having debit closed four.

A few weeks on our platform.

That existing clients have more confidence in the combined balance sheet and now bringing options to claim based balance sheet. They are trading at higher volumes and trading and holding more assets on our platform. So the brand strength of balance sheet strength that we're able to now put behind Arabic and their strong product and risk management is having outsized benefits to the both of us.

Operator: Thanks. So let's begin with pre-submitted questions from retail shareholders. Many of the top questions touch on similar topics, so for efficiency, we'll group by theme. The first topic is about competition. What's the plan to improve product innovation, velocity, and increase market share? How are you thinking about listing stocks in prediction markets given the success of others? Brian?

Anil Gupta: Thanks. So let's begin with pre-submitted questions from retail shareholders. Many of the top questions touch on similar topics, so for efficiency, we'll group by theme. The first topic is about competition. What's the plan to improve product innovation, velocity, and increase market share? How are you thinking about listing stocks in prediction markets given the success of others? Brian?

We can follow up with you.

About the margin differential obviously, there's no margin on spot trading we do offer leverage on those assets, but they're very customized by products. So the.

They look different in each market and they look different to different customer groups I don't have a simple way of answering that question for you.

Brian Armstrong: Yeah, so on this question, I'd say that we've spent a lot of time investing in policy and getting regulatory clarity both in the US and a number of countries around the world, and that's starting to bear fruit, which is great. It's growing the TAM of crypto. It's making it trusted and regulated. Even as more and more people come into the space, we're able to power a lot of that with our infrastructure services, but it does mean that lots of new competition is coming in, and so we need to make sure we're executing well. We've talked since Q2 about this Everything Exchange vision. We've made really substantial progress toward that already, areas where I think we're best in class.

And we'll take our final question from Gus Gala at <unk> Crespi Hardt.

Hey, guys. Thanks for taking my question wanted to talk a little bit about the competitive environment between September and October.

September was a fantastic month in terms of outgrowing the market spot in October seeking to reverse.

Just trying to parse out is this competitive pressure like present system, maybe seeing more aggressive pricing competition among peers on the promos.

The incentives fueling away or is it just a mix issue I'm just trying to understand what's going on there. Thanks.

Brian Armstrong: Like I mentioned, the DEX integrations where we went from 300 tradable assets to 40,000 tradable assets in Q3, and we were the first to launch these CFTC-regulated US perpetual style futures contracts, which have been growing really well. So there's a lot to like there. Now, we've been heads down working on the next pieces of that because we think that every asset class is going to come on-chain, and our customers are asking for this too, prediction markets, tokenized stocks, and every on-chain asset you can imagine. So the Everything Exchange is really central to the next chapter of what we're building, and I'm really excited that we'll have more to share on that on 17 December at our product showcase, so please tune into the livestream for that.

Like I mentioned, the DEX integrations where we went from 300 tradable assets to 40,000 tradable assets in Q3, and we were the first to launch these CFTC-regulated US perpetual style futures contracts, which have been growing really well. So there's a lot to like there. Now, we've been heads down working on the next pieces of that because we think that every asset class is going to come on-chain, and our customers are asking for this too, prediction markets, tokenized stocks, and every on-chain asset you can imagine. So the Everything Exchange is really central to the next chapter of what we're building, and I'm really excited that we'll have more to share on that on 17 December at our product showcase, so please tune into the livestream for that.

We've always faced competition, we are a platform that has multiple customer types multiple products and so we all have faced competition since we've been founded on different products different customer groups within our portfolio.

Our focus and our goal is always to deliver the most trusted and easiest to use.

<unk> to our customers and we've been really proud of our continued growth in market share trading volumes size and scaling up these various product offerings. So when you think about those competitive pressures in the month of October.

There's nothing specific to talk about gen.

Brian Armstrong: And I'd say the Everything Exchange is really a perfect complement to all the other features that we've built into Coinbase, including DeFi Borrow Lend, USDC, global payments, Coinbase Card. People really love that product. Base is having really strong momentum, and so I think these are all going to come together to be our goal long term is to be the number one financial app, and that's what we're working on.

And I'd say the Everything Exchange is really a perfect complement to all the other features that we've built into Coinbase, including DeFi Borrow Lend, USDC, global payments, Coinbase Card. People really love that product. Base is having really strong momentum, and so I think these are all going to come together to be our goal long term is to be the number one financial app, and that's what we're working on.

Generally we are always looking for ways to continue to build and delight our customers.

Yeah, I hope we answered your question on that.

I was a little distracted because I was tracking the prediction market about what coinbase will stay on their next earnings call and I just want to.

Adhere the words bitcoin, a theory and blockchain staking and web three to make sure we get those in before the end of the call.

Operator: Thanks, Brian. So the second topic is Base. Brian, can you elaborate on how you're thinking about a Base network token and, in particular, how shareholders could be beneficiaries of the distribution? And Alesia, can you talk about the monetization of the Base network and how that might evolve over time?

Anil Gupta: Thanks, Brian. So the second topic is Base. Brian, can you elaborate on how you're thinking about a Base network token and, in particular, how shareholders could be beneficiaries of the distribution? And Alesia, can you talk about the monetization of the Base network and how that might evolve over time?

Alright, well, we've taken all of our questions Thats. It for today, thanks for joining us and we'll talk to you again next quarter before we end I just wanted to invite anybody to join us on our ex spaces call next week and so please follow us on X and Brian and I will be taking additional questions on Monday.

Brian Armstrong: Yeah, so I'll start it off. We're still early on exploring a Base network token, but the high-level goal is to help bring a billion people on-chain and just to really grow the developer and creator ecosystem around Base. So there's not any specifics that we're going to announce today on the governance or distribution model or the timing of it exactly, but we are going to build this in the open and just continue talking with our customers, investors, regulators to make sure that we get it right. So, Alesia, anything you want to add?

Okay.

Yeah.

Alesia Haas: I'll just speak about monetization. So on the Base chain, we monetize through sequencer fees, and we've talked historically about how we have direct monetization through sequencer fees, but we also monetize indirectly as those who are building apps on Base often will then incorporate USDC. They will often need to be able to buy other crypto. They may need custody solutions, and so we do monetize to the other products and services by the growth of the overall ecosystem and the growth of on-chain developers. What I would share, though, is the Base app that we are building, then, on Base will have other monetization opportunities. The Base app is monetizing through trading fees.

Yes.

Yeah.

Yes.

Yeah.

Yes.

Okay.

Yeah.

Okay.

Yes.

Alesia Haas: It is monetizing through advertising, and while it's early days, we see opportunities to have revenue profiles that look similar, honestly, to the Coinbase main app in terms of transaction fees, maybe some subscription fees, maybe advertising fees, some various different ways that we can monetize in that app, but we'll talk more about that as that grows over time.

It is monetizing through advertising, and while it's early days, we see opportunities to have revenue profiles that look similar, honestly, to the Coinbase main app in terms of transaction fees, maybe some subscription fees, maybe advertising fees, some various different ways that we can monetize in that app, but we'll talk more about that as that grows over time.

Yeah.

Yes.

Yeah.

Operator: All right, thank you both. So we'll now take questions from the research analysts. To ask a question, press star one, and each participant will be limited to one question. Our first question comes from Craig Siegenthaler at Bank of America.

Anil Gupta: All right, thank you both. So we'll now take questions from the research analysts. To ask a question, press star one, and each participant will be limited to one question. Our first question comes from Craig Siegenthaler at Bank of America.

Emilie Choi: Good evening, everyone. Thanks for taking my question. Our question is on Echo. So how will Echo help expand your network by making it more easy for crypto companies to raise and invest via private sales or public sales with Sonar?

Craig Siegenthaler: Good evening, everyone. Thanks for taking my question. Our question is on Echo. So how will Echo help expand your network by making it more easy for crypto companies to raise and invest via private sales or public sales with Sonar?

Brian Armstrong: Yeah, I can start off, and then Emily, if you want to add anything, that'd be great. Yeah, I mean, one of our, as I mentioned, we believe that every type of financial service is going to come on-chain, and crypto is this technology to update the financial system. So capital formation is certainly a big piece of that, right? We think that it can be much more efficient. The fees can be reduced. People more around the world can have better access to it. This will just accelerate the economy. So Echo was a really innovative, I think, company that we decided to go acquire to get a foothold here, and we're trying to make it easy for anyone to raise money. And then the beauty of combining it with Coinbase is that we have now over $500 billion of assets.

Brian Armstrong: We have a large number of retail institutional customers, accredited investors that want to invest in unique assets. So you can just see the two-sided marketplace coming together here in a really powerful way as we think more and more about capital formation and how crypto can update that.

We have a large number of retail institutional customers, accredited investors that want to invest in unique assets. So you can just see the two-sided marketplace coming together here in a really powerful way as we think more and more about capital formation and how crypto can update that.

Emilie Choi: Yeah, agreed. We're really excited about it. The management team for Echo has a great nose for what the most compelling companies will be to launch. And so if Echo launches these great companies and tokens and those are successful, it helps us deeply because we're moving up the stack and where coins are issued before they graduate to the exchange. So it's kind of a vertical integration that we think is quite powerful for the whole ecosystem of Coinbase products.

Operator: Let's take our next question from Ken Worthington at JPMorgan.

Anil Gupta: Let's take our next question from Ken Worthington at JPMorgan.

Ken Worthington: Hi, good evening. Thanks for taking the question. The pace of announced M&A seems to be rising for Coinbase versus what we may have seen in recent years. How is the more regulatory and political certainty in the US impacting the pace of innovation? And would you expect this pace of innovation to drive Coinbase to be more active in M&A as we look forward? And then in terms of the innovation that we're seeing, are there certain themes that you are focused on trying to capture as we look forward?

Emilie Choi: Thanks for the question. I'll start, and then Brian and Alesia, feel free to jump in. So to take a step back, we worked really, really hard to get to this place of regulatory clarity, and we think that that just generally provides more opportunities, key bets, and more predictability with this type of M&A and these types of investments. So these companies just have more certainty than they did in an environment where there was regulation by enforcement. When we look to the spectrum of opportunities, we do look a lot to some of the best tech companies of all time and how they were able to use M&A to massively accelerate adoption. And so we're very excited about some of the opportunities on the horizon.

Emilie Choi: In terms of the areas that we're interested in, we're always kind of keying in on the priorities that the company has outlined, whether those include trading and payments and these other areas that are very interesting to Coinbase. We also try to look ahead as there might be strategic opportunities that present themselves. We're always on the lookout, and when we think, we always look at buy, build, partner, invest, and then determine which is the right vehicle for us at that moment.

In terms of the areas that we're interested in, we're always kind of keying in on the priorities that the company has outlined, whether those include trading and payments and these other areas that are very interesting to Coinbase. We also try to look ahead as there might be strategic opportunities that present themselves. We're always on the lookout, and when we think, we always look at buy, build, partner, invest, and then determine which is the right vehicle for us at that moment.

Brian Armstrong: Yeah, I'd just say you're right. The pace has picked up. The political environment definitely helps with that, and all of this M&A is really in service of our core focus around trading and payments. So it's been great.

Operator: Our next question is from Pete Christiansen at Citi.

Anil Gupta: Our next question is from Pete Christiansen at Citi.

Peter Christiansen: Good evening. Thanks for the question and nice execution on a bunch of partnership deals signed in the quarter. I do want to ask about Coinbase's operational infrastructure. I mean, we've had some really busy trading days in the last quarter. There have been cloud service providers multiple have had issues this year. I know that Coinbase has spent a lot this year bulking up customer service. How would you assess where Coinbase is in terms of its operating infrastructure today, redundancy, and how are you thinking about investments there going forward? That'd be helpful. Thank you.

Brian Armstrong: Yeah, I mean, I can start off. Like many companies, we were impacted by AWS outages. I think it always raises this question of should we be pursuing a more robust multi-cloud approach? We already do use multi-clouds in a variety of ways, but we haven't made what would be a substantial investment to make every service in the company redundant to a certain cloud outage. So it's always a trade-off. Now, these clouds are also kind of working hard to build their own redundancy, and so you always have to factor that into other priorities and investments that you could make and look at the cost-benefit analysis.

Emilie Choi: I would just say in terms of some of the things we're really excited about as well, we're very invested in automation. Currently, 65% of our customer support interactions are fully automated. We're trying to push that number up rapidly, and then we're also rolling out deep reasoning LLM agents to automate the majority of compliance investigations in 2026. So there's a lot of really interesting areas for automation over the next several years as well.

Brian Armstrong: Yeah, and I guess your question made me think of actually on 10 October, there was also a record level of activity across crypto exchanges. And in that case, we actually operated very well without disruption, and we didn't have any downtime or degraded latency around market data or anything like that. So that was a result of a lot of investment we've made over the last year or two in doing load testing and making sure we didn't have any reversions as new software is being developed. Several major exchanges experienced extended outages during that time, and we didn't have any, and so I was really proud of how that part came to be.

Operator: Next question is from Ben Buddish at Barclays.

Anil Gupta: Next question is from Ben Buddish at Barclays.

Benjamin Budish: Hey, good evening, and thank you for taking the question. In your shareholder letter, I believe you talked about a new sort of white glove service for the advanced retail trader. Just curious if you could talk about that a little bit more, and is there anything to read in there regarding the state of competition among retail trading? It seems like there are newly listed crypto exchange competitors, other, I guess you could say, legacy competitors trying to expand their offering and be more competitive. So is there anything to read into there? How would you describe the state of competition there, and can you talk a little bit about this service? Thank you.

Ben Budish: Hey, good evening, and thank you for taking the question. In your shareholder letter, I believe you talked about a new sort of white glove service for the advanced retail trader. Just curious if you could talk about that a little bit more, and is there anything to read in there regarding the state of competition among retail trading? It seems like there are newly listed crypto exchange competitors, other, I guess you could say, legacy competitors trying to expand their offering and be more competitive. So is there anything to read into there? How would you describe the state of competition there, and can you talk a little bit about this service? Thank you.

Alesia Haas: Maybe I'll start, and then feel free to add on, Brian. Our white glove service has been made available to some of our high-value advanced traders. So this is not a service available to all of our retail traders, but to our very specific high-value advanced traders, and it provides some concierge-level support, a personal account manager, and really makes commitments around time to resolve issues, making sure they can trade seamlessly, that they don't run into any hiccups with our services. With regards to our broader retail program, though, we are really pleased to have our trading volume exceed overall US spot volume in the quarter. So we're really seeing strong adoption on our products and services.

Alesia Haas: There's more to do there, as Brian said, which is why we are building towards the Everything Exchange to continue to meet our customers where they are and provide broader access to all assets they would like to trade.

There's more to do there, as Brian said, which is why we are building towards the Everything Exchange to continue to meet our customers where they are and provide broader access to all assets they would like to trade.

Brian Armstrong: Yeah, not much to add. I would just say that in trading, I mean, there are whales that are out there that drive a disproportionate amount of volume, and so it's important for them to have a dedicated relationship manager that can help them resolve any issue, but also it has partially a sales function. So I think it's just a good example of us maturing as a company and courting the best customers.

Operator: Let's go now to Owen Lau from Clear Street.

Anil Gupta: Let's go now to Owen Lau from Clear Street.

Ken Worthington: Thank you for taking my question. Could you please talk about innovation in Coinbase Business? It has global payout. I think it enabled business to send and receive USDC with lower fees. You also make an announcement with Citi to develop digital asset payment capabilities. I know it's still early here, but I'm wondering what you have heard from the banks and merchants so far about these deal capabilities, and have you started to see more merchants moving into blockchain or even considering moving into blockchain? Thanks.

Owen Lau: Thank you for taking my question. Could you please talk about innovation in Coinbase Business? It has global payout. I think it enabled business to send and receive USDC with lower fees. You also make an announcement with Citi to develop digital asset payment capabilities. I know it's still early here, but I'm wondering what you have heard from the banks and merchants so far about these deal capabilities, and have you started to see more merchants moving into blockchain or even considering moving into blockchain? Thanks.

Brian Armstrong: Yeah, well, I'll start off. So obviously, we have our first-party business with retail and businesses and institutions, which is growing really well, but I'm also really proud that Coinbase has built out infrastructure that can power other companies. And we call that product Coinbase Developer Platform or CDP. Sometimes people think of it as crypto as a service, and what's great is that we've been able to close 264 institutions now that are using that product, including large companies like JPMorgan, BlackRock, Citi, and PNC, fintechs like Stripe, PayPal, Revolut, and Webull. So I think that this is going to increasingly be an important part of our business. It just allows us to have different revenue streams and participate in the value creation as more and more companies come in to integrate with crypto.

Brian Armstrong: That's going to be all banks, all fintechs, all payment service providers, but it's also going to be non-financial services-related companies. I mean, we're also working with, for instance, Shopify on powering payments for them. So I think it's similar to what Amazon did with AWS. I think this third-party infrastructure can be a powerful business for us over time.

That's going to be all banks, all fintechs, all payment service providers, but it's also going to be non-financial services-related companies. I mean, we're also working with, for instance, Shopify on powering payments for them. So I think it's similar to what Amazon did with AWS. I think this third-party infrastructure can be a powerful business for us over time.

Alesia Haas: Oh, and maybe I could add on here for you, though. We've really been building the various infrastructure layers and are pleased to have a more vertically integrated payments product that we're bringing to market. It starts with Base, which is our layer two solution, USDC, and other stablecoins. We've now built out payments APIs, and we're now bringing those forward to our customers via Coinbase, the Base app, and then directly to businesses. So what we're seeing here is, one, we are a partner of choice. We continue to win mandates from large financial players, fintechs, as Brian shared, but we're also seeing small and medium-sized businesses really come to our platform as we enable them to more efficiently manage their capital and their liquidity through instant settlement via stablecoins while earning rewards now on any idle funds that they hold in USDC.

Alesia Haas: We've seen great early traction with over 1,000 businesses onboarded, and we have a growing waitlist.

We've seen great early traction with over 1,000 businesses onboarded, and we have a growing waitlist.

Operator: Let's go next to Devin Ryan at Citizens.

Anil Gupta: Let's go next to Devin Ryan at Citizens.

Ken Worthington: Great. Thanks so much. Just want to ask a question about Deribit. Obviously, you haven't had it on the platform for too long, but it seems like it's doing well here out of the gate for Coinbase. So just love to kind of think about kind of the integration thus far, what that informs around potential future product development and cross-sell opportunities for Coinbase, and just more broadly, if you can just touch on kind of the scaling plan now that it's fully integrated or a part of Coinbase. Thanks.

Devin Ryan: Great. Thanks so much. Just want to ask a question about Deribit. Obviously, you haven't had it on the platform for too long, but it seems like it's doing well here out of the gate for Coinbase. So just love to kind of think about kind of the integration thus far, what that informs around potential future product development and cross-sell opportunities for Coinbase, and just more broadly, if you can just touch on kind of the scaling plan now that it's fully integrated or a part of Coinbase. Thanks.

Alesia Haas: So it officially just closed in August, and we onboarded 100 employees in September. So they had record volume in the month of August. Their revenue has been growing. And where we are right now is we're really working to integrate their products seamlessly with our products so we can bring together spot derivatives, and derivatives meaning both perpetual futures, futures, and options all under one roof. We, in the quarter, had brought forward for our US customers spot and derivatives cross-margining, and it enables capital efficiency where our customers really value the ability to get better leverage, better margin on their trading products. And so we think that that is a future that we can bring forward to options as well.

Alesia Haas: So the goal is going to be to integrate for the next few quarters so we can bring everything under one roof and enable side-by-side trading of these products and services to our institutional clients.

So the goal is going to be to integrate for the next few quarters so we can bring everything under one roof and enable side-by-side trading of these products and services to our institutional clients.

Operator: We'll take our next question from Patrick Moley at Piper Sandler.

Anil Gupta: We'll take our next question from Patrick Moley at Piper Sandler.

Patrick Moley: Good evening. Thanks for taking the question. I just had one on the Everything Exchange. I was wondering if you could update us on the timeline or some of the milestones we should be looking out for as you introduce new asset classes to that platform. Thanks.

Brian Armstrong: Yeah, well, some of them are already live, right? I mentioned the DEX integration, the US-style perps, and 17 December 2024 is going to be another milestone for us. We're hosting that H2 product event where we'll be giving an update on everything we've been working on in the second half of this year. So that'll be a good one to tune into on the livestream.

Operator: Let's go next to James Yarrow from Goldman Sachs.

Anil Gupta: Let's go next to James Yarrow from Goldman Sachs.

James Yaro: Good afternoon, and thanks for taking the question. Could you help us think through the impacts of the crypto liquidations on 10 October on markets as well as on the various market participants? Do you see any medium-term ramifications, and are there any lessons learned that you think could improve market function going forward?

Alesia Haas: I'll start, and others can add on. So obviously, the events of 10 October led to some liquidation as folks had to delever to address the sharp sell-off in certain assets. We are really pleased that we did not see significant liquidations on our platform, and as Brian shared earlier, our platforms really withstood the volatility quite well during that window. In part, that's due to the design of our products and the approach that we've taken to leverage with our products. One of the observations that I would have broadly in the market is today there are very few of us that are publicly traded that have as much transparency into our operations, our risk management, our balance sheets. And so we do have these risks throughout the overall ecosystem of operational errors that then lead to deleveraging events.

Alesia Haas: I think over time you'll see more and more companies come into a regulatory framework, more and more companies go public, and so this risk will reduce over time because transparency then helps all risks. The more sunlight, the better in some of these areas. But I would say that the market rebounded quite nicely from this, and I don't see any systemic losses or any kind of continued fallout from that sell-off.

I think over time you'll see more and more companies come into a regulatory framework, more and more companies go public, and so this risk will reduce over time because transparency then helps all risks. The more sunlight, the better in some of these areas. But I would say that the market rebounded quite nicely from this, and I don't see any systemic losses or any kind of continued fallout from that sell-off.

Operator: We'll take our next question from Andrew Jeffrey at William Blair.

Anil Gupta: We'll take our next question from Andrew Jeffrey at William Blair.

Andrew Jeffrey: Hi. Appreciate the question. Brian, I definitely agree with your vision on stablecoins. I wonder if you can sort of dimensionalize for us sort of timing in your mind for more commercial adoption outside of crypto, and the role you think Coinbase plays in that cross-border commerce, and whether or not it changes with whether or not your economics change with volume as USDC takes off.

Brian Armstrong: Yeah. Well, interesting. I mean, I think taking that last part first, I'm not seeing a change in economics yet. I think we're still super early in this, and it's growing really fast. And so it'll be interesting to see how that plays out. I mean, we have different ways to monetize it, like with Base Sequencer Fees and with USDC. You could, of course, charge directly for the payments themselves. But I think just zooming out, I mean, payments are just very clearly the next big use case for crypto. I think it started with trading. Payments are growing enormously now. And I would say just in general, it's a massive market, right? Cross-border payments are something like $40 trillion in volume annually. B2B is 75% of that, which is an early use case for stablecoins.

Brian Armstrong: We're now seeing about 100 billion in annual stablecoin volume, which it's growing rapidly. We're going to keep participating in this space across a number of different areas. We're building payments for businesses. Coinbase Business is our account for small, medium-sized businesses. We're adding various products and services in there around invoices and how to pay contractors and vendors. A lot of it's cross-border, but even within country, it's powerful. Since we announced that product just recently, we've had about 1,000 businesses onboarded already. There's another 1,000 on the waitlist. We're also integrating payments into our retail app for Coinbase and into the new Base app. I think that'll be powerful. We can be one of the; I think we're really one of the only companies that can start to connect these businesses and consumers together, right, in the two-sided market.

We're now seeing about 100 billion in annual stablecoin volume, which it's growing rapidly. We're going to keep participating in this space across a number of different areas. We're building payments for businesses. Coinbase Business is our account for small, medium-sized businesses. We're adding various products and services in there around invoices and how to pay contractors and vendors. A lot of it's cross-border, but even within country, it's powerful. Since we announced that product just recently, we've had about 1,000 businesses onboarded already. There's another 1,000 on the waitlist. We're also integrating payments into our retail app for Coinbase and into the new Base app. I think that'll be powerful. We can be one of the; I think we're really one of the only companies that can start to connect these businesses and consumers together, right, in the two-sided market.

Brian Armstrong: Shopify is an example of that where we're powering USDC checkout for their merchants. For these merchants, it's a big deal because they're used to paying 2% to 3% in fees for people to move money over the internet. There's no reason that that needs to exist, I don't think. I mean, and when you can do it in less than a second, less than $0.01, flat fee, regardless of the amount, it just has a lot more of the value. You can give some of that back to the consumer. Like in Shopify's case, they're giving 1% back to the people who pay with USDC, but the merchant also saves money. It's just kind of a win for everyone. I think that when you lower friction in the economy like that, you see an order of magnitude more activity happening.

Shopify is an example of that where we're powering USDC checkout for their merchants. For these merchants, it's a big deal because they're used to paying 2% to 3% in fees for people to move money over the internet. There's no reason that that needs to exist, I don't think. I mean, and when you can do it in less than a second, less than $0.01, flat fee, regardless of the amount, it just has a lot more of the value. You can give some of that back to the consumer. Like in Shopify's case, they're giving 1% back to the people who pay with USDC, but the merchant also saves money. It's just kind of a win for everyone. I think that when you lower friction in the economy like that, you see an order of magnitude more activity happening.

Brian Armstrong: It can really have a dramatic effect. So I guess just one other item to touch on in the payment space, which I think is really innovative that we're doing, is there's a protocol we came out with called X402. And what this is, it's a way to attach a stablecoin payment to any web request. You may be familiar with 404, which is on the internet, like it's file not found, right? If you go to a page that doesn't exist. There's actually another code called 402 in the HTTP spec, which was originally put in there for payment required. Now, it was never really implemented in most web browsers because the web browser never became a place where you'd put in your credit card. You'd put it into the website itself, not the browser.

It can really have a dramatic effect. So I guess just one other item to touch on in the payment space, which I think is really innovative that we're doing, is there's a protocol we came out with called X402. And what this is, it's a way to attach a stablecoin payment to any web request. You may be familiar with 404, which is on the internet, like it's file not found, right? If you go to a page that doesn't exist. There's actually another code called 402 in the HTTP spec, which was originally put in there for payment required. Now, it was never really implemented in most web browsers because the web browser never became a place where you'd put in your credit card. You'd put it into the website itself, not the browser.

Brian Armstrong: But anyway, we decided to go ahead and ship this, and it's attracted a lot of attention in the last month or so. Partners like Cloudflare, Vercel, and Google have started working with this. It's caused a lot of people to go sign up for Coinbase Developer Platform to start building these integrations. So it's still early days, but for payments happening over the internet for AI agent payments, that's another big emerging area. We shipped an open-source toolkit called AgentKit that lets any AI agent put a stablecoin wallet inside it. So we're starting to see a lot of things happen with payments on the frontier now. And yeah, I think this is going to be a big area for crypto and for Coinbase.

But anyway, we decided to go ahead and ship this, and it's attracted a lot of attention in the last month or so. Partners like Cloudflare, Vercel, and Google have started working with this. It's caused a lot of people to go sign up for Coinbase Developer Platform to start building these integrations. So it's still early days, but for payments happening over the internet for AI agent payments, that's another big emerging area. We shipped an open-source toolkit called AgentKit that lets any AI agent put a stablecoin wallet inside it. So we're starting to see a lot of things happen with payments on the frontier now. And yeah, I think this is going to be a big area for crypto and for Coinbase.

Operator: Our next question comes from Beau Pei at US Tiger.

Anil Gupta: Our next question comes from Beau Pei at US Tiger.

Bo Pei: Good afternoon. Thanks for taking my question. In the shareholders' letter, you mentioned scaling back with Base and incentives in derivatives. Could you quantify how that's affecting takeaway and whether you expect this to help margin expansion in Q4 in 2026?

Alesia Haas: Beau, it's a great question. So we have scaled back those incentives, and you can see that in the overall institutional growth. We did not attribute any change in take rate, and it's very difficult to look at take rate for the institutional business given the acquisition of Deribit, given the growth of the derivatives platform, which is not reported in underlying trading volume. So there's been no change to the overall pricing of any of the products and services in any material way quarter over quarter, but there has been a lot of mix shift and just change in the drivers of the total institutional platform. We are pleased to be able to change the incentives and derivatives because we've seen more liquidity and just more solid, sticky, organic open interest growth in that platform, which has enabled more profitable growth for our international derivatives business.

Operator: Our next question is from Alex Markgraf at KeyBank Capital Markets.

Anil Gupta: Our next question is from Alex Markgraf at KeyBank Capital Markets.

Alexander Markgraff: Hey, everyone. Thanks for taking my question. Alesia, maybe one for you. Just as we think about the many new products and elements of the Coinbase platform, just hoping we could just sort of step back and maybe you could remind us how you're thinking about managing margins across these various products and platform elements. Any way to sort of frame the vision for contribution margin across these newer items?

Alex Markgraff: Hey, everyone. Thanks for taking my question. Alesia, maybe one for you. Just as we think about the many new products and elements of the Coinbase platform, just hoping we could just sort of step back and maybe you could remind us how you're thinking about managing margins across these various products and platform elements. Any way to sort of frame the vision for contribution margin across these newer items?

Alesia Haas: So we do have a big mix of products, and they do all monetize separately. And in some cases, we have launched products with the sole growth of retention and acquisition in the case, for example, of the Coinbase Card. So what we look to do is monetize the overall customer relationship. For example, on the institutional side, we have many of our customers who are now engaged with three-plus products and services, and we look to the overall customer relationship and the customer economics versus single-product economics. So we're focused on growing overall profits. We're focused on how do we drive total Adjusted EBITDA growth at the company level, and that is how we think about it versus targeting a specific margin by product at this time.

Operator: We'll take our next question from Dan Dolev at Mizuho.

Anil Gupta: We'll take our next question from Dan Dolev at Mizuho.

Dan Dolev: Hey, guys. Great results here. I guess two quick questions. On the take rates, I appreciate you answering on the institutional take rates. Is there any way you can help us think about sort of how this looks a couple of quarters out? And then I have a very, very quick follow-up, if you don't mind.

Alesia Haas: As we've shared before, we don't focus on outlooks that far in our public comments. We are focusing on meeting our customers where they are, engaging them with products and services. We are constantly experimenting with our pricing on the retail side to understand how best our customers engage. Right now, we're really pleased to see the growth of the Coinbase One subscribers. We introduced the new Basic Tier last quarter, and the Basic Tier along with Coinbase Card is showing a lot of traction. Over time, we anticipate more and more customers will monetize through many products and services, and we're reducing the overall reliance on trading fees as a single monetization as it was many years ago. We will adjust fees as needed by the market, and that has been our long-standing approach.

Operator: We'll go now to Ed Engel from Compass Point.

Anil Gupta: We'll go now to Ed Engel from Compass Point.

Ed Engel: Hi. Thanks for taking my question. Alesia, in the past, you've talked about how 2025 was a bit of a reinvestment year just as you capitalize on the better political environment. I guess with the step-up in Q4 OpEx, I'm just kind of saying, are you still ramping up hiring through the end of the year, or is most of that headcount growth behind us? I guess I'm just trying to gauge whether this kind of Q4 guidance is a fully baked-in number for some of the reinvestment you made this year. Thanks.

Alesia Haas: Great question. So as we shared in my opening comments, the outlook for Q4 on our tech, dev, and G&A combined is up roughly $100 million quarter over quarter. About half of that step-up in cost is due to the two acquisitions we made, one being Deribit, the second being Echo. And then the other half is due to headcount growth. So we are still growing headcount in the fourth quarter, although at a much slower rate than we did in the third quarter.

Operator: Let's go now to Zach Gunn at FT Partners.

Anil Gupta: Let's go now to Zach Gunn at FT Partners.

Zach Gunn: Hey there. Thanks for taking my question. I just also wanted to ask on the payment side of things. Historically, when we think about driving adoption of a new payment modality or platform, it takes anywhere from 3% to 5% of overall transaction value to incentivize either consumer, merchant, or business switching. So can you just talk about what Coinbase is doing to incentivize adoption of its payments platform? Thanks.

Brian Armstrong: Yeah. I mean, you're right. There are a lot of powerful network effects in payments. So we don't want to be flippant about the challenge of coming into these new markets. Luckily, it's not just one Coinbase or one company like Coinbase going up against the powers that be here. I think the beauty of crypto is that these are decentralized open networks with thousands of companies participating all over the world. So it's a little bit like the internet going up against some kind of proprietary system, not just one company. Now, that being said, lots of people, I mean, there's something like $500 billion of assets that we have on platform. There's a huge number of people around the world now who have used crypto that are holding crypto. We're starting to get into those categories where it can be meaningful.

Brian Armstrong: Now, it won't be for every type of merchant, right? I mean, if you go to a Starbucks on the corner, maybe that doesn't hit the threshold. But for a certain type of e-commerce category, it could be that a large enough number of people actually the only way they want to pay is with crypto or it opens up microtransactions or new international markets where credit card penetration is low. So we'll see it first take off in areas where people's unmet need is the highest. And then eventually, it'll eat into more and more of it just because it's faster, cheaper, and more global. But yeah, this will take time for sure. And I guess I mentioned this earlier as well, but a lot of times when people think about payments, they think about buying the proverbial cup of coffee on the corner store.

Now, it won't be for every type of merchant, right? I mean, if you go to a Starbucks on the corner, maybe that doesn't hit the threshold. But for a certain type of e-commerce category, it could be that a large enough number of people actually the only way they want to pay is with crypto or it opens up microtransactions or new international markets where credit card penetration is low. So we'll see it first take off in areas where people's unmet need is the highest. And then eventually, it'll eat into more and more of it just because it's faster, cheaper, and more global. But yeah, this will take time for sure. And I guess I mentioned this earlier as well, but a lot of times when people think about payments, they think about buying the proverbial cup of coffee on the corner store.

Brian Armstrong: But the majority of cross-border payments are really B2B transactions, and that's the area where we're seeing higher adoption for crypto right now. I mean, it's growing like gangbusters, frankly, because that's just a very underserved part of the market where businesses want to get their money faster. They want to not be exposed to these FX risks. So those are some of the areas it'll take off in first, and I think eventually get to the majority of all payments.

But the majority of cross-border payments are really B2B transactions, and that's the area where we're seeing higher adoption for crypto right now. I mean, it's growing like gangbusters, frankly, because that's just a very underserved part of the market where businesses want to get their money faster. They want to not be exposed to these FX risks. So those are some of the areas it'll take off in first, and I think eventually get to the majority of all payments.

Operator: Let's go next to Joseph Vafi from Canaccord.

Anil Gupta: Let's go next to Joseph Vafi from Canaccord.

Joseph Vafi: Everyone, good afternoon. Just as a quick side note, just finishing lunch here on the West Coast that I bought with my Coinbase One card. So thanks for a great product. But just maybe double-click on Deribit here a little bit more. And Alesia, I appreciate the commentary on cross-product margin capability and efficiency there. But as you look forward, the distribution of the Coinbase platform is so big. Do you see this as a big share gainer or share creator in option transactions? And then could you just remind us on margin structure on a transaction margin basis, how your options and derivatives compare to spot? Thank you.

Alesia Haas: All right. So Deribit is already the market leader in options. They had over 75% market share for options. Notably, this is all non-US, and so there is path to grow the market for options in the US. That is going to be a multi-quarter roadmap of bringing both the regulatory licenses and product to bear in the US, but we think that's a huge opportunity for us. But more importantly, we believe that bringing these products to trade all under one umbrella will be able to grow overall trading volume on all of our products on our platform. And we've already seen just by having Deribit closed for a few weeks on our platform that existing clients have more confidence in the combined balance sheet and now bringing options to the Coinbase balance sheet. They are trading at higher volumes and holding more assets on our platform.

Alesia Haas: So the brand strength, the balance sheet strength that we're able to now put behind Deribit and their strong product and risk management is having outsized benefits to both of us. We can follow up with you about the margin differential. Obviously, there's no margin on spot trading. We do offer leverage on those assets, but they're very customized by product. So they look different in each market, and they look different to different customer groups. I don't have a simple way of answering that question for you.

So the brand strength, the balance sheet strength that we're able to now put behind Deribit and their strong product and risk management is having outsized benefits to both of us. We can follow up with you about the margin differential. Obviously, there's no margin on spot trading. We do offer leverage on those assets, but they're very customized by product. So they look different in each market, and they look different to different customer groups. I don't have a simple way of answering that question for you.

Operator: We'll take our final question from Gus Gala at Monness, Crespi, Hardt.

Anil Gupta: We'll take our final question from Gus Gala at Monness, Crespi, Hardt.

Gus Gala: Hey, guys. Thanks for taking my question. I wanted to talk a little bit about the competitive environment between September and October. September was a fantastic month in terms of outgrowing the market at spot, and October seemed to reverse that. Just trying to parse out, is this competitive pressure present in the system, maybe seeing more aggressive pricing competition from peers in terms of promos, the incentives peeling away, or is it just a mix issue? Just trying to understand what's going on there. Thanks.

Alesia Haas: We've always faced competition. We are a platform that has multiple customer types, multiple products, and so we all have faced competition since we've been founded on different products, different customer groups within our portfolio. Our focus and our goal is always to deliver the most trusted and easiest-to-use products to our customers. We've been really proud of our continued growth in market share, trading volumes, size, and scaling up these various product offerings. When you think about the competitive pressures in the month of October, there's nothing specific to talk about generally. We are always looking for ways to continue to build and delight our customers.

Brian Armstrong: Yeah. I hope we answered your question on that. I was a little distracted because I was tracking the prediction market about what Coinbase will say on their next earnings call, and I just want to add here the words Bitcoin, Ethereum, Blockchain, Staking, and Web3 to make sure we get those in before the end of the call.

Operator: All right. Well, we've taken all of our questions. That's it for today. Thanks for joining us, and we'll talk to you again next quarter.

Anil Gupta: All right. Well, we've taken all of our questions. That's it for today. Thanks for joining us, and we'll talk to you again next quarter.

Alesia Haas: Before we end, I just want to invite anybody to join us on our X Spaces call next week. So please follow us on X, and Brian and I will be taking additional questions on Monday.

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