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    COIN
    Earnings call· Dec 2024(Q4 FY24)

    Coinbase Global, Inc. COIN

    Feb 13, 2025 Source

    Executive summary

    Coinbase Q4 FY24 — Strong Performance Driven by Regulatory Tailwinds and Diversified Revenue

    Coinbase delivered a strong Q4 FY24, benefiting from a rallying crypto market and favorable regulatory shifts, particularly in the U.S. The company achieved significant revenue growth and positive adjusted EBITDA, driven by diversified product offerings and successful international expansion. Management is focused on capitalizing on these tailwinds by expanding existing products, driving utility in new categories like payments, and scaling foundational infrastructure for future growth.

    Highlights

    5

    • Total revenue more than doubled to $6.6 billion in FY24.

    • Adjusted EBITDA reached $3.3 billion in FY24, marking two consecutive years of positive adjusted EBITDA.

    • Subscription and services revenue grew 64% year-over-year to $2.3 billion in FY24.

    • International revenue share reached 19% in Q4 FY24, demonstrating successful expansion.

    • Reached all-time high U.S. spot and global derivatives market share in Q4 FY24.

    Concerns

    2

    • Stablecoin revenue declined $21 million or 9% QoQ in Q4 FY24 due to lower interest rates and new ecosystem participants, despite USDC market cap growth.

    • Total Q4 operating expenses increased 19% QoQ to $1.2 billion, primarily due to higher transaction expenses and increased marketing/policy spend.

    Guidance & targets

    4
    CategoryTargetConfidence
    Subscription and services revenue
    $685 million to $765 million
    medium materiality
    High
    Technology and development and general and administrative expenses
    $750 million to $800 million
    medium materiality
    High
    Sales and marketing expenses
    $235 million to $375 million
    medium materiality
    High
    USDC market position
    #1 dollar stablecoin
    high materiality
    High

    Operational metrics

    29
    Total revenue
    $6.6 billionmore than doubled YoY
    FY24
    Adjusted EBITDA
    $3.3 billion2 straight years of positive
    FY24
    Subscription and services revenue
    $2.3 billionup 64% YoY
    FY24

    Driven by USDC, staking and Coinbase One.

    International revenue share
    19%
    Q4 FY24

    Due to improved payment rails and localization.

    Total trading volume
    $439 billionup 137% QoQ
    Q4 FY24
    Consumer trading volume
    $94 billionup 176% QoQ
    Q4 FY24

    Outperformed the U.S. spot market, which increased 126%.

    Consumer transaction revenue
    $1.3 billionup 179% QoQ
    Q4 FY24
    Monthly Transacting Users
    9.7 millionup nearly 24% QoQ
    Q4 FY24

    Nearly half of trading customers in Q4 were new or resurrected.

    Institutional trading volume
    $345 billionup 128% QoQ
    Q4 FY24

    Outperformed the U.S. spot market.

    Institutional transaction revenue
    $141 millionup 156% QoQ
    Q4 FY24
    Prime financing loan balances
    all-time high
    Q4 FY24

    In connection with strong market conditions.

    Subscription and services revenue
    $641 millionup 15% QoQ
    Q4 FY24

    Driven by higher asset prices and USDC market cap, as well as native unit inflows across staking, custody and USDC.

    Stablecoin revenue
    $21 million declinedown 9% QoQ
    Q4 FY24

    Lower interest rate environment and impact of new USDC ecosystem participants offset growth from increased USDC market cap and on-platform balances.

    Other subscription and services revenue
    $33 million growthup 56% QoQ
    Q4 FY24

    Largely driven by Coinbase One.

    Coinbase One paid members
    over 600,000
    Q4 FY24
    Total operating expenses
    $1.2 billionup 19% QoQ
    Q4 FY24

    Primarily driven by higher transaction expenses in connection with higher trading activity.

    Technology, G&A, Sales & Marketing collective growth
    over $84 millionup 10% QoQ
    Q4 FY24

    Due to high performance marketing spend, higher USDC rewards, and policy-related spend.

    Net income
    $1.3 billion
    Q4 FY24

    Benefited by $476 million in pretax gains on crypto asset investment portfolio (vast majority unrealized), representing $357 million after-tax.

    USD resources
    $9.3 billion
    Q4 FY24
    Assets on platform
    $404 billion
    Q4 FY24

    Approximately 12% of total crypto market cap. Reinstated as a key business metric after early adoption of SAB 122.

    Transaction revenue
    roughly $750 million
    Q1 FY25 YTD

    Strong start to the year.

    Average crypto market cap
    33%up 33% QoQ
    Q4 FY24
    Crypto asset volatility
    27%up 27% QoQ
    Q4 FY24
    USDC market cap
    substantially increased
    Q4 FY24
    On-platform USDC balances
    substantially grew
    Q4 FY24
    Crypto stablecoin volume
    $30 trillionup 3x YoY
    FY24
    Global GDP on crypto rails
    1%
    Current
    Global GDP on crypto rails
    up to 10%
    End of decade
    Tokens created
    about 1 million
    Current

    Product announcements

    1
    ProductTypeDetails
    13 new assets (PEPE, WIF)launch

    Deals & partnerships

    2
    Global and local players (e.g., Stripe, Yellow Card)Accelerating USDC market cap growth and adoption.

    Driving more partnerships with global and local players like Stripe and Yellow Card to do more global adoption.

    Various companiesExploring M&A opportunities.

    Management sees an incredible pipeline of companies that could make sense to purchase.

    Risks & headwinds

    3
    Regulatory uncertainty

    The regulatory overhang is lifting.

    Mitigation: Policy efforts in the U.S. and other countries, supporting Stand With Crypto.org, donations to fair shake super pack.

    Crypto market volatilityShort-term

    No meaningful impact to business from February volatility.

    Mitigation: Retail users are long-term hodlers; markets recovered quickly.

    Lower take rates in international derivatives due to competitionCurrent

    Fees are lower than spot trading.

    Mitigation: Currently focused on building liquidity and trading volume by providing incentives; fees will evolve to be more mature over time.

    What to watch in Q1 FY25

    5

    Q1 Subscription and Services Revenue

    Q1 FY25
    Current$641 million
    Target$685 million to $765 million

    Why it matters

    This metric is a key indicator of Coinbase's revenue diversification strategy and growth beyond transaction fees, driven by USDC, staking, and Coinbase One.

    We expect Q1 subscription and services revenue to grow sequentially and be in the range of $685 million to $765 million.

    Q&A highlights

    6

    How can Coinbase continue to gain market share against lower-cost products and spot ETFs, and what makes it different?

    Coinbase's market share gains are attributed to trust, platform stability, user experience improvements, and effective marketing. They view crypto as a growing pie, not zero-sum, and aim to power the broader ecosystem through their developer platform. Being crypto-native and regulatory-compliant provides a durable competitive advantage.

    “We were really proud to see that we did hit an all-time high for both U.S. spot and global derivatives market share in Q4.”

    asked by Kwun Sum Lau · answered by Brian Armstrong

    2 min read6 chapters

    Detailed Narrative

    01

    Regulatory Tailwinds and Market Expansion

    The U.S. political landscape has become significantly more pro-crypto, with President Trump advocating for the U.S. as a crypto capital and Congress pushing for stablecoin and market structure legislation. This shift is seen as a major catalyst for TAM expansion, positioning Coinbase as a preferred partner for companies integrating crypto, with the long-term vision of 10% of global GDP running on crypto rails by decade-end.

    02

    Diversified Revenue Growth

    Coinbase achieved a strong financial performance in 2024, with total revenue doubling to $6.6 billion and adjusted EBITDA reaching $3.3 billion, demonstrating its "all-weather" capability. Subscription and services revenue grew 64% year-over-year to $2.3 billion, driven by USDC, staking, and Coinbase One, highlighting successful revenue diversification beyond transaction fees.

    03

    International Expansion Success

    The company's international revenue share reached 19% in Q4, attributed to improved payment rails and localization efforts. Coinbase has developed a repeatable playbook for launching in new markets, achieving contribution margin positive results, and plans to continue this expansion to build out world-class financial services infrastructure globally.

    04

    Strategic Priorities for 2025

    Coinbase's 2025 strategy focuses on three key areas: growing revenue from existing products (e.g., derivatives trading, asset addition, USDC market cap growth, Coinbase One), driving utility for mass adoption (e.g., stablecoin payments, Base as a leading L2 chain, Coinbase Developer Platform), and scaling foundational elements (e.g., policy advocacy, infrastructure re-architecture).

    05

    Evolution of Trading and Asset Listing

    Coinbase achieved all-time high U.S. spot and global derivatives market share in Q4, driven by platform stability, improved user experience, and effective marketing. The company is rethinking its asset listing process due to the explosion of new tokens, aiming to deeply integrate decentralized exchanges while balancing customer access with appropriate disclosures and consumer protection.

    06

    Vision for Crypto's Future

    Management envisions crypto evolving beyond an asset class to a foundational component of the global financial system, with daily utility for payments and tokenized real-world assets. The goal is for Coinbase to become a primary financial account, offering trusted and easy-to-use products that simplify complex crypto interactions for the average person and businesses.

    AI-generated summary of the company’s earnings call. Not investment advice.