Circle's performance fell short of expectations. What is your take on this?

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Coinbase 2026Q1業績直播

Key Takeaways (AI-Generated)

Financial Performance

- Q1 2026 total revenue of $1.4 billion, down 21% quarter over quarter due to softer crypto market conditions

- Quarterly net loss of $394 million with positive Adjusted EBITDA of $303 million

- Transaction revenue of $756 million: consumer $567 million (down 23%), institutional $136 million (down 27%)

- Subscription and services revenue of $584 million, down 16% quarter over quarter, representing 44% of net revenue

Business Highlights

- Reached new all-time high in crypto trading market share despite down market conditions

- Derivatives trading now generating over $200 million in annualized revenue

- Prediction markets reached $100 million in annualized revenue in March, just two months after launch

- Coinbase One surpassed 1 million paid subscribers with 12 products generating $100+ million annualized revenue

Financial Guidance

- Q2 subscription and services revenue expected in range of $565-645 million with opportunity for quarter-over-quarter growth

- Q2 technology and development plus general and administrative expenses expected at $820-870 million, down 4-9% from Q1

- 2026 adjusted expenses expected between $4.3-4.6 billion, roughly $500 million lower than Q4 2025 annualized exit rate

- Additional $50-60 million in restructuring expenses expected in Q2 related to headcount reduction

Opportunities

- Clarity Act expected to unlock institutional capital and enable hundreds of companies to integrate crypto services

- AI-native transition increasing product velocity with pull requests per engineer up 80% year-over-year

- X4O2 protocol adopted by major companies including Cloudflare, AWS, Stripe, Shopify, Google as open standard

- AI enabling non-technical employees to draft code while maintaining quality through human review processes

Full Transcript (AI-Generated)

Operator

Welcome to the Coinbase Q1 2026 earnings call. Before we get into the good stuff, some disclaimers. During today's call we may make forward-looking statements that may vary materially from our actual results. Please refer to our SEC filings and this slide of the presentation for more information concerning risks, uncertainties and other factors that could cause these results to differ.

In addition, our discussion today will include certain non GAAP financial measures. Reconciliations to the most directly comparable GAAP financial measures are provided in the earnings presentation on our Investor Relations website.

Alicia Haas

Hello everyone and welcome to our Q1 2026 earnings call. My name's Alicia Haas and I'm the Chief Financial Officer of Coinbase. You may see a new face on this call with us today, Mike, very right over there. I want to introduce you all to Sean Agarwal. Sean is our Chief Business Officer and he's our newest Head of Investor Relations.

You're going to see a lot more of him, but I want to tell you a story about Sean. Sean is our OG head of IR. Sean led our Series E fundraise back in 2018. He was my right hand as we went public in 2021 and I could not be more delighted to introduce him to his first public company earnings call and bring him back to this new set of investors that we have with us today. So welcome Sean and I'm going to turn it over to him and he's going to walk us through our agenda and what to expect at our earnings call today.

Sean Agarwal

Thank you, Alicia and hi everyone. Really excited to be here and back in the IRC. As Alicia mentioned, my name is Sean Agarwal and I'm the Chief Business Officer and Head of Investor Relations at Coinbase. I'll be MC-ing our call today and in addition to Alicia and I, I am joined by my esteemed colleagues, Brian Armstrong, our Co-founder and CEO, Emily Choi, our President and COO and of course Paul Gruel, our Chief Legal Officer.

All righty diving in. Our agenda today is that we'll start with comments from Brian and Alicia on Coinbase's strategy and Q1 performance. We'll then have time to address questions from both our ex and analyst communities. So with that, Brian, over to you.

Brian Armstrong

All right, Thanks, Sean. So I want to start with our mission, which is to increase economic freedom in the world. Our mission matters for everyone because 4 billion people are locked out of the financial system globally, the unbanked and the unbrokered. Crypto fixes this by giving everyone equal access to property rights, stable currency, and permissionless financial services.

Now let's take a look at the state of the market. Despite the crypto market being down, the fundamental growth of the on chain economy is strong. All of finance is moving on chain because crypto provides faster, cheaper and more efficient financial infrastructure. Crypto trading volumes have grown more than 50X in the last seven years. Stablecoin market cap is now more than 300 billion and growing fast.

Tokenized real world assets are scaling and expected to hit 16 trillion by 2030. And now crypto has a new catalyst, AI. There will soon be billions of agents transacting, and they need rails that can keep up. Crypto is the only option that checks all three boxes, fast, cheap, and global. To summarize, the world economy is moving on chain, and Coinbase was built to capitalize on this transition.

Here's why. First, we're the most trusted brand in crypto. Individuals and businesses trust us to store more crypto than any other company in the world. Second, we've pooled global liquidity on our centralized exchange, creating a powerful network effect. Third, we're the largest regulated stablecoin platform in the world. And fourth, we have a proven track record of building and scaling frontier products.

In short, we believe Coinbase is well positioned to win as the world increasingly moves on chain. You're probably familiar with Coinbase's products, but if not, here's a quick reminder. We serve three main customer groups, consumers with our retail, advanced trading and self custody apps, institutions with our prime brokerage platform. And for developers, we have CDP or Coinbase developer platform, our one stop shop where any company can integrate crypto.

And the most powerful part of our product suite is that they are all built on a shared infrastructure that creates network effects and economies of scale across our platform. You can see the full stack architecture of Coinbase here. How it works is our battle tested custody stores more crypto than any other company. Our settlement rails are fast, cheap and global. Our exchange offers deep liquidity from our multiple customer groups.

Stable coins like USDC enable efficient money movement and it's all supported by a decade plus track record of leaning into regulation and compliance around the world. Now let's get into Q1. We faced headwinds with a softer trading market this quarter, but we executed well on what was in our control. We saw huge growth in derivatives trading volume driven by our everything exchange, we hit a new all time high in USDC held in Coinbase products and saw 10X year over year growth in stable coin transactions on base.

We're also leading on the next frontier with over 90% of on chain agentic transaction volume happening on base. So let's walk through some of our key metrics. First, crypto trading market share. Despite the market being down, we continued to grow share globally and reached a new all time high. When market conditions are difficult, we see customers consolidate activity on platforms they trust.

Next, let's touch on assets on platform. In short, Coinbase stores more crypto than any other platform and despite asset prices being down, Q1 marked the 12th consecutive quarter of net native unit inflows. This is a key part of our strategy. Our most trusted brand attracts assets on platform, which leads to customers adopting more products. Finally, I want to highlight stable coin growth this quarter.

USDC growth on our platform has hit another all time high despite broader crypto market performance. We are the largest distributor of USDC with more than 25% of all USDC held in our products. And importantly, we capture about 50% of all USDC economics. Moving into an update on our 2026 priorities, which we've told you about in prior sessions, we've made significant progress against our top three priorities this quarter.

As a reminder, these are the everything exchange so users can trade every asset in one place, stable coins and payments, enabling money to move at the speed of the Internet and bringing trading and payments on chain. I'll give a quick overview of each of these. So first, how we're growing the everything exchange. We heard from customers that they wanted to trade more than just crypto on Coinbase.

And I'm excited to share that in the past year, we've transformed Coinbase from a primarily spot focused crypto platform into a place where you can now trade any asset class. We've added stock trading, 24/7 equity perps, retail access and geographic expansion for derivatives. We've added prediction markets. We're starting to see real traction now validating our everything exchange strategy.

Derivatives trading is now over 200 million in annualized revenue. Prediction markets are scaling fast reaching 100 million in annualized revenue in March. That's just two months after launch. And we added non crypto contracts like silver, gold, oil, which saw more than 4X growth quarter over quarter. Next, Coinbase is driving stablecoin adoption worldwide.

Coinbase has a full stack stablecoin solution across USDC, base and Coinbase developer platform. We're seeing this bundle accelerate adoption of stablecoins. First, total stablecoin supply has doubled over the last two years and USDC is taking a bigger share of that growing pie. Second, stablecoin transaction volume doubled this quarter and USDC and partner stablecoins drove more than 80% of that total volume.

Lastly, the third chart shows how base is now the dominant chain for all stablecoin transactions with 62% share. And we're also building stablecoin infrastructure for agents. So USDC and BASE are now powering the majority of on chain stablecoin transactions for AI agents. And when agents pay with crypto on chain, they used USDC 99% of the time and over 90% of those transactions are happening on the base chain in Q1.

We're seeing agents also use the X4O2 protocol for a wide variety of use cases, including trading, AI, inference, media generation, storage and more. In short, Coinbase is at the center of the agent economy. And lastly, our third priority for 2026, growing on chain. We continue to make DeFi easy to use through our Coinbase app. DEX volumes grew 2X quarter over quarter and Borrowland balances have grown to over a billion dollars in the last year.

So to wrap up, the future of finance is on chain and Coinbase is the company best positioned to power it. Crypto's updating every aspect of the financial system. Coinbase has a full stack solution across multiple customer groups and Agentic commerce is the next frontier. With that, I'll hand it over to Alicia.

Alicia Haas

Thank you, Brian. In Q1 2026, we generated $1.4 billion of total revenue, a quarterly net loss of 394 million and 303 million of positive Adjusted EBITDA. We're going to unpack these results and more in the following slides. But before we dive deeper in the numbers, I want to step back and give you our assessment of the quarter because the headline figures alone don't tell the full story.

We are controlling what we can control and the underlying business performed well. As Brian shared, we reached a new all time high in crypto trading market share. We posted our 12th consecutive quarter of native unit growth. We saw green shoots in the everything exchange from derivatives and prediction markets. We came in under our expense guidance.

Against this backdrop, macro conditions were genuinely tough. Total crypto market cap and total crypto trading volume were both down more than 20% quarter over quarter and volatility in long tail assets were at historic lows. The bottom line is that we saw price headwinds outpace the strong growth in this quarter, but our fundamentals remain strong.

Our Q1 results deliver the message we control what we can control and when we look at our results versus the outlook we provided in February, we delivered within or better than every range we set. Total revenue for Q1 was down 21% quarter over quarter reflecting the softer market backdrop. As a reminder our revenue is inherently non linear. A significant portion moves in line with crypto asset prices and trading volumes.

What matters is our ability to build and grow our product suite and assets on our platform through these cycles and show long term growth even amid the short term volatility. Drilling into our transaction revenue of $756 million, consumer was 567, down 23% compared to a 35% decline in the overall consumer spot volumes. There were two factors at play here.

One, we saw a mixed shift towards consumer core trading away from advanced. Second, we see accelerating contributions from our newer products like derivatives and prediction markets, which contribute to our total revenue but are not included in trading volume key business metric which is spot crypto only. On the institutional side, revenue of 136 million declined 27% alongside volumes.

Subscription and services revenue was $584 million, down 16% quarter over quarter. We saw continued strength in native unit inflows. However, this growth was offset by prices and rates. Stablecoin revenue was $305 million. Average USDC held in Coinbase products reached a new all time high of $19 billion. A quick reminder here, our USDC contract auto renews every three years into perpetuity. It cannot be terminated.

I also want to flag a reporting change we made in the first quarter. We reclassified $18 million of corporate stable coin revenue to other revenue. This change reflects our treatment of cash and USDC as completely fungible within our corporate operations. And this is consistent with our decision earlier this year to report payment stable coins as cash and cash equivalents on our balance sheet. We've recast historical periods for comparability.

Blockchain rewards were $101 million, down on price and protocol reward rates, but importantly we saw native unit growth in staked balances. Interest in finance fee revenue was $68 million, up 13% quarter over quarter. Average daily loan balances reached 1.4 billion and active customers grew double digits. Last, I want to highlight Coinbase One now over 1 million paid subscribers.

A sign of the product value proposition is resonating independent of the broader macro market conditions. It's important to know that Coinbase One members generate incrementally higher trading volume, higher revenue. There are most engaged customers in the products across the portfolio and they exhibit strong unit economics. Revenue diversification is one of our key financial objectives.

We are proud to have 12 products generating more than 100 million in the annualized revenue. Our retail derivatives business, as Brian mentioned earlier reached a new all time high in Q1, generating revenue at an annualized run rate exceeding 200 million and putting it on track to be our next product to hit the $250 million product tier. Prediction markets is also tracking well and it's on track to be the 13th product to cross 100 million in annualized revenue in its second month of meaningful operations.

We remain focused on revenue diversification and we're really encouraged by the breadth of this portfolio and our ability to launch and scale $100 million plus revenue lines. Our total operating expenses were $1.4 billion, down 5% quarter over quarter. Tech and dev was 526 million up modestly driven by one time costs related to acquisitions completed in Q4 2025.

G and A declined 17% quarter over quarter as we got a head start on expense reductions driving declines in deal related legal costs, customer support costs and policy related expenses. This is our 13th consecutive quarter of positive Adjusted EBITDA spanning bull markets, bear markets and everything in between. We believe this track record is one of the clearest demonstrations of our commitment and the durability of our business model.

We ended the quarter with over $10 billion in cash and cash equivalents and total available resources of $12 billion. We have the flexibility to invest through the cycle. We can pursue strategic opportunities. We can return capital to shareholders via share purchases all simultaneously. I wanted to remind you that our 2026 convertible notes are due on June 1st.

Unless the notes reach the defined conversion price, we do intend to retire the $1.3 billion obligation. In Q1, we repurchased approximately 6 million shares for $1.1 billion. Our cumulative buybacks have roughly offset 90% of shares that we issued for employee compensation since Q4 of 2024. Forward turning to our outlook, we expect subscription and services revenue in the range of 565 to $645 million with an opportunity for quarter over quarter growth.

We expect technology and development and general and administrative expenses to continue to come down sequentially with a range of 820 to $870 million in Q2, down 4 to 9% from the first quarter. In addition to our recurring expense outlook, we expect to incur 50 to $60 million in restructuring expenses related to the headcount reduction we announced earlier this week. This will be recognized as a standalone restructuring line item in our Q2 financials.

As we mentioned in Tuesday's announcement, we are transitioning to be an AI native company. Our product velocity is already increasing rapidly. The number of pull requests per engineer is up almost 80% year over year. And importantly, our focus on quality is scaling even faster. Integration test coverage across core services is up 3X in the last six months.

The ability to scale our team members and their ability to iterate and improve our products at these speeds is a game changer for our execution throughput and efficiency. Before I close, we wanted to provide an annual adjusted expense outlook in addition to our quarterly expense outlook. We define adjusted expenses as technology and development plus general and administrative plus sales and marketing, less the amortization of intangibles.

We expect 2026 adjusted expenses to be between 4.3 and 4.6 billion dollars. This is roughly $500 million lower than our Q4 2025 annualized exit rate at the midpoint. And I also want to point out that absent any growth in USDC Rewards, we would expect 2026 expenses to be flat to 2025. With that, this concludes our prepared remarks and I will hand it back to Sean to moderate Q&A.

Sean Agarwal

Thanks, Alicia. We're going to transition over to Q&A for this quarter. We're going to take a mix of questions from both our ex and our analyst community. All the questions are being submitted to us in writing and we'll try to get broad coverage across topics that folks are interested in. So to start, we'll talk about one that's top of mind for a lot of folks, regulation.

So for Paul, a question comes from James Yarrow at Goldman Sachs, who asks, could you comment on the status of the Clarity Act? How do you expect this bill to evolve? And what are your latest views on the impacts to the business?

Paul Gruel

Thanks, Sean. On clarity, we are confident that the bill is going to head to markup this month with a floor vote to follow in early summer. All that translates to our confidence that we're going to see a signed piece of legislation by the end of the summer. And all of this timing follows from real progress that we've seen on particular issue of interest to many, which is the rewards question.

Just last week we saw Senator Tillis and Senator Brooks announce a compromise on stable coin rewards. And while we're certainly not declaring victory here, we appreciate both Senators efforts to work out an important resolution of this issue. And we also appreciate that this is still live legislative process, which means voices are going to continue to weigh in on the question.

Like every other compromise coming out of Washington, everyone's undoubtedly a little unhappy about where things have landed. But what we can say is that the direction of the text and in particular it's preservation of activity based rewards while prohibiting a passive pure bank style deposit style yield really reflects what to us is an approach that can work and will work going forward.

So look, the details do matter a lot here, but from the language that was released, we think it's clear rewards are going to be protected and we can preserve what are the key elements of our current program. As for business impact going forward, there remain a lot of rules that still need to be written once the legislation is passed. So I think it would be premature to get out ahead of that.

But what we can say right now is that we are building towards a model that is based on engagement, is based on utility. And we think that these positions are going to serve us and our customers well, no matter what the final framework looks like. I do think it's important to emphasize one further point though, which is we shouldn't lose sight of the broader picture.

Clarity is going to be a significant unlock for the industry, for our customers and for Coinbase and especially our ability to build new products and services with regulatory clarity in a way that we haven't seen really ever in crypto and on a timeline of years rather than dealing with individual case by case concerns. So this is all exactly what we have spent time, energy, sweat and emotion building towards.

And we're very excited to continue to keep working through next week's markup and beyond to make sure that this bill gets passed.

Sean Agarwal

Thanks, Paul. Yeah, a lot of good discussion on the rewards topic, but clarity is about much more. And so for Brian, this question from Ken Worthington at JP Morgan. You and the crypto community seem to come to a compromise on legislation, particularly around stablecoin rewards, but you were also concerned about DeFi regulatory authority and tokenized securities.

When legislation comes out and gets signed into law. From your perspective, what are the things that you expect to see over the next year in terms of who new will be participating in the crypto ecosystem and what do you expect they will be doing?

Brian Armstrong

Yeah, well, you're correct that the Clarity Act is about much more than just stable coins and rewards. I think as Paul mentioned it, it will create a lot of opportunities for people to work on tokenization, having clarity about what's a commodity versus a security, exchanges and custodians, what their roles are. DeFi has an important role to play here, self custodial wallets. And so there's going to be lots of energy that comes out of it.

I think it's going to be a little bit like when the Genius Act passed for stablecoins and we saw a couple hundred large companies in the US come out in the subsequent months and announce integrations with stablecoins. And so this means that hopefully lots of companies post in a world post clarity being passed will come out and start to integrate crypto.

They might use it to raise money on chain. They might use it to provide crypto services to their customers. I think it'll just unlock a lot of institutional capital that'll flow into the space broadly. And the opportunity is really there for Coinbase to go provide those services to all these companies coming into crypto post clarity being passed into law and actually power integrations for many of them as well via Coinbase developer platform.

So we think it's going to be very additive. We want every company to be integrated into the crypto enabled financial system just like they use the Internet or AI or any other technology and Coinbase can provide those services them. So that's what we plan to do.

Sean Agarwal

Great. OK. Last question on this theme, this one for Paul and Alicia from Paul Christiansen at City who asks, would changes in stablecoin rewards policy lead to changes in contractual revenue share mechanics with Circle?

Paul Gruel

Well, fortunately the contracts that we have in place with Circle are set and as Alicia has underscored, they auto renew. So we expect to continue to go forward with our relationship with Circle under those same terms. Again, the details in the legislation matter, so I can't say until the ink is dried on the final document what the full set of implications may be, but we're confident that this will land in the right place and then our relationship will proceed as it has up until this point.

Alicia Haas

I don't have much to add. I just think it's important that to know that the revenue share is tied to overall USDC supply and adoption and it's really unaffected by any rewards language.

Sean Agarwal

Great. OK, transitioning. We got a question from one of our ex analysts. At Architect 9000, who asks? It was fairly alarming in your note earlier this week, Brian to hear that non-technical developers are pushing code, AI code into production. Is that really true? And how is Coinbase going to marry AI's ability to move fast while preserving high quality and brand trust?

Brian Armstrong

Yeah. So I should have made this more clear in my note, but we encourage product managers, designers, other non-technical employees to use AI agents to draft code. That's getting easier to do. But human engineers still review all code before it goes into production. In some cases we have multiple review levels from human engineers just on the most sensitive systems, as you can imagine.

So it's important to realize, and I think your question points at this, AI agents are not just about increasing speed of execution in terms of code or enabling lots more people to write it. It's also going to raise the bar on quality and cybersecurity. And we saw a glimpse of this recently actually with the Mythos model that Entropic put out where it's actually able to find security vulnerabilities that 99% plus of human engineers would not have been able to find.

So I think that it's important to lean into this as an opportunity to raise quality and cybersecurity standards with AI agents. It's a little bit like self driving cars, they're getting to a place where they're actually safer than human drivers. And so there will be a point I think in the future where people will be able to, non-technical people will be able to write code, AI agents will be able to review it and check it for security, improve the quality of it and actually in certain situations have it go to production.

But that's not yet the case today. And so we want to make sure at Coinbase, we are leaning into the frontier, rigorously testing these things often times in parallel to make sure it has a proven track record. And if we see it consistently exceed the standard of what a human could do in certain situations, it would be irresponsible not to automate it further. So that's how we're going to stay on the frontier.

Alicia Haas

And I just wanted to add the comments that I made in opening comments that our investment in quality, our investment in integration testing is exceeding the pace of our growth in new pull requests. So we are definitely investing in the testing required to drive up quality on our platform.

Sean Agarwal

All right, thanks for that. Switching gears a little bit for Emily, question from Ramsey El Assaw at Cantor Fitzgerald, who asks, you're gaining market share recently. Can you give us an update on the competitive environment and on the drivers that have enabled you to win share despite the down market?

Emily Choi

Yep, we reached an all time high in Coinbase crypto trading volume market share in Q1 and we gained share in both spot and derivatives globally in a market where total crypto trading volumes were down 20% plus quarter over quarter. Our market share has grown roughly 5X since Q1 2023. And what we found is that when conditions are difficult, people go to where they trust.

So this is the 12th consecutive quarter of net native unit inflows for us. Share gains have been driven by product innovation and expansion of our platform including launching derivatives in our flagship Coinbase app and adding support for non crypto contracts, our everything exchange strategy is validating retail derivatives are at 200 million plus of annualized revenue.

Prediction markets are at 100 million plus of annualized revenue in March and incremental revenue cross sold into a customer base we've already acquired. So it's very positive. We do also believe that share captured in down markets will be sticky as conditions improve.

Sean Agarwal

OK, let's switch gears a little bit and talk about stable coins. So this question also for you, Emily from Andrew Jeffrey at William Blair. Can you talk a little bit about what the extent of your stablecoin movement infrastructure ambitions are? Is Coinbase content with being a CPN participant or is the company looking to expand offerings such as settlement?

Emily Choi

So we have built a faster, cheaper global settlement layer and we intend to fully leverage it. We have the full stack. We are the primary distributor of USDC as the digital dollar, base as the settlement layer, our payments APIs as the enterprise integration layer and X4O2 is the open standard for the next wave of Agentic commerce.

We have a vertically integrated stack that no other company in the world owns end to end. We're not playing as a network participant. We are the platform that powers stable coins. The market opportunity is pretty massive here and we still think it's quite early in the cycle.

Sean Agarwal

OK. Let's continue on that theme a little bit and talk about Agentic and AI native finance for Brian. Question from Raina Kumar at Oppenheimer. As we get closer to the commercialization of agentic payments at scale, can you talk about the particular opportunity you see for X4O2? Specifically, how should we think about incremental USDC on platform growth from X4O2 adoption? And over time, how meaningful could transaction fees on base and from the X4O2 facilitator really become?

Brian Armstrong

Yeah, So thanks for following X4O2. For anybody doesn't know, this is an open protocol that we incubated within Coinbase for agentic commerce. It allows agents to spend small or large amounts attached to any request, whether that's to e-commerce check out or any other agent in the world. And we're seeing this emerging area of agentic commerce really start to take off.

We've subsequently opened this protocol and put it as part of the Linux foundations and lots of other companies have come in to contribute to it and oversee the governance of it, including Cloudflare, AWS, Stripe, Shopify, Google. And so it's currently the most popular open standard for agentic commerce, which is great. So your question asked about how this helps Coinbase.

Well, there's a couple ways. One is that 99% of the X4O2 transactions right now are settled in USDC. That's from Q1. And so we obviously monetize USDC via our relationship with Circle, which is good. 90% of the agentic stable coin transaction volumes were settled on base in Q1. So base is the leading chain now.

And it just makes sense that there's lots of companies who can build on X4O2. It is truly an open standard. But because it was incubated within Coinbase, we have really great API. It's inside Coinbase developer platform for instance, that let people integrate with X4O2, put it into any check out that they wanna make agentic enabled.

And so it's been a really nice thing that's grown from out of Coinbase to become an open standard that has secondary effects on all of our various products. This kind of speaks to the full stack solution that Emily was mentioning. I think we're really the only company that owns that full stack of incubating X4O2, Coinbase developer platform, base and USDC. These are all products that we either co-created or helped create.

And it's been a really great journey to see that all those pieces come together to become the leading stack for Agentic Commerce.

Sean Agarwal

All right, switching gears just slightly, we talked a little bit about stable coins and payments. One of our top priorities is the everything exchange, of course. So Alicia, a question from Patrick Moley at Piper Sandler who asks as you scale the Everything Exchange across equities, prediction markets and commodities, how should investors think about the monetization timeline and the revenue contribution from these new asset classes relative to your core crypto trading business over the next 12 to 18 months?

Alicia Haas

Thank you for the question, Patrick. So as you heard in our opening comments, the Everything exchange is already moving the needle. We highlighted retail derivatives growth that's now on track for $200 million annualized. Prediction markets is one of our fastest growing new products that as of March was 100 million annualized. A little less than two months after Go Live, so we are seeing really nice green shoots from these new products that we rolled out with Everything Exchange.

We believe that the non crypto assets are starting to also gain traction. They were 4X quarter over quarter in terms of volume from silver, gold, oil. So this is really tangible signs that our decision to expand out the tradable assets on the Everything exchange is seeing traction with our customers and seeing engagement. So we hope to have more news to share with you next quarter.

We're not going to give an outlook on a per product basis. Our whole goal is to grow our total trading volume market share as we did this quarter to continue to penetrate these new asset classes and engage more and more customers with them.

Sean Agarwal

Great. Maybe continuing on that theme, let's talk about something super fun at least within the Coinbase walls. Talk about crypto options. So Alicia Owen Lau at Clear St. asks, could you please give us an update on launching crypto options trading in the US and the timing of that? What are the major hurdles in front of you?

Alicia Haas

Great question, Owen. So as many of you know, we closed the Deribit transaction last year. Deribit was the clear leader within terms of institutional clients and professional market makers and trading options. We are very focused on this integration right now. It is progressing nicely and we expect to be fully integrated in 2026.

This means that we're going to unify spot, perps, futures, options, all on a single platform that's going to provide deep liquidity, that's going to provide efficiency across these various asset classes. This is you're going to hear incremental milestones as we go through the year towards this outcome. On the US specifically, I cannot give you a timeline on today's call, but we're actively working on it and very optimistic.

So coming soon on a global basis, if I could zoom out and talk about derivatives globally as well, both of our exchanges, both the US and international derivatives exchanges achieved new all time highs in the quarter. In terms of revenue contribution, this is included in our institutional transaction revenue line and the institutional derivatives revenue more than offset any declines that we saw in option activity in Deribit during the quarter.

Sean Agarwal

OK. Next, relatedly for Brian, crypto volumes have remained under pressure, Sorry, this question from Devin Ryan at Citizens. But crypto volumes have remained under pressure, especially in more speculative token trading, even as the industry narrative has become increasingly optimistic toward stable coins, tokenization and utility driven on chain activity as we're, are we in a transition moment where speculative volume is declining before the utility side of the market has produced a step function increase in block space demand?

How are you thinking about the timing and magnitude of that shift? And what gives you confidence in the secular growth path for Coinbase transaction volumes?

Brian Armstrong

Yeah. So this is really part of the reason why we've been investing in the Everything exchange. It's to diversify the asset classes that are there. So in recent quarters, crypto spot trading was down a bit. But as we mentioned, derivatives and prediction markets, some commodities futures, things like that were up, right. So in any, it's true in any given market, right? Something's always up, something's down. And that's the nature of trading.

So it's important we're diversifying that through the Everything exchange and then we're also diversifying our revenue from a non trading point of view into what we call subscription and services, of course. And that's now 44% of our net revenue. So that's a nice balancing factor as well. You had asked about utility. I don't think the utility side is really waiting.

I think that we're seeing obviously stable coins are growing like crazy, prediction markets. There's really great signs of adoption for tokenization more broadly, agentic commerce that we mentioned. Even our DeFi integrations such as DeFi, borrow, lend are growing really nicely. So I think the utility side is already here and we're in kind of this interim where spot crypto assets were down a bit, other asset classes were up.

And as we diversify, these things will get balanced out where we'll just be in a more upward channel over time.

Sean Agarwal

Great. Next for Alicia from Alex Mark Graph at KVCM. Can you walk us through the riff? I think many folks are curious to understand how much is a function of the current environment versus AI leverage? And what do you anticipate in terms of cost savings both in quarter and run rate?

Alicia Haas

Thanks, Alex. Hopefully the materials that we provided in the earnings please go a long way to providing data for this question, but I want to zoom back. So the restructuring reflects 2 forces acting simultaneously. It wasn't all one, it's not all the other. And it's hard to detangle and say what is more or less. We definitely saw market headwinds and we've definitely also seen a transition to AI native operations.

So as we shared pull requests are up by engineer by 78% year over year, we are seeing continued growth in that. And I think that we're going to only see more and more of our work being done by AI in all of our functions over time. With regard to specific dollars, the actions removed about $500 million of total cost as compared to the Q4 2025 run rate we provided in our outlook, both Q2 as well as full year outlook.

The full year adjusted expenses are going to be between 4.3 and 4.6 billion and excluding that USDC rewards growth, that's roughly flat year over year in terms of that adjusted OpEx 2025 to 2026.

Sean Agarwal

Great. So we'll go to another question from X for Alicia and this one's from at President Noble. Related to fees, do you plan on lowering fees? Morgan Stanley and other Trad Fi banks are offering better prices on their brokerages.

Alicia Haas

Thanks for this. So our position is as it's been for a long time, our clients are not choosing us because we're the cheapest. However, we do experiment and we do look at different fee schedules for our customers. They're choosing us today because we're the most trusted, we're the easiest to use, the most crypto stored, We have 80 licenses. We have a global regulatory foundation.

Customers have the choice between trading on our core platform Advanced to go on to Coinbase One. And so with this choice, we believe that customers are choosing us for the right product for their needs, not on fees alone, but over the long term. We've always said that we believe that fees could come down as things become commoditized. And so our focus on diversifying our revenue is very important and it's more diversified than ever.

We have 12 products with over $100 million of revenue. We've shared with you that we have a really solid forward pipeline of additional products that are scaling and on pace to become our 13th. And so we are not keeping our eye off the ball of the risk of fee compression, but it's not what we're seeing in the near term business.

Brian Armstrong

Yeah, and I'll just add that for customers that are more fee sensitive, we have a couple of really great options already. I mean one is that with a Coinbase One subscription, they can get zero fee trading. So a lot of customers are taking advantage of that. And then in Coinbase Advanced, for our more prosumer traders, there's very competitive pricing that scales down really to just a few bits at the high end based on volume.

So I think for many of our customers that want to get lower fees or even zero fee trading, we have great options for them.

Sean Agarwal

Great. Next one for Emily from John Todaro at Needham and Co. Institutional transaction revenue declined more than the retail consumer quarter over quarter. Can you frame up the institutional interest in crypto as of late? And if you were surprised to see more weakness in institutional than retail?

Emily Choi

Sure. Listen, I think things ebb and flow between institutional and retail and that's okay. It's how it's always been for the business. Institutional transaction revenue of 136 million declined 27% quarter on quarter, which is in line with macro institutional trends. Lower volatility, reduced hedging demand specifically at Deribit and options activity declined following all time high volumes in Q4 that weighs disproportionately on our institutional revenue.

Deribit open interest share held steady despite that headwind and we feel that the durability of positioning is still very much intact underneath the revenue line. Institutional engagement was actually quite strong by the end of the quarter. Most of the downtrend happened in January and active lending clients grew double digits quarter over quarter. Average daily loan balances hit an all time high of 1.4 billion.

45 major financial institutions have moved tokenization from concept to production in Q1. Institutions understand the longer term utility of crypto and they are definitely positioning ahead of regulation. And on top of that we have a very strong institutional pipeline that ETFs including staking ETFs, prime custody activations that are opening new TAM for us.

Sean Agarwal

Great. And I think we just have time for one last question. This one from X from at Credit Brian. What is Coinbase or Brian most excited about for the next one to three years?

Brian Armstrong

Well, there's lots happening in crypto. I mean, the first is just every asset class is coming on chain, right, whether it's stocks, prediction markets, commodities, FX, tokenization of all these real world assets, right, which is about $30 billion today, expected to be 16 trillion by 2030. So the trading is just going to get more and more efficient and more and more of that will flow to on chain.

I think the second one is of course stablecoins. It's just we're in a golden age right now where payments are now fast, cheap and global. They can be under one second, under 1 cent anywhere in the world, just like sending WhatsApp message or something. It just arrives instantly almost for free anywhere in the world. That's never been possible before in payments.

And we're going to see more and more payments like global GDP essentially flow to these stablecoin rails. And then agentic commerce is really going to be a catalyst on top of all of that where I think increasingly people will rely on these agents to get work done for them. They'll need to get things paid for.

And we launched this website agentic.market, for instance. That's just, it's a collection of all the different services out there that are AI agent enabled, where agents can connect to them, pay transaction fees through the X4O2 protocol and get work done on your behalf. And it's just a really exciting time to be building financial infrastructure that's more efficient for the whole world, plus AI agents.

And that's what I'm excited about doing in the coming years.

Sean Agarwal

Alrighty. Well, that concludes today's earnings call. Thank you so much for joining us for this Q1 update and we look forward to speaking with you all next quarter.

Details at Coinbase IR

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