Coinbase Global Inc Q1 2025 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Kenneth Worthington - JPMorgan - Analyst : I wanted to just start with the Deribit acquisition. Can you talk about the cross-sell opportunity and how the transaction strengthens Coinbase's existing franchise? And Alesia, you said it immediately enhances profitability. I take that to mean it's immediately accretive. Am I thinking about that correctly?

Question: James Yaro - Goldman Sachs - Analyst : So USDC comprises an increasing percentage of overall stablecoin market cap. Perhaps you could just speak to some of the logic behind Binance being added into the USDC partnership along with Circle and what this means for the USDC TAM? And then perhaps could you also update us on the economics and how that split has changed as a percentage of USDC interest revenue now that Binance is part of the partnership?

Question: Devin Ryan - Citizens - Analyst : A question just around momentum in allowing kind of traditional banks to enter the industry in different capacities, obviously kind of moving towards that. And on one hand, some could be competitors in certain places and that gets a fair amount of press. But on the other side, it seems like there's still a fair amount that Coinbase can do with this potential customer cohort or partner with and even potentially even through the partnership with Circle. So I'm curious if you're having conversations directly with this part of the market. And just more broadly, the view around kind of the opening up of traditional financial institutions into the space, how that could be a positive catalyst for Coinbase.

Question: Owen Lau - Oppenheimer - Analyst : So first of all, congrats on the Deribit deal. I have a high-level question. Could you please give us an update on what Coinbase aspires to be in 5 to 10 years? I realize that a lot of things have changed over the past few years and great companies evolve with opportunities. And you just announced the Deribit deal. You're also considering, I think, getting a federal bank charter. What will Coinbase look like longer term? Do you think Coinbase will be more like a tech provider, a surface onchain bank, or a super app like WeChat? Also, are you interested to get into TradFi space such as equities and bond trading, given that you mentioned that you're 100% focused on crypto?

Question: Brett Knoblauch - Cantor Fitzgerald - Analyst : Maybe just on the recent rumor that there could be a change of control with Circle. Is there any change of control clause with Circle where that provides over would acquire Circle and out? Or what would happen in a scenario where Circle get acquired?

Question: Peter Christiansen - Citi - Analyst : Congratulations on the Deribit acquisition. I want to expand a little bit on Owen's question actually. So we hear it a lot from our clients. And Brian, you touched upon all the things that Coinbase is doing currently and aspires to do and some press article last month that Coinbase is potentially seeking a banking license. LSEG STREETEVENTS | www.lseg.com | Contact Us consent of LSEG. 'LSEG' and the LSEG logo are registered trademarks of LSEG and its affiliated companies. MAY 08, 2025 / 9:30PM, COIN.OQ - Q1 2025 Coinbase Global Inc Earnings Call I'm just curious how do you juxtapose doing all these different services, servicing different sorts of customers against potential legislation down the line where you may be limited in certain functions. Just curious on how you're thinking about how potential legislation could perhaps limit some of the functions that Coinbase aspires to do.

Question: Benjamin Budish - Barclays Capital - Analyst : Maybe a follow-up on Deribit. I'm kind of just curious if you could talk about options and crypto more broadly. It almost, in a way, looks like the futures market in TradFi where there's sort of incumbents, although obviously quite a bit different as most of the products traded there are different from the products on which options are written. So any kind of -- just curious about the history, like why is it that there's really only one crypto exchange that has such meaningful market share? Is it a lack of competitors? Is it -- does crypto volatility make options more challenging to trade? And what does that sort of say about the user base of Deribit? Is it institutional customers who are similar to those trading on other international futures exchanges? Is it retail? But just kind of curious your thoughts on crypto options more broadly.

Question: Patrick Moley - Piper Sandler - Analyst : So my kind of relates to Ben's question, but in light of the Deribit acquisition, I was hoping you could update us on the go-to-market strategy for crypto derivatives broadly in the US. And then once you close the Deribit acquisition, how quickly do you think you'll be able to offer those products to US customers? If you go on their website today, the US is listed as a restricted jurisdiction. So what are some of the regulatory considerations or hurdles that need to be crossed before you are able to do so?

Question: Joseph Vafi - Canaccord Genuity - Analyst : Just wanted to circle back on USDC. I know I think maybe Alesia or Brian mentioned the amount of USDC per monthly active has kind of doubled over the last year. Just wondering what that means from a P&L perspective. I know there's incentives out there. I know that there's a rev share, but just kind of trying to get to what the bottom line on that means. And if it's an investment, what the implications are there?

Question: Dan Dolev - Mizuho - Analyst : Really nice results and nice quarter. Just wanted to ask on the USDC rewards specifically in terms of the opportunity there. What you're seeing seems like a big opportunity for the long term. So any color there would be great.

Question: Alexander Markgraff - KeyBanc Capital Markets - Analyst : Maybe one for Emily or Brian, M&A. Just are there any sort of other large deals that we should think about Coinbase pursuing in an effort to command global leadership maybe just categorically speaking? And then I think it would be helpful to get thoughts there on the heels of the Deribit announcement. And then I do have a quick follow-up on payments for Brian if there's time.

Question: Bo Pei - US Tiger Securities - Analyst : So I have a high-level question. So given the current macroeconomic uncertainty and volatility, the crypto asset price, how flexible is Coinbase strategy across different market environments? Are there specific strategy areas you plan to emphasize more in bearish versus a bullish market?