Coinbase (COIN) Announces Verified Users of 56 million, Q1 Revenue of $1.8B

Coinbase Global, Inc. (pending IPO: COIN) , which is scheduled to go public via a direct listing on NASDAQ, issued estimated results for its first quarter ended March 31, 2021 and an outlook for the full year ending December 31, 2021.

First Quarter 2021 Estimated Results*

For the first quarter of 2021, the Company currently expects the following as of or for the three months ended March 31, 2021:

• Verified Users of 56 million
• Monthly Transacting Users (MTUs) of 6.1 million
• Assets on Platform of $223 billion, representing 11.3% crypto asset market share
  • Includes $122 billion of Assets on Platform from Institutions

• Trading Volume of $335 billion
• Total Revenue of approximately $1.8 billion
• Net Income of approximately $730 million to $800 million
• Adjusted EBITDA of approximately $1.1 billion

*This information is based on information available to the Company as of the date of this release and is subject to the completion of its quarterly financial closing procedures and review by the Company’s independent registered public accounting firm.

Crypto price cycle overview

Crypto markets have observed four major price cycles since 2010 which have typically had durations ranging from two to four years. On average, these price cycles have increased the overall crypto market capitalization significantly from the prior cycle and attracted new users into the cryptoeconomy. These cycles can be highly volatile, and as a result, we measure our performance over price cycles in lieu of quarterly results. We believe that we can create long-term value throughout these price cycles.

Impact of crypto prices on Coinbase’s results

MTUs, Trading Volume, and therefore transaction revenue currently fluctuate, potentially materially, with Bitcoin price and crypto asset volatility. This revenue unpredictability, in turn, impacts our profitability on a quarter-to-quarter basis. In terms of expenses, we intend to prioritize investment, including in periods where we may see a decrease in Bitcoin price. This is because we believe that scale is central to achieving our mission and it is still early in the development of this industry.

Full-Year 2021 Outlook

Our approach to public outlooks will be to provide transparency consistent with the internal plans we use to manage our business. Given the inherent unpredictability of our business mentioned above, we are providing a range of possible scenarios for full-year 2021:

2021 Annual Average MTU possible scenarios

Our transaction revenue is currently highly correlated to MTUs. Looking to full year 2021, we present three possible scenarios for annual average MTU:

• High: Average 2021 MTUs of 7.0 million. This scenario assumes an increase in crypto market capitalization and moderate-to-high crypto asset price volatility. In this scenario, we expect that MTUs continue to grow for the remainder of 2021.

• Mid: Average 2021 MTUs of 5.5 million. This scenario assumes flat crypto market capitalization and low-to-moderate crypto asset price volatility. This scenario assumes a modest decline in MTUs from Q1 2021.

• Low: Average 2021 MTUs of 4.0 million. This scenario assumes a significant decrease in crypto market capitalization, similar to the decrease observed in 2018, and low levels of crypto asset price volatility thereafter. In this scenario, we assume MTUs will decrease in a corresponding manner and end 2021 at similar levels to Q4 2020.

Institutional Revenue

We expect meaningful growth in 2021 driven by transaction and custody revenue given the increased institutional interest in the crypto asset class. However, our institutional revenue is inherently unpredictable given the factors listed above.

Expenses

In the second quarter of 2021, we expect approximately $35 million of one-time expenses related to the Company’s direct listing. Looking to full year 2021, in order to scale our operations and to continue to drive product innovation, we expect our technology and development expenses and our general and administrative expenses to be between $1.3 billion to $1.6 billion, excluding stock-based compensation, in 2021. Additionally, we plan to augment our historically strong organic growth with customer acquisition and engagement by meaningfully increasing our investment in sales and marketing. We plan for sales and marketing to be between 12% and 15% of net revenue in 2021. Lastly, we anticipate transaction expenses will be in the low-to-mid teens as a percent of net revenue in 2021.

Webcast Information
The Company will host a conference call to discuss the estimated results for the first quarter of 2021 and an outlook for full year 2021 on April 6, 2021 at 1:30pm PT. The live webcast of the call will be available on the Investor Relations section of the Company’s website at https://investor.coinbase.com. A replay of the call as well as a transcript will be available on the same website.

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