Coinbase Global, Inc. Q4 FY2022 Earnings Call

· Earnings call transcript and AI-powered summary

Coinbase Q4 and Full Year 2022 Earnings Summary

  • Revenue: Q4 net revenue increased 5% quarter-over-quarter (QoQ) to $605M.
  • Transaction Revenue: Decreased 12% QoQ to $322M due to a 9% decline in trading volume. However, Coinbase gained market share as the overall spot crypto market declined 21% QoQ.
  • Subscription & Services Revenue: Increased 34% QoQ to $283M in Q4 and grew 53% YoY to $792M in FY2022. This was largely driven by increased interest rates and Coinbase’s USTC participation.
  • Operating Expenses: Q4 OpEx rose 3% QoQ to $1.2B. Excluding a $50M regulatory settlement, expenses would have declined ~1% QoQ.
  • Adjusted EBITDA: Negative $124M in Q4; FY2022 adjusted EBITDA was -$371M, within previously guided guardrails.

Operational & Strategic Updates

  • Cost Reductions: Workforce reduced by 20% in January 2023 (following an 18% reduction in June 2022). OpEx in Q1 2023 expected to be down 30% compared to Q4 2022 (or 25% excluding settlement).
  • Stock-Based Compensation: Decreased from $431M in Q4 2022 to a projected $250M in Q1 2023.
  • Future Outlook: Q1 2023 subscription revenue is projected between $300M–$325M. Targeting improved adjusted EBITDA in 2023 compared to 2022.

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Operator: Good afternoon. My name is Paula, and I will be your conference operator today. At this time, I would like to welcome everyone to the Coinbase Fourth Quarter and Full Year 2022 Earnings Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. [Operator Instructions]. Anil Gupta, Vice President, Investor Relations, you may begin your conference. Anil Gupta : Good afternoon, and welcome to the Coinbase fourth quarter and full year '22 earnings call. Joining me on today's call are Brian Armstrong, Co-Founder and CEO; Emily Choi, President and COO; Alesia Haas, CFO; and because regulatory questions may be top of mind, Paul Grewal, Chief Legal Officer, is also joining today. I hope you've all had the opportunity to read our shareholder letter, which was published on our Investor Relations website earlier today. Before we get started, I'd like to remind you that during today's call, we may make forward-looking statements. Actual results may vary materially from today's statements. Information concerning risks, uncertainties and other factors that could cause these results to differ is included in our SEC filings. Our discussion today will include references to certain non-GAAP financial measures. Reconciliations to the most directly comparable GAAP financial measures are provided in our shareholder letter and on our Investor Relations website. Non-GAAP financial measures should be

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