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Coinbase Global, Inc.

COIN

Wall street consensus:

Ticker:

​Recent Conference Call

### Summary of Coinbase Global, Inc. FQ4 2023 Earnings Call

**Key Insightful Quote:**

Alesia Jeanne Haas, CFO, stated, "In 2023, we focused on financial discipline and operational excellence. As a result, we're in a much stronger position today than we were 1 year ago."

**Key Quarterly Business Trends:**
1. **Cost Reduction and Lean Team Efficiency:** Coinbase made significant strides in reducing operational costs by 45% year-over-year, enhancing the team's efficiency in product delivery. This shift towards operational excellence was pivotal in achieving positive net income and adjusted EBITDA, indicating a robust response to changing business demands.
2. **Expansion in Derivatives Trading:** The successful launch of derivatives trading globally symbolizes Coinbase's strategic expansion and adaptation to the competitive landscape. The introduction of Coinbase Financial Markets in the U.S. and the Coinbase International Exchange indicates a proactive approach toward capturing a share of the global derivatives market.
3. **Regulatory Engagement and Compliance:** The company's firm stance on regulatory clarity and compliance underscores its long-term vision amidst a complex macro environment. Coinbase's engagement in legislative processes and the establishment of a super PAC highlight its proactive stance on shaping a favorable regulatory landscape.

**Critical Analyst Questions:**

1. **On Sales and Marketing Strategy Adjustments:** Analysts inquired about the decision to maintain a flat sales and marketing budget into Q1 despite favorable market conditions. *Alesia Jeanne Haas noted* that the adjustment was primarily due to seasonal variations and the pursuit of high ROI marketing strategies.

2. **Expansion of Revenue Streams Beyond ETF Custodianship:** Analysts were keen on understanding Coinbase's plan to diversify revenue streams. *Brian Armstrong elaborated* on leveraging Coinbase Prime and custody services as part of their strategy for broader institutional engagement, indicating a move to capitalize on market opportunities beyond ETF custodianship.

3. **Impact of Bitcoin ETFs on Trading Volume:** A unique question around the implications of spot Bitcoin ETF approvals on Coinbase’s trading volumes and institutional engagement was raised. *Brian Armstrong responded,* emphasizing that ETFs have been additive to Coinbase's business and have not cannibalized spot trading volumes, suggesting a positive market sentiment and broader crypto adoption.

**Outlook and Guidance:**

Coinbase projects a promising start to Q1 2024, with early indicators showing strong transaction revenue. The guidance for subscription and services revenue reflects a positive outlook, though dependent on crypto price movements. Notably, Alesia Jeanne Haas highlighted the company's disciplined approach to operational expenses, indicating expectations of modest growth in line with revenue expansion. This strategic focus reaffirms Coinbase’s commitment to financial discipline while pursuing growth and market share expansion.

Key Questions to follow

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