Fourth Quarter and Full-Year 2021 February 24, 2022

Shareholder Letter
Fellow
shareholders,
2021 was a year of tremendous growth and development in the cryptoeconomy, as well
as for Coinbase. We ended 2021 with strong performance across our key metrics that
were within our outlook. In Q4, we generated $2.5 billion of net revenue, $840 million of
net income, and $1.2 billion of Adjusted EBITDA. We ended the year with 11.4 million
Monthly Transacting Users (“MTUs”) – of whom 32% both invested and engaged with a
non-investing product.

Coinbase Delivered 2021 Results Within Outlook

Metric Coinbase Outlook 2021 Results
Annual Average Retail MTUs 8.0 - 8.5 million 8.4 million
Average Transaction Revenue Per User High $50s $64
Transaction Expenses 

Mid-teens 17%
as a percentage of net revenue

Technology & Development and General Approximately

$1.413 billion
& Administrative Expenses* $1.4 billion

Sales and Marketing Expenses 
 Approximately 10% 9%

as a percentage of net revenue

*excludes stock-based compensation

Select Key Business and Financial Metrics Full-Year

KEY BUSINESS METRICS Q4’20 Q1’21 Q2’21 Q3’21 Q4’21 2020 2021
1 The annual average of MTUs for the
years ended December 31, 2020 and Monthly Transacting Users MTU ($M)1 2.8 6.1 8.8 7.4 11.4 2.8 11.4
December 31, 2021 were 1.9 million
and 8.4 million, respectively. Trading Volume ($B) 89 335 462 327 547 193 1,671
2 For a reconciliation of net income
Assets on Platform ($B) 90 223 180 255 278 90 278
to Adjusted EBITDA, please refer to
the reconciliation table in the
section titled “Reconciliation of
Net Income to Adjusted EBITDA”, Financial Metrics ($M) Q4’20 Q1’21 Q2’21 Q3’21 Q4’21 2020 2021
following the financial statements
included at the end of this
shareholder letter.
Net Revenue $497 $1,597 $2,033 $1,235 $2,490 $1,141 $7,355
Net Income $177 $771 $1,606 $406 $840 $322 $3,624
Adjusted EBITDA2 $288 $1,117 $1,150 $618 $1,205 $527 $4,090

Note: Figures presented may not sum precisely due to rounding

Q4 AND FULL-YEAR 2021 2

 The total crypto market capitalization at the end of Q4 was $2.3 trillion – up nearly
three-fold from approximately $800 billion at the end of 2020 – and hit a peak of $3.1
trillion in November 2021. Bitcoin and Ethereum prices reached new highs that were
247% and 457% higher, respectively, than prior peaks seen in 2017, with Bitcoin itself
nearly reaching $1.3 trillion in market capitalization in Q4. Moreover, the number of
crypto owners continued to climb in 2021 to nearly 1 in 4 U.S. households, according 

to a recent study.

Total Crypto Market Cap3

3Figures indicate total crypto market

capitalization as of December 31 of

$2,321B

respective years.

$782B
 2021
2020
$123B
 $192B

2019
2018

Q4 AND FULL-YEAR 2021 3

 This past year also saw strong growth in the utilization of crypto. Prominent use cases
included non-fungible tokens (NFTs), decentralized finance (DeFi) adoption, decentralized
applications, play-to-earn gaming, and metaverse-related opportunities. For example, NFT
sales reached nearly $20 billion in 2021 compared with less than just $100 million in 2020,
according to Cryptoslam. Additionally, the value locked in DeFi applications increased 13x
throughout 2021 to approximately $250 billion at year end according to Defi Llama,
demonstrating that peer-to-peer financial services are growing. And while it is early days,
we believe it is clear that blockchain technologies will be foundational to Web3 and
ultimately the development of the metaverse.

Unique Monthly Buying Wallets vs. Monthly NFT Sales

Unique Monthly
Monthly NFT Sales
Wallets ($B)
1,000,000 $5

800,000 $4

600,000 $3

400,000 $2

200,000 $1

0 $0
01’21 02’21 03’21 04’21 05’21 06’21 07’21 08’21 09’21 10’21 11’21 12’21 01’22
Unique Monthly wallets Monthly NFt sales

Total DeFi Unique Addresses vs. Total Value Locked

Unique Defi Total Value
Addresses (M) Locked ($B)
5 $300

4 $240

3 $180

2 $120

1 $60

0 0
01’20 07’20 01’21 07’21 01’22

Unique DEFI ADDRESSES TOTAL value locked

Q4 AND FULL-YEAR 2021 4

 2021
Highlights
Amid this extraordinary pace of development, Coinbase had a strong year as well. In
2021, millions of new users joined the cryptoeconomy through Coinbase; we generated
$7.4 billion in net revenue – including $2.5 billion in the fourth quarter; we became the
first publicly traded crypto asset trading platform; and we made substantial progress
in building a best-in-class infrastructure to enable easy, safe, and secure on-ramps
and access into the global cryptoeconomy. Among our highlights for the year:

Expanded access to crypto and grew user base

User growth: Grew MTUs to 11.4 million – over 4x compared to 2020 – and Verified Users to 

89 million.


Asset addition: Added trading and custody support for 95 and 72 new crypto assets,
respectively. Other crypto assets beyond Bitcoin and Ethereum contributed 55% of total
Trading Volume in 2021.

Expanded access: More than doubled the number of countries where users can buy and sell
crypto via fiat rails to 90+, and added Apple Pay, Google Pay, and PayPal as payment methods.

Grew Market Share, Revenues, and Profits

Grew market share of Trading Volume: In 2021, our Trading Volume grew more than 8.5x
compared to 2020, and our market share of Trading Volume increased in virtually all assets.

Revenue diversification
Generated over $500 million in Subscription and services revenues – including over 

$200 million in the fourth quarter – with traction in products including Staking, 

Earn, and Custody
Grew our Institutional customer base by over 50%, including doubling the number 

of Custody customers, and launched Coinbase Prime, our integrated solution for
institutional crypto needs.

Profitable growth: In 2021, we generated $3.6 billion in net income, up 11x compared to 2020.

Made Key Investments to Drive Future Growth

Ecosystem investments: Further expanded the number of ecosystem partners using

Coinbase through such initiatives as the launch of Coinbase Cloud and build-out of APIs
to enable businesses of all kinds to leverage our platform.

Headcount growth: We ended 2021 with 3,730 full-time employees, up 3x compared to

2020, including an expanded engineering presence in India, Canada, Brazil and Singapore.

Strong balance sheet: We ended the year with $7.1 billion in cash and cash equivalents -
including proceeds from $3.4 billion in long-term debt we issued in 2021 at attractive
terms. We believe our strong balance sheet will enable us to continue to invest in long-
term growth opportunities regardless of crypto market conditions.

Q4 AND FULL-YEAR 2021 5

User Growth &
Engagement
Retail MTUs in Q4 were 11.4 million, an increase of 4.0 million or 54% compared to
Q3. Full-year average annual MTUs in 2021 – a straight average across all four
quarters – were 8.4 million and within our outlook range. Strong market conditions,
our consumer marketing efforts, asset addition, and product development all
contributed to strong MTU trends in Q4.

We continued to see a growing percentage of our users deepen their engagement

with our product portfolio. In Q4, 32% of our MTUs were using both investing and
non-investing products, up from 22% at the end of 2020. The most widely adopted
non-investing products are Staking and Earn, which have higher levels of retention
than investing. We believe adoption of these products should help support MTU
levels in 2022 as we expand those offerings. At the end of Q4 2021, we had 3.6
million users who were earning yield on their crypto assets.

On the institutional side, a major theme throughout 2021 was adoption by a

broader range of clients seeking to engage with crypto – beyond asset managers
and financial services firms to corporate treasuries and institutional allocators.

We were proud to welcome or expand relationships with Anheuser-Busch, Brex,

Enfusion, and Franklin Templeton on the Coinbase institutional platform in Q4.

Listing More
Assets and
Trading Pairs
As part of our strategy to serve as the primary crypto account and give our
customers the greatest amount of choice, we want to list all legal assets. Over the
course of 2021, we accelerated our asset listing efforts. In Q4, we added custody
and trading support for 14 and 36 assets, respectively. We ended 2021 with support
for 172 assets for custody and 139 assets for trading.

Looking ahead, we will continue to invest in our asset review process, including
expanding our team, improving automation and tooling, and emphasizing our
rigorous process where we evaluate security, legality, and compliance.

Building 

Innovative

Products
Coinbase Wallet

In Q4, we made improvements to our self-hosted Wallet product to make it easier for
our users to participate in DeFi and NFTs, as well as natively trade more than 5,500
crypto assets via decentralized exchanges - all of which have unique access and
participation complexities. Now, Coinbase Wallet can be used to interact with
decentralized crypto applications via the mobile app as well as a browser extension,
which works with third-party browsers such as Chrome.

Q4 AND FULL-YEAR 2021 6

Coinbase Payroll

In Q4, we launched our payroll product, which allows employees to receive a
percentage of their compensation in crypto. Tens of thousands of users have signed
up to date, including New York City Mayor Eric Adams. This product is available to all
users in the U.S. and we look forward to expanding access to international customers
in the future.

Tax Center

In Q4, we launched the Coinbase Tax Center to help simplify the crypto tax filing
experience for our U.S. retail customers by providing the reports, information, and
education they need. Coinbase customers can leverage the Tax Center to get the
resources they need to file their crypto taxes, and advanced users with multiple
wallets can leverage a partnership with CoinTracker. For the first time, taxpayers can
also receive tax refunds in crypto or USDC into their Coinbase account when they file
with TurboTax.

Customer education

Crypto is a complex and rapidly evolving industry and it is important to bring our users
along with the industry innovation. We have expanded our content offering to help our
customers learn more about the crypto ecosystem

Coinbase Bytes, our weekly newsletter, now reaches nearly 23 million users weekly

BUIDL Crypto is a weekly Twitter Spaces series we began in Q3, where we bring
together leading builders from around the ecosystem to discuss some of crypto's
challenges and opportunities

Around the Block sheds light on the biggest trends in crypto and Web3 through
long form research and a weekly podcast featuring discussions with some of the
best minds in the industry.

Q4 AND FULL-YEAR 2021 7

Coinbase Shareholder Letter

Financial Overview
 Key

Metrics
Financial Overview Full-Year
TRADING VOLUME ($B) Q4’20 Q1’21 Q2’21 Q3’21 Q4’21 2020 2021
Retail 32 120 145 93 177 73 535
Institutional 57 215 317 234 371 120 1,136
Total 89 335 462 327 547 193 1,671

TRADING VOLUME (% OF TOTAL) Q4’20 Q1’21 Q2’21 Q3’21 Q4’21 2020 2021
Bitcoin 38 39 24 19 16 41 24
Ethereum 14 21 26 22 16 15 21
Other crypto assets 48 40 50 59 68 44 55
Total 100 100 100 100 100 100 100

TRANSACTION REVENUE 

(% OF TOTAL) Q4’20 Q1’21 Q2’21 Q3’21 Q4’21 2020 2021
Bitcoin 44 41 26 21 16 44 25
Ethereum 11 19 26 22 16 12 21
Other crypto assets 45 40 48 57 68 44 54
Total 100 100 100 100 100 100 100

Note: Figures presented may not sum precisely due to rounding

Q4 total retail Trading Volume was $177 billion, an increase of 90% compared to
Q3. Our Trading Volume growth was significantly higher than the total crypto spot
market, which grew 32% compared to Q3 as we gained Trading Volume market
share across 9 of our top 10 traded assets, including BTC and ETH. Retail was 32%
of our Q4 Trading Volume, an increase of approximately 400 bps compared to Q3.
The sequential increase in retail Trading Volume was driven primarily by higher
levels of volatility as well as strong consumer interest in a wider variety of 

crypto assets.

Institutional Trading Volume was $371 billion, an increase of 59% compared to Q3,
and was 68% of our total Trading Volume.

While the popularity of any crypto asset will rise or fall in any particular period,
our strategy to list all legal assets contributed to our 2021 Trading Volume trends.
In Q4, Other crypto assets contributed 68% of total Trading Volume. On a full-
year basis, Other crypto assets contributed 55% to Trading Volume, up from 44%
in 2020. Over the course of 2021, we saw a higher percentage of institutional
adoption of other crypto assets as well.

Q4 AND FULL-YEAR 2021 9

 Quarterly Crypto Asset Volatility4 vs.
Total Coinbase Trading Volume
4Crypto asset volatility represents
our internal measure of crypto Volume

volatility in the market relative to ($B) Volatility

prior periods. Please see our annual
report for the year ended December 15
31, 2021 that will be filed pursuant $600
to Section 13 under the Exchange
Act with the SEC for a more
detailed definition of crypto asset $400 10
volatility.

$200 5

$0 0
Q1’20 Q2’20 Q3’20 Q4’20 Q1’21 Q2’21 Q3’21 Q4’21

crypto asset volatility total Coinbase Trading volume

Assets on

Platform At the end of Q4, Assets on Platform were $278 billion, up from $255 billion at the
end of Q3. Factors contributing to our sequential growth include billions of dollars
of net inflows from new customers as well as changes in underlying asset prices.

Crypto assets on Coinbase represented 11.5% of the total crypto market

capitalization at the end of Q4, a decline from 12.2% at the end of Q3. Market share
can fluctuate quarter-to-quarter based on price effects. For example, if our
customers have a concentration of BTC on our platform and BTC performs
differently than the overall market capitalization, our market share would be
impacted accordingly. While we had billions of dollars in net inflows from new
customers in Q4, price effects impacted our market share as the assets held by our
customers performed below the overall crypto market capitalization.

Assets on Platform Full-Year

ASSETS ON PLATFORM ($B) Q4’20 Q1’21 Q2’21 Q3’21 Q4’21 2020 2021
Retail 45 101 88 116 141 45 141
Institutional 45 122 92 139 137 45 137
Total 90 223 180 255 278 90 278

ASSETS ON PLATFORM (% OF TOTAL) Q4’20 Q1’21 Q2’21 Q3’21 Q4’21 2020 2021
Bitcoin 70 62 47 42 40 70 40
Ethereum 13 14 24 22 25 13 25
Other crypto assets 13 21 25 33 31 13 31
Fiat 4 3 5 3 4 4 4
Total 100 100 100 100 100 100 100

Note: Figures presented may not sum precisely due to rounding

Q4 AND FULL-YEAR 2021 10

 Net Revenue Full-Year
NET REVENUE ($M) Q4’20 Q1’21 Q2’21 Q3’21 Q4’21 2020 2021
Transaction revenue
Retail, net 451.8 1,455.2 1,828.0 1,022.0 2,185.8 1,040.2 6,491.0
Institutional, net 24.6 85.4 102.4 67.7 90.8 55.9 346.3
Total Transaction revenue 476.4 1,540.6 1,930.4 1,089.7 2,276.6 1,096.2 6,837.3

Subscription and services revenue

Blockchain rewards 3.0 9.0 34.4 77.0 102.7 10.4 223.1
Custodial fee revenue 8.0 23.5 31.7 31.5 49.6 18.6 136.3
Earn campaign revenue 6.1 11.1 16.9 15.2 19.9 7.7 63.1
Interest income 2.2 3.3 6.5 8.4 7.6 5.5 25.8
Other subscription and services revenue 1.4 9.5 13.1 13.0 33.6 2.8 69.2
Total Subscription and services revenue 20.7 56.4 102.6 145.1 213.4 45.0 517.5
Net Revenue 497.1 1,597.0 2,033.0 1,234.7 2,490.0 1,141.2 7,354.8

Note 1: Figures presented may not sum precisely due to rounding


Note 2: In the current quarter, the Company retrospectively reclassified certain revenues from Blockchain
rewards to Other subscription and services revenue in order to conform with the current period presentation.
This reclassification has no impact on the Company’s previously reported net revenue.

Transaction Revenue

Net revenue in Q4 was $2.5 billion, of which $2.3 billion was Transaction revenue and $213
million was Subscription and services revenue. On a full-year basis, we generated net
revenue of $7.4 billion in 2021, up from $1.1 billion in 2020.

Retail transaction revenue in Q4 was $2.2 billion, up 114% compared to Q3. All-time high
crypto prices and higher levels of crypto asset volatility contributed to higher
transaction revenue per retail MTU in Q4 compared to Q3. Full-year 2021 transaction
revenue was $6.8 billion, up 524% from $1.1 billion in full-year 2020.

In Q4, we experienced a sequential improvement in our blended average retail fee rate
driven by elevated activity on Coinbase, and we continue to see no material evidence of
migration between Coinbase and Coinbase Pro.

Institutional transaction revenue was $90.8 million in Q4, up 34% compared to Q3. The
weighted average institutional transaction fee rate declined in Q4 compared to Q3, driven
by continued growth of our market maker program where we have a tiered fee structure.
Market makers contribute the vast majority of our institutional Trading Volume.

Q4 AND FULL-YEAR 2021 11

Subscription and Services Revenue

Subscription and services revenue was $213.4 million in Q4, up 47% compared to Q3. On
a full-year basis, Subscription and services revenues were $517 million in 2021, an
increase of over 10x from $45 million in full-year 2020. While these revenues are subject
to movements in crypto asset prices, most are recurring by nature as compared to
transaction revenues and therefore provide incremental stability to our revenue base
as they grow.

Blockchain rewards revenue was $102.7 million in Q4, up 33% compared to Q3. Growth
was largely driven by staking – notably ETH2 – which comprises the majority of our
staked assets. Interest in ETH2 staking for institutional clients remains high, and we
intend to make that capability available later this year.

Custodial fee revenue was $49.6 million in Q4, up 58% from Q3. The primary factor
driving the sequential increase was higher average crypto asset prices in Q4 compared
to Q3. In addition, we continued to see billions of dollars of net inflows from new
customers. On a full-year basis, we generated $136.3 million of Custodial fee revenue in
2021, up from $18.6 million in 2020. We added custody support for 72 assets throughout
2021 and more than doubled our custody customers in 2021 as more and more
institutions choose Coinbase for our best-in-class storage solutions.

Earn campaign revenues were $19.9 million in Q4, up 31% compared to Q3. Growth was
driven by both an increase in retail MTUs that engaged with Earn campaigns and an
increase in amounts allocated by asset issuers for distribution. As we continue to add
more assets to our platform, we believe that our Earn program serves as a compelling
channel for both new and seasoned users alike to learn about new assets and 

earn rewards.

Operating Expenses

Total Q4 operating expenses were $1.6 billion, an increase of 55% compared to Q3. The
increase was primarily driven by higher transaction expenses.

Transaction expenses were $501.1 million in Q4, an increase of 154% compared to Q3.
Transaction expenses are correlated to net revenues, which increased 102% in Q4
compared to Q3. In addition, we experienced higher miner fee expenses associated
with high network congestion in Q4. Lastly, the increased adoption of ETH2 staking also
contributed to transaction expense growth, which includes staking rewards paid to
users.

Technology and development expenses were $459.6 million in Q4, an increase of 29%
compared to Q3, and were driven primarily by hiring to invest in our product innovation
and platform infrastructure efforts.

Sales and marketing expenses were $244.6 million in Q4, or approximately 10% of net
revenue. We deployed higher levels of spend towards performance and brand
marketing in Q4 in connection with stronger market conditions compared to Q3.

Q4 AND FULL-YEAR 2021 12

General and administrative expenses were $297.4 million, up 23% compared to Q3,
driven by personnel related expenses and investments in customer support.

Other operating expenses were $73.5 million, down 38% compared to Q3. Other
operating expenses primarily consist of the cost of crypto assets used to fulfill
customer transactions during periods of exchange downtime, of which we had
significantly less in Q4 compared to Q3. This was partially offset by an increase in the
net impairment on crypto assets due to crypto prices decreasing below the carrying
value of our crypto assets held.

Operating Expenses Full-Year

OPERATING EXPENSES Q4’20 Q1’21 Q2’21 Q3’21 Q4’21 2020 2021
Transaction expense ($M) 49.9 234.1 335.4 197.3 501.1 135.5 1,267.9
% of net revenue 10% 15% 16% 16% 20% 12% 17%
Sales and marketing ($M) 23.5 118.0 195.7 105.4 244.6 56.8 663.7
% of net revenue 5% 7% 10% 9% 10% 5% 9%
Technology and development ($M) 90.5 184.2 291.5 356.3 459.6 271.7 1,291.6
General and administrative ($M) 97.5 121.2 248.2 242.6 297.4 279.9 909.4
Other operating expense, net ($M) 97.1 155.9 282.4 118.5 73.5 124.6 630.3
Total operating expenses ($M) 358.5 813.4 1,353.2 1,020.1 1,576.2 868.5 4,762.9

Full-time employees (end of quarter) 1,249 1,717 2,176 2,781 3,730 1,249 3,730

Note: Figures presented may not sum precisely due to rounding

Profitability & Cash

In Q4, net income was $840 million and Adjusted EBITDA was $1.2 billion. Our effective
tax rate of 6% was lower than the statutory rate primarily due to tax deductions on
stock-based compensation provided to full-time employees. Our weighted average
fully diluted share count in Q4 was 252.3 million.

On a full-year basis, we generated $3.6 billion in net income and $4.1 billion in
Adjusted EBITDA in 2021. We ended 2021 with approximately $7.1 billion of cash and
cash equivalents, including $3.4 billion in proceeds from long-term debt we issued in
2021. As of December 31, 2021, we also had $100.1 million in USDC and the fair market
value of our crypto investments was $696.0 million.

Q4 AND FULL-YEAR 2021 13

Coinbase Shareholder Letter

Outlook
Outlook Q1 2022

Quarter-to-date we have seen a decline in crypto asset volatility and crypto asset prices
compared to all-time high levels in Q4 2021. This is not unusual, as we have seen historical
crypto market patterns where all-time high periods have been followed by softer periods.
Quarter-to-date:

Crypto market capitalization is down over 20%. Recent market performance has been
driven by macroeconomic factors such as tightening financial conditions (particularly
after the U.S. Federal Reserve raised the possibility of quantitative tightening in 2022) 

and geopolitical instability in parts of the world.
Crypto asset volatility is down approximately 10%
These factors are contributing to lower trading volume per retail MTU trends to date in Q
Total Trading Volume of approximately $200 billio
Retail MTUs have averaged at roughly 10 million

Accordingly, we believe that retail MTU and total Trading Volume will both be lower in Q1
2022 as compared to Q4 2021.

For Subscription and services products we have seen net inflows of assets staked – in native
crypto units. However, due to crypto asset price declines in Q1 2022, we anticipate our
Subscription and services revenues will be lower as compared to Q4 2021.

On the expense side, we anticipate transaction expenses to be in the low-to-mid twenties as

a percent of net revenue. Contributing factors include: growth in staking revenues,
increased miner expenses due to network congestion and elevated account verification
expenses driven by our Superbowl ad.

We expect all other operating expenses will be in the range of $1.2 billion to $1.3 billion.
Within this range, we anticipate sales and marketing will be 15-20% of net revenue given the
timing of planned marketing spend. Note that our operating expense range includes roughly
$360 million of stock-based compensation, but excludes “Other expenses,” which are driven
by unpredictable crypto price impairments and exchange outages.

Full-year 2022

2021 was a remarkable year for Coinbase and the cryptoeconomy. We saw a dramatic
increase in crypto adoption and significant growth in new use cases which give us even more
confidence in the long-term opportunities in the cryptoeconomy. All told, our business is
significantly stronger than just two years ago, with thousands more employees, millions
more users, diversifying revenue streams and a strong balance sheet. We anticipate massive
industry growth to continue over the long-term, which informs our 

2022 investment plans.

Our plan includes ambitious headcount growth to build product experiences and
infrastructure and driving higher user adoption around the world through increased
marketing investments and international expansion. There is always a possibility that our
planned expense growth may outpace revenue growth in the short-term, but we are focused
on making the right investments to drive long-term growth.

Although we plan for aggressive investment, we are experienced in managing our business
through crypto asset volatility and believe we are prepared for any market conditions that
may emerge. For example, in the event of a material decline in our business, below the
ranges we have planned for, we may slow down our investments and would expect to
manage our Adjusted EBITDA losses to approximately $500 million on a full-year basis.

Q4 AND FULL-YEAR
Q2 2021 15
 We enter 2022 with even more unknowns which make our business all the more
difficult to forecast. On one hand, in addition to the unpredictability of crypto asset
prices and volatility, we also face global macroeconomic headwinds, rising interest
rates, inflation, and more recently, geopolitical instability. On the other hand, global
crypto adoption is accelerating and diversifying. We are seeing new and exciting use
cases for crypto and more market participants helping grow the global cryptoeconomy.

Coinbase Full-Year 2022 Outlook

Metric Outlook Commentary
Annual Average Retail 5.0 - 15.0 million This wider than normal set of factors results in a wider range of
MTUs potential outcomes for 2022. Simply put, we have less near-term
visibility, and it is currently too early to provide a more precise range.
Most importantly, we are confident, experienced, and prepared to
manage our business through either end of this range.

Average Transaction Pre-2021 Levels Quarter-to-date in Q1 2022, ATRPU has trended closer to pre-2021
Revenue Per User (ATRPU) levels and we assume this trend will continue throughout 2022.
See chart below for more details.

Subscription and services Strong growth

Outlook assumes no material price effects
Revenue compared to 2021

Transaction Expenses 
 Low 20%s Driven primarily by growth in in Blockchain Rewards revenue

As a percentage of net revenue

Sales and Marketing 12-15% Increased brand marketing efforts, building on the momentum from
Expenses
our first ever Super Bowl ad in February 2022

As a percentage of net revenue,

including stock-based compensation

Technology & Development + $4.25 - $5.25 billion Driven by ambitious plans to hire 6,000 employees in 2022, largely
General & Administrative technology & development teams to execute on product innovation,
Expenses
international expansion, platform scaling and reliability.

Including stock-based compensation

Additionally, we plan to migrate a portion of customer support from a
vendor to employees which accounts for more than 1,500 of the
planned hires, however we plan this to be roughly cost neutral.

We expect over $1.5 billion of stock based compensation expenses of

which, due to our vesting schedules, over 80% will be expensed in the
first 3 quarters.
Other Expenses N/A We do not forecast these as they are driven by crypto asset price
impairments and exchange outages. If crypto asset prices drop below
our impaired value we recognize a non-cash impairment expense.

Tax High teens to In the event of meaningful strength or weakness in our business
low 20s
over the course of the year, our tax rate could trend lower or higher
than this range.

Q4 AND FULL-YEAR 2021 16

 2022 Average Transaction Revenue Per User (ATRPU)

ATRPU fluctuates on a monthly basis due to crypto volatility. As a result, we focus

on an annual ATRPU to smooth out short term volatility. Historically, our ATRPU
has been driven by our investing product. Going forward, we plan to add to our
product suite by investing in products like Coinbase Wallet and Coinbase NFT, as
well as international expansion, which we believe will generate more MTUs, but
likely have lower levels of ATRPU.

Historical Transaction Revenue Per User4

4 Calculated as Retail Transaction 
 $100
Fee Revenue divided by Retail MTUs
in each period. Annual averages
reflect full-year Retail Transaction
Fee Revenue divided by the average $75
monthly Retail MTUs, divided by 

12 months.

Note : 2017 - 2018 data is unaudited.

$50

$25

0
2017 2018 2019 2020 2021

Actuals ‘17 AVG. 
 ‘18 AVG. 
 ‘19 AVG. 
 ‘20 AVG. 
 ‘21 AVG. 

($55) ($45) ($34) ($45) ($64)

Q4 AND FULL-YEAR 2021 17

Coinbase Shareholder Letter

Looking Ahead

Q3 2021 8
Looking

Ahead Consistent with our mission to bring economic freedom to the world, we are continuing to
invest in and execute against our growth strategy in the U.S. and abroad. We are making
significant international investments to enable us to launch foundational Web3 products –
notably Wallet – broadly around the world, and will be investing deep in select markets with
localized infrastructure and a full suite of Coinbase products and services.

The first pillar of our strategy is crypto as an investment. To expand our core investing
business, we are focused on increasing access to crypto by integrating with more fiat
payment rails and payments partnerships as well as supporting more assets for trading and
custody. We are excited to expand support for Layer 2 blockchains and think this is an
important area of growth for the cryptoeconomy. Layer 2 blockchains build on top of native
protocols, enabling faster, lower-cost crypto-to-crypto transactions. Coinbase is building
tools to facilitate Layer 2 transactions that will enable users to interact more seamlessly
across decentralized apps and Web3.

We also seek to expand our investing product suite beyond spot trading. With our recent
acquisition of FairX, we are planting seeds to offer crypto derivatives over time.

We are also experimenting with alternative ways for users to engage with our investing
products. We are testing a subscription offering called Coinbase One, which offers users
zero-commission trading, 24/7 live phone support, and a $1 million guarantee against
account takeovers for a flat monthly fee. We look forward to learning more about the best
experiences we can offer our customers.

The second pillar of our strategy is crypto as a financial system. We will continue to build out
the primary crypto account which means rebuilding familiar financial tools and services with
a crypto-first mindset so that people can deepen their engagement in the cryptoeconomy.
For example, we are making crypto easier to use for day to day activities such as crypto
payments. To this end, we plan to expand access to our Coinbase Card debit product – which
allows users to spend and earn 4% crypto rewards – to all U.S. users in the near future. In
addition, we recently launched and are looking forward to expanding a service that allows
users in the United States to send crypto to users in Mexico, where it can be converted into
fiat at more than 37,000 local stores for a lower cost than traditional solutions. We also are
focused on creating more opportunities for customers to earn rewards or yield on their
crypto assets. Near term we plan to support more assets for staking - including providing
access to institutional clients. Lastly, we are growing our financing products, providing more
users the ability to receive loans secured by the crypto assets they have on our platform.

The third and last pillar of our strategy is crypto as an app platform. We believe Coinbase is
well-positioned to serve as the gateway to Web3 applications. While still early, Web3 is a
vision of the internet owned by its users and builders; it represents a decentralized,
community-governed internet with modern functionality. To enable users to easily discover
and interact with Web3 applications, we are increasing investment in Coinbase Wallet by
adding security features and further removing complexity. We are also building
decentralized applications, such as our upcoming NFT marketplace, Coinbase NFT, which
users will be able to access via Coinbase Wallet or other third-party wallets.

Over the longer term, we are building tools to help other developers create decentralized
applications themselves. This includes providing services such as identity and attestation,
advanced storage, validator services, and wallet and key management technology as a
service to the entire industry.

We hope that you share our excitement over the opportunities we see on the horizon.

Q4 AND FULL-YEAR 2021 19

Webcast Information

We will host a question and answer session to discuss the results for the fourth
quarter and full-year of 2021 on February 24, 2022 at 2:30 pm PT. The live webcast
of the call will be available on the Investor Relations section of Coinbase’s website
at https://investor.coinbase.com. A replay of the call as well as a transcript will be
available on the same website.

Forward Looking Statements

This communication contains forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. All statements other than statements
of historical fact are forward-looking statements. These statements include, but are
not limited to, statements regarding our future operating results and financial
position, including for our quarter ending March 31, 2022, anticipated future expenses
and investments, expectations relating to certain of our key financial and operating
metrics, our business strategy and plans, market growth, our market position and
potential market opportunities, and our objectives for future operations. The words
"believe," "may," "will," "estimate," "potential," "continue," "anticipate,'' "intend," "expect,"
"could," "would," "project," "plan," "target," and similar expressions are intended to
identify forward-looking statements. Forward-looking statements are based on
management's expectations, assumptions, and projections based on information
available at the time the statements were made. These forward-looking statements are
subject to a number of risks, uncertainties, and assumptions, including risks and
uncertainties related to: our ability to successfully execute our business and growth
strategy and maintain future profitability, market acceptance of our products and
services, our ability to further penetrate our existing customer base and expand our
customer base, our ability to develop new products and services, our ability to expand
internationally, the success of any acquisitions or investments that we make, the
effects of increased competition in our markets, our ability to stay in compliance with
applicable laws and regulations, and market conditions across the cryptoeconomy. It is
not possible for our management to predict all risks, nor can we assess the impact of
all factors on our business or the extent to which any factor, or combination of factors,
may cause actual results to differ materially from those contained in any forward-
looking statements we may make. In light of these risks, uncertainties, and
assumptions, our actual results could differ materially and adversely from those
anticipated or implied in the forward-looking statements. Further information on risks
that could cause actual results to differ materially from forecasted results are, or will
be included in our filings with the Securities and Exchange Commission (SEC)
including our Quarterly Report on Form 10-Q for the quarter ended September 30,
2021 and our Annual Report on Form 10-K for the year ended December 31, 2021 that
will be filed with the SEC. Except as required by law, we assume no obligation to
update these forward-looking statements, or to update the reasons if actual results
differ materially from those anticipated in the forward-looking statements.

Q4 AND FULL-YEAR 2021 20

Non-GAAP Financial Measure

In addition to our results determined in A reconciliation of Adjusted EBITDA to net

accordance with U.S. generally income can be found below in the table
accepted accounting principles captioned “Reconciliation of Net Income to
(GAAP), we believe Adjusted EBITDA, a Adjusted EBITDA.” Investors are
non-GAAP measure, is useful in encouraged to review the related GAAP
evaluating our operating performance. financial measures and the reconciliation
We use Adjusted EBITDA to evaluate our of Adjusted EBITDA to its most directly
ongoing operations and for internal comparable GAAP financial measure, and
planning and forecasting purposes. We not to rely on any single financial measure
believe that Adjusted EBITDA may be to evaluate our business. We calculate
helpful to investors because it provides Adjusted EBITDA as net income (loss),
consistency and comparability with adjusted to exclude provision for or benefit
past financial performance. However, from income taxes, depreciation and
Adjusted EBITDA is presented for amortization, interest expense, crypto
supplemental informational purposes asset borrowing costs, stock-based
only, has limitations as an analytical compensation expense, impairment, net,
tool, and should not be considered in non-recurring direct listing expenses,
isolation or as a substitute for financial unrealized gain or loss on foreign
information presented in accordance exchange, fair value gain or loss on
with GAAP. Among other non-cash and derivatives, non-recurring legal reserves
non-recurring items, Adjusted EBITDA and related costs and other loss, net.

excludes stock-based compensation

expense, which has recently been, and
will continue to be for the foreseeable
future, a significant recurring expense
for our business and an important part
of our compensation strategy. In
addition, other companies, including
companies in our industry, may
calculate similarly titled non-GAAP
measures, including Adjusted EBITDA,
differently or may use other measures
to evaluate their performance, all of
which could reduce the usefulness of
our non-GAAP financial measures as
tools for comparison.

Q4 AND FULL-YEAR 2021 21

 Coinbase Global, Inc.
Consolidated Balance Sheets
(In thousands, except par value data)
(unaudited)

December 31,
2021 2020
Assets
Current assets:
Cash and cash equivalents............................................................................................. $ 7,123,478 $ 1,061,850
Restricted cash ................................................................................................................. 30,951 30,787
Customer custodial funds ............................................................................................... 10,526,233 3,763,392
USDC ................................................................................................................................. 100,096 48,938
Accounts and loans receivable, net of allowance ....................................................... 396,025 189,471
Income tax receivable...................................................................................................... 61,231 —
Prepaid expenses and other current assets ................................................................ 135,849 39,510
Total current assets..................................................................................................... 18,373,863 5,133,948
Crypto assets held ................................................................................................................. 988,193 316,094
Lease right-of-use assets ..................................................................................................... 98,385 100,845
Property and equipment, net ............................................................................................... 59,230 49,250
Goodwill................................................................................................................................... 625,758 77,212
Intangible assets, net ............................................................................................................ 176,689 60,825
Other non-current assets...................................................................................................... 952,307 117,240
Total assets .................................................................................................................. $ 21,274,425 $ 5,855,414
Liabilities, Convertible Preferred Stock, and Stockholders’ Equity
Current liabilities:
Custodial funds due to customers ................................................................................. $ 10,480,612 $ 3,849,468
Accounts payable ............................................................................................................. 39,833 12,031
Accrued expenses and other current liabilities ............................................................ 439,559 88,783
Crypto asset borrowings ................................................................................................. 426,665 271,303
Lease liabilities, current ................................................................................................... 32,366 25,270
Total current liabilities ................................................................................................. 11,419,035 4,246,855
Lease liabilities, non-current ................................................................................................ 74,078 82,508
Long-term debt ....................................................................................................................... 3,384,795 —
Other non-current liabilities .................................................................................................. 14,828 —
Total liabilities............................................................................................................... 14,892,736 4,329,363
Commitments and contingencies (Note 19) ......................................................................
Convertible preferred stock, $0.00001 par value; 500,000 and 126,605 shares
authorized at December 31, 2021 and December 31, 2020, respectively; zero and
112,878 shares issued and outstanding at December 31, 2021 and December 31,
2020, respectively; aggregate liquidation preference of $0 and $578,750 at
December 31, 2021 and December 31, 2020, respectively ........................................... — 562,467
Stockholders’ equity:
Class A common stock, $0.00001 par value; 10,000,000 and 267,640 shares
authorized at December 31, 2021 and December 31, 2020, respectively;
168,807 and 12,204 shares issued and outstanding at December 31, 2021 and
December 31, 2020, respectively .................................................................................. 2 —
Class B common stock, $0.00001 par value; 500,000 and 208,414 shares
authorized at December 31, 2021 and December 31, 2020; 48,310 and 60,904
shares issued and outstanding at December 31, 2021 and December 31, 2020,
respectively ....................................................................................................................... — —
Additional paid-in capital ................................................................................................. 2,034,658 231,024
Accumulated other comprehensive (loss) income ...................................................... (3,395) 6,256
Retained earnings ............................................................................................................ 4,350,424 726,304
Total stockholders’ equity........................................................................................... 6,381,689 963,584
Total liabilities, convertible preferred stock, and stockholders’ equity ........... $ 21,274,425 $ 5,855,414
 Coinbase Global, Inc.
Consolidated Statements of Operations
(In thousands, except per share data)
(unaudited)

Three Months Ended Year Ended

December 31, December 31,
2021 2020 2021 2020
Revenue:
Net revenue $ 2,490,026 $ 497,091 $ 7,354,753 $ 1,141,167
Other revenue 8,437 88,021 484,691 136,314
Total revenue 2,498,463 585,112 7,839,444 1,277,481
Operating expenses:
Transaction expense 501,181 49,946 1,267,924 135,514
Technology and development 459,611 90,498 1,291,561 271,732
Sales and marketing 244,572 23,501 663,689 56,782
General and administrative 297,324 97,501 909,392 279,880
Other operating expense, net 73,451 97,081 630,308 124,622
Total operating expenses 1,576,139 358,527 4,762,874 868,530
Operating income 922,324 226,585 3,076,570 408,951
Other expense (income), net 31,784 (6,183) 49,623 (248)
Income before income taxes 890,540 232,768 3,026,947 409,199
(Benefit from) provision for income taxes 50,332 55,983 (597,173) 86,882
Net income $ 840,208 $ 176,785 $ 3,624,120 $ 322,317
Net income attributable to common
stockholders:
Basic $ 832,929 $ 54,940 $ 3,096,958 $ 108,256
Diluted $ 836,507 $ 66,615 $ 3,190,404 $ 127,471
Net income per share attributable to
common stockholders:
Basic $ 3.90 $ 0.77 $ 17.47 $ 1.58
Diluted $ 3.32 $ 0.66 $ 14.50 $ 1.40
Weighted-average shares of common stock
used to compute net income per share
attributable to common stockholders:
Basic 213,741 71,702 177,319 68,671
Diluted 252,279 100,394 219,965 91,209

Stock-based Compensation Expense

Three Months Ended Year Ended

December 31, December 31,
2021 2020 2021 2020
Technology and development......................... $ 190,831 $ 14,307 $ 571,861 $ 36,869
Sales and marketing ........................................ 12,645 634 32,944 1,566
General and administrative ............................. 59,052 16,441 215,880 34,190
Total .................................................................... $ 262,528 $ 31,382 $ 820,685 $ 72,625
 Coinbase Global, Inc.
Consolidated Statements of Cash Flows
(In thousands)
(unaudited)

Year Ended December 31,

2021 2020

Cash flows from operating activities

Net income............................................................................................................. $ 3,624,120 $ 322,317
Adjustments to reconcile net income to net cash provided by operating
activities
Depreciation and amortization ....................................................................... 63,651 30,962
Impairment expense ........................................................................................ 329,652 8,355
Stock-based compensation expense............................................................ 820,685 70,548
Provision for transaction losses and doubtful accounts ............................ 22,390 (2,966)
Loss on disposal of property and equipment .............................................. 1,425 355
Deferred income taxes .................................................................................... (558,329) 474
Unrealized (gain) loss on foreign exchange ................................................ (14,944) 1,057
Non-cash lease expense ................................................................................ 34,542 25,012
Change in fair value of contingent consideration........................................ (924) 3,281
Realized gain on crypto assets...................................................................... (178,234) (23,682)
Crypto assets received as revenue .............................................................. (1,015,920) (94,158)
Crypto asset payments for expenses ........................................................... 815,783 40,205
Fair value (gain) loss on derivatives ............................................................. (32,056) 5,254
Amortization of debt discount and issuance costs ..................................... 5,031 —
(Gain) loss on investments ............................................................................. (20,138) 150
Changes in operating assets and liabilities:
USDC ................................................................................................................. (77,471) 37,936
Accounts and loans receivable ...................................................................... (8,016) (157,156)
Income taxes, net ............................................................................................ (62,145) 86,791
Other current and non-current assets .......................................................... (20,060) (48,677)
Custodial funds due to customers ................................................................. 6,691,859 2,710,522
Accounts payable ............................................................................................ 27,330 6,090
Lease liabilities ................................................................................................. (20,596) (24,998)
Other current and non-current liabilities ....................................................... 302,396 6,398
Net cash provided by operating activities ........................................................... 10,730,031 3,004,070
Cash flows from investing activities
Purchase of property and equipment .............................................................. (2,910) (9,913)
Proceeds from sale of property and equipment ............................................ 31 —
Capitalized internal-use software development costs .................................. (22,073) (8,889)
Business combination, net of cash acquired ................................................. (70,911) 33,615
Purchase of investments................................................................................... (326,513) (10,329)
Purchase of assembled workforce .................................................................. (60,800) —
Proceeds from settlement of investments ...................................................... 5,159 303
Purchase of crypto assets held ........................................................................ (3,009,086) (528,080)
Disposal of crypto assets held ......................................................................... 2,574,032 574,115
Loans originated ................................................................................................. (336,189) —
Proceeds from repayment of loans ................................................................. 124,520 —
Net cash (used in) provided by investing activities ............................................ (1,124,740) 50,822
 Coinbase Global, Inc.
Consolidated Statements of Cash Flows
(In thousands)
(unaudited)

Year Ended December 31,

2021 2020
Cash flows from financing activities
Issuance of common stock upon exercise of stock options, net of
repurchases ........................................................................................................ 217,064 20,731
Taxes paid related to net share settlement of equity awards ...................... (262,794) —
Cash paid to repurchase equity awards ......................................................... — (1,930)
Proceeds received under the Employee Stock Purchase Plan .................. 19,889 —
Issuance of shares from exercise of warrants ............................................... 433 —
Issuance of convertible senior notes, net ....................................................... 1,403,753 —
Issuance of senior notes, net ........................................................................... 1,976,011 —
Purchase of capped calls .................................................................................. (90,131) —
Proceeds from short-term borrowing .............................................................. 20,000 —
Net cash provided by financing activities ............................................................ 3,284,225 18,801
Net increase in cash, cash equivalents, and restricted cash ........................... 12,889,516 3,073,693
Effect of exchange rates on cash ......................................................................... (64,883) (2,081)
Cash, cash equivalents, and restricted cash, beginning of period .................. 4,856,029 1,784,417
Cash, cash equivalents, and restricted cash, end of period ............................ $ 17,680,662 $ 4,856,029

Cash, cash equivalents, and restricted cash consisted of the following:

Cash and cash equivalents .............................................................................. $ 7,123,478 $ 1,061,850
Restricted cash ................................................................................................... 30,951 30,787
Customer custodial funds ................................................................................. 10,526,233 3,763,392
Total cash, cash equivalents, and restricted cash ............................................. $ 17,680,662 $ 4,856,029

Supplemental disclosure of cash flow information

Cash paid during the period for interest ......................................................... $ 3,793 $ —
Cash paid during the period for income taxes ............................................... $ 68,614 $ 62,060
Operating cash outflows for amounts included in the measurement of
operating lease liabilities ................................................................................... $ 20,061 $ 40,011

Supplemental schedule of non-cash investing and financing activities

Unsettled purchases of property and equipment .......................................... $ 808 $ —
Right-of-use assets obtained in exchange for operating lease
obligations ........................................................................................................... $ 27,286 $ 2,146
Non-cash consideration paid for business combinations ............................ $ 571,196 $ —
Purchase of crypto assets and investments with non-cash consideration $ 13,511 $ 662
Crypto assets borrowed .................................................................................... $ 1,134,876 $ 194,696
Crypto assets borrowed repaid with crypto assets ....................................... $ 609,600 $ 59,171
 Reconciliation of Net Income to Adjusted EBITDA (unaudited)

Q4’20 Q1’21 Q2’21 Q3’21 Q4’21 FY’21 FY’20

(in thousands)
Net Income ........................................ $176,785 $ 771,463 $1,606,349 $ 406,100 $ 840,208 $3,624,120 $322,317

Adjusted to exclude the following:

(Benefit from) provision for
income taxes ............................. 55,983 225,203 (737,468) (135,240) 50,332 (597,173) 86,882
Depreciation and amortization 8,577 10,922 12,612 17,099 23,018 63,651 30,962
Interest expense ....................... — — 748 6,972 21,440 29,160 —
Crypto asset borrowing costs . 2,354 4,273 2,925 2,326 2,322 11,847 2,634
Stock-based compensation..... 32,880 104,628 189,335 264,195 262,528 820,685 69,889
Impairment, net(1) ...................... 3 841 57,343 17,485 44,252 119,921 8,355
Non-recurring Direct Listing
expenses .................................... — 4,160 35,000 — — 39,160 —
Unrealized (gain) loss on
foreign exchange ...................... (5,150) (2,869) 5,261 13,692 (31,028) (14,944) 1,057
Fair value (gain) loss on
derivatives .................................. 16,249 (2,800) (22,415) 1,392 (8,233) (32,056) 5,254
Legal reserves and related
costs ........................................... — 1,500 — — — 1,500 —
Other loss, net(2) ........................ — — — 24,200 — 24,200 —
Adjusted EBITDA .............................. $287,681 $1,117,321 $1,149,690 $ 618,221 $1,204,839 $4,090,071 $527,350
__________________

Note: Figures presented above may not sum precisely due to rounding

(1) Impairment, net includes impairment on crypto assets still held and intangible assets.
(2) Other loss, net includes $25.1 million loss associated with an incident which did not breach our security infrastructure or broader
systems, but for which impacted customers were reimbursed, offset by an unrealized gain of $0.9 million related to a contingent
consideration arrangement.