Shareholder

Letter

Fourth Quarter and Full-Year 2022 Feb 21, 2023

Fellow 
 In light of all of the volatility in the industry, we believe our year-end shareholder letter provides a
Shareholders, good opportunity to reflect on what Coinbase is, and perhaps more importantly, what it is not.

We founded Coinbase with a conscious choice that we would be the most trusted, and easiest to
use crypto platform. Our products enable millions of consumers, institutions, and developers
around the world to discover, transact, and engage with crypto assets and web3 applications. We
have built reliable infrastructure, a durable business model, and a strong balance sheet. We have
prioritized prudent risk management and emphasized transparency with customers, market
participants, and government authorities, all to help encourage the cryptoeconomy’s
development. That transparency is punctuated by our decision to make Coinbase a publicly
traded company, embracing the attendant disclosure and regulatory requirements. 

Throughout our history, we have routinely worked with industry and legal experts, as well as
global regulators and policymakers, to develop products that are safe for consumers and
compliant within the countries that we operate. Given the nascency of crypto and evolving
regulatory landscapes, we have certainly not been perfect. But when we identify issues, we work
to remediate as quickly and thoroughly as possible - most recently evidenced by our January
2023 settlement with the New York Department of Financial Services (NYDFS). We remain
committed to working with global regulators and policymakers to drive prudent regulation to this
emerging asset class. 

We have rigorous processes to evaluate assets to list on our Spot Market and the majority of
assets we review have not met our listing criteria and therefore have been rejected. We have
avoided offering high leverage products to consumers which has both protected consumers and
helped us avoid credit risk. We do not operate as a market maker that trades against our
customers, and we do not issue exchange tokens. We do not believe we have violated any
securities laws: Coinbase staking products are not securities, USD Coin (USDC) is not a security.
The list goes on. We expect 2023 to be a year of regulatory focus and we believe our strong
foundation will make us a net beneficiary of this new environment. Our business decisions do not
always match competitive offerings, or result in maximizing near term growth or profit - but
rather they are intended to maximize safety for customers, legitimacy for the cryptoeconomy,
and longevity for Coinbase.  

These principles can all be seen in our 2022 results and how we managed the company through a
tumultuous year. Our Q4 results were consistent with our outlook, including coming in well within
our full-year Adjusted EBITDA loss guardrail we conveyed in February 2022. In the latter half of
2022, we pivoted and began reducing expenses which has culminated in a materially lower
expense run rate beginning in Q1’23. 

In addition to focusing on financial performance, we also increased engagement with global

policymakers and regulators, and took significant steps in building industry leading partnerships
to serve as important building blocks for the future. In short, we are proud of our ability to
execute, and position our business as a regulated and legitimate market leader. The journey
ahead will have its challenges, but our grit, determination, and resolve have been strong for 10+
years and we are excited for the future.

Q4 and Full-Year 2022 1

Chapter 1

Coinbase and crypto proved to be largely resilient in 2022 despite major shocks to the system. Idiosyncratic events
throughout 2022 exacerbated already weak macro conditions. As a result, crypto market capitalization declined 64% or $1.5
trillion Y/Y in 2022 and volatility reached multi-year lows. However, Coinbase and the cryptoeconomy have proven to be
resilient and long-term fundamentals remain strong.

Chapter 2

Revenue has been diversifying with Q4 net revenues increasing 5% Q/Q, driven by Subscription and Services. While
transaction revenues declined 12% Q/Q in Q4, subscription and services revenue grew 34% Q/Q to $283 million.

Chapter 3

We have cut our expenses and are positioning Coinbase for improving financial performance. We anticipate that our
recent headcount reduction and ongoing cost management efforts will result in a 30%+ reduction in technology and
development, sales and marketing, and general and administrative expenses in Q1’23 compared to Q4’22, which would
constitute a 25%+ reduction when excluding the NYDFS settlement in Q4'22.

Chapter 4

Risk management strength provides for a strong liquidity position and modest counterparty risk. Our longstanding
commitment to sound risk management continues to differentiate us and protect customers. In 2022, our total corporate
exposure to client or counterparty insolvencies was $14 million with no customer funds lost. We ended Q4 with $5.5 billion
in total $USD resources, in addition to $426 million in crypto assets, which we believe puts us in a strong financial position.

Chapter 5

Regulation is coming and we believe we are positioned to benefit. Crypto policy is in an important period of transition.
Policy developments could pave the way for crypto to realize its full innovative potential — as we’re seeing in many
jurisdictions around the world — and we believe Coinbase will be a beneficiary.

Chapter 6

Outlook. We are operating toward a goal of improving full-year 2023 Adjusted EBITDA in absolute dollar terms versus full-
year 2022 and believe our recent cost reduction efforts help position us to do so. When Coinbase went public, our goal was
to operate at roughly break even across each crypto cycle. We have evolved our approach and are now setting our sights on
positioning the company to generate Adjusted EBITDA in all market conditions.

For a reconciliation of net income Select Key Financial Metrics

(loss) to Adjusted EBITDA used in FULL-YEAR
this shareholder letter, please
refer to the reconciliation table in FINANCIAL METRICS ($M) Q4’21 Q1’22 Q2’22 Q3’22 Q4’22 2021 2022
the section titled “Reconciliation
of Net Income (Loss) to Adjusted Net Revenue 2,490 1,165 803 576 605 7,355 3,149
EBITDA”, following the financial
statements included at the end of Net Income (Loss) 840 (430) (1,094) (545) (557) 3,624 (2,625)
this shareholder letter.
Adjusted EBITDA 1,205 20 (151) (116) (124) 4,090 (371)

Full-Year 2022 Results were Consistent with Outlook

Metric Coinbase Full-Year 2022 Outlook (Nov 2022) Full-YeaR 2022 Actuals
Annual Average MTUs Slightly below 9.0 million 8.8 million1
Subscription and Services Revenue More than $700 million $793 million

Transaction Expenses
 Low 20%s 20%

as a percentage of net revenue

Sales and Marketing Expenses
 $500-$550 million $510 million

including stock-based compensation

Technology and Development +
 Around $4 billion, including approximately $3.9 billion, including $1.5
General and Administrative Expenses
$1.5 billion of stock-based compensation billion of stock-based
1 Represents Average MTU over including stock-based compensation compensation
the course of the year vs. Q4’22
figure of 8.3 million Adjusted EBITDA Within $(500) million guardrail $(371) million

Q4 and Full-Year 2022 2

Chapter 1
 To state the obvious, 2022 was a challenging year for crypto markets and our transaction
Coinbase and crypto revenues. As macroeconomic indicators like inflation remained high and interest rates rose
throughout the year, crypto market cap declined along with broader equity markets. These
proved to be largely weakening market conditions became exacerbated by two idiosyncratic events. The first was the
resilient in 2022 depegging of $LUNA in Q2’22 which contributed to a ~60% crypto market cap decline in that
despite major shocks quarter and exposed poor risk management practices in crypto, which ultimately helped drive the
to the system. credit related bankruptcies of Three Arrows Capital, Voyager, and Celsius. The second event was
the collapse of FTX in Q4’22, which was the result of fraud, and helped drive additional credit
related bankruptcies.

Crypto Market Cap vs. Nasdaq (Indexed)

100

90

80
UST/LUNA
70

60
3AC/CELSIUS/VOYAGER
50
FTX

40

30
JAN 22 FEB 22 MAR 22 APR 22 MAY 22 JUN 22 JUL 22 AUG 22 SEP 22 OCT 22 NOV 22 DEC 22

NASDAQ COMPOSITE CRYPTO MARKET CAP

In total, crypto market cap declined 64% or approximately $1.5 trillion over the course of 2022. As
a result, our 2022 total trading volumes and transaction revenues declined 50% and 66% Y/Y,
respectively. When zooming out and looking at the most recent price cycle which started in 2020
– and after the industry endured the collapse of $LUNA and FTX – we have seen growth and
advancement of both the industry and Coinbase:

Average Bitcoin prices in Jan 2023 were still up 80%+ compared to the average price in 2020
Monthly active developers in crypto have more than doubled since 2020 to over 20,000
Progress in global crypto regulation – notably the EU’s Markets in Crypto Assets (MiCA)
framework, recent laws in Brazil, plans to regulate crypto in the UK, and other proposals in
jurisdictions like Australia, Japan, Switzerland, and Hong Kong
Major brands (Starbucks, Adidas, Nike, Coca-Cola) and social media platforms (Instagram,
Twitter, Reddit) partnered with web3 protocols and/or launched NFT powered technologies. 

Coinbase has stood apart from the competition and continues to be recognized as a trusted
platform

Trading volume grew to $830 billion in 2022 from $193 billion in 2020
Subscription and services revenues grew over 17x to nearly $800 million in 2022 from less than
$50 million in 2020
Roughly 25% of the top 100 largest hedge funds in the world by reported AUM have chosen to
onboard with Coinbase, up from a handful at the end of 2020
Announced industry leading partnerships, including with Blackrock.

Q4 and Full-Year 2022 3

Chapter 2
 Q4 net revenue was $605 million, up 5% Q/Q, of which $322 million was transaction revenue and
Revenue has been $283 million was subscription and services revenue. On a full-year basis, we generated net
revenue of $3.1 billion in 2022, down from $7.4 billion in 2021, of which $2.4 billion was transaction
diversifying with Q4 revenue and $793 million was subscription and services revenue.
net revenues
increasing 5% Q/Q,
driven by
Subscription and Net Revenue ($M)
FULL-YEAR
Services. NET REVENUE Q4’21 Q1’22 Q2’22 Q3’22 Q4’22 2021 2022

Tranaction Revenue

Consumer, net 2,185.8 965.8 616.2 346.1 308.8 6,491.0 2,236.9

Institutional, net 90.8 47.2 39.0 19.8 13.4 346.3 119.3

Total transaction revenue 2,276.6 1,013.0 655.2 365.9 322.1 6,837.3 2,356.2

Subscription and services revenue

Blockchain rewards 102.7 81.9 68.4 62.8 62.4 223.1 275.5

1 We have included Learning Rewards Custodial fee revenue 49.6 31.7 22.2 14.5 11.4 136.3 79.8
revenues – which we re-branded
from Earn campaign revenues – in
other subscription and services Interest Income 7.6 10.5 32.5 101.8 182.2 25.8 327.0
revenues for Q3 and prior periods
shown. Prior to Q3, Earn campaign Other subscription and services revenue1 53.5 27.8 24.3 31.4 26.7 132.3 110.3
revenues was reported as a distinct
line item. Learning Rewards revenue Total subscription and services revenue 213.4 151.9 147.4 210.5 282.8 517.5 792.6
was $7 million in Q3 and $2 million in
Q4 and historical revenue can be
found in prior SEC filings.
Net Revenue 2,490.0 1,164.9 802.6 576.4 604.9 7,354.8 3,148.8

Note: Figures presented may not sum precisely due to rounding

Transaction Revenue 

Q4 total transaction revenue declined 12% Q/Q to $322 million. Consumer transaction revenue
was $309 million, down 11% compared to Q3, while institutional transaction revenue was $13
million, down 32% compared to Q3. 

The decline in transaction revenue was driven by lower Q4 total trading volume although we
gained overall trading volume market share in the quarter. Q4 total trading volume was $145
billion, down 9% Q/Q, outperforming global crypto spot market trading volume which declined
21% Q/Q. Our total consumer trading volume declined 23% Q/Q in Q4. Our institutional trading
volume declined 6% Q/Q in Q4.

Q4 and Full-Year 2022 4

 FULL-YEAR
TRADING VOLUME ($B) Q4’21 Q1’22 Q2’22 Q3’22 Q4’22 2021 2022

Consumer 177 74 46 26 20 535 167

Institutional 371 235 171 133 125 1,136 663

Total 547 309 217 159 145 1,671 830

FULL-YEAR
TRADING VOLUME (% OF TOTAL) Q4’21 Q1’22 Q2’22 Q3’22 Q4’22 2021 2022

Bitcoin 16% 24% 31% 31% 35% 24% 29%

Ethereum 16% 21% 22% 33% 33% 21% 25%

Other crypto assets 68% 55% 47% 36% 33% 55% 45%

Total 100% 100% 100% 100% 100% 100% 100%

FULL-YEAR
TRANSACTION REVENUE (% OF TOTAL) Q4’21 Q1’22 Q2’22 Q3’22 Q4’22 2021 2022

Bitcoin 16% 25% 31% 31% 35% 25% 29%

Ethereum 16% 23% 22% 24% 19% 21% 22%

Other crypto assets 68% 52% 47% 45% 46% 54% 49%

Total 100% 100% 100% 100% 100% 100% 100%

Note: Figures presented may not sum precisely due to rounding

Advanced traders on our consumer platform were much less active in December 2022 which we
believe was primarily driven by multi-year low levels of volatility. As a result, we had a lower mix of
advanced trading volume in Q4.

Further, we experienced an elevated number of institutional customers onboarding onto

Coinbase Prime in Q4. Based on market feedback, we believe this was partially attributable to
heightened recognition of the importance in working with a regulated, trusted, qualified
custodian, as well as a long-term view on the adoption of crypto as an asset class. Elevated
customer onboarding coincided with public support from a number of industry leaders speaking
out about their optimism around the future of crypto and blockchain technologies. 

Our Q4 blended average consumer fee increased compared to Q3. The primary factor was a lower
mix of advanced trading volume. In connection with multi-year lows in crypto asset volatility and
the migration of the majority of users from Coinbase Pro to our advanced trading experience on
our consumer application, we saw a notable decline in advanced trading volume particularly in
December. Since advanced trades carry a lower fee, the result was an increase in our blended
average fee. 

Our institutional blended average fee declined in Q4 compared to Q3, driven by lower fees
associated with our market maker program. The vast majority of our reported institutional trading
volume came from our Spot Market, where market makers and high frequency traders are the
core customers.

Q4 and Full-Year 2022 5

 Subscription and Services Revenue

In Q4, subscription and services revenues grew 34% Q/Q to $283 million. When applying constant
Q4 average crypto prices to prior quarters, subscription and services revenues would have grown
approximately 49% in Q4 compared to Q3.

Subscription and Services Revenue ($M)

Revenue as Reported Revenue Adjusted to Avg Q4'22 Price1

$300 282.8 $300 282.8

213.4 210.5
$200 $200 189.6
151.9 147.4
145.1
102.6 103.1
$100 $100 91.4
78.2
56.4 73.6
52.0
33.6

$0 $0
Q1’21 Q2’21 Q3’21 Q4’21 Q1’22 Q2’22 Q3’22 Q4’22 Q1’21 Q2’21 Q3’21 Q4’21 Q1’22 Q2’22 Q3’22 Q4’22

1 Graph is illustrative of
subscription and services revenues
Blockchain rewards revenue declined 1% Q/Q to $62 million in Q4, or 10% of net revenue. As a
assuming that average crypto reminder, we recognize blockchain rewards revenue on a gross basis. Rewards passed through to
asset prices from the fourth
quarter of 2022 were consistent
customers (less applicable fees) are recognized in transaction expenses. Adjusting for these
throughout the period shown payouts, blockchain rewards represented approximately 3% of net revenue in Q4. While we saw an
increase in native unit staked balances across all assets supported for staking in Q4, the
sequential decline was driven by lower average crypto asset prices in Q4 compared to Q3. Our
largest staked balance is ETH2, which was approximately $3.0 billion as of 12/31. In Q4, we
expanded access to ETH2 staking to Canada and Australia, allowing more users to earn staking
rewards.

Custodial fee revenue was $11 million, down 21% Q/Q. The decline was driven primarily by lower
average crypto prices compared to Q3. Average assets under custody declined 13% Q/Q to $41.6
billion, and were partially offset by modest net inflows into our custody product. 

A key driver of our blockchain rewards and custodial fee revenue is the amount of assets we hold on
platform for our users that are participating in staking or custody products. Total assets on
platform declined 21% Q/Q in Q4, largely driven by lower crypto asset prices, which declined 16%
from 9/30 to 12/31. To a lesser extent, we had modest net outflows in Q4, approximately ⅓ of which
were a reduction in fiat balances. A reduction in customer fiat balances is consistent with behavior
observed during the prior down market. Despite the market turmoil, our retail customers largely
continued to “hodl” on Coinbase at levels similar to Q3. We believe this indicates that retail
customers, on average, maintained long-term conviction in crypto and, assuming history repeats
itself, are likely to become more active when market conditions improve.

Q4 and Full-Year 2022 6

 FULL-YEAR
Note: As a result of the SAB 121 ASSETS ON PLATFORM ($B) Q4’21 Q1’22 Q2’22 Q3’22 Q4’22 2021 2022
disclosure requirement, investors
can now calculate Assets on
Platform based on line items on our Consumer 141 123 47 51 40 141 40
balance sheet. Please add our
“customer crypto liabilities” and Institutional 137 134 49 51 40 137 40
“customer custodial cash liabilities”
together to calculate total Assets on Total 278 256 96 101 80 278 80
Platform.

FULL-YEAR
ASSETS ON PLATFORM (% OF TOTAL) Q4’21 Q1’22 Q2’22 Q3’22 Q4’22 2021 2022

Bitcoin 40% 42% 44% 39% 41% 40% 41%

Ethereum 25% 24% 20% 24% 26% 25% 26%

USDC 1% 1% 2% 1% 1% 1% 1%

Other Crypto Assets 30% 30% 27% 30% 26% 30% 26%

Fiat 4% 4% 7% 6% 6% 4% 6%

Total 100% 100% 100% 100% 100% 100% 100%

Note: Figures presented may not sum precisely due to rounding

Interest income grew 79% Q/Q to $182 million in Q4, of which $146 million was derived from
USDC. The primary driver of the increase was the rising interest rate environment which
benefited our business in two ways

First, higher interest generated via our participation in the USDC ecosystem. We have entered
into an agreement with the issuer of USDC, pursuant to which we share any revenue generated
from USDC reserves pro rata based on (i) the amount of USDC distributed by each respective
party and (ii) the amount of USDC held on each respective party’s platform. In Q4, average
interest rates earned on USDC reserves increased compared to Q3. At the end of Q4, we had
approximately $2 billion of USDC on our platform - consisting of $1.1 billion of customer USDC
and $861 million of corporate owned USDC. In Q4, we continued to expand our USDC Rewards
program internationally, and it is now available in nearly 70 countries. USDC Rewards allows
eligible customers to earn up to 1.5% APY rewards for holding their USDC on the Coinbase
platform

Second, we generated higher interest on customer fiat balances in Q4 compared to Q3. While
customer fiat balances on our platform declined to $5.0 billion as of 12/31 from $6.6 billion as
of 9/30, the increase in average interest rates in Q4 more than offset this decline. Customer
fiat balances vary on a quarter to quarter basis depending on customer activity and we do not
manage our business to grow these balances. 

Finally, other subscription and services revenue was $27 million, down 15% Q/Q. The primary
driver for this was fewer Learning Rewards campaigns in Q4 vs. Q3. The largest component of
other subscription and services is Coinbase One, where we continued to see growth in paid
subscribers in Q4. In Q4, we expanded access to Coinbase One to users in certain international
markets and launched several additional benefits, including access to Messari Pro for advanced
market insights.

Q4 and Full-Year 2022 7

Chapter 3
 Q4 total operating expenses were $1.2 billion, up 3% Q/Q and consistent with our outlook. The
We have cut our sequential increase was driven by anticipated seasonality in our marketing spend, the timing of
certain stock-based compensation awards, and a $50 million settlement with NYDFS. Absent the
expenses and are settlement, total operating expenses would have been down ~1% Q/Q. On a full-year basis, 2022
positioning Coinbase total operating expenses were $5.9 billion, up 24% compared to 2021. We ended Q4 with 4,510
for improving full-time employees, down 4% Q/Q but up 21% Y/Y. 

financial As the events of 2022 unfolded, it became clear that we had hired too many people too quickly.
performance. We moved quickly, both mid-year and just after year-end, to implement difficult but prudent
actions to reduce our headcount while also reorganizing the company to focus on efficiency. We
feel confident that we have a more durable cost structure, which combined with our strong
balance sheet, positions our expenses to better align with the range of scenarios we are currently
forecasting.

We anticipate that our January 2023 headcount reduction and ongoing across-the-board cost
management efforts will result in a greater than 30% reduction in Q1’23 technology and
development, sales and marketing, and general and administrative expenses compared to
Q4’22, which would constitute a greater than 25% reduction when excluding the NYDFS
settlement in Q4'22.

Operating Expenses ($M, except full-time employees)

FULL-YEAR
OPERATING EXPENSES Q4’21 Q1’22 Q2’22 Q3’22 Q4’22 2021 2022

Transaction expense 501.1 277.8 167.2 101.9 83.0 1,267.9 629.9

% of net revenue 20% 24% 21% 18% 14% 17% 20%

Sales and marketing 244.6 200.2 140.9 75.9 93.1 663.7 510.1
% of net revenue 10% 17% 18% 13% 15% 9% 16%

Technology and development 459.6 570.7 609.2 556.3 590.1 1,291.6 2,326.4

General and administrative 297.4 413.6 470.2 339.2 377.7 909.4 1,600.6

Restructuring 0.0 0.0 42.5 (1.2) (0.5) 0.0 40.7

Other operating expenses, net 73.5 258.6 422.8 74.8 40.6 630.3 796.8

Total operating expenses 1,576.2 1,720.9 1,852.7 1,146.8 1,184.0 4,762.9 5,904.4

Non-cash crypto related impairment 43.8 209.8 377.0 0.0 5.7 119.4 592.5

Total operating expenses, 
 1,532.4 1,511.1 1,475.7 1,146.8 1,178.3 4,643.5 5,311.9
absent impairment

Full-time employees (end of quarter) 3,730 4,948 4,977 4,706 4,510 3,730 4,510

Note: Figures presented may not sum precisely due to rounding

Q4 and Full-Year 2022 8

Q4 transaction expenses were $83 million, down 19% compared to Q3. Transaction expenses
decreased to 14% of net revenue in Q4 from 18% in Q3, driven by two primary factors: First, we
saw a reduction in transaction losses as a percentage of revenue from several optimization
efforts realized in the quarter that we expect to persist, and second, a higher percentage of net
revenue coming from interest income, which does not have transaction expenses. To the extent
our revenue shifts in composition, transaction expenses as a percentage of net revenue will vary.
For example, if USDC revenue increases as a percentage of net revenue, transaction expenses as
a percentage of net revenue will decrease since USDC revenue does not have transaction
expenses. Conversely, if blockchain rewards increase as a percentage of net revenue, transaction
expenses as a percentage of net revenue will increase, since ~75% of blockchain rewards revenue
is paid to the consumer. Full-year 2022 transaction expenses were 20% of net revenue and
consistent with our outlook. 

Sales and marketing expenses were $93 million, up 23% Q/Q. The primary driver of the increase
was seasonally higher marketing spend, notably driven by our NBA partnership. Full-year 2022
sales and marketing expenses were $510 million, down 23% compared to 2021, and were
consistent with our outlook.

Technology and development expenses were $590 million, up 6% Q/Q. As expected, the primary
driver of the sequential increase was the timing of certain stock-based compensation awards.
Full-year 2022 technology and development expenses were $2.3 billion, up 80% compared to
2021. 

General and administrative expenses were $378 million, up 11% Q/Q. This includes our NYDFS
settlement. Full-year 2022 general and administrative expenses were $1.6 billion, up 76%
compared to 2021. 

Other operating expenses declined 46% Q/Q to $41 million. The primary driver of the sequential
decline was a reduction in certain platform related incidents and net impairment expenses. Full-
year 2022 other operating expenses were $797 million, up 26% compared to 2021.

Profitability 

Q4 net loss was $557 million. Full-year 2022 net loss was $2.6 billion and included $694 million in
unrealized non-cash crypto asset impairment and impairment to our ventures portfolio.  

Q4 Adjusted EBITDA was negative $124 million. Full-year 2022 Adjusted EBITDA was negative $371
million, well within the $500 million loss guardrail we communicated in February 2022. 

Our full-year 2022 tax rate was 14%.

Share Count

On our first earnings call as a public company, we disclosed that we had a fully diluted share
count of 261.9 million which included both basic shares as well as options and RSUs that had not
yet vested or been exercised. Since then, we have issued approximately 13.5 million net new
shares – inclusive of shares issued for acquisitions, the impact of our ESPP, assumes our
convertible notes convert to shares, forfeitures, and the impact of net share settlement practice
– resulting in a Q4 fully diluted share count of 275.4 million. This includes 230.9 million common
shares and approximately 44.6 million additional dilutive shares (which includes 3.9 million shares
associated with our convertible notes which have a conversion price of $370.45). Accordingly,
total dilution since going public in April 2021 has been approximately 5.2%.  

Q4 and Full-Year 2022 9

Chapter 4
 We were an early investor in multifaceted risk management capabilities, with the understanding
that effectively managing liquidity, credit, and counterparty risk is critical to the financial health
Risk management
of TradFi and crypto companies alike. Our risk professionals have decades of experience risk-
strength provides for managing businesses across a range of economic cycles. Our commitment to being the most
a strong liquidity trusted, most transparent, and most disciplined on risk management continues to inspire
position and modest confidence in our platform amongst institutional clients.

counterparty risk.
Capital and Liquidity

We ended Q4 with $5.5 billion in total available $USD resources which we define as cash and cash
equivalents, USDC, and custodial account overfunding. This represents a decline of 3% or $148
million compared to Q3. As a reminder, custodial account overfunding represents both customer
transaction fees that have been paid but not yet been transferred into a corporate bank account
and corporate funds utilized to facilitate customer liquidity – since crypto trades 24/7 and banks
are not open 24/7, we are not able to settle these accounts real-time. To calculate this balance,
investors should subtract “customer custodial cash liabilities” from “customer custodial funds”
on the balance sheet. As of December 31, 2022, this amounted to $212 million.

Total $USD Resources ($M) Total $5,498M

USDC

$861M

CUSTODIAL 

ACCOUNT OVERFUNDING

$212M

Corporate Cash held

at Third Party Venues Corporate Cash
$143M $2,032M

Money Market Funds

$2,250M

Q4 and Full-Year 2022 10

 2022 Q3 to Q4 Change in $USD Resources ($M)
5,646M (171M)
Custodial Account (12M) (5M) 14M 3
(2 M) 20M (67M)
96M 98M
5,4
Overfunding 271M
212M
USDC 368M
861M

Cash and Equivalents
 5,007M

(excl. Restricted Cash)
4,425M

Sep 30 j x+ y
Ad . Op. Cash Cape Internall M&A + y m
Cr pto Invest ents ,
 Financing Short-term Net Equity Other 5 Dec 3 1
w, x 

Flo e cl. Developed Ventures Inventor y 
 P roducts Borrowings Transactions3
In-transit w
Soft are and Other 2 and Other

Operating
 Investing
 Financing
 Ot eh r
 Total


(171M)1 (26M) (47M)4 9 6M 8
(14 M)

1 Cash flows due to operating Change in $USD Resources From Q3 to Q4:


activities, excluding the net
change in USDC. The $148 million sequential decline in $USD resources can be attributed to
2 Crypto purchases and disposals
across crypto investment Operating activities: $171 million net use of cash includes cash operating losses, a $119 million
portfolio, operating purposes, and
other business activities.
increase in accounts receivable (the majority of which was collected prior to the publication of
3 Net cash paid for taxes related to
this letter), $39 million paid in cash interest, and $18 million paid for cash income taxes, offset
net share settlement of equity by $103 million net inflows from hedging collateral as we closed out FX hedging positions.
awards, offset by cash received for
the issuance of common stock upon
Investing activities: $26 million net use of cash, consisting of $42 million pledged as collateral
exercises of stock options, net of included within financing products and other, $12 million used for internally developed
repurchases and proceeds for the
employee stock purchase plan.
software and capital expenditures, and $5 million used for M&A / ventures, offset by inflows
of $14 million from the sale of crypto inventory, and $19 million of repayments from financing
4 Excludes net change in customer
custodial cash liabilities. products, principally Retail Borrow
5 Includes effect of FX on
Financing activities: $47 million net use of cash, largely driven by net share settlement of
corporate cash, net outflows employee equity awards offset by proceeds from short-term borrowings
made in USDC, movement of
restricted cash, and other.
Other activities: $96 million increase, primarily due to the effect of FX on corporate cash,
offset by net outflows made in USDC.  

We also consider our crypto assets held as investments as additional unencumbered resources to
us. The fair market value of our crypto assets held as investments was $426 million as of
December 31, 2022 and had a cost basis of $289 million. When including our crypto investments,
total available resources totaled $5,924 million.

Credit and Counterparty Risk


Risk management is a first principle in our product design. We regularly conduct thorough
reviews of counterparty risks, including of the banks we use. Our credit underwriting and limits
are governed by internal policies. We hold customer assets 1:1, backed by the same asset
deposited with us. Coinbase funds our loans with corporate assets and does not rehypothecate or
lend customer assets except in limited circumstances with their consent. Any lending activity at
Coinbase is at the discretion of the customer and backed by collateral, which serves as a first
layer of protection against potential default contagion.

Our longstanding commitment to sound risk management continued to differentiate us through

Q4 credit events. As a result

No credit losses from our loans to customers

No blocking of client withdrawals or loan recalls
No changes in access to credit for our institutional trading clients, an
Total exposure of $14 million to counterparty insolvencies (consisting entirely of deposits on FTX
to facilitate business operations and client trades). We had no material exposure to any other
client or counterparty insolvencies, including Voyager, BlockFi, or Genesis. 

Q4 and Full-Year 2022 11

 At the end of Q4, we had total credit and counterparty risk, excluding deposits at banks, of $427
million comprised of the following:

Credit and Counterparty Risk (as of 12/31/22)

Page 127 of 10-K (in $ thousands) Page 157 of 10-K (in $ thousands)
Assets December 31, 2022
Accounts and loans receivable,

Current assets: net of allowance December 31, 2022

Loans to

184M Cash and cash equivalents 4,425,021
Customers1 Restricted cash 25,873 Custodial fee revenue receivable 8,434
Customer custodial funds 5,041,119 Loans receivable 98,203
Customer crypto assets 75,413,188
Crypto asset loan receivables 85,826
USDC 861,149
Accounts and loans receivable, net of allowance 404,376 Interest and other receivables 223,413
Income tax receivable 60,441 Allowance for doubtful accounts (11,500)
Collateral

Posted2
100M Prepaid expenses and other current assets 217,048
Total accounts and loans receivable,
Total current assets 86,448,215 net of allowance 404,376

Non-current assets:
Crypto assets held 424,393
Page 164 of 10-K (in $ thousands)
Cash held at 
 Lease right-of-use assets 69,357
3rd Party Venues3 143M Property and equipment, net 171,853 Prepaid expenses and other current assets
Goodwill 1,073,906
Intangible assets, net 135,429 Prepaid expenses 98,204
Other non-current assets 1,401,720 Assets pledged as collateral 100,007
Total assets 89,724,873
427M Other 18,837
Total credit and counterparty Liabilities 217,048
Total prepaid expenses and other current assets
risk, excluding banks
Current liabilities:
Other non-current assets
Customer custodial cash liabilities 4,829,587
Strategic Investments 326,683
1 We extend loans in fiat and Customer crypto liabilities 75,413,188
crypto, collateralized by fiat and Accounts payable 56,043 Deferred tax assets 1,046,791
crypto. Our Retail Borrow Accrued expenses and other current liabilities 331,236
program allows customers to Deposits 10,989
borrow up to 40% of the value Crypto asset borrowings 151,505
of the Bitcoin in their account, Lease liabilities, current 33,734 Other 17,257
up to a total of $1 million. In our Total current liabilities 80,815,293 Total other non-current assets 1,401,720
Institutional program, our
standard practice is to require Non-current liabilities:
100%+ in collateral, and we Lease liabilities, non-current 42,044
always measure risk against a Page 112 of 10-K (in $ millions)
Long-term debt 3,393,448
substantially higher stressed Other non-current liabilities 19,531
price move. Cash and cash equivalents
Total liabilities 84,270,316
2 When we enter into hedging Cash equivalents 2,250.1
transactions or when we Note: Figures presented may not sum precisely due to rounding. Cash held at banks 2,031.7
borrow, we may be required to
post collateral. Cash held at venues 143.2

Total cash and cash equivalents 4,425.0

3 We hold cash at venues,
which may include traditional Restricted cash 25.9
financial institutions and
payment providers or USDC 861.1
cryptocurrency companies.
At year-end, 100% was with
traditional financial
institutions and service
providers.

We also have counterparty exposure to banks where we hold customer and corporate fiat.  We
have policies and procedures that govern where we deposit client cash, how much we put in each
bank in aggregate, and how much we can hold in each bank per customer.

Q4 and Full-Year 2022 12

Chapter 5
 We have shared in previous quarters that crypto policy is at an important period of transition.
Regulation is coming That is more true now than it has ever been, and we expect 2023 to be a significant year for crypto
policy in the United States and abroad. This could pave the way for crypto to realize its full
and we believe we are innovative potential, but could also result in further actions by policymakers and regulators that
positioned to benefit. would have a negative impact on the industry. We are preparing for both eventualities.      

The public conversation around crypto policy is receiving more attention from the crypto
community than it ever has before. FTX’s collapse in November 2022 was undeniably a catalyst for
this increased attention. The actions taken by some regulators in response to that collapse,
however, have kept the policy conversation at the forefront. Coinbase has concerns about those
actions that appear more designed to be punitive and reactive than to address actual consumer
interests and the realities of how crypto works.  

There is, nevertheless, a lot of reason to be optimistic about how crypto policy is developing
globally.  The European Union’s MiCA framework was finalized in October 2022.  Since then, the
EU and its member states have directed their attention toward operationalizing and
implementing this framework. The significance of this agreement cannot be understated – a fit-
for-purpose framework for crypto will be applied throughout 27 different member nations
(representing roughly one-sixth of the global economy) in order to create predictability and
stability for the industry in those nations.  

The EU is not the only jurisdiction that sees the value of this. The President of Brazil signed
legislation into law in December 2022 that affirms crypto’s use as a payment within the country,
directs the appointment of a single regulator to oversee crypto, and ultimately ensures better
consumer protection and compliance with anti-money laundering rules. The United Kingdom also
published a detailed consultation in January of this year that outlines the UK’s plan for regulating
crypto asset service providers; this consultation appears to be the first step in the UK executing
on its commitment to become a global crypto hub. Finally, the Indian government resolved to
champion the development of an international crypto regulatory framework as part of their G20
presidency this year.  Other major crypto proposals are being developed in jurisdictions like
Australia, Switzerland, and Hong Kong. 

These international jurisdictions are doing the hard work of drafting fit-for-purpose rules to
govern the industry, which will benefit both consumers and industry participants alike.  

To be sure, Coinbase and other industry players are also putting in the work to create alignment
between the developing cryptoeconomy and reasonable government regulation. Coinbase
entered into a consent order with the NYDFS in January of this year that stemmed from past
shortcomings in our compliance program. We took NYDFS’s concerns seriously and did intensive
work to address their concerns, including building new crypto-focused anti-money laundering
and sanctions tools, enhancing our Transaction Monitoring System, maturing our Enhanced Due
Diligence program, and more. These kinds of steps and collaborative work with regulators
position Coinbase to thrive in the regulated space – for example, we are now the standard bearer
when it comes to complying with the guidance NYDFS issued in January 2023 on custodial
structures for consumer protection.   

We have shown the same dedication to pragmatism in our policy advocacy. In July of last year we
filed a petition for rulemaking with the Securities and Exchange Commission (SEC) that asked for a
public rulemaking on digital asset securities. The purpose of our petition is to encourage the SEC to
work with the public on a process to eliminate the barriers to crypto companies seeking to register
with the agency in order to offer digital asset securities, while ensuring customer protection and
fair and orderly markets. To further contribute to this effort, we submitted a comment that detailed
some of what we believe should be contained in that SEC rule. We are pleased that more than 1,600
submissions also came in to the SEC in support of our petition, including from the Center for
Markets Competitiveness at the US Chamber of Commerce, and other organizations.

Q4 and Full-Year 2022 13

 Disappointingly, we are not seeing regulators necessarily welcoming transparency and public
participation in their rule-making. United States’ agencies, in particular, are demonstrating a
disjointed stance regarding crypto that is pushing the industry overseas. The SEC, for example,
has not responded to our petition, and the industry continues to grapple with the SEC’s approach
to instead regulate via enforcement action. The SEC seems determined to increase its
jurisdiction over digital assets, despite most of the existing US market not satisfying Howey or
any other test that would result in digital assets being securities, as well as persistent, real
questions about whether or how those standards should apply at all to digital assets and
secondary markets. In the absence of federal legislation, public rulemaking is a necessary step
for regulators seeking jurisdiction over parts of the industry.   

While the SEC moves to expand its jurisdiction, other agencies seem to prefer for crypto to be
pushed out of the regulatory sphere. The Federal Reserve, Federal Deposit Insurance
Corporation, and Office of the Comptroller of the Currency issued a joint statement in January
2023 discouraging banks from owning crypto assets on public blockchains. Some banks have felt
subsequent pressure to provide fewer basic services to crypto companies. Because banks engage
in thorough vetting of companies that they take on as clients, this loss of access to banking
services has the unfortunate effect of reducing protections for consumers, and ultimately cedes
this important innovation to the rest of the world. We will continue to partner with financial
institutions globally to work through these challenges, demonstrating the rigorous and mature
approach Coinbase has taken to maintenance of these important relationships.

In the face of this disjointed approach in the United States, the need for federal legislation is
more important than ever.  We believe and strongly advocate that the United States should follow
the lead of jurisdictions around the world that have created frameworks to establish consistency
and certainty for the industry. Congress seems to recognize this need – it has held multiple
hearings on crypto since the fall of FTX.  We expect the relevant committees in Congress to begin
concrete action to develop and consider crypto-related legislation. Tangible progress in
Congress will be important, and will also demonstrate to relevant agencies the importance of
allowing crypto companies to operate in and with the regulated sphere in ways that advance the
goals of consumer protection, protect against systemic risk, and grow this innovative industry. 

Chapter 6
 We enter 2023 with a focus on cost management, efficiency, and a goal to improve full-year
Outlook Adjusted EBITDA in absolute dollar terms on a year over year basis. Crypto remains volatile and
we have limited ability to forecast our transaction revenues which remain correlated with crypto
market capitalization and crypto asset volatility. As such, we are prepared to manage our
business through a wide range of transaction revenue scenarios in 2023, which include possible
increases, decreases or stabilization of crypto market capitalization and crypto asset volatility
compared to levels at the end of 2022.

In addition to our focus on cost reduction and efficiency, we are more rigorously assessing our
product-market fit, and taking a scrappier approach to investments in new and unproven
products by, for example, getting back to smaller team sizes. We are controlling what we can
control and contingency planning for what we cannot. You can expect us to be nimble and adapt
to the market if conditions evolve outside the range of scenarios we have currently planned for.     

Q1’23 Outlook

Crypto markets have improved  thus far in Q1 compared to Q4. Total crypto market cap is up 40%
year-to-date through February 17. In addition, crypto asset volatility is 5% higher over this same
time period compared to Q4. These market dynamics are reflected in our trading business. We
generated $120 million of transaction revenue in January 2023. We caution investors not to
extrapolate these results forward. Last year’s experience reminds us how quickly the market can
evolve and we are mindful that industry dynamics - across multiple dimensions - remain in flux. 

Q4 and Full-Year 2022 14

In that spirit, our outlook reflects what we believe are the most stable and predictable elements

of our business, specifically subscription and services revenue and expenses, as outlined below.

Coinbase Q1 2023 Outlook

Metric O UTLOOK

Subscription and Services Revenue $300 million - $325 million

Transaction Expenses Mid teens as a % of net revenue

Technology and Development + General and $625 million - $675 million

Administrative Expenses Including ~$200M in stock-based compensation

Sales and Marketing Expenses $60 million - $70 million

15M in stock-based compensation

Including ~$

Restructuring Expenses Approximately $150 million

Looking Ahead


Given the unpredictability of crypto markets, we have limited certainty around the rest of the

year. But in the spirit noted above, we are operating toward a goal of improving Adjusted EBITDA

in absolute dollar terms versus full-year 2022 and believe our recent cost reduction efforts help

position us to do so. As we look out to the full year, we do not expect to meaningfully increase our

headcount compared to Q1 levels which we anticipate to be in the neighborhood of 3,650 people.

Q4 and Full-Year 2022 15

Webcast Information

We will host a question and answer session to discuss the results for the fourth quarter and full-
year 2022 on February 21, 2023 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 the first quarter and
the full-year ending December 31, 2023, anticipated future expenses and investments;
expectations relating to certain of our key financial and operating metrics; our business strategy
and plans; expectations relating to our industry, the regulatory environment, market conditions,
trends and growth; expectations relating to customer behaviors and preferences; our ability to
fund our operations through periods of macroeconomic uncertainty and significant volatility in
the cryptoeconomy 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, among others: our ability to
successfully execute our business and growth strategy and generate 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; stock price fluctuations; market conditions across the cryptoeconomy,
including crypto asset price volatility; and general market, political and economic conditions,
including interest rate fluctuations. 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 we make with the
Securities and Exchange Commission (SEC) from time to time, including our Annual Report on
Form 10-K for the year ended December 31, 2022 filed with the SEC on February 21, 2023. 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.

Non-GAAP Financial Measure


In addition to our results determined in accordance with US generally accepted accounting
principles (GAAP), we believe Adjusted EBITDA, a non-GAAP measure, is useful in evaluating our
operating performance. We use Adjusted EBITDA to evaluate our ongoing operations and for
internal planning and forecasting purposes. We believe that Adjusted EBITDA may be helpful to
investors because it provides consistency and comparability with past financial performance.
However, Adjusted EBITDA is presented for supplemental informational purposes only, has
limitations as an analytical tool, and should not be considered in isolation or as a substitute for
financial information presented in accordance with GAAP. Among other non-cash and non-
recurring items, Adjusted EBITDA excludes stock-based compensation expense, which has
recently been, and will continue to be for the foreseeable future, a significant recurring expense

Q4 and Full-Year 2022 16

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 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.

A reconciliation of Adjusted EBITDA to net income (loss) can be found below in the table
captioned “Reconciliation of Net Income (Loss) to Adjusted EBITDA.” Investors are encouraged to
review the related GAAP financial measures and the reconciliation of Adjusted EBITDA to its most
directly comparable GAAP financial measure, and not to rely on any single financial measure to
evaluate our business. We calculate Adjusted EBITDA as net income (loss), adjusted to exclude
provision for or benefit from income taxes, depreciation and amortization, interest expense,
crypto asset borrowing costs, stock-based compensation expense, crypto asset impairment, net,
impairment on investments, other impairment, non-recurring direct listing expenses,
restructuring, change in unrealized foreign exchange, fair value gain or loss on foreign exchange
derivatives, fair value gain or loss on derivatives, non-recurring legal reserves and related costs,
and other adjustments, net.

Q4 and Full-Year 2022 17

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

December 31,
2022 2021
Assets
Current assets:
Cash and cash equivalents............................................................................................. $ 4,425,021 $ 7,123,478
Restricted cash ................................................................................................................. 25,873 30,951
Customer custodial funds ............................................................................................... 5,041,119 10,617,552
Customer crypto assets(1) ................................................................................................ 75,413,188 —
USDC ................................................................................................................................. 861,149 100,096
Accounts and loans receivable, net of allowance ....................................................... 404,376 304,706
Income tax receivable...................................................................................................... 60,441 61,231
Prepaid expenses and other current assets ................................................................ 217,048 135,849
Total current assets..................................................................................................... 86,448,215 18,373,863
Crypto assets held ................................................................................................................. 424,393 988,193
Lease right-of-use assets ..................................................................................................... 69,357 98,385
Property and equipment, net ............................................................................................... 171,853 59,230
Goodwill................................................................................................................................... 1,073,906 625,758
Intangible assets, net ............................................................................................................ 135,429 176,689
Other non-current assets...................................................................................................... 1,401,720 952,307
Total assets .................................................................................................................. $ 89,724,873 $ 21,274,425
Liabilities, Convertible Preferred Stock, and Stockholders’ Equity
Current liabilities:
Customer custodial cash liabilities................................................................................. $ 4,829,587 $ 10,480,612
Customer crypto liabilities(2) ............................................................................................ 75,413,188 —
Accounts payable ............................................................................................................. 56,043 39,833
Accrued expenses and other current liabilities ............................................................ 331,236 439,559
Crypto asset borrowings ................................................................................................. 151,505 426,665
Lease liabilities, current ................................................................................................... 33,734 32,366
Total current liabilities ................................................................................................. 80,815,293 11,419,035
Lease liabilities, non-current ................................................................................................ 42,044 74,078
Long-term debt ....................................................................................................................... 3,393,448 3,384,795
Other non-current liabilities .................................................................................................. 19,531 14,828
Total liabilities............................................................................................................... 84,270,316 14,892,736
Commitments and contingencies ........................................................................................
Stockholders’ equity:
Class A common stock, $0.00001 par value; 10,000,000 shares authorized at
December 31, 2022 and 2021; 182,796 and 168,807 shares issued and
outstanding at December 31, 2022 and 2021, respectively ........................................... 2 2
Class B common stock, $0.00001 par value; 500,000 shares authorized at
December 31, 2022 and 2021; 48,070 and 48,310 shares issued and
outstanding at December 31, 2022 and 2021, respectively ........................................... — —
Additional paid-in capital ................................................................................................. 3,767,686 2,034,658
Accumulated other comprehensive loss ....................................................................... (38,606) (3,395)
Retained earnings ............................................................................................................ 1,725,475 4,350,424
Total stockholders’ equity........................................................................................... 5,454,557 6,381,689
Total liabilities, convertible preferred stock, and stockholders’ equity ........... $ 89,724,873 $ 21,274,425
__________________
(1) Safeguarding assets
(2) Safeguarding liabilities
 Coinbase Global, Inc.
Consolidated Statements of Operations
(In thousands, except per share data)
(unaudited)

Three Months Ended December 31, Year Ended December 31,

2022 2021 2022 2021
Revenue:
Net revenue ............................................. 604,946 2,490,026 3,148,815 7,354,753
Other revenue ......................................... 24,162 8,437 45,393 484,691
Total revenue......................................... 629,108 2,498,463 3,194,208 7,839,444
Operating expenses:
Transaction expense............................ 82,991 501,181 629,880 1,267,924
Technology and development............. 590,103 459,611 2,326,354 1,291,561
Sales and marketing ............................ 93,103 244,572 510,089 663,689
General and administrative ................. 377,682 297,324 1,600,586 909,392
Restructuring ......................................... (518) — 40,703 —
Other operating expense, net ............. 40,619 73,451 796,804 630,308
Total operating expenses .................. 1,183,980 1,576,139 5,904,416 4,762,874
Operating (loss) income ................. (554,872) 922,324 (2,710,208) 3,076,570
Interest expense ..................................... 21,600 21,440 88,901 29,160
Other expense (income), net ................ (5,594) 10,344 265,473 20,463
(Loss) income before income taxes .. (570,878) 890,540 (3,064,582) 3,026,947
(Benefit from) provision for income
taxes ........................................................ (13,877) 50,332 (439,633) (597,173)
Net (loss) income ................................. $ (557,001) $ 840,208 $ (2,624,949) $ 3,624,120
Net (loss) income attributable to
common stockholders:
Basic ....................................................... $ (557,001) $ 832,929 $ (2,624,949) $ 3,096,958
Diluted .................................................... $ (557,853) $ 836,507 $ (2,631,179) $ 3,190,404
Net (loss) income per share
attributable to common stockholders:
Basic ....................................................... $ (2.46) $ 3.90 $ (11.81) $ 17.47
Diluted .................................................... $ (2.46) $ 3.32 $ (11.83) $ 14.50
Weighted-average shares of common
stock used to compute net (loss)
income per share attributable to
common stockholders:
Basic ....................................................... 226,758 213,741 222,314 177,319
Diluted .................................................... 226,769 252,279 222,338 219,965

Stock-based Compensation Expense

Three Months Ended December 31, Year Ended December 31,

2022 2021 2022 2021
Technology and development .................. $ 300,410 $ 190,831 $ 1,093,983 $ 571,861
Sales and marketing .................................. 23,340 12,645 76,153 32,944
General and administrative....................... 106,995 59,052 395,687 215,880
Total .............................................................. $ 430,745 $ 262,528 $ 1,565,823 $ 820,685
 Coinbase Global, Inc.
Consolidated Statements of Cash Flows
(In thousands)
(unaudited)

Year Ended December 31,

2022 2021
Cash flows from operating activities
Net (loss) income .......................................................................................................................... $ (2,624,949) $ 3,624,120
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating
activities:
Depreciation and amortization .............................................................................................. 154,069 63,651
Crypto asset impairment expense ........................................................................................ 757,257 329,152
Investment impairment expense........................................................................................... 101,445 —
Other impairment expense .................................................................................................... 26,518 500
Stock-based compensation expense ................................................................................... 1,565,823 820,685
Provision for transaction losses and doubtful accounts .................................................... (13,051) 22,390
(Gain) loss on disposal of property and equipment ........................................................... (58) 1,425
Deferred income taxes ........................................................................................................... (468,035) (558,329)
Unrealized loss (gain) on foreign exchange ....................................................................... 28,516 (14,944)
Non-cash lease expense ....................................................................................................... 31,123 34,542
Change in fair value of contingent consideration ............................................................... (8,312) (924)
Realized gain on crypto assets ............................................................................................. (36,666) (178,234)
Crypto assets received as revenue ...................................................................................... (470,591) (1,015,920)
Crypto asset payments for expenses .................................................................................. 383,221 815,783
Fair value loss (gain) on derivatives .................................................................................... 7,410 (32,056)
Amortization of debt discount and issuance costs............................................................. 9,253 5,031
Loss (gain) on investments.................................................................................................... 3,056 (20,138)
Changes in operating assets and liabilities:
USDC ........................................................................................................................................ (848,138) (77,471)
Accounts and loans receivable ............................................................................................. (141,023) 28,511
Deposits in transit.................................................................................................................... 28,952 (36,527)
Income taxes, net .................................................................................................................... 1,906 (62,145)
Other current and non-current assets .................................................................................. 19,237 (20,060)
Accounts payable .................................................................................................................... 18,612 27,330
Lease liabilities ........................................................................................................................ (10,223) (20,596)
Other current and non-current liabilities .............................................................................. (100,771) 302,396
Net cash (used in) provided by operating activities .................................................................... (1,585,419) 4,038,172
Cash flows from investing activities
Purchase of property and equipment...................................................................................... (2,933) (2,910)
Proceeds from sale of property and equipment .................................................................... 83 31
Capitalized internal-use software development costs .......................................................... (61,038) (22,073)
Business combinations, net of cash acquired ....................................................................... (186,150) (70,911)
Purchase of investments........................................................................................................... (63,048) (326,513)
Purchase of assembled workforce .......................................................................................... — (60,800)
Proceeds from settlement of investments .............................................................................. 1,551 5,159
Purchase of crypto assets held................................................................................................ (1,400,032) (3,009,086)
Disposal of crypto assets held ................................................................................................. 969,185 2,574,032
Loans originated ......................................................................................................................... (207,349) (336,189)
Proceeds from repayment of loans ......................................................................................... 327,539 124,520
Assets pledged as collateral..................................................................................................... (41,630) —
Net cash used in investing activities ............................................................................................. (663,822) (1,124,740)
 Coinbase Global, Inc.
Consolidated Statements of Cash Flows
(In thousands)
(unaudited)

Year Ended December 31,

2022 2021
Cash flows from financing activities
Issuance of common stock upon exercise of stock options, net of repurchases ............. 51,497 217,064
Taxes paid related to net share settlement of equity awards .............................................. (351,867) (262,794)
Proceeds received under the ESPP ....................................................................................... 20,848 19,889
Other financing activities ........................................................................................................... 3,679 —
Customer custodial cash liabilities .......................................................................................... (5,562,558) 6,691,859
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 borrowings .................................................................................... 190,956 20,000
Repayment of short-term borrowings ..................................................................................... (191,073) —
Net cash (used in) provided by financing activities..................................................................... (5,838,518) 9,976,084
Net (decrease) increase in cash, cash equivalents, and restricted cash ................................ (8,087,759) 12,889,516
Effect of exchange rates on cash, cash equivalents, and restricted cash .............................. (163,257) (64,883)
Cash, cash equivalents, and restricted cash, beginning of period ........................................... 17,680,662 4,856,029
Cash, cash equivalents, and restricted cash, end of period ..................................................... $ 9,429,646 $ 17,680,662

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

Cash and cash equivalents ...................................................................................................... $ 4,425,021 $ 7,123,478
Restricted cash ........................................................................................................................... 25,873 30,951
Customer custodial cash........................................................................................................... 4,978,752 10,526,233
Total cash, cash equivalents, and restricted cash ...................................................................... $ 9,429,646 $ 17,680,662

Supplemental disclosure of cash flow information

Cash paid during the period for interest ................................................................................. $ 82,399 $ 3,793
Cash paid during the period for income taxes ....................................................................... 35,888 68,614
Operating cash outflows for amounts included in the measurement of operating lease
liabilities ....................................................................................................................................... 14,528 20,061

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 ...................... 3,059 27,286
Non-cash consideration paid for business combinations .................................................... 324,925 571,196
Purchase of crypto assets and investments with non-cash consideration ....................... 19,967 13,511
Redemption of investments with non-cash consideration ................................................... 5,000 —
Disposal of crypto assets for non-cash consideration.......................................................... 617 —
Crypto assets borrowed ............................................................................................................ 920,379 1,134,876
Crypto assets borrowed repaid with crypto assets ............................................................... 1,432,688 609,600
Non-cash assets pledged as collateral ................................................................................... 58,377 —
Non-cash assets received as collateral .................................................................................. 26,874 —
 Reconciliation of Net Income (Loss) to Adjusted EBITDA (unaudited)

Q4’21 Q1’22 Q2’22 Q3’22 Q4’22 FY’22 FY’21

(in thousands)

Net income (loss) .................... $ 840,208 $ (429,659) $ (1,093,654) $ (544,635) $ (557,001) $ (2,624,949) $3,624,120

Adjusted to exclude the

following:
(Benefit from) provision
for income taxes .............. 50,332 (179,786) (146,915) (99,055) (13,877) (439,633) (597,173)
Depreciation and
amortization ...................... 23,018 31,580 42,027 40,114 40,348 154,069 63,651
Interest expense .............. 21,440 22,138 23,656 21,507 21,600 88,901 29,160
Crypto asset borrowing
costs .................................. 2,322 1,436 1,566 945 2,728 6,675 11,847
Stock-based
compensation................... 262,528 352,141 391,496 391,441 430,745 1,565,823 820,685
Crypto asset
impairment, net(1) ............. 43,752 209,818 377,005 — 5,672 592,495 119,421
Impairment on
investments ...................... — — 69,289 1,577 30,579 101,445 —
Other impairment(2) ......... 500 1,179 6,770 1,122 17,446 26,518 500
Non-recurring Direct
Listing expenses .............. — — — — — — 39,160
Restructuring .................... — — 42,453 (1,232) (518) 40,703 —
Change in unrealized
foreign exchange ............. (31,028) 7,389 107,683 77,181 (163,736) 28,516 (14,944)
Fair value (gain) loss on
foreign exchange
derivatives ........................ — — — (22,935) 22,935 — —
Fair value loss (gain) on
derivatives ........................ (8,233) 3,452 (2,500) 2,399 4,059 7,410 (32,056)
Non-recurring legal
reserves and related
costs .................................. — — 14,250 — 50,000 64,250 1,500
Other adjustments, net ... — — 15,797 15,679 (15,097) 16,379 24,200
Adjusted EBITDA .................... $1,204,839 $ 19,688 $ (151,077) $ (115,892) $ (124,117) $ (371,398) $4,090,071
__________________

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

(1) Crypto asset impairment, net represents impairment on crypto assets still held.
(2) Other impairment represents impairment on intangible assets of $0.5 million, $1.2 million, $3.2 million, $0.1 million and $0.2 million
for the three months ended December 31, 2021, March 31, 2022, June 30, 2022, September 30, 2022 and December 31, 2022,
respectively, and $3.6 million, $1.0 million and $17.2 million of impairment on property and equipment for the three months ended
June 30, 2022, September 30, 2022 and December 31, 2022.