COIN

Welcome to the Coinbase Q1 2026 earnings call. Before we get into the good stuff, some disclaimers. During today's call, we may make forward-looking statements that may vary materially from our actual results. Please refer to our SEC filings and this slide of the presentation for more information concerning risks, uncertainties and other factors that could cause these results to differ. In addition, our discussion today will include certain non-GAAP financial measures. Reconciliations to the most directly comparable GAAP financial measures are provided in the earnings presentation on our investor relations website.

Hello everyone, and welcome to our Q1 2026 earnings call. My name's Alesia Haas, and I'm the Chief Financial Officer of Coinbase. You may see a new face on this call with us today, might be right over there. I want to introduce you all to Shan Aggarwal. Shan is our Chief Business Officer, and he's our newest Head of Investor Relations. You're going to see a lot more of him, but I want to tell you a story about Shan. Shan is our OG Head of IR. Shan led our Series E fundraise back in 2018. He was my right hand as we went public in 2021, and I could not be more delighted to introduce him to his first public company earnings call, and bring him back to this new set of investors that we have with us today.

Welcome, Shan, and I'm gonna turn it over to him, and he's gonna walk us through our agenda and what to expect at our earnings call today.

Thank you, Alesia, and hi everyone. Really excited to be here and back in the IR seat. As Alesia mentioned, my name is Shan Aggarwal, and I'm the Chief Business Officer and Head of Investor Relations at Coinbase. I'll be MC-ing our call today, and in addition to Alesia and I am joined by my esteemed colleagues, Brian Armstrong, our Co-founder and CEO, Emilie Choi, our President and COO, and of course, Paul Grewal, our Chief Legal Officer. All righty, diving in. Our agenda today is that we'll start with comments from Brian and Alesia on Coinbase's strategy and Q1 performance. We'll then have time to address questions from both our ex and analyst communities. With that, Brian, over to you.

All right. Thanks, Shan. I want to start with our mission, which is to increase economic freedom in the world. Our mission matters for everyone because 4 billion people are locked out of the financial system globally, the unbanked and the unbrokered. Crypto fixes this by giving everyone equal access to property rights, stable currency and permissionless financial services. Let's take a look at the state of the market. Despite the crypto market being down, the fundamental growth of the on-chain economy is strong. All of finance is moving on-chain because crypto provides faster, cheaper and more efficient financial infrastructure. Crypto trading volumes have grown more than 50x in the last seven years. Stablecoin market cap is now more than $300 billion and growing fast. Tokenized real world assets are scaling and expected to hit $16 trillion by 2030, and now crypto has a new catalyst, AI.

There will soon be billions of agents transacting, and they need rails that can keep up. Crypto is the only option that checks all three boxes, fast, cheap and global. To summarize, the world economy is moving on-chain, and Coinbase was built to capitalize on this transition. Here's why. First, we're the most trusted brand in crypto. Individuals and businesses trust us to store more crypto than any other company in the world. Second, we've pooled global liquidity on our centralized exchange, creating a powerful network effect. Third, we're the largest regulated stablecoin platform in the world. Fourth, we have a proven track record of building and scaling frontier products. In short, we believe Coinbase is well-positioned to win as the world increasingly moves on-chain. You're probably familiar with Coinbase's products, but if not, here's a quick reminder.

We serve three main customer groups, consumers, with our retail, advanced trading and self-custody apps, institutions, with our Coinbase Prime brokerage platform, and for developers, we have CDP or Coinbase Developer Platform, our one-stop shop where any company can integrate crypto. The most powerful part of our product suite is that they are all built on a shared infrastructure that creates network effects and economies of scale across our platform. You can see the full stack architecture of Coinbase here. How it works is our battle-tested custody stores more crypto than any other company. Our settlement rails are fast, cheap and global. Our exchange offers deep liquidity from our multiple customer groups. Stablecoins like USDC enable efficient money movement, and it's all supported by a decade-plus track record of leaning into regulation and compliance around the world. Now, let's get into Q1.

We faced headwinds with a softer trading market this quarter. We executed well on what was in our control. We saw huge growth in derivatives trading volume driven by our Everything Exchange. We hit a new all-time high in USDC held in Coinbase products and saw 10x year-over-year growth in stablecoin transactions on Base. We're also leading on the next frontier with over 90% of on-chain agentic transaction volume happening on Base. Let's walk through some of our key metrics. First, crypto trading market share. Despite the market being down, we continued to grow share globally and reached a new all-time high. When market conditions are difficult, we see customers consolidate activity on platforms they trust. Next, let's touch on assets on platform.

In short, Coinbase stores more crypto than any other platform, and despite asset prices being down, Q1 marked the 12th consecutive quarter of net native unit inflows. This is a key part of our strategy. Our most trusted brand attracts assets on platform, which leads to customers adopting more products. Finally, I wanna highlight stablecoin growth this quarter. USDC growth on our platform has hit another all-time high despite broader crypto market performance. We are the largest distributor of USDC with more than 25% of all USDC held in our products, and importantly, we capture about 50% of all USDC economics. Moving into an update on our 2026 priorities, which we've told you about in prior sessions, we've made significant progress against our top three priorities this quarter.

As a reminder, these are the Everything Exchange, so users can trade every asset in one place, stablecoins and payments, enabling money to move at the speed of the internet, and bringing trading and payments onchain. I'll give a quick overview of each of these. First, how we're growing the Everything Exchange. We heard from customers that they wanted to trade more than just crypto on Coinbase, and I'm excited to share that in the past year, we've transformed Coinbase from a primarily spot-focused crypto platform into a place where you can now trade any asset class. We've added stock trading, 24/7 equity derivatives, retail access and geographic expansion for derivatives. We've added prediction markets. We're starting to see real traction now, validating our Everything Exchange strategy. Derivatives trading is now over $200 million in annualized revenue.

Prediction markets are scaling fast, reaching $100 million in annualized revenue in March. That's just two months after launch. We added non-crypto contracts like silver, gold, oil, which saw more than 4x growth quarter-over-quarter. Next, Coinbase is driving stablecoin adoption worldwide. Coinbase has a full stack stablecoin solution across USDC, Base, and Coinbase Developer Platform. We're seeing this bundle accelerate adoption of stablecoins. First, total stablecoin supply has doubled over the last two years, and USDC is taking a bigger share of that growing pie. Second, stablecoin transaction volume doubled this quarter, and USDC and partner stablecoins drove more than 80% of that total volume. Lastly, the third chart shows how Base is now the dominant chain for all stablecoin transactions with 62% share. We're also building stablecoin infrastructure for agents.

USDC and Base are now powering the majority of on-chain stablecoin transactions for AI agents. When agents pay with crypto on-chain, they use USDC 99% of the time, and over 90% of those transactions are happening on the Base chain in Q1. We're seeing agents also use the x402 protocol for a wide variety of use cases, including trading, AI inference, media generation, storage, and more. In short, Coinbase is at the center of the agent economy. Lastly, our third priority for 2026, growing on-chain. We continue to make DeFi easy to use through our Coinbase app. DEX volumes grew 2x quarter-over-quarter, and Borrow lend balances have grown to over $1 billion in the last year.

To wrap up, the future of finance is onchain, and Coinbase is the company best positioned to power it. Crypto's updating every aspect of the financial system. Coinbase has a full stack solution across multiple customer groups, and agentic commerce is the next frontier. With that, I'll hand it over to Alesia Haas.

Thank you, Brian. In Q1 2026, we generated $1.4 billion of total revenue, a quarterly net loss of $394 million, and $303 million of positive adjusted EBITDA. We're gonna unpack these results and more in the following slides. Before we dive deeper in the numbers, I wanna step back and give you our assessment of the quarter because the headline figures alone don't tell the full story. We are controlling what we can control, and the underlying business performed well. As Brian shared, we reached a new all-time high in crypto trading market share. We posted our 12th consecutive quarter of native unit growth. We saw green shoots in the Everything Exchange from derivatives and prediction markets. We came in under our expense guidance. Against this backdrop, macro conditions were genuinely tough.

Total crypto market cap and total crypto trading volume were both down more than 20% quarter-over-quarter. Volatility in the long tail assets were at historic lows. The bottom line is that we saw price headwinds outpace the strong growth in this quarter, but our fundamentals remain strong. Our Q1 results underscore the message, we control what we can control. When we look at our results versus the outlook we provided in February, we delivered within or better than every range we set. Total revenue for Q1 was down 21% quarter-over-quarter, reflecting the softer market backdrop. As a reminder, our revenue is inherently nonlinear. A significant portion moves in line with crypto asset prices and trading volumes.

What matters is our ability to build and grow our product suite and assets on our platform through these cycles and show long-term growth even amidst the short-term volatility. Drilling into our transaction revenue of $756 million, consumer was $567 million, down 23% compared to a 35% decline in the overall consumer spot volumes. There were two factors at play here. One, we saw a mix shift towards consumer core trading away from Advanced. Second, we see accelerating contributions from our newer products, like derivatives and prediction markets, which contribute to our total revenue but are not included in trading volume key business metric, which is spot crypto only. On the institutional side, revenue of $136 million declined 27% alongside volumes. Subscription and services revenue was $584 million, down 16% quarter-over-quarter.

We saw continued strength in native unit inflows. This growth was offset by prices and rates. Stablecoin revenue was $305 million. Average USDC held in Coinbase products reached a new all-time high of $19 billion. A quick reminder here. Our USDC contract auto-renews every three years into perpetuity. It cannot be terminated. I also want to flag a reporting change we made in the first quarter. We reclassified $18 million of corporate stablecoin revenue to other revenue. This change reflects our treatment of cash and USDC as completely fungible within our corporate operations, and this is consistent with our decision earlier this year to report payment stablecoins as cash and cash equivalents on our balance sheet. We've recast historical periods for comparability. Blockchain rewards were $101 million, down on price and protocol reward rates.

Importantly, we saw native unit growth in staked balances. Interest and finance fee revenue was $68 million, up 13% quarter-over-quarter. Average daily loan balances reached $1.4 billion, and active customers grew double digits. Last, I wanna highlight Coinbase One, now over 1 million paid subscribers, a sign that the product value proposition is resonating independent of the broader macro market conditions. It's important to know that Coinbase One members generate incrementally higher trading volume, higher revenue. They're our most engaged customers in the products across the portfolio, and they exhibit strong unit economics. Revenue diversification is one of our key financial objectives. We are proud to have 12 products generating more than $100 million in annualized revenue.

Our retail derivatives business, as Brian mentioned earlier, reached a new all-time high in Q1, generating revenue at an annualized run rate exceeding $200 million and putting it on track to be our next product to hit the $250 million product tier. Prediction markets is also tracking well, and it's on track to be the 13th product to cross $100 million in annualized revenue in its second month of meaningful operations. We remain focused on revenue diversification, and we're really encouraged by the breadth of this portfolio and our ability to launch and scale $100 million-plus revenue lines. Our total operating expenses were $1.4 billion, down 5% quarter-over-quarter. Tech and dev was to $526 million, up modestly, driven by one-time costs related to acquisitions completed in Q4 2025.

G&A declined 17% quarter-over-quarter as we got a head start on expense reductions, driving declines in deal-related legal costs, customer support costs, and policy-related expenses. This is our thirteenth consecutive quarter of positive adjusted EBITDA, spanning bull markets, bear markets, and everything in between. We believe this track record is one of the clearest demonstrations of our commitment and the durability of our business model. We ended the quarter with over $10 billion in cash and cash equivalents and total available resources of $12 billion. We have the flexibility to invest through the cycle. We can pursue strategic opportunities. We can return capital to shareholders via share purchases all simultaneously. I wanted to remind you that our 2026 convertible notes are due on June first.

Unless the notes reach the defined conversion price, we do intend to retire the $1.3 billion obligation. In Q1, we repurchased approximately 6 million shares for $1.1 billion. Our cumulative buybacks have roughly offset 90% of shares that we issued for employee compensation since Q4 of 2024 forward. Turning to our outlook, we expect subscription and services revenue in the range of $565 million-$645 million with an opportunity for quarter-over-quarter growth. We expect technology and development and general and administrative expenses to continue to come down sequentially with a range of $820 million-$870 million in Q2, down 4%-9% from the first quarter.

In addition to our recurring expense outlook, we expect to incur $50 million-$60 million in restructuring expenses related to the headcount reduction we announced earlier this week. This will be recognized as a standalone restructuring line item in our Q2 financials. As we mentioned in Tuesday's announcement, we are transitioning to be an AI-native company. Our product velocity is already increasing rapidly. The number of pull requests per engineer is up almost 80% year-over-year. Importantly, our focus on quality is scaling even faster. Integration test coverage across core services is up 3x in the last six months. The ability to scale our team members and their ability to iterate and improve our products at these speeds is a game-changer for our execution throughput and efficiency.

Before I close, we wanted to provide an annual adjusted expense outlook in addition to our quarterly expense outlook. We define adjusted expenses as technology and development, plus general and administrative, plus sales and marketing, less the amortization of intangibles. We expect 2026 adjusted expenses to be between $4.3 billion and $4.6 billion. This is roughly $500 million lower than our Q4 2025 annualized exit rate at the midpoint. I also wanna point out that absent any growth in USDC rewards, we would expect 2026 expenses to be flat to 2025. With that, this concludes our prepared remarks, and I will hand it back to Shan to moderate Q&A.

Thanks, Alesia. We're gonna transition over to Q&A. For this quarter, we're gonna take a mix of questions from both our X and our analyst community. All the questions are being submitted to us in writing, and we'll try to get broad coverage across topics that folks are interested in. To start, we'll talk about one that's top of mind for a lot of folks, regulation. For Paul, a question comes from James Yaro at Goldman Sachs, who asks, "Could you comment on the status of the CLARITY Act? How do you expect this bill to evolve, and what are your latest views on the impacts to the business?

Thanks, Shan. On CLARITY, we are confident that the bill is going to head to markup this month with a floor vote to follow in early summer. All that translates to our confidence that we're going to see a signed piece of legislation by the end of the summer. All of this timing follows from real progress that we've seen on a particular issue of interest to many, which is the rewards question. Just last week, we saw Senator Tillis and Senator Angela Alsobrooks announce a compromise on stablecoin rewards. While we're certainly not declaring victory here, we appreciate both senators' efforts to work out an important resolution of this issue. We also appreciate that this is still a live legislative process, which means voices are going to continue to weigh in on the question.

Like every other compromise, coming out of Washington, everyone's undoubtedly a little unhappy about where things have landed. What we can say is that the direction of the text, and in particular, its preservation of activity-based rewards while prohibiting a passive, pure bank-style, deposit-style yield, really reflects what, to us, is an approach that can work and will work going forward. Look, the details do matter a lot here, but from the language that was released, we think it's clear. Rewards are gonna be protected, and we can preserve what are the key elements of our current program. As for business impact going forward, there remain a lot of rules that still need to be written once the legislation is passed. I think it would be premature to get out ahead of that.

What we can say right now is that, we are building towards a model that is based on engagement, is based on utility, and we think that, these positions are gonna serve us and our customers well, no matter what the final framework looks like. I do think, it's important to emphasize one further point, though, which is we shouldn't lose sight of the broader picture. CLARITY is going to be a significant unlock for the industry, for our customers, and for Coinbase, and especially our ability, to build new products and services with regulatory clarity, in a way that we haven't seen really ever in crypto, and, you know, on a timeline of years rather than, dealing with individual case-by-case concerns.

This is all exactly what we have spent time, energy, sweat, and emotion building towards, and we're very excited to continue to keep working through next week's markup and beyond to make sure that this bill gets passed.

Thanks, Paul. A lot of good discussion on the rewards topic, CLARITY is about much more. For Brian, this question from Ken Worthington at J.P. Morgan. You and the crypto community seem to have come to a compromise on legislation, particularly around stablecoin rewards, you were also concerned about DeFi regulatory authority and tokenized securities. When legislation comes out and gets signed into law, from your perspective, what are the things that you expect to see over the next year in terms of who knew will be participating in the crypto ecosystem, and what do you expect they will be doing?

Yeah. Well, you're correct that the CLARITY Act is about much more than just stablecoins and rewards. I think, as Paul mentioned, it will create a lot of opportunities for people to work on tokenization, having clarity about what's a commodity versus a security, exchanges and custodians, what their roles are. You know, DeFi has an important role to play here, self-custodial wallets. There's gonna be lots of energy that comes out of it. I think it's gonna be a little bit like when the GENIUS Act passed for stablecoins, we saw 200 large companies in the U.S. come out in the subsequent months and announce integrations with stablecoins. This means that hopefully lots of companies post in a world post-CLARITY being passed, will come out and start to integrate crypto.

They might use it to raise money on-chain. They might use it to provide crypto services to their customers. I think it'll just unlock a lot of institutional capital that'll flow into the space broadly. The opportunity is really there for Coinbase to go provide those services to all these companies coming into crypto post CLARITY being passed into law, and actually power integrations for many of them as well via Coinbase Developer Platform. We think it's gonna be very additive. We want every company to be integrated into the crypto-enabled financial system, just like they use the internet or AI or any other technology. Coinbase can provide those services to them, so that's what we plan to do.

Great. Okay, last question on this theme, this one for Paul and Alesia, from Peter Christiansen at Citi, who asks, "Would changes in stablecoin rewards policy lead to changes in contractual revenue share mechanics with Circle?

Well, fortunately, the contracts that we have in place in Circle are set, and as Alesia has underscored, they auto-renew. We expect to continue to go forward with our relationship with Circle under those same terms. Again, the details in the legislation matter, so I can't say until the ink is dried on the final document what the full set of implications may be. We're confident that this will land in the right place and that our relationship will proceed as it has up until this point.

I don't have much to add. I just think it's important that to know that the revenue share is tied to overall USDC supply and adoption, and it's really unaffected by any rewards language.

Great. Okay. Transitioning, we got a question from one of our ex-analysts at Architect 9000 who asks: It was fairly alarming in your note earlier this week, Brian, to hear that non-technical developers are pushing code, AI code into production. Is that really true, and how is Coinbase going to marry AI's ability to move fast while preserving high quality and brand trust?

Yeah. I should have made this more clear in my note, but, you know, we encourage product managers, designers, other non-technical employees to use AI agents to draft code. That's getting easier to do. Human engineers still review all code before it goes into production. In some cases, we have multiple review levels from human engineers just on the most sensitive systems, et cetera, as you can imagine. It's important to realize, and I think your question points at this, AI agents are not just about increasing speed of execution in terms of code or enabling lots more people to write it's also gonna raise the bar on quality and cybersecurity.

We saw a glimpse of this recently actually with the Mythos model that Anthropic put out, where it's actually able to find security vulnerabilities that 99%-plus of human engineers would not have been able to find. I think that it's important to lean into this as an opportunity to raise quality and cybersecurity standards with AI agents. It's a little bit like self-driving cars, you know? They're getting to a place where they're actually safer than human drivers. There will be a point, I think, in the future where, you know, non-technical people will be able to write code, AI agents will be able to review it and check it for security, improve the quality of it, and actually in certain situations have it go to production.

That's not yet the case today, we wanna make sure at Coinbase we are leaning into the frontier, rigorously testing these things, oftentimes in parallel, to make sure it has a proven track record. If we see it consistently exceed the standard of what a human could do in certain situations, it would be irresponsible not to automate it further. That's how we're gonna stay on the frontier.

I just wanted to underscore the comments that I made in opening comments, that our investment in quality, our investment in integration testing is exceeding the pace of our growth in new pull requests. We are definitely investing in the testing required to drive up quality on our subplatform.

All right. Thanks for that. Switching gears a little bit for Emilie, a question from Ramsey El-Assal at Cantor Fitzgerald, who asks: You're gaining market share recently. Can you give us an update on the competitive environment and on the drivers that have enabled you to win share despite the down market?

We reached an all-time high in Coinbase crypto trading volume market share in Q1, and we gained share in both spot and derivatives globally in a market where total crypto trading volumes were down 20%-plus quarter-over-quarter. Our market share has grown roughly 5x since Q1 2023, and what we found is that when conditions are difficult, people go to where they trust. This is the 12th consecutive quarter of net native unit inflows for us. Share gains have been driven by product innovation and expansion of our derivatives platform, including launching derivatives in our flagship Coinbase app and adding support for non-crypto contracts. Our Everything Exchange strategy is validating. Retail derivatives are at $200 million-plus of annualized revenue. Prediction markets are at $100 million-plus of annualized revenue in March.

Incremental revenue cross-sold into a customer base we've already acquired, so it's very positive. We do also believe that share captured in down markets will be sticky as conditions improve.

Great. Let's switch gears a little bit and talk about stablecoins. This question also for you, Emilie Choi, from Andrew Jeffrey at William Blair. Can you talk a little bit about what the extent of your stablecoin movement infrastructure ambitions are? Is Coinbase content with being a CPN participant, or is the company looking to expand offerings such as Settlement?

We have built a faster, cheaper global settlement layer, and we intend to fully leverage it. We have the full stack. We are the primary distributor of USDC as the digital dollar, Base as the settlement layer, our payments APIs as the enterprise integration layer, and x402 as the open standard for the next wave of agentic commerce. We have a vertically integrated stack that no other company in the world owns end to end. We're not playing as a network participant. We are the platform that powers stablecoins. The market opportunity is pretty massive here, and we still think it's quite early in the cycle.

Okay. Let's continue on that theme a little bit and talk about agentic and AI native finance. For Brian, question from Rayna Kumar at Oppenheimer. As we get closer to the commercialization of agentic payments at scale, can you talk about the particular opportunity you see for x402? Specifically, how should we think about incremental USDC on platform growth from x402 adoption? And over time, how meaningful could transaction fees on Base and from the x402 facilitator really become?

Yeah. Thanks for following x402. For anybody who doesn't know, this is an open protocol that we incubated within Coinbase for agentic commerce. It allows agents to spend small or large amounts attached to any request, whether that's to e-commerce checkout or any other agent in the world, and we're seeing this emerging area of agentic commerce really start to take off. We've subsequently opened this protocol and put it as part of the Linux Foundation, and lots of other companies have come in to contribute to it and oversee the governance of it, including Cloudflare, AWS, Stripe, Shopify, Google. It's currently the most popular open standard for agentic commerce, which is great. Your question asked about how this helps Coinbase. Well, there's two ways. One is that 99% of the x402 transactions right now are settled in USDC.

That's from Q1, and so we obviously monetize USDC via our relationship with Circle, which is good. 90% of the agentic stable coin transaction volumes were settled on Base in Q1, so Base is the leading chain now. It just makes sense, that, you know, there's lots of companies who can build on x402. It is truly an open standard. Because it was incubated within Coinbase, we have really great APIs, inside Coinbase Developer Platform, for instance, that let people integrate with x402, put it into any checkout that they wanna make, you know, agentic enabled. It's been a really nice thing that's grown from out of Coinbase to become an open standard that has secondary effects on all of our various products. This kind of speaks to the full stack solution that Emilie was mentioning.

I think we're really the only company that owns that full stack of, you know, incubating x402, Coinbase Developer Platform, Base, and USDC. These are all products that we either co-created or helped create, it's been a really great journey to see all those pieces come together to become the leading stack for agentic commerce.

Switching gears just slightly. We talked a little bit about stable coins and payments. You know, one of our top priorities is the Everything Exchange, of course. Alessia, question from Patrick Moley at Piper Sandler, who asks, "As you scale the Everything Exchange across equities, prediction markets, and commodities, how should investors think about the monetization timeline and the revenue contribution from these new asset classes relative to your core crypto trading business over the next 12 to 18 months?

Thank you for the question, Patrick. As you heard in our opening comments, the Everything Exchange is already moving the needle. We highlighted retail derivatives growth that is now on track for $200 million annualized. Prediction markets is one of our fastest growing new products that, as of March, was $100 million annualized. This is all less than two months after go live. We are seeing really nice green shoots from these new products that we rolled out with Everything Exchange. We believe that the non-crypto assets are starting to also gain traction. They were 4x quarter-over-quarter in terms of volume from silver, gold, oil. This is really tangible signs that our decision to expand out the tradable assets on the Everything Exchange is seeing traction with our customers and seeing engagement.

We hope to have more news to share with you next quarter. We're not gonna give an outlook on a per product basis. Our whole goal is to grow our total trading volume market share as we did this quarter, to continue to penetrate these new asset classes and engage more and more customers with them.

Great. Maybe continuing on that theme, let's talk about something super fun, at least within the Coinbase walls. Talk about crypto options.

Alesia Haas, Owen Lau at Clear Street asks, "Could you please give us an update on launching crypto options trading in the U.S. and the timing of that? What are the major hurdles in front of you?

Great question, Owen. As many of you know, we closed the Deribit transaction last year. Deribit was the clear leader within terms of institutional clients and professional market makers in trading options. We are very focused on this integration right now. It is progressing nicely, and we expect to be fully integrated in 2026. This means that we're gonna unify spot, perps, futures, options, all on a single platform. That's gonna provide deep liquidity. That's gonna provide efficiency across these various asset classes. You're gonna hear incremental milestones as we go through the year towards this outcome. On the U.S. specifically, I cannot give you a timeline on today's call, but we're actively working on it and very optimistic. Coming soon.

On a global basis, if I could zoom out and talk about derivatives globally as well, both of our exchanges, both the US and international derivatives exchanges, achieved new all-time highs in the quarter in terms of revenue contribution. This is included in our institutional transaction revenue line, the institutional derivatives revenue more than offset any declines that we saw in option activity in Deribit during the quarter.

Great. Next, relatedly for Brian, crypto volumes have remained under pressure. Sorry, this question from Devin Ryan at Citizens. Crypto volumes have remained under pressure, especially in more speculative token trading, even as the industry narrative has become increasingly optimistic toward stablecoins, tokenization, and utility-driven onchain activity. Are we in a transition moment where speculative volume is declining before the utility side of the market has produced a step function increase in block space demand? How are you thinking about the timing and magnitude of that shift, and what gives you confidence in the secular growth path for Coinbase transaction volumes?

Yeah. This is really part of the reason why we've been investing in the Everything Exchange. It's to diversify the asset classes that are there. In recent quarters, this crypto spot trading was down a bit, but as we mentioned, you know, derivatives and prediction markets, some commodities futures, you know, things like that were up, right? In any given market, right? Something's always up, something's down, that's the nature of trading. It's important we're diversifying that through the Everything Exchange. We're also diversifying our revenue from a non-trading point of view into what we call subscription and services, of course, and that's now 44% of our net revenue. That's a nice balancing factor as well. You had asked about utility.

You know, I don't think the utility side is really waiting. I think that we're seeing obviously stablecoins are growing like crazy, prediction markets. There's really great signs of adoption for tokenization, more broadly, agentic commerce that we mentioned. Even our DeFi integrations, such as for DeFi borrow lend, are growing really nicely. I think the utility side is already here, and we're in kind of this interim period where spot crypto assets were down a bit, other asset classes were up. As we diversify, these things will get, you know, balanced out, where we'll just be in a more upward channel over time.

Great. Next, for Alesia from Alex Markgraff at KBCM. Can you walk us through the RIF? I think many folks are curious to understand how much is a function of the current environment versus AI leverage, and what do you anticipate in terms of cost savings, both in quarter and run rate?

Thanks, Alex. Hopefully, the materials that we provided in the earnings presentation go a long way to providing data for this question, but I want to zoom back. The restructuring reflects two forces acting simultaneously. It wasn't all one, it's not all the other, and it's hard to just detangle and say what is more or less. We definitely saw market headwinds, and we've definitely also seen a transition to AI-native operations. As we shared, pull requests are up by engineer by 78% year-over-year. We are seeing continued growth in that, and I think that we're going to only see more and more of our work being done by AI in all of our functions over time. With regard to specific dollars, the actions removed about $500 million of total costs as compared to the Q4 2025 run rate.

We provided in our outlook both Q2 as well as full year outlook. The full year adjusted expenses are gonna be between $4.3 billion and $4.6 billion. Excluding that USDC rewards growth, that's roughly flat year-over-year in terms of that adjusted OpEx, 2025-2026.

Great. We'll go to another question from X, for Alesia Haas, and this one's from @presidentnoble, related to fees. Do you plan on lowering fees? Morgan Stanley and other TradFi banks are offering better prices on their brokerages.

Thanks for this. Our position is, as it's been for a long time, our clients are not choosing us because of we're the cheapest. However, we do experiment, and we do look at different fee schedules for our customers. They're choosing us today because we're the most trusted, we're the easiest to use, the most crypto stored. We have 80 licenses. We have a global regulatory foundation. Customers have the choice between trading on our core platform, Coinbase Advanced to go onto Coinbase One. With this choice, we believe that customers are choosing us for the right product for their needs, not on fees alone. Over the long term, we've always said that we believe that fees could come down as things become commoditized. Our focus on diversifying our revenue is very important, and it's more diversified than ever.

We have 12 products with over $100 million of revenue. We've shared with you that we have a really solid forward pipeline of additional products that are scaling and on pace to become our 13th. We are not keeping our eye off the ball of the risk of fee compression, but it's not what we're seeing in the near term business.

Yeah, I'll just add that, you know, for customers that are more fee sensitive, we have a couple of really great options already. I mean, one is that with a Coinbase One subscription, they can get zero fee trading, a lot of customers are taking advantage of that. In Coinbase Advanced, for our more prosumer traders, there's very competitive pricing that scales down really to just a few bips at the high end based on volume. I think for many of our customers that are wanna get lower fees or even zero fee trading, we have great options for them.

Great. Next one for Emilie Choi, from John Todaro, at Needham & Company. Institutional transaction revenue declined more than the retail consumer quarter-over-quarter. Can you frame up the institutional interest in crypto as of late, and if you are surprised to see more weakness in institutional than retail?

Sure. Listen, I think things ebb and flow between institutional and retail, and that's okay. It's how it's always been. For the business institutional transaction revenue of $136 million declined 27% quarter-over-quarter, which is in line with macro institutional trends. Lower volatility reduced hedging demand, specifically at Deribit, and options activity declined following all-time high volumes in Q4. That weighs disproportionately on our institutional revenue. Deribit open interest share held steady despite that headwind, and we feel that the durability of positioning is still very much intact. Underneath the revenue line, institutional engagement was actually quite strong by the end of the quarter. Most of the downtrend happened in January. Active lending clients grew double digits quarter-over-quarter. Average daily loan balances hit an all-time high of $1.4 billion.

45 major financial institutions have moved tokenization from concept to production in Q1. Institutions understand the longer-term utility of crypto. They are definitely positioning ahead of regulation. On top of that, we have a very strong institutional pipeline. We've got ETFs, including staking, DApps, prime custody activations, that they're opening new TAM for us.

Great. I think we just have time for one last question, this one from X from @creditbrian. What is Coinbase or Brian most excited about for the next one to three years?

Well, there's lots happening in crypto. I mean, the first is just every asset class is coming on-chain, right? Whether it's stocks, prediction markets, commodities, FX, tokenization of all these real-world assets, right? Which is about $30 billion today, expected to be $16 trillion by 2030. You know, the trading is just gonna get more and more efficient and more and more of that will float it to on-chain. I think the second one is, of course, stablecoins. It's just we're in a golden age right now where payments are now fast, cheap, and global. They can be under one second, under $0.01 anywhere in the world, just like sending, you know, a WhatsApp message or something. It arrives instantly, almost for free anywhere in the world.

That's never been possible before in payments. We're gonna see more and more payments, like global GDP essentially flow to these stablecoin rails. Agentic commerce is really, you know, gonna be a catalyst on top of all of that, where I think increasingly people will rely on these agents to get work done for them. They'll need to get things paid for. You know, we launched this website, agentic.market, for instance, it's a collection of all the different services out there that are AI agent-enabled, where agents can connect to them, pay transaction fees through the x402 protocol and get work done on your behalf. It's just a really exciting time to be building financial infrastructure that's more efficient for the whole world, plus AI agents.

You know, that's what I'm excited about doing in the coming years.

All righty. Well, that concludes today's earnings call. Thank you so much for joining us for this Q1 update, and we look forward to speaking with you all next quarter.