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UNITED STATES SECURITIES and EXCHANGE COMMISSION Washington, D.C UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2021 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to . Commission file number 001-04321 Coinbase Global, Inc. (Exact name of registrant as specified in its charter) Delaware 46-4707224 (State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.) Not Applicable Not Applicable (Address of Principal Executive Offices) (Zip Code) Not Applicable Registrant's telephone number, including area code Not Applicable (Former name, former address and former fiscal year, if changed since last report) Securities registered pursuant to Section 12(b) of the Act: Title of each class Trading Symbol(s) Name of each exchange on which registered Class A common stock, $0.00001 par value per share COIN Nasdaq Global Select Market Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports); and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐ Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐ Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one): ☐ Large accelerated filer ☐ Accelerated filer Non-accelerated filer ☒ Smaller reporting company ☐ Emerging growth company ☐ If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐ Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒ As of August 3, 2021, the number of shares of the registrant's Class A common stock outstanding was 150,967,792 and the number of shares of the registrant's Class B common stock outstanding was 59,961,149. TABLE OF CONTENTS Page Part I - Financial Information Item 1. Financial Statements 4 Condensed Consolidated Balance Sheets 4 Condensed Consolidated Statements of Operations 5 Condensed Consolidated Statements of Comprehensive Income 6 Condensed Consolidated Statements of Changes in Convertible Preferred Stock and Stockholders' Equity 7 Condensed Consolidated Statements of Cash Flows 9 Notes to Condensed Consolidated Financial Statements 11 Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 40 Item 3. Quantitative and Qualitative Disclosures About Market Risk 61 Item 4. Controls and Procedures 62 Part II - Other Information Item 1. Legal Proceedings 63 Item 1A. Risk Factors 64 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 126 Item 3. Defaults Upon Senior Securities 127 Item 4. Mine Safety Disclosures 127 Item 5. Other Information 127 Item 6. Exhibits 128 Signatures 130 1 SPECIAL NOTE ABOUT FORWARD-LOOKING STATEMENTS This Quarterly Report on Form 10-Q contains forward-looking statements. All statements contained in this Quarterly Report on Form 10-Q other than statements of historical fact, including statements regarding our future operating results and financial position, our business strategy and plans, market growth, and our objectives for future operations, are forward-looking statements. 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 contained in this Quarterly Report on Form 10-Q include, but are not limited to, statements about: • our future financial performance, including our expectations regarding our net revenue, operating expenses, and our ability to achieve and maintain future profitability; • our business plan and our ability to effectively manage our growth; • anticipated trends, growth rates, and challenges in our business, the cryptoeconomy, and in the markets in which we operate; • market acceptance of our products and services; • beliefs and objectives for future operations; • our ability to maintain, expand, and further penetrate our existing customer base; • our ability to develop new products and services and grow our business in response to changing technologies, customer demand, and competitive pressures; • our expectations concerning relationships with third parties; • our ability to maintain, protect, and enhance our intellectual property; • our ability to continue to expand internationally; • the effects of increased competition in our markets and our ability to compete effectively; • future acquisitions of or investments in complementary companies, products, services, or technologies and our ability to successfully integrate such companies or assets; • our ability to stay in compliance with laws and regulations that currently apply or become applicable to our business both in the United States and internationally; • economic and industry trends, projected growth, or trend analysis; • trends in revenue, cost of revenue, and gross margin; • trends in operating expenses, including technology and development expenses, sales and marketing expenses, and general and administrative expenses, and expectations regarding these expenses as a percentage of revenue; • our key business metrics used to evaluate our business, measure our performance, identify trends affecting our business, and make strategic decisions; • increased expenses associated with being a public company; and • other statements regarding our future operations, financial condition, and prospects and business strategies. 2 We caution you that the foregoing list may not contain all of the forward-looking statements made in this Quarterly Report on Form 10-Q. You should not rely upon forward-looking statements as predictions of future events. We have based the forward-looking statements contained in this Quarterly Report on Form 10-Q primarily on our current expectations and projections about future events and trends that we believe may affect our business, financial condition, results of operations, and prospects. The outcome of the events described in these forward-looking statements is subject to risks, uncertainties, and other factors, including those described in the section titled Risk Factors and elsewhere in this Quarterly Report on Form 10-Q. Moreover, we operate in a very competitive and rapidly changing environment. New risks and uncertainties emerge from time to time and it is not possible for us to predict all risks and uncertainties that could have an impact on any forward-looking statements contained in this Quarterly Report on Form 10-Q. We cannot assure you that the results, events, and circumstances reflected in the forward-looking statements will be achieved or occur, and actual results, events, or circumstances could differ materially from those described in such forward-looking statements. Neither we nor any other person assumes responsibility for the accuracy and completeness of any of these forward-looking statements. Moreover, the forward-looking statements made in this Quarterly Report on Form 10-Q relate only to events as of the date on which the statements are made. We undertake no obligation to update any forward-looking statements made in this Quarterly Report on Form 10-Q to reflect events or circumstances after the date of this Quarterly Report on Form 10-Q or to reflect new information or the occurrence of unanticipated events, except as required by law. We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements and you should not place undue reliance on our forward-looking statements. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, restructurings, joint ventures, partnerships, or investments we may make. In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this Quarterly Report on Form 10-Q, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and investors are cautioned not to unduly rely upon these statements. 3 PART I. FINANCIAL INFORMATION Item 1. Financial Statements Coinbase Global, Inc. Condensed Consolidated Balance Sheets (In thousands, except par
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