Cover Page
Cover Page - shares | 6 Months Ended | |
Jun. 30, 2022 | Aug. 02, 2022 | |
Entity Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2022 | |
Document Transition Report | false | |
Entity File Number | 001-04321 | |
Entry Registrant Name | Coinbase Global, Inc. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 46-4707224 | |
Title of 12(b) Security | Class A common stock, $0.00001 par value per share | |
Trading Symbol | COIN | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Central Index Key | 0001679788 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q2 | |
Current Fiscal Year End Date | --12-31 | |
Class A common stock | ||
Entity Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 176,833,689 | |
Class B common stock | ||
Entity Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 48,310,752 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 | |
Current assets: | |||
Cash and cash equivalents | $ 5,682,068 | $ 7,123,478 | |
Restricted cash | 28,962 | 30,951 | |
Customer custodial cash | 7,181,148 | 10,526,233 | |
Customer crypto assets | [1] | 88,453,873 | |
USDC | 361,714 | 100,096 | |
Accounts and loans receivable, net of allowance | 245,616 | 396,025 | |
Income tax receivable | 62,406 | 61,231 | |
Prepaid expenses and other current assets | 146,463 | 135,849 | |
Total current assets | 102,162,250 | 18,373,863 | |
Crypto assets held | 539,683 | 988,193 | |
Lease right-of-use assets | 85,972 | 98,385 | |
Property and equipment, net | 142,209 | 59,230 | |
Goodwill | 1,073,906 | 625,758 | |
Intangible assets, net | 189,508 | 176,689 | |
Other non-current assets | 1,274,715 | 952,307 | |
Total assets | 105,468,243 | 21,274,425 | |
Current liabilities: | |||
Customer custodial cash liabilities | 7,071,557 | 10,480,612 | |
Customer crypto liabilities | [2] | 88,453,873 | |
Accounts payable | 40,745 | 39,833 | |
Accrued expenses and other current liabilities | 457,399 | 439,559 | |
Crypto asset borrowings | 136,548 | 426,665 | |
Lease liabilities, current | 34,174 | 32,366 | |
Total current liabilities | 96,194,296 | 11,419,035 | |
Lease liabilities, non-current | 59,317 | 74,078 | |
Long-term debt | 3,389,033 | 3,384,795 | |
Other non-current liabilities | 12,208 | 14,828 | |
Total liabilities | 99,654,854 | 14,892,736 | |
Commitments and contingencies (Note 18) | |||
Stockholders’ equity: | |||
Additional paid-in capital | 3,004,459 | 2,034,658 | |
Accumulated other comprehensive loss | (18,183) | (3,395) | |
Retained earnings | 2,827,111 | 4,350,424 | |
Total stockholders’ equity | 5,813,389 | 6,381,689 | |
Total liabilities, convertible preferred stock and stockholders’ equity | 105,468,243 | 21,274,425 | |
Class A common stock | |||
Stockholders’ equity: | |||
Common stock | 2 | 2 | |
Class B common stock | |||
Stockholders’ equity: | |||
Common stock | $ 0 | $ 0 | |
[1]Safeguarding assets[2]Safeguarding liabilities |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Jun. 30, 2022 | Dec. 31, 2021 |
Class A common stock | ||
Common stock, par value (in dollars per share) | $ 0.00001 | $ 0.00001 |
Common stock, authorized (in shares) | 10,000,000,000 | 10,000,000,000 |
Common stock, issued (in shares) | 176,087,000 | 168,807,000 |
Common stock, outstanding (in shares) | 176,087,000 | 168,807,000 |
Class B common stock | ||
Common stock, par value (in dollars per share) | $ 0.00001 | $ 0.00001 |
Common stock, authorized (in shares) | 500,000,000 | 500,000,000 |
Common stock, issued (in shares) | 48,311,000 | 48,310,000 |
Common stock, outstanding (in shares) | 48,311,000 | 48,310,000 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Revenue: | ||||
Revenue | $ 808,325 | $ 2,227,962 | $ 1,974,761 | $ 4,029,073 |
Operating expenses: | ||||
Transaction expense | 167,187 | 335,426 | 445,013 | 569,492 |
Technology and development | 609,249 | 291,461 | 1,179,913 | 475,686 |
Sales and marketing | 140,894 | 195,733 | 341,098 | 313,722 |
General and administrative | 470,169 | 248,195 | 883,747 | 369,426 |
Restructuring | 42,453 | 0 | 42,453 | 0 |
Other operating expense, net | 422,762 | 282,422 | 681,389 | 438,309 |
Total operating expenses | 1,852,714 | 1,353,237 | 3,573,613 | 2,166,635 |
Operating (loss) income | (1,044,389) | 874,725 | (1,598,852) | 1,862,438 |
Interest expense | 23,656 | 748 | 45,794 | 748 |
Other expense (income), net | 172,524 | 5,096 | 205,368 | (3,857) |
(Loss) income before income taxes | (1,240,569) | 868,881 | (1,850,014) | 1,865,547 |
Benefit from income taxes | (146,915) | (737,468) | (326,701) | (512,265) |
Net (loss) income | (1,093,654) | 1,606,349 | (1,523,313) | 2,377,812 |
Net (loss) income attributable to common stockholders: | ||||
Basic | (1,093,654) | 1,589,713 | (1,523,313) | 1,677,909 |
Diluted | $ (1,099,838) | $ 1,593,150 | $ (1,529,497) | $ 1,804,860 |
Net (loss) income per share attributable to common stockholders: | ||||
Basic (in dollars per share) | $ (4.95) | $ 7.77 | $ (6.95) | $ 11.78 |
Diluted (in dollars per share) | $ (4.98) | $ 6.42 | $ (6.97) | $ 9.60 |
Weighted-average shares of common stock used to compute net (loss) income per share attributable to common stockholders: | ||||
Basic (in shares) | 220,988 | 204,728 | 219,240 | 142,397 |
Diluted (in shares) | 221,034 | 248,147 | 219,286 | 187,918 |
Net revenue | ||||
Revenue: | ||||
Revenue | $ 802,603 | $ 2,033,011 | $ 1,967,494 | $ 3,629,991 |
Other revenue | ||||
Revenue: | ||||
Revenue | $ 5,722 | $ 194,951 | $ 7,267 | $ 399,082 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive (Loss) Income - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Statement of Comprehensive Income [Abstract] | ||||
Net (loss) income | $ (1,093,654) | $ 1,606,349 | $ (1,523,313) | $ 2,377,812 |
Other comprehensive (loss) income: | ||||
Translation adjustment, net of tax | (14,293) | 656 | (14,788) | (3,482) |
Comprehensive (loss) income | $ (1,107,947) | $ 1,607,005 | $ (1,538,101) | $ 2,374,330 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Changes in Convertible Preferred Stock and Stockholders' Equity - USD ($) shares in Thousands, $ in Thousands | Total | Convertible Preferred Stock | Common Stock | Additional Paid-In Capital | Accumulated Other Comprehensive (Loss) Income | Retained Earnings |
Beginning balance (in shares) at Dec. 31, 2020 | 112,878 | |||||
Beginning balance at Dec. 31, 2020 | $ 562,467 | |||||
Ending balance (in shares) at Jun. 30, 2021 | 0 | |||||
Ending balance at Jun. 30, 2021 | $ 0 | |||||
Beginning balance (in shares) at Dec. 31, 2020 | 73,108 | |||||
Beginning balance at Dec. 31, 2020 | $ 963,584 | $ 0 | $ 231,024 | $ 6,256 | $ 726,304 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Issuance of common stock upon exercise of stock options, net of repurchases (in shares) | 19,293 | |||||
Issuance of common stock upon exercise of stock options, net of repurchases | 137,804 | 137,804 | ||||
Stock-based compensation expense | 294,711 | 294,711 | ||||
Issuance of equity instruments as consideration in business combination (in shares) | 3,680 | |||||
Issuance of equity instruments as consideration for business combinations | 431,897 | 431,897 | ||||
Conversion of preferred stock (in shares) | (112,878) | 112,878 | ||||
Conversion of preferred stock | 562,467 | $ (562,467) | $ 2 | 562,465 | ||
Issuance of common stock from exercise of warrants (in shares) | 412 | |||||
Issuance of common stock from exercise of warrants | 433 | 433 | ||||
Issuance of common stock upon settlement of RSUs and restricted common stock, net of shares witheld (in shares) | 505 | |||||
Issuance of common stock upon settlement of RSUs and restricted common stock, net of shares withheld | (51,670) | (51,670) | ||||
Purchase of capped calls | (90,131) | (90,131) | ||||
Comprehensive income (loss) | (3,482) | (3,482) | ||||
Net (loss) income | 2,377,812 | 2,377,812 | ||||
Ending balance (in shares) at Jun. 30, 2021 | 209,876 | |||||
Ending balance at Jun. 30, 2021 | 4,623,425 | $ 2 | 1,516,533 | 2,774 | 3,104,116 | |
Beginning balance (in shares) at Mar. 31, 2021 | 112,407 | |||||
Beginning balance at Mar. 31, 2021 | $ 552,037 | |||||
Ending balance (in shares) at Jun. 30, 2021 | 0 | |||||
Ending balance at Jun. 30, 2021 | $ 0 | |||||
Beginning balance (in shares) at Mar. 31, 2021 | 85,666 | |||||
Beginning balance at Mar. 31, 2021 | 2,304,408 | $ 0 | 804,523 | 2,118 | 1,497,767 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Issuance of common stock upon exercise of stock options, net of repurchases (in shares) | 11,383 | |||||
Issuance of common stock upon exercise of stock options, net of repurchases | 98,223 | 98,223 | ||||
Stock-based compensation expense | 189,335 | 189,335 | ||||
Issuance of equity instruments as consideration in business combination (in shares) | 96 | |||||
Issuance of equity instruments as consideration for business combinations | 14,218 | 14,218 | ||||
Conversion of preferred stock (in shares) | (112,407) | 112,407 | ||||
Conversion of preferred stock | 552,037 | $ (552,037) | $ 2 | 552,035 | ||
Issuance of common stock upon settlement of RSUs and restricted common stock, net of shares witheld (in shares) | 324 | |||||
Issuance of common stock upon settlement of RSUs and restricted common stock, net of shares withheld | (51,670) | (51,670) | ||||
Purchase of capped calls | (90,131) | (90,131) | ||||
Comprehensive income (loss) | 656 | 656 | ||||
Net (loss) income | 1,606,349 | 1,606,349 | ||||
Ending balance (in shares) at Jun. 30, 2021 | 209,876 | |||||
Ending balance at Jun. 30, 2021 | 4,623,425 | $ 2 | 1,516,533 | 2,774 | 3,104,116 | |
Beginning balance (in shares) at Dec. 31, 2021 | 0 | |||||
Beginning balance at Dec. 31, 2021 | $ 0 | |||||
Ending balance (in shares) at Jun. 30, 2022 | 0 | |||||
Ending balance at Jun. 30, 2022 | $ 0 | |||||
Beginning balance (in shares) at Dec. 31, 2021 | 217,117 | |||||
Beginning balance at Dec. 31, 2021 | $ 6,381,689 | $ 2 | 2,034,658 | (3,395) | 4,350,424 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Issuance of common stock upon exercise of stock options, net of repurchases (in shares) | 2,207 | 2,240 | ||||
Issuance of common stock upon exercise of stock options, net of repurchases | $ 34,942 | 34,942 | ||||
Stock-based compensation expense | 815,094 | 815,094 | ||||
Issuance of equity instruments as consideration in business combination (in shares) | 1,663 | |||||
Issuance of equity instruments as consideration for business combinations | 314,356 | 314,356 | ||||
Issuance of common stock upon settlement of RSUs and restricted common stock, net of shares witheld (in shares) | 3,223 | |||||
Issuance of common stock upon settlement of RSUs and restricted common stock, net of shares withheld | (213,133) | (213,133) | ||||
Issuance of common stock under the Employee Stock Purchase Plan (shares) | 155 | |||||
Issuance of common stock under the Employee Stock Purchase Plan | 14,863 | 14,863 | ||||
Other | 3,679 | 3,679 | ||||
Comprehensive income (loss) | (14,788) | (14,788) | ||||
Net (loss) income | (1,523,313) | (1,523,313) | ||||
Ending balance (in shares) at Jun. 30, 2022 | 224,398 | |||||
Ending balance at Jun. 30, 2022 | 5,813,389 | $ 2 | 3,004,459 | (18,183) | 2,827,111 | |
Beginning balance (in shares) at Mar. 31, 2022 | 0 | |||||
Beginning balance at Mar. 31, 2022 | $ 0 | |||||
Ending balance (in shares) at Jun. 30, 2022 | 0 | |||||
Ending balance at Jun. 30, 2022 | $ 0 | |||||
Beginning balance (in shares) at Mar. 31, 2022 | 221,325 | |||||
Beginning balance at Mar. 31, 2022 | 6,496,093 | $ 2 | 2,579,216 | (3,890) | 3,920,765 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Issuance of common stock upon exercise of stock options, net of repurchases (in shares) | 1,115 | |||||
Issuance of common stock upon exercise of stock options, net of repurchases | 16,446 | 16,446 | ||||
Stock-based compensation expense | 461,556 | 461,556 | ||||
Issuance of common stock upon settlement of RSUs and restricted common stock, net of shares witheld (in shares) | 1,803 | |||||
Issuance of common stock upon settlement of RSUs and restricted common stock, net of shares withheld | (71,301) | (71,301) | ||||
Issuance of common stock under the Employee Stock Purchase Plan (shares) | 155 | |||||
Issuance of common stock under the Employee Stock Purchase Plan | 14,863 | |||||
Other | 3,679 | 3,679 | ||||
Comprehensive income (loss) | (14,293) | (14,293) | ||||
Net (loss) income | (1,093,654) | (1,093,654) | ||||
Ending balance (in shares) at Jun. 30, 2022 | 224,398 | |||||
Ending balance at Jun. 30, 2022 | $ 5,813,389 | $ 2 | $ 3,004,459 | $ (18,183) | $ 2,827,111 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Cash flows from operating activities | ||
Net (loss) income | $ (1,523,313) | $ 2,377,812 |
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities | ||
Depreciation and amortization | 73,607 | 23,534 |
Crypto asset impairment expense | 663,159 | 175,636 |
Investment impairment expense | 69,289 | 0 |
Other impairment expense | 7,949 | 0 |
Stock-based compensation expense | 743,637 | 293,963 |
Provision for transaction losses and doubtful accounts | (9,016) | 9,797 |
Loss on disposal of property and equipment | 0 | 11 |
Deferred income taxes | (337,520) | (93,328) |
Unrealized loss on foreign exchange | 115,072 | 2,392 |
Non-cash lease expense | 14,451 | 19,338 |
Change in fair value of contingent consideration | (8,223) | 0 |
Realized gain on crypto assets | (19,121) | (95,454) |
Crypto assets received as revenue | (290,209) | (418,871) |
Crypto asset payments for expenses | 265,816 | 364,772 |
Fair value loss (gain) on derivatives | 952 | (25,215) |
Amortization of debt discount and issuance costs | 4,838 | 748 |
Loss (gain) on investments | 1,830 | (10,271) |
Changes in operating assets and liabilities: | ||
USDC | (287,984) | (118,156) |
Accounts and loans receivable | 43,692 | 83,754 |
Income taxes, net | 4,058 | (437,287) |
Other current and non-current assets | (663) | (126,772) |
Customer custodial cash liabilities | (3,421,287) | 5,101,293 |
Accounts payable | 659 | 23,952 |
Lease liabilities | (4,033) | (18,350) |
Other current and non-current liabilities | 28,585 | 261,366 |
Net cash (used in) provided by operating activities | (3,863,775) | 7,394,664 |
Cash flows from investing activities | ||
Purchase of property and equipment | (3,741) | (235) |
Proceeds from sale of property and equipment | 0 | 31 |
Capitalized internal-use software development costs | (32,088) | (9,787) |
Business combinations, net of cash acquired | (186,150) | (32,992) |
Purchase of investments | (46,902) | (38,631) |
Purchase of assembled workforce | 0 | (24,000) |
Proceeds from settlement of investments | 1,497 | 0 |
Purchase of crypto assets held | (1,204,918) | (1,100,865) |
Disposal of crypto assets held | 761,226 | 937,472 |
Loans originated | (166,648) | (107,596) |
Proceeds from repayment of loans | 259,104 | 38,855 |
Net cash used in investing activities | (618,620) | (337,748) |
Cash flows from financing activities | ||
Issuance of common stock upon exercise of stock options, net of repurchases | 31,866 | 149,865 |
Taxes paid related to net share settlement of equity awards | (213,133) | (51,670) |
Proceeds received under the Employee Stock Purchase Plan | 12,031 | 0 |
Other financing activities | 3,679 | 0 |
Issuance of shares from exercise of warrants | 0 | 433 |
Issuance of convertible senior notes, net | 0 | 1,406,179 |
Purchase of capped calls | 0 | (90,131) |
Proceeds from short-term borrowings | 149,400 | 20,000 |
Repayment of short-term borrowings | (170,000) | 0 |
Net cash (used in) provided by financing activities | (186,157) | 1,434,676 |
Net (decrease) increase in cash, cash equivalents, and restricted cash | (4,668,552) | 8,491,592 |
Effect of exchange rates on cash, cash equivalents, and restricted cash | (119,932) | 11,015 |
Cash, cash equivalents, and restricted cash, beginning of period | 17,680,662 | 4,856,029 |
Cash, cash equivalents, and restricted cash, end of period | 12,892,178 | 13,358,636 |
Cash, cash equivalents, and restricted cash consisted of the following: | ||
Cash and cash equivalents | 5,682,068 | 4,365,982 |
Restricted cash | 28,962 | 30,842 |
Customer custodial cash | 7,181,148 | 8,961,812 |
Total cash, cash equivalents, and restricted cash | 12,892,178 | 13,358,636 |
Supplemental disclosure of cash flow information | ||
Cash paid during the period for interest | 43,630 | 0 |
Cash paid during the period for income taxes | 10,002 | 51,504 |
Operating cash outflows for amounts included in the measurement of operating lease liabilities | 7,020 | 13,413 |
Supplemental schedule of non-cash investing and financing activities | ||
Unsettled purchases of property and equipment | 283 | 533 |
Right-of-use assets obtained in exchange for operating lease obligations | 3,240 | 18,460 |
Non-cash consideration paid for business combinations | 324,925 | 442,760 |
Purchase of crypto assets and investments with non-cash consideration | 17,096 | 2,090 |
Crypto assets borrowed | 505,176 | 290,449 |
Crypto assets borrowed repaid with crypto assets | $ 935,792 | $ 59,348 |
NATURE OF OPERATIONS
NATURE OF OPERATIONS | 6 Months Ended |
Jun. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
NATURE OF OPERATIONS | NATURE OF OPERATIONS Coinbase, Inc. was founded in 2012. In April 2014, in connection with a corporate reorganization, Coinbase, Inc. became a wholly-owned subsidiary of Coinbase Global, Inc. (together with its consolidated subsidiaries, the “Company”). The Company operates globally and is a leading provider of end-to-end financial infrastructure and technology for the cryptoeconomy. The Company offers retail users the primary financial account for the cryptoeconomy, institutions a state of the art marketplace with a deep pool of liquidity for transacting in crypto assets, and ecosystem partners technology and services that enable them to build crypto-based applications and securely accept crypto assets as payment. The Company is a remote-first company. Accordingly, the Company does not maintain a headquarters. On April 14, 2021, the Company completed the direct listing of its Class A common stock on the Nasdaq Global Select Market (the “Direct Listing”). |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended |
Jun. 30, 2022 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of presentation and principles of consolidation The accompanying condensed consolidated financial statements of the Company are unaudited. These unaudited condensed consolidated financial statements have been prepared in accordance with United States generally accepted accounting principles (“GAAP”), on the same basis as the audited consolidated financial statements, and in management’s opinion, reflect all adjustments, consisting only of normal, recurring adjustments, that are necessary for the fair statement of the Company’s condensed consolidated financial statements for the periods presented. The unaudited condensed consolidated results of operations for the three and six months ended June 30, 2022 are not necessarily indicative of the results to be expected for the full year or any other period. These condensed consolidated financial statements and accompanying notes should be read in conjunction with the audited consolidated financial statements and notes included in the Company’s annual report on Form 10-K for the year ended December 31, 2021 filed with the Securities and Exchange Commission (the “SEC”) on February 25, 2022 (the “Annual Report”). These condensed consolidated financial statements include the accounts of the Company and its subsidiaries. The Company’s subsidiaries are entities in which the Company holds, directly or indirectly, more than 50% of the voting rights or where it exercises control. Certain subsidiaries of the Company have a basis of presentation different from GAAP. For the purposes of these unaudited condensed consolidated financial statements, the basis of presentation of such subsidiaries is converted to GAAP. All intercompany accounts and transactions have been eliminated in consolidation. There were no changes to the significant accounting policies or recent accounting pronouncements that were disclosed in Note 2. Summary of Significant Accounting Policies to the audited consolidated financial statements included in the Annual Report, other than as discussed below. Reclassifications Certain prior period amounts have been reclassified in order to conform with the current period presentation. These reclassifications have no impact on the Company’s previously reported consolidated net income. Use of estimates The preparation of th e condensed consolidated financial statements in accordance with GAAP requires management to make estimates and assumptions in the Company’s condensed consolidated financial statements and notes thereto. Significant estimates and assumptions include the determination of the recognition, measurement, and valuation of current and deferred income taxes; the fair value of stock-based awards issued; the useful lives of long-lived assets; the impairment of long-lived assets; the valuation of privately-held strategic investments, including impairments; the Company’s incremental borrowing rate; the fair value of Customer crypto assets and liabilities; the fair value of assets acquired and liabilities assumed in business combinations, including contingent consideration arrangements; the fair value of derivatives and related hedges; the fair value of long-term debt; assessing the likelihood of adverse outcomes from claims and disputes; and loss provisions. Actual results and outcomes may differ from management’s estimates and assumptions due to risks and uncertainties. To the extent that there are material differences between these estimates and actual results, the Comp any’s condensed c onsolidated financial statements will be affected. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable, the result of which forms the basis for making judgments about the carrying values of assets and liabilities. Customer custodial cash and Customer custodial cash liabilities Customer custodial cash represents restricted cash and cash equivalents maintained in segregated Company bank accounts that are held for the exclusive benefit of customers. Customer custodial cash liabilities represent cash deposits held by customers in their fiat wallets and unsettled deposits and withdrawals. The Company restricts the use of the assets underlying the Customer custodial cash to meet regulatory requirements and classifies the assets as current based on their purpose and availability to fulfill its direct obligation under Customer custodial cash liabilities. Certain jurisdictions where the Company operates require the Company to hold eligible liquid assets, as defined by applicable regulatory requirements and commercial law in these jurisdictions, equal to at least 100% of the aggregate amount of all Customer custodial cash liabilities. Depending on the jurisdiction, eligible liquid assets can include Cash and cash equivalents, Customer custodial cash, and In-transit funds receivable. As of June 30, 2022 and December 31, 2021, the Company’s eligible liquid assets were greater than the aggregate amount of Customer custodial cash liabilities. Concentration of credit risk The Company’s Cash and cash equivalents, Restricted cash, Customer custodial cash, and Accounts and loans receivable are potentially subject to concentration of credit risk. Cash and cash equivalents, Restricted cash, and Customer custodial cash are placed with financial institutions which are of high credit quality. The Company invests Cash and cash equivalents, and Customer custodial accounts primarily in highly liquid, highly rated instruments which are uninsured. The Company may also have deposit balances with financial institutions which exceed the Federal Deposit Insurance Corporation insurance limit of $250,000. The Company also holds cash at crypto trading venues and performs a regular assessment of these crypto trading venues as part of its risk management process. The Company held $361.7 million and $100.1 million of USD Coin (“USDC”) as of June 30, 2022 and December 31, 2021, respectively. In July 2022, the issuer of USDC stated that, as of June 30, 2022, underlying reserves were held in cash and 3-month U.S. Treasuries within segregated accounts for the benefit of USDC holders. As of June 30, 2022 and December 31, 2021, the Company had no customers who accounted for more than 10% of the Company’s Accounts and loans receivable, net. As of June 30, 2022 and December 31, 2021, the Company had no payment processors or bank partners representing more than 10% of Accounts and loans receivable, net. During the three and six months ended June 30, 2022 and June 30, 2021, no customer accounted for more than 10% of total revenue. Derivative contracts Derivative contracts derive their value from underlying asset prices, other inputs or a combination of these factors. Derivative contracts are recognized as either assets or liabilities in the condensed consolidated balance sheets at fair value, with changes in fair value recognized in Other operating expense, net. The Company enters into arrangements that result in obtaining the right to receive or obligation to deliver a fixed amount of crypto assets in the future. These are hybrid instruments, consisting of a debt host contract that is initially measured at the fair value of the underlying crypto assets and is subsequently carried at amortized cost, and an embedded forward feature based on the changes in the fair value of the underlying crypto asset. The embedded forward is bifurcated from the host contract, and is subsequently measured at fair value. Derivatives designated as hedges The Company applies hedge accounting to certain derivatives executed for risk management purposes. To qualify for hedge accounting, a derivative must be highly effective at reducing the risk associated with the exposure being hedged. The Company uses fair value hedges primarily to hedge the fair value exposure of crypto asset prices. For qualifying fair value hedges, the changes in the fair value of the derivative and the fair value of the hedged item, the crypto assets, are recognized in current-period earnings in Other operating expense, net in the condensed consolidated statements of operations. Derivative amounts affecting earnings are recognized in the same line item as the earnings effect of the hedged item. Customer crypto assets and liabilities Customer crypto assets and liabilities represent the Company’s obligation to safeguard customers’ crypto assets in digital wallets on the Company’s platform. The Company safeguards these assets for customers and is obligated to safeguard them from loss, theft, or other misuse. The Company recognizes Customer crypto liabilities and corresponding Customer crypto assets, on initial recognition and at each reporting date, at fair value of the crypto assets. Any loss, theft, or other misuse would impact the measurement of Customer crypto assets. Recent accounting pronouncements Recently adopted accounting pronouncements On October 28, 2021, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No. 2021-08, Accounting for Contract Assets and Contract Liabilities from Contracts with Customers (“ASU 2021-08”). ASU 2021-08 amends Accounting Standards Codification 805 (“ASC 805”) to require acquiring entities to apply Topic 606 - Revenue from Contracts with Customer s to recognize and measure contract assets and contract liabilities in a business combination. The Company early adopted the standard on January 1, 2022. The adoption of the standard did not have a material impact on the Company’s condensed consolidated financial statements. On March 31, 2022, the SEC issued Staff Accounting Bulletin No. 121 (“SAB 121”). SAB 121 sets out interpretive guidance from the staff of the SEC regarding the accounting for obligations to safeguard crypto assets that an entity holds for its customers. Safeguarding is defined as taking actions to secure customer crypto assets and the associated cryptographic key information and protecting them from loss, theft, or other misuse. The guidance requires an entity to recognize a liability for the obligation to safeguard the users’ assets, and recognize an associated asset for the crypto assets safeguarded. Both the liability and asset should be measured initially and subsequently at the fair value of the crypto assets being safeguarded. The guidance also requires additional disclosures related to the nature and amount of crypto assets that the entity is responsible for holding for its customers, with separate disclosure for each significant crypto asset, and the vulnerabilities the entity has due to any concentration in such activities. The Company has adopted this guidance as of June 30, 2022 with retrospective application as of January 1, 2022. The balances as of January 1, 2022 for the Customer crypto assets and Customer crypto liabilities were both $267.6 billion. Accounting pronouncements pending adoption On June 30, 2022, FASB issued Accounting Standards Update No. 2022-03, Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions (“ASU 2022-03”). ASU 2022-03 clarifies that a contractual sale restriction prohibiting the sale of an equity security is a characteristic of the reporting entity holding the equity security and is not included in the equity security's unit of account. The standard requires specific disclosures related to equity securities that are subject to contractual sale restrictions, including (1) the fair value of such equity securities reflected in the balance sheet, (2) the nature and remaining duration of the corresponding restrictions, and (3) any circumstances that could cause a lapse in the restrictions. The new standard is effective for the Company for its fiscal year beginning January 1, 2024, with early adoption permitted. The Company is currently evaluating the impact of adopting the standard. |
RESTRUCTURING
RESTRUCTURING | 6 Months Ended |
Jun. 30, 2022 | |
Restructuring and Related Activities [Abstract] | |
RESTRUCTURING | RESTRUCTURING In June 2022, the Company announced and completed a restructuring impacting approximately 18% of the Company’s headcount, effective immediately. This strategic reduction of the existing global workforce was intended to manage the Company’s operating expenses in response to market conditions and ongoing business prioritization efforts. As a result, approximately 1,100 employees in various departments and locations were terminated. As part of their termination, they were given separation pay and other post-employment benefits. The Company does not expect to incur any additional charges and the cash payments associated with this restructuring are expected to be substantially completed by the third quarter of 2022. The following expenses were recognized within Restructuring expenses in the condensed consolidated statements of operations for the three and six months ended June 30, 2022 (in thousands), and the associated liability remains outstanding as of June 30, 2022 and is recorded in Accrued expenses and other current liabilities in the condensed consolidated balance sheets: Separation pay $ 39,259 Post-employment benefits 3,194 Total $ 42,453 |
ACQUISITIONS
ACQUISITIONS | 6 Months Ended |
Jun. 30, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
ACQUISITIONS | ACQUISITIONS2022 Acquisitions Unbound Security, Inc. On January 4, 2022, the Company completed the acquisition of Unbound Security, Inc. (“Unbound”) by acquiring all issued and outstanding shares of capital stock and stock options of Unbound. Unbound is a pioneer in a number of cryptographic security technologies, which the Company believes will play a key role in the Company’s product and security roadmap. In accordance with ASC 805, Business Combinations, the acquisition was accounted for as a business combination under the acquisition method. The purchase consideration was allocated to the tangible and intangible assets acquired and liabilities assumed based on their estimated fair values as of the acquisition date with the excess recorded as goodwill, none of which is expected to be deductible for tax purposes. The goodwill balance is primarily attributed to the assembled workforce, synergies, and the use of purchased technology to develop future products and technologies. The final allocation of purchase consideration to assets and liabilities remains in process as the Company continues to evaluate certain balances, estimates, and assumptions during the measurement period (up to one year from the acquisition date). Any changes in the fair value of the assets acquired and liabilities assumed during the measurement period may result in adjustments to goodwill. During the three and six months ended June 30, 2022, a measurement period adjustment associated with deferred tax assets was recorded, resulting in an increase in Other non-current assets of $4.1 million and a corresponding reduction in Goodwill. The total consideration transferred in the acquisition was $258.0 million, consisting of the following (in thousands): Cash $ 151,424 Cash payable 126 Class A common stock of the Company 103,977 RSUs for shares of the Company’s Class A common stock 2,457 Total purchase consideration $ 257,984 Included in the purchase consideration are $21.7 million in cash and 85,324 shares of the Company’s Class A common stock that are subject to an indemnity holdback. These cash amounts and shares will be released 18 months after the closing date of the transaction. The results of operations and the fair values of the assets acquired and liabilities assumed have been included in the condensed consolidated financial statements from the date of acquisition. The following table summarizes the preliminary fair values of assets acquired and liabilities assumed as of the date of acquisition (in thousands): Cash and cash equivalents $ 10,560 Restricted cash 573 Accounts and loans receivable, net of allowance 4,981 Prepaid expenses and other current assets 4,182 Lease right-of-use assets 1,059 Property and equipment, net 1,248 Goodwill 222,732 Intangible assets 28,500 Other non-current assets 3,476 Total assets 277,311 Accounts payable 719 Accrued expenses and other current liabilities 11,325 Lease liabilities 1,059 Other non-current liabilities 6,224 Total liabilities 19,327 Net assets acquired $ 257,984 The following table sets forth the components of identifiable intangible assets acquired and their estimated useful lives as of the date of acquisition (in thousands, except for years data): Fair Value Useful Life at Acquisition (in years) Developed technology $ 15,700 1 - 5 In-process research and development ("IPR&D") 2,500 N/A Customer relationships 10,300 2 The intangible assets will be amortized on a straight-line basis over their respective useful lives to Technology and development expenses for developed technology and General and administrative expenses for customer relationships. Amortization of the IPR&D will be recognized in Technology and development expenses once the research and development is placed into service as internally developed software. Management applied significant judgment in determining the fair value of intangible assets, which involved the use of estimates and assumptions with respect to development costs and profit, costs to recreate customer relationships, market participation profit, and opportunity cost. Total acquisition costs of $3.0 million were incurred in relation to the acquisition, which were recognized as an expense and included in General and administrative expenses in the condensed consolidated statements of operations. The impact of this acquisition was not considered significant to the Company’s condensed consolidated financial statements for the current period presented and pro forma financial information has not been provided. FairXchange, Inc. On February 1, 2022, the Company completed the acquisition of FairXchange, Inc. (“FairX”) by acquiring all issued and outstanding shares of capital stock, stock options and warrants of FairX. FairX is a derivatives exchange which is registered with the U.S. Commodity Futures Trading Commission as a designated contract market (“DCM”) and the Company believes it has been a key stepping stone on the Company’s path to offer crypto derivatives to retail and institutional customers in the United States. In accordance with ASC 805, Business Combinations, the acquisition was accounted for as a business combination under the acquisition method. The purchase consideration was allocated to the tangible and intangible assets acquired and liabilities assumed based on their estimated fair values as of the acquisition date with the excess recorded as goodwill, none of which is expected to be deductible for tax purposes. The goodwill balance is primarily attributed to the assembled workforce, market presence, synergies, and the use of purchased technology to develop future products and technologies. The final allocation of purchase consideration to assets and liabilities remains in process as the Company continues to evaluate certain balances, estimates, and assumptions during the measurement period (up to one year from the acquisition date). Any changes in the fair value of the assets acquired and liabilities assumed during the measurement period may result in adjustments to goodwill. During the three and six months ended June 30, 2022, a measurement period adjustment associated with deferred tax assets was recorded, resulting in an increase in Other non-current assets of $0.3 million and a corresponding reduction in Goodwill. The total consideration transferred in the acquisition was $275.1 million, consisting of the following (in thousands): Cash $ 56,726 Cash payable 10,442 Class A common stock of the Company - issued 174,229 Class A common stock of the Company - to be issued 33,693 Total purchase consideration $ 275,090 The aggregate purchase consideration includes 170,397 shares of the Company’s Class A common stock to be issued after the acquisition date. The fair value of these shares on the acquisition date is included in Additional paid-in capital. Additionally, included in the purchase consideration are $4.7 million in cash and 83,035 shares of the Company’s Class A common stock that are subject to an indemnity holdback. These cash amounts and shares will be released 15 months after the closing date of the transaction. The results of operations and the fair values of the assets acquired and liabilities assumed have been included in the condensed consolidated financial statements from the date of acquisition. The following table summarizes the preliminary fair values of assets acquired and liabilities assumed as of the date of acquisition (in thousands): Cash and cash equivalents $ 10,867 Accounts and loans receivable, net of allowance 411 Prepaid expenses and other current assets 20 Intangible assets 41,000 Goodwill 231,685 Other non-current assets 8,295 Total assets 292,278 Accounts payable 472 Accrued expenses and other current liabilities 5,796 Other non-current liabilities 10,920 Total liabilities 17,188 Net assets acquired $ 275,090 The following table sets forth the components of identifiable intangible assets acquired and their estimated useful lives as of the date of acquisition (in thousands, except for years data): Fair Value Useful Life at Acquisition (in years) DCM License $ 26,900 Indefinite Developed technology 10,700 5 Trading relationships 3,400 3 The developed technology and trading relationships will be amortized on a straight-line basis over their respective useful lives to Technology and development expenses for developed technology and General and administrative for trading relationships. The DCM license has an indefinite useful life and will not be amortized. Management applied significant judgment in determining the fair value of intangible assets, which involved the use of estimates and assumptions with respect to forecasted revenues and expenses, development costs and profit, costs to recreate trading relationships, market participation profit, and opportunity cost. Total acquisition costs of $1.1 million were incurred related to the acquisition, which were recognized as an expense and included in General and administrative expenses in the condensed consolidated statements of operations. The impact of this acquisition was not considered significant to the Company’s condensed consolidated financial statements for the current period presented and pro forma financial information has not been provided. Bison Trails On February 8, 2021, the Company completed the acquisition of Bison Trails Co. (“Bison Trails”) by acquiring all issued and outstanding common stock and stock options of Bison Trails. Bison Trails is a platform-as-a-service company that provides a suite of easy-to-use blockchain infrastructure products and services on multiple networks to custodians, exchanges and funds. Prior to the acquisition, the Company held a minority ownership stake in Bison Trails, which was accounted for as a cost method investment. In accordance with ASC 805, Business Combinations , the acquisition was accounted for as a business combination achieved in stages under the acquisition method. Accordingly, the cost method investment was remeasured to fair value as of the acquisition date. The Company considered multiple factors in determining the fair value of the previously held cost method investment, including the price negotiated with the selling shareholders and current trading multiples for comparable companies. Based on this analysis, the Company recognized an $8.8 million gain on remeasurement, which was recorded in Other expense (income), net in th e condensed co nsolidated statement of operations on the acquisition date. The purchase consideration was allocated to the tangible and intangible assets acquired and liabilities assumed based on their estimated fair values as of the acquisition date with the excess recorded as goodwill, none of which is expected to be deductible for tax purposes. The goodwill balance is primarily attributed to the assembled workforce, market presence, synergies, and the use of purchased technology to develop future products and technologies. The total consideration transferred in the acquisition was $457.3 million, consisting of the following (in thousands): Common stock of the Company $ 389,314 Previously held interest on acquisition date 10,863 Cash 28,726 Replacement of Bison Trails options 28,365 Total purchase consideration $ 457,268 Included in the purchase consideration are 496,434 shares of the Company’s Class A common stock that are subject to an indemnity holdback. These shares will be released 18 months after the closing date of the transaction. The results of operations and the fair values of the assets acquired and liabilities assumed have been included in t he condensed co nsolidated financial statements from the date of acquisition. The following table summarizes the estimated fair values of assets acquired and liabilities assumed using a cost-based approach (in thousands): Cash and cash equivalents $ 12,201 Crypto assets held 5,177 Accounts and loans receivable, net of allowance 2,323 Prepaid expenses and other current assets 122 Intangible assets 39,100 Goodwill 404,167 Other non-current assets 1,221 Lease right-of-use assets 808 Total assets 465,119 Accounts payable 526 Accrued expenses and other current liabilities 1,920 Lease liabilities 808 Other non-current liabilities 4,597 Total liabilities 7,851 Net assets acquired $ 457,268 The following table sets forth the components of identifiable intangible assets acquired and their estimated useful lives as of the date of acquisition (in thousands, except for years data): Fair Value Useful Life at Acquisition (in years) Developed technology $ 36,000 3 IPR&D 1,200 N/A User base 1,900 3 The intangible assets will be amortized on a straight-line basis over their respective useful lives to Technology and development expenses for developed technology and General and administrative expenses for user base. Amortization of the IPR&D will be recognized in Technology and development expenses once the research and development is placed into service as internally developed software. Management applied significant judgement in determining the fair value of intangible assets, which involved the use of estimates and assumptions with respect to development costs and profit, costs to recreate customer relationships, market participation profit, and opportunity cost. Total acquisition costs of $3.7 million were incurred related to the acquisition, which were recognized as an expense and included in General and administrative expenses in the condensed consolidated statements of operations. The impact of this acquisition was not considered significant to the Company’s condensed consolidated financial statements and pro forma financial information has not been provided. |
REVENUE
REVENUE | 6 Months Ended |
Jun. 30, 2022 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE | REVENUE Revenue recognition The Company determines revenue recognition from contracts with customers through the following steps: • identification of the contract, or contracts, with the customer; • identification of the performance obligations in the contract; • determination of the transaction price; • allocation of the transaction price to the performance obligations in the contract; and • recognition of the revenue when, or as, the Company satisfies a performance obligation. Revenue is recognized when control of the promised goods or services is transferred to the customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services. The Company primarily generates revenue through transaction fees charged on the platform. The following table presents revenue of the Company disaggregated by revenue source (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 Net revenue Transaction revenue Retail, net $ 616,212 $ 1,827,951 $ 1,582,054 $ 3,283,121 Institutional, net 39,001 102,431 86,196 187,840 Total transaction revenue 655,213 1,930,382 1,668,250 3,470,961 Subscription and services revenue Blockchain rewards 68,410 34,421 150,305 43,673 Custodial fee revenue 22,178 31,698 53,872 55,148 Earn campaign revenue 2,495 16,947 8,400 28,058 Interest income 32,514 6,481 42,968 9,801 Other subscription and services revenue 21,793 13,082 43,699 22,350 Total subscription and services revenue 147,390 102,629 299,244 159,030 Total net revenue 802,603 2,033,011 1,967,494 3,629,991 Other revenue Crypto asset sales revenue 48 194,524 617 398,323 Corporate interest and other income 5,674 427 6,650 759 Total other revenue 5,722 194,951 7,267 399,082 Total revenue $ 808,325 $ 2,227,962 $ 1,974,761 $ 4,029,073 Transaction revenue Retail transaction revenue represents transaction fees earned from customers that are primarily individuals, while institutional transaction revenue represents transaction fees earned from institutional customers, such as hedge funds, family offices, principal trading firms, and financial institutions on the institutional platform. Institutional clients can trade via the Company’s trading platform or utilize Coinbase Prime services depending on their needs. High-frequency trading firms, such as market makers and principal traders, benefit from lower latency by connecting through the trading platform, while corporations and family offices can access an integrated suite of investment services through Coinbase Prime. The Company’s service is comprised of a single performance obligation to provide a crypto asset matching service when customers buy, sell, or convert crypto assets on the platform. That is, the Company is an agent in transactions between customers and presents revenue for the fees earned on a net basis. Judgment is required in determining whether the Company is the principal or the agent in transactions between customers. The Company evaluates the presentation of revenue on a gross or net basis based on whether it controls the crypto asset provided before it is transferred to the customer (gross) or whether it acts as an agent by arranging for other customers on the platform to provide the crypto asset to the customer (net). The Company does not control the crypto asset being provided before it is transferred to the buyer, does not have inventory risk related to the crypto asset, and is not responsible for the fulfillment of the crypto asset. The Company also does not set the price for the crypto asset as the price is a market rate established by users of the platform. As a result, the Company acts as an agent in facilitating the ability for a customer to purchase crypto assets from another customer. The Company considers its performance obligation satisfied, and recognizes revenue, at the point in time the transaction is processed. Contracts with customers are usually open-ended and can be terminated by either party without a termination penalty. Therefore, contracts are defined at the transaction level and do not extend beyond the service already provided. The Company charges a fee at the transaction level. The transaction price, represented by the trading fee, is calculated based on volume and varies depending on payment type and the value of the transaction. Crypto asset purchase or sale transactions executed by a customer on the Company’s platform is based on tiered pricing that is driven primarily by transaction volume processed for a specific historical period. The Company has concluded that this volume-based pricing approach does not constitute a future material right since the discount is within a range typically offered to a class of customers with similar volume. The transaction fee is collected from the customer at the time the transaction is executed. In certain instances, the transaction fee can be collected in crypto assets, with revenue measured based on the amount of crypto assets received and the fair value of the crypto assets at the time of the transaction. The transaction price includes estimates for reductions in revenue from transaction fee reversals that may not be recovered from customers. Such reversals occur when the customer disputes a transaction processed on their credit card or their bank account for a variety of reasons and seeks to have the charge reversed after the Company has processed the transaction. These amounts are estimated based upon the most likely amount of consideration to which the Company will be entitled. All estimates are based on historical experience and the Company’s best judgment at the time to the extent it is probable that a significant reversal of revenue recognized will not occur. All estimates of variable consideration are reassessed periodically. The total transaction price is allocated to the single performance obligation. While the Company recognizes transaction fee reversals as a reduction of net revenue, crypto asset losses related to those same transaction reversals are included in Transaction expense. Blockchain rewards The Company generates revenues in crypto assets through various blockchain protocols. These blockchain protocols, or the participants that form the protocol networks, reward users for performing various activities on the blockchain, such as participating in proof-of-stake networks and other consensus algorithms. The Company considers itself the principal in transactions with the blockchain networks, and therefore presents such blockchain rewards earned on a gross basis. Blockchain rewards are primarily comprised of Staking revenue in which the Company participates in networks with proof-of-stake consensus algorithms, through creating or validating blocks on the network using the staking validators that it controls. In exchange for participating in the consensus mechanism of these networks, the Company earns rewards in the form of the native token of the network. Each block creation or validation is a performance obligation. Revenue is recognized at the point when the block creation or validation is complete and the rewards are transferred into a digital wallet that the Company controls. Revenue is measured based on the number of tokens received and the fair value of the token at contract inception. Blockchain services offered as part of Coinbase Cloud’s blockchain infrastructure solutions are included in Other subscription and services revenue. Custodial fee revenue The Company provides a dedicated secure cold storage solution to customers and earns a fee, which is based on a contractual percentage of the daily value of assets under custody. The fee is collected on a monthly basis. These contracts typically have one performance obligation which is provided and satisfied over the term of the contracts as customers simultaneously receive and consume the benefits of the services. The contract may be terminated by a customer at any time, without incurring a penalty. Customers are billed on the last day of the month during which services were provided, with the amounts being due within thirty days of receipt of the invoice. Accounts receivable from customers for Custodial fee revenue, net of allowance, were $11.0 million and $22.4 million as of June 30, 2022 and December 31, 2021, respectively. The allowance recognized against these fees was not material for any of the periods presented. Earn campaign revenue The Company provides a platform for crypto asset issuers, the customer, to engage with the Company’s retail users and teach them about new crypto assets through the use of educational tools, videos, and tutorials. In exchange for completing a task, such as watching the video or downloading an application, retail users may be eligible to receive crypto assets from the crypto asset issuer. The Company is the agent with respect to the delivery of the crypto assets. The Company earns a commission from the crypto asset issuer based on the amount of crypto assets that are distributed to users. Interest income and corporate interest and other income The Company holds Customer custodial cash and Cash and cash equivalents at certain third-party banks which earn interest. The Company also earns interest income under a revenue sharing arrangement and on loans granted to retail and institutional users. Interest income is calculated using the interest method and is not within the scope of Topic 606 – Revenue from Contracts with Customers. Interest earned on Customer custodial cash, revenue sharing, and loans is included in Interest income within Subscription and services revenue. Interest earned on Cash and cash equivalents is included in Corporate interest and other income, within Other revenue. Other subscription and services revenue Other subscription and services revenue primarily includes revenue from Coinbase Cloud, which includes staking application, delegation, and infrastructure services, Coinbase One, and other subscription licenses. Generally, revenue from other subscription and services contains one performance obligation, may have variable and non-cash consideration, and is recognized at a point in time or over the period that services are provided. Other revenue Other revenue includes the sale of crypto assets and Corporate interest and other income. Periodically, as an accommodation to customers, the Company may fulfill customer transactions using the Company’s own crypto assets held for operating purposes. The Company has custody and control of the crypto assets prior to the sale to the customer and records revenue at the point in time when the sale to the customer is processed. Accordingly, the Company records the total value of the sale in Other revenue and the cost of the crypto assets in Other operating expense, net within th e condensed c onsolidated statements of operations. The cost of crypto assets used in fulfilling customer transactions was $0 and $178.8 million for the three months ended June 30, 2022 and June 30, 2021, respectively, and $0.3 million and $365.2 million for the six months ended June 30, 2022 and June 30, 2021, respectively. Related party transactions Certain of the Company’s directors, executive officers, and principal owners, including immediate family members, are users of the Company’s platform. The Company recognized revenue with related parties of $2.6 million and $8.0 million for the three months ended June 30, 2022 and June 30, 2021, respectively, and $7.6 million and $13.3 million for the six months ended June 30, 2022 and June 30, 2021, respectively. As of June 30, 2022 and December 31, 2021, amounts receivable from related parties were $1.3 million and $4.5 million, respectively. As of June 30, 2022, C ustomer custodial cash liabilities due to related party customers were $2.0 million. As of December 31, 2021, C ustomer custodial cash liabilities due to related party customers were immaterial. Revenue by geographic location In the table below are the revenues disaggregated by geography, based on domicile of the client or booking location, as applicable (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 United States $ 667,214 $ 1,870,465 $ 1,623,047 $ 3,335,900 Rest of the World (1) 141,111 357,497 351,714 693,173 Total revenue $ 808,325 $ 2,227,962 $ 1,974,761 $ 4,029,073 __________________ (1) No other individual country accounted for more than 10% of total revenue |
ACCOUNTS AND LOANS RECEIVABLE,
ACCOUNTS AND LOANS RECEIVABLE, NET OF ALLOWANCE | 6 Months Ended |
Jun. 30, 2022 | |
Receivables [Abstract] | |
ACCOUNTS AND LOANS RECEIVABLE, NET OF ALLOWANCE | ACCOUNTS AND LOANS RECEIVABLE, NET OF ALLOWANCE Accounts and loans receivable, net of allowance consisted of the following (in thousands): June 30, December 31, 2022 2021 In-transit customer receivables $ 60,724 $ 102,720 Trade finance receivables 144 1,865 Custodial fee revenue receivable 12,755 23,727 Loans receivable (1) 126,004 218,461 Interest and other receivables (2) 61,524 73,803 Allowance for doubtful accounts (3) (15,535) (24,551) Total accounts and loans receivable, net of allowance $ 245,616 $ 396,025 __________________ (1) The fair value of collateral held as security exceeded the outstanding loans receivable as of June 30, 2022 and December 31, 2021, so no allowance was recorded. (2) Includes Accounts receivables denominated in crypto assets of $6.7 million and $26.4 million as of June 30, 2022 and December 31, 2021, respectively. See Note 12. Derivatives for additional details. (3) Includes provision for transaction losses of $4.3 million and $16.8 million as of June 30, 2022 and December 31, 2021, respectively. Loans receivable The Company grants loans to retail users and institutions. As of June 30, 2022 and December 31, 2021, the Company had granted loans with an outstanding balance of $126.0 million and $218.5 million, respectively. The related interest receivable on the loans as of June 30, 2022 and December 31, 2021, was $1.0 million and $1.3 million, respectively. The amounts loaned are collateralized with the crypto assets held by the borrower in their crypto asset wallet on the Company’s platform. The Company does not have the right to use such collateral unless the borrower defaults on the loans. The Company’s credit exposure is significantly limited and no allowance was recorded against these loans receivable. Loans receivable are measured at amortized cost. The carrying value of the loans approximates their fair value. As of June 30, 2022 and December 31, 2021, there were no loans receivable past due. |
ACCOUNTS AND LOANS RECEIVABLE, NET OF ALLOWANCE | ACCOUNTS AND LOANS RECEIVABLE, NET OF ALLOWANCE Accounts and loans receivable, net of allowance consisted of the following (in thousands): June 30, December 31, 2022 2021 In-transit customer receivables $ 60,724 $ 102,720 Trade finance receivables 144 1,865 Custodial fee revenue receivable 12,755 23,727 Loans receivable (1) 126,004 218,461 Interest and other receivables (2) 61,524 73,803 Allowance for doubtful accounts (3) (15,535) (24,551) Total accounts and loans receivable, net of allowance $ 245,616 $ 396,025 __________________ (1) The fair value of collateral held as security exceeded the outstanding loans receivable as of June 30, 2022 and December 31, 2021, so no allowance was recorded. (2) Includes Accounts receivables denominated in crypto assets of $6.7 million and $26.4 million as of June 30, 2022 and December 31, 2021, respectively. See Note 12. Derivatives for additional details. (3) Includes provision for transaction losses of $4.3 million and $16.8 million as of June 30, 2022 and December 31, 2021, respectively. Loans receivable The Company grants loans to retail users and institutions. As of June 30, 2022 and December 31, 2021, the Company had granted loans with an outstanding balance of $126.0 million and $218.5 million, respectively. The related interest receivable on the loans as of June 30, 2022 and December 31, 2021, was $1.0 million and $1.3 million, respectively. The amounts loaned are collateralized with the crypto assets held by the borrower in their crypto asset wallet on the Company’s platform. The Company does not have the right to use such collateral unless the borrower defaults on the loans. The Company’s credit exposure is significantly limited and no allowance was recorded against these loans receivable. Loans receivable are measured at amortized cost. The carrying value of the loans approximates their fair value. As of June 30, 2022 and December 31, 2021, there were no loans receivable past due. |
GOODWILL, INTANGIBLE ASSETS, NE
GOODWILL, INTANGIBLE ASSETS, NET AND CRYPTO ASSETS HELD | 6 Months Ended |
Jun. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL, INTANGIBLE ASSETS, NET AND CRYPTO ASSETS HELD | GOODWILL, INTANGIBLE ASSETS, NET AND CRYPTO ASSETS HELD Goodwill The following table reflects the changes in the carrying amount of goodwill (in thousands): Six Months Ended June 30, 2022 Year Ended December 31, 2021 Balance, beginning of period $ 625,758 $ 77,212 Additions due to business combinations 454,418 548,546 Measurement period adjustments (1) (6,270) — Balance, end of period $ 1,073,906 $ 625,758 __________________ (1) The measurement period adjustments consisted of $4.1 million, $0.3 million and $1.9 million related to the Unbound acquisition, FairX acquisition and certain other acquisitions that were material when aggregated, respectively, and which were associated with the changes in deferred tax assets as a result of changes in estimates. There was no impairment recognized against goodwill at the beginning or end of the periods presented. Intangible assets, net Intangible assets, net consisted of the following (in thousands, except years data): As of June 30, 2022 Gross Carrying Amount Accumulated Amortization Intangible Assets, Net Weighted Average Remaining Useful Life (in years) Amortizing intangible assets Acquired developed technology $ 128,292 $ (57,805) $ 70,487 2.47 User base 2,997 (1,585) 1,412 1.25 Customer relationships 86,691 (36,621) 50,070 3.03 Non-compete agreement 2,402 (1,401) 1,001 2.09 Assembled workforce 60,800 (26,541) 34,259 0.94 Trade Relationships 3,400 (472) 2,928 2.59 In-process research and development (1) 2,201 — 2,201 N/A Indefinite-lived intangible assets Domain name 250 — 250 N/A Licenses 26,900 — 26,900 N/A Total $ 313,933 $ (124,425) $ 189,508 __________________ (1) Amortization begins once the technology is placed in service. IPR&D is expected to have a useful life of three years. As of December 31, 2021 Gross Carrying Amount Accumulated Amortization Intangible Assets, Net Weighted Average Remaining Useful Life (in years) Amortizing intangible assets Acquired developed technology $ 100,908 $ (34,865) $ 66,043 1.97 User base 2,997 (1,020) 1,977 1.75 Customer relationships 79,491 (27,789) 51,702 3.68 Non-compete agreement 2,402 (1,161) 1,241 2.58 Assembled workforce 60,800 (8,324) 52,476 1.43 In-process research and development (1) 3,000 — 3,000 N/A Indefinite-lived intangible assets Domain name 250 — 250 N/A Total $ 249,848 $ (73,159) $ 176,689 __________________ (1) Amortization begins once the technology is placed in service. IPR&D is expected to have a useful life of three years. Amortization expense of intangible assets was $26.4 million and $52.3 million for the three and six months ended June 30, 2022, respectively. Amortization expense of intangible assets was $8.3 million and $15.2 million for the three and six months ended June 30, 2021, respectively. The Company estimates that there is no significant residual value related to its amortizing intangible assets. During the three and six months ended June 30, 2022, the Company recorded impairment charges of $3.2 million and $4.4 million, respectively, related to its intangible assets, excluding Crypto assets held. The Company did not have any impairment charges in the three and six months ended June 30, 2021. Impairment expense is included in Other operating expense, net in the condensed consolidated statements of operations. The expected future amortization expense for intangible assets other than IPR&D as of June 30, 2022 is as follows (in thousands): 2022 (for the remainder of) $ 51,813 2023 68,869 2024 21,360 2025 13,119 2026 4,818 Thereafter 178 Total expected future amortization expense $ 160,157 Crypto assets held Crypto assets held consisted of the following (in thousands): June 30, December 31, 2022 2021 Recorded at impaired cost Crypto assets held as investments $ 289,744 $ 209,415 Crypto assets held for operating purposes 113,653 357,093 Total Crypto assets held recorded at impaired cost 403,397 566,508 Recorded at fair value (1) Crypto assets held as investments 1,896 — Crypto assets borrowed 134,390 421,685 Total Crypto assets held recorded at fair value 136,286 421,685 Total Crypto assets held $ 539,683 $ 988,193 __________________ (1) Recorded at fair value as these Crypto assets are held as the hedged item in qualifying fair value hedges. Crypto assets held as of June 30, 2022 and December 31, 2021 includes $0.1 million and $38.1 million, respectively, of crypto assets loaned to customers under the trade finance receivables settlement arrangements as these did not meet the criteria for derecognition. The Company recorded gross impairment charges of $435.2 million and $663.2 million during the three and six months ended June 30, 2022, respectively, due to the observed market price of crypto assets decreasing below the carrying value during the period. The Company recorded gross impairment charges of $174.8 million an d $175.6 million during the three and six months ended June 30, 2021, respectively, due to the observed market price of crypto assets decreasing below the carrying value during the period. The Company partially recovered impairments recorded during the period through subsequent crypto asset sales and disposals. Of the gross impairment charges, $377.0 million and $586.8 million were recorded during the three and six months ended June 30, 2022, respectively, which relate to the crypto assets still held as of June 30, 2022. Impairment expense is included in Other operating expense, net in t he condensed c onsolidated statements of operations. See Note 12. Derivatives , for additional details regarding Crypto assets held designated as hedged items in fair value hedges. See Note 13. Fair Value Measurements , for additional details regarding the carrying value of the Company’s Crypto assets held. |
CUSTOMER ASSETS AND LIABILITIES
CUSTOMER ASSETS AND LIABILITIES | 6 Months Ended |
Jun. 30, 2022 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
CUSTOMER ASSETS AND LIABILITIES | CUSTOMER ASSETS AND LIABILITIES The Company includes customer custodial funds in the condensed consolidated balance sheets as Customer custodial cash and includes customer safeguarding assets in the condensed consolidated balance sheets as Customer crypto assets, with a corresponding offset in Customer crypto liabilities. Custodial funds due to customers are included in the condensed consolidated balance sheets as Customer custodial cash liabilities. The following table presents customers’ cash and crypto positions (in thousands): June 30, December 31, 2022 2021 Customer custodial cash $ 7,181,148 $ 10,526,233 Customer crypto assets 88,453,873 — Total customer assets $ 95,635,021 $ 10,526,233 Customer custodial cash liabilities $ 7,071,557 $ 10,480,612 Customer crypto liabilities 88,453,873 — Total customer liabilities $ 95,525,430 $ 10,480,612 The Company safeguards crypto assets for customers in digital wallets and portions of cryptographic keys necessary to access crypto assets on the Company’s platform. The Company safeguards these assets and/or keys and is obligated to safeguard them from loss, theft, or other misuse. The Company records Customer crypto assets as well as corresponding Customer crypto liabilities, in accordance with recently adopted guidance, SAB 121. The Company maintains a record of all assets in digital wallets held on our platform as well as the full or a portion of private keys including backup keys, which are maintained on behalf of customers. For crypto assets that are not maintained on our platform and for which the Company does not maintain a private key or the ability to recover a customer’s private key, these balances are not recorded, as there is no related safeguarding obligation in accordance with SAB 121. The Company records the assets and liabilities, on the initial recognition and at each reporting date, at the fair value of the crypto assets which it safeguards for its customers. The Company has committed to securely store all crypto assets and cryptographic keys (or portions thereof) it holds on behalf of customers, and the value of these assets have been recorded as Customer crypto liabilities and corresponding Customer crypto assets. As such, the Company may be liable to its customers for losses arising from theft or loss of private keys. The Company has no reason to believe it will incur any expense associated with such potential liability because (i) it has no known or historical experience of claims to use as a basis of measurement, (ii) it accounts for and continually verifies the amount of crypto assets on its platform, and (iii) it has established security around private key management to minimize the risk of theft or loss. The Company has adopted a number of measures to safeguard crypto assets it secures including, but not limited to, holding customer crypto assets on a 1:1 basis at all times and strategically storing custodied assets offline using Coinbase’s cold storage process. The Company also does not reuse or rehypothecate customer crypto assets nor grant security interests in customer crypto assets, in each case unless required by law or expressly agreed to by the customer. Any loss or theft would impact the measurement of the Customer crypto assets. During the six months ended June 30, 2022, no losses have been incurred in connection with Customer crypto assets. The following table sets forth the fair value of Customer crypto assets, as shown in the condensed consolidated balance sheets, as Customer crypto assets and Customer crypto liabilities, as of June 30, 2022 (in billions): Fair Value Percentage of total (1) Bitcoin $ 41.7 47.2 % Ethereum 18.8 21.2 % Other crypto assets 28.0 31.6 % Total customer crypto assets $ 88.5 100.0 % __________________ (1) As of June 30, 2022, no assets other than Bitcoin and Ethereum individually represented more than 5% of total Customer crypto assets. See Note 13. Fair Value Measurements , for additional details regarding the Customer crypto assets and Customer crypto liabilities. |
PREPAID EXPENSES AND OTHER ASSE
PREPAID EXPENSES AND OTHER ASSETS | 6 Months Ended |
Jun. 30, 2022 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
PREPAID EXPENSES AND OTHER ASSETS | PREPAID EXPENSES AND OTHER ASSETS Prepaid expenses and other current assets, and Other non-current assets consisted of the following (in thousands): June 30, December 31, 2022 2021 Prepaid expenses and other current assets Prepaid expenses $ 129,797 $ 123,246 Deposits 5,538 9,658 Other 11,128 2,945 Total prepaid expenses and other current assets $ 146,463 $ 135,849 Other non-current assets Strategic investments $ 350,910 $ 363,950 Deferred tax assets 909,557 573,547 Deposits 12,425 13,347 Other 1,823 1,463 Total other non-current assets $ 1,274,715 $ 952,307 Strategic investments The Company makes strategic investments in various companies and technologies through Coinbase Ventures. Strategic investments primarily include equity investments in privately held companies without readily determinable fair values where the Company (1) holds less than 20% ownership in the entity, and (2) does not exercise significant influence, and accordingly, these investments are recorded at cost and adjusted for observable transactions for same or similar investments of the same issuer (referred to as the measurement alternative) and impairment. The changes in the carry value of strategic investments accounted for under the measurement alternative are presented below (in thousands): Six Months Ended June 30, 2022 2021 Carrying amount, beginning of period $ 352,431 $ 26,146 Net additions (1) 47,208 40,071 Upward adjustments 879 2,379 Previously held interest in Bison Trails (see Note 4) — (2,000) Impairments and downward adjustments (69,054) (50) Carrying amount, end of period (2) $ 331,464 $ 66,546 __________________ (1) Net additions include additions from purchases and reductions due to exits of securities and reclassifications due to changes to capital structure. (2) Excludes $19.4 million and $11.5 million as at June 30, 2022 and June 30, 2021, respectively, of strategic investments that are not accounted for under the measurement alternative. Upward adjustments, impairments and downward adjustments from remeasurement of investments are included in Other expense (income), net in the condensed consolidated statements of operations. As of June 30, 2022, cumulative upward adjustments were $4.8 million and cumulative impairments and downward adjustments were $69.6 million. As of December 31, 2021, cumulative upward adjustments and cumulative impairments and downward adjustments were $4.6 million and $0.5 million, respectively. |
ACCRUED EXPENSES AND OTHER CURR
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | 6 Months Ended |
Jun. 30, 2022 | |
Payables and Accruals [Abstract] | |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES Accrued expenses and other current liabilities consisted of the following (in thousands): June 30, December 31, 2022 2021 Accrued expenses $ 220,566 $ 195,810 Accrued payroll and payroll related 143,882 146,313 Income taxes payable 9,652 4,553 Short-term borrowings 504 20,060 Other payables (1) 82,795 72,823 Total accrued expenses and other current liabilities $ 457,399 $ 439,559 __________________ (1) Includes Other payables denominated in crypto assets of $7.2 million as of June 30, 2022 and an immaterial amount as of December 31, 2021. |
INDEBTEDNESS
INDEBTEDNESS | 6 Months Ended |
Jun. 30, 2022 | |
Debt Disclosure [Abstract] | |
INDEBTEDNESS | INDEBTEDNESS The components of Indebtedness were as follows as of June 30, 2022 (in thousands, except percentages): Indebtedness Effective interest rate Principal Amount Unamortized Debt Discount and Issuance Costs Net Carrying Amount 0.50% 2026 Convertible Notes due on June 1, 2026 0.98 % $ 1,437,500 $ (26,465) $ 1,411,035 3.38% 2028 Senior Notes due on October 1, 2028 3.57 % 1,000,000 (10,801) 989,199 3.63% 2031 Senior Notes due on October 1, 2031 3.77 % 1,000,000 (11,201) 988,799 Total $ 3,437,500 $ (48,467) $ 3,389,033 The components of Indebtedness were as follows as of December 31, 2021 (in thousands, except percentages): Indebtedness Effective interest rate Principal Amount Unamortized Debt Discount and Issuance Costs Net Carrying Amount 0.50% 2026 Convertible Notes due on June 1, 2026 0.98 % $ 1,437,500 $ (29,436) $ 1,408,064 3.38% 2028 Senior Notes due on October 1, 2028 3.57 % 1,000,000 (11,565) 988,435 3.63% 2031 Senior Notes due on October 1, 2031 3.77 % 1,000,000 (11,704) 988,296 Total $ 3,437,500 $ (52,705) $ 3,384,795 Convertible Senior Notes In May 2021, the Company issued an aggregate principal amount of $1.44 billion of convertible senior notes due in 2026 (the “2026 Convertible Notes”) pursuant to an indenture, dated May 18, 2021 (the “Convertible Notes Indenture”), between the Company and U.S. Bank National Association, as trustee. The 2026 Convertible Notes were offered and sold in a private offering to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”). Senior Notes In September 2021, the Company completed the issuance of an aggregate principal amount of $1.0 billion of senior notes due on October 1, 2028 (the “2028 Senior Notes”) and an aggregate principal amount of $1.0 billion of senior notes due on October 1, 2031 (the “2031 Senior Notes” and together with the 2028 Senior Notes, the “Senior Notes”). The Senior Notes were issued within the United States only to persons reasonably believed to be qualified institutional buyers pursuant to Rule 144A under the Securities Act, and outside the United States to non-U.S. persons pursuant to Regulation S under the Securities Act. The indenture governing the Senior Notes contains customary covenants that restrict the ability of the Company and certain of its subsidiaries to incur debt and liens. The Company is not aware of any instances of non-compliance with the covenants as of June 30, 2022. Interest The following table summarizes the Interest expense for the 2026 Convertible Notes, the 2028 Senior Notes and the 2031 Senior Notes (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 Coupon interest $ 19,234 $ 800 $ 38,641 $ 800 Amortization of debt discount and issuance costs 2,168 700 4,238 700 Total $ 21,402 $ 1,500 $ 42,879 $ 1,500 Debt discounts and debt issuance costs are amortized to Interest expense using the effective interest method over the contractual term of the respective note. |
DERIVATIVES
DERIVATIVES | 6 Months Ended |
Jun. 30, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVES | DERIVATIVES The following outlines the Company’s derivatives and the related hedge accounting designation, as applicable. Type of derivative Description of derivative Location of host contract and derivative on balance sheet Crypto asset borrowings (1) The Company borrows crypto assets that result in the obligation to deliver a fixed amount of crypto assets in the future. Crypto asset borrowings Accounts receivable denominated in crypto assets The Company provides services for which, under the contract, the customer pays in crypto assets. The amount of crypto assets are fixed at the time of invoicing. The right to receive fixed amounts of crypto assets consists of a receivable host contract and an embedded forward contract to purchase crypto assets. Accounts and loans receivable, net of allowance Other payables denominated in crypto assets The Company enters into arrangements that result in the obligation to deliver a fixed amount of crypto assets in the future. Accrued expenses and other current liabilities Crypto asset futures (1) The Company enters into short positions on futures contracts to minimize the exposure on the change in the fair value price of Crypto assets held. Accounts and loans receivable, net of allowance __________________ (1) For risk management purposes, the Company applies hedge accounting using these derivative instruments in qualifying fair value hedges to primarily hedge the fair value exposure of crypto asset prices. Impact of derivatives on the condensed consolidated balance sheets The following table summarizes the notional amounts of derivative instruments outstanding, measured in U.S. dollar equivalents (in thousands): June 30, December 31, 2022 2021 Designated as hedging instrument Crypto asset borrowings with embedded derivatives $ 234,805 $ 669,445 Crypto asset futures 2,342 — Not designated as hedging instrument Accounts receivable denominated in crypto assets 15,523 17,415 Other payables denominated in crypto assets 16,815 — The following tables summarize information on derivative assets and liabilities that are reflected in the Compan y’s condensed consolidated balance sheets, by accounting designation (in thousands): Gross derivative assets Gross derivative liabilities June 30, 2022 Not designated as hedges Designated as hedges Total derivative assets Not designated as hedges Designated as hedges Total derivative liabilities Crypto asset borrowings with embedded derivatives (1) $ — $ 99,989 $ 99,989 $ — $ 1,732 $ 1,732 Accounts receivable denominated in crypto assets — — — 8,824 — 8,824 Other payables denominated in crypto assets 9,574 — 9,574 — — — Total fair value of derivative assets and liabilities $ 9,574 $ 99,989 $ 109,563 $ 8,824 $ 1,732 $ 10,556 __________________ (1) During the six months ended June 30, 2022, the fee on these borrowings ranged from 0.0% to 7.5%. During the six months ended June 30, 2021, the fee on these borrowings ranged from 0.0% to 3.5%. During the three and six months ended June 30, 2022, the Company incurred $1.6 million and $3.0 million, respectively, of borrowing fees in crypto assets. During the three and six months ended June 30, 2021, the Company incurred $2.9 million and $7.2 million, respectively, of borrowing fees in crypto assets. Borrowing fees are included in Other operating expense, net in the condensed consolidated statements of operations. Gross derivative assets Gross derivative liabilities December 31, 2021 Not designated as hedges Designated as hedges Total derivative assets Not designated as hedges Designated as hedges Total derivative liabilities Crypto asset borrowings with embedded derivatives $ — $ 336,396 $ 336,396 $ — $ 93,616 $ 93,616 Accounts receivable denominated in crypto assets 9,033 — 9,033 — — — Total fair value of derivative assets and liabilities $ 9,033 $ 336,396 $ 345,429 $ — $ 93,616 $ 93,616 Impact of derivatives on the condensed consolidated statements of operations Gains (losses) on derivative instruments recognized in the Company’s condensed consolidated statements of operations were as follows (in thousands): Gains (losses) recorded in Other operating expense, net Three Months Ended June 30, 2022 Three Months Ended June 30, 2021 Derivatives Hedged items Income statement impact Derivatives Hedged items Income statement impact Designated as fair value hedging instruments Crypto asset borrowings with embedded derivatives $ 355,071 $ (356,416) $ (1,345) $ 448,957 $ (427,240) $ 21,717 Crypto asset futures 15,678 (15,005) 673 — — — Not designated as hedging instruments Crypto asset borrowings with embedded derivatives 6,626 — 6,626 — — — Accounts receivable denominated in crypto assets (5,350) — (5,350) — — — Other payables denominated in crypto assets 2,510 — 2,510 — — — Crypto asset futures 1,181 — 1,181 — — — Total $ 375,716 $ (371,421) $ 4,295 $ 448,957 $ (427,240) $ 21,717 Gains (losses) recorded in Other operating expense, net Six Months Ended June 30, 2022 Six Months Ended June 30, 2021 Derivatives Hedged items Income statement impact Derivatives Hedged items Income statement impact Designated as fair value hedging instruments Crypto asset borrowings with embedded derivatives $ 360,069 $ (361,340) $ (1,271) $ 181,557 $ (169,116) $ 12,441 Crypto asset futures 13,012 (12,262) 750 — — — Not designated as hedging instruments Crypto asset borrowings with embedded derivatives 6,626 — 6,626 — — — Accounts receivable denominated in crypto assets (10,263) — (10,263) — — — Other payables denominated in crypto assets 2,510 — 2,510 — — — Crypto asset futures (511) — (511) — — — Total $ 371,443 $ (373,602) $ (2,159) $ 181,557 $ (169,116) $ 12,441 The following amounts were recorded in the condensed consolidated balance sheets related to certain cumulative fair value hedge basis adjustments that are expected to reverse through the condensed consolidated statements of operations in future periods as an adjustment to Other operating expense, net (in thousands): Cumulative amount of fair value hedging adjustments included in the carrying amount of hedged items June 30, 2022 Carrying amount of the hedged items Active hedging relationships Discontinued hedging relationships Total Crypto assets held $ 136,286 $ 93,318 $ (3,333) $ 89,985 Cumulative amount of fair value hedging adjustments included in the carrying amount of hedged items December 31, 2021 Carrying amount of the hedged items Active hedging relationships Discontinued hedging relationships Total Crypto assets held $ 421,685 $ (240,771) $ — $ (240,771) |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 6 Months Ended |
Jun. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS The following table sets forth by level, within the fair value hierarchy, the Company’s assets and liabilities measured and recorded at fair value on a recurring basis (in thousands): June 30, 2022 Level 1 Level 2 Level 3 Total Assets Cash equivalents (1) $ 2,773,062 $ — $ — $ 2,773,062 Customer custodial cash (2) 1,819,169 — — 1,819,169 Crypto assets held (3) 136,286 — — 136,286 Derivative assets (4) — 109,563 — 109,563 Customer crypto assets — 88,453,873 — 88,453,873 Total assets $ 4,728,517 $ 88,563,436 $ — $ 93,291,953 Liabilities Derivative liabilities (4) $ — $ 10,556 $ — $ 10,556 Contingent consideration arrangement — — 6,605 6,605 Customer crypto liabilities — 88,453,873 — 88,453,873 Total liabilities $ — $ 88,464,429 $ 6,605 $ 88,471,034 December 31, 2021 Level 1 Level 2 Level 3 Total Assets Cash equivalents (1) $ 4,813,621 $ — $ — $ 4,813,621 Customer custodial cash (2) 3,566,072 — — 3,566,072 Crypto assets held (3) — 421,685 — 421,685 Derivative assets (4) — 345,429 — 345,429 Total assets $ 8,379,693 $ 767,114 $ — $ 9,146,807 Liabilities Derivative liabilities (4) $ — $ 93,616 $ — $ 93,616 Contingent consideration arrangement — — 14,828 14,828 Total liabilities $ — $ 93,616 $ 14,828 $ 108,444 __________________ (1) Represents money market funds. Excludes $2.7 billion of corporate cash held in deposit at banks and $168.9 million held at venues, which were not measured and recorded at fair value as of June 30, 2022. Excludes $2.1 billion of corporate cash held in deposit at banks and $168.9 million held at venues, which were not measured and recorded at fair value as of December 31, 2021. (2) Represents money market funds. Excludes Customer custodial cash of $5.4 billion and $7.0 billion held in deposit at financial institutions and not measured and recorded at fair value as of June 30, 2022 and December 31, 2021. (3) Includes Crypto assets held that have been designated as hedged items in fair value hedges and excludes crypto assets of $403.4 million and $566.5 million held at cost as of June 30, 2022 and December 31, 2021, respectively. (4) Excludes crypto asset borrowings of $234.8 million and $669.4 million, representing the host liability contract which is not measured and recorded at fair value as of June 30, 2022 and December 31, 2021, respectively. Excludes the host contract of $15.5 million and $17.4 million related to Accounts receivable denominated in crypto assets as of June 30, 2022 and December 31, 2021, respectively. Excludes the host contract of $16.8 million and an immaterial amount related to Other payables denominated in crypto assets as of June 30, 2022 and December 31, 2021, respectively. The Company did not make any transfers into or out of Level 3 of the fair value hierarchy during the six months ended June 30, 2022 and the year ended December 31, 2021. Customer crypto assets and liabilities represent the Company’s obligation to safeguard customers’ crypto assets. Accordingly, the Company has valued the assets and liabilities using quoted market prices for the underlying crypto assets which is based on Level 2 inputs. Assets and liabilities measured and recorded at fair value on a non-recurring basis The Company’s non-financial assets, such as Goodwill, Intangible assets, Property and equipment, and Crypto assets held but not designated in hedging relationships are adjusted to fair value when an impairment charge is recognized. The Company’s strategic investments are also measured at fair value on a non-recurring basis. Such fair value measurements are based predominately on Level 3 inputs. The carrying value of our strategic investments is adjusted based on an Option-Pricing Model (“OPM”) that uses publicly available market data of comparable companies and other unobservable inputs including expected volatility, expected time to liquidity, adjustments for other company-specific developments, and the rights and obligations of the securities the Company holds. Fair value of crypto assets held are predominantly based on Level 1 inputs. Assets and liabilities not measured and recorded at fair value The Company’s financial instruments, including certain Cash and cash equivalents, Restricted cash, certain Customer custodial cash, USDC, Customer custodial cash liabilities, Short-term borrowings and Loans receivable are carried at amortized cost, which approximates their fair value. If these financial instruments were recorded at fair value, they would be based on Level 1 inputs, except for Short-term borrowings and Loans receivable which would be based on Level 2 and Level 3 inputs, respectively. |
COMMON STOCK
COMMON STOCK | 6 Months Ended |
Jun. 30, 2022 | |
Equity [Abstract] | |
COMMON STOCK | COMMON STOCKEffective April 1, 2021, the Company amended and restated its certificate of incorporation to authorize 10,000,000,000 shares of Class A common stock, 500,000,000 shares of Class B common stock, 500,000,000 shares of undesignated common stock, and 500,000,000 shares of undesignated preferred stock. Shares of Class A common stock and Class B common stock will be treated equally, identically and ratably, on a per share basis, with respect to dividends that may be declared by the Company’s board of directors. Holders of Class A common stock are entitled to one vote per share, and holders of Class B common stock are entitled to 20 votes per share. Holders of Class A common stock and Class B common stock generally vote together as a single class on all matters (including the election of directors) submitted to a vote of the stockholders of the Company. Upon a liquidation, dissolution or winding-up of the Company, the assets legally available for distribution to stockholders would be distributed ratably among the holders of Class A common stock and Class B common stock and any participating preferred stock or new series of common stock outstanding at that time, subject to prior satisfaction of all outstanding debt and liabilities and the preferential rights of and the payment of liquidation preferences, if any, on any outstanding shares of preferred stock or new series of common stock. Shares of Class B common stock are convertible at any time at the option of the holder into shares of Class A common stock on a one-to-one basis. In addition, each share of Class B common stock will automatically convert into a share of Class A common stock upon a sale or transfer (other than with respect to certain estate planning and other transfers). Further, upon certain events specified in the restated certificate of incorporation, all outstanding shares of Class B common stock will convert automatically into shares of Class A common stock. The Company has reserved shares of Class A common stock and Class B common stock for issuance for the following purposes (in thousands): June 30, December 31, 2022 2021 Class A common stock Options issued and outstanding under the 2013 Amended and Restated Stock Plan (the “2013 Plan”) 1,083 1,569 Options issued and outstanding under the 2019 Equity Incentive Plan (the “2019 Plan”) 27,035 29,311 RSUs issued and outstanding under the 2019 Plan 3,571 5,851 Options issued and outstanding under the 2021 Equity Incentive Plan (the “2021 Plan”) 788 — RSUs issued and outstanding under the 2021 Plan 4,529 1,402 Shares available for future issuance under the 2021 Plan 43,417 35,856 Shares available for future issuance under the 2021 Employee Stock Purchase Plan (the “ESPP”) 7,097 5,125 Replacement options issued and outstanding from the Tagomi acquisition 4 4 Replacement options issued and outstanding from the Bison Trails acquisition 175 223 RSUs issued and outstanding from other acquisitions 229 229 Shares available for future issuance of warrants 2,296 2,296 Total Class A common stock shares reserved 90,224 81,866 Class B common stock Options issued and outstanding under the 2013 Plan 5,322 6,101 Total Class B common stock shares reserved 5,322 6,101 |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 6 Months Ended |
Jun. 30, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
STOCK-BASED COMPENSATION | STOCK-BASED COMPENSATION Stock options Activity of options outstanding are as follows (in thousands, except per share and years data): Options Outstanding Weighted Average Exercise Price per Share Weighted Average Remaining Contractual Life (Years) Aggregate Intrinsic Value Balance at January 1, 2022 37,208 $ 18.60 7.83 $ 8,698,078 Issued 793 200.19 Exercised (2,207) 14.47 Forfeited and cancelled (1,387) 21.96 Balance at June 30, 2022 34,407 22.91 7.40 950,079 Vested and exercisable at June 30, 2022 17,629 17.04 6.58 547,220 Vested and expected to vest at June 30, 2022 28,273 22.80 7.25 805,562 During the three and six months ended June 30, 2022, the Company granted stock options for the purchase of 68,745 and 793,496 shares of the Company’s Class A common stock with a weighted-average grant date fair value of $49.09 and $90.60 per share, respectively, to certain employees of the Company. The stock options vest over three years at a rate of 1/12 per quarter. As of June 30, 2022, there was total unrecognized compensation cost of $186.2 million related to unvested stock options. These costs are expected to be recognized over a weighted-average period of approximately 2.6 years. The assumptions used under the Black-Scholes-Merton option pricing model and the weighted average calculated value of the options granted to employees were as follows: Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 Dividend yield 0.0 % N/A 0.0 % 0.0 % Expected volatility 67.6 % N/A 56.2 % 44.0 % Expected term (in years) 5.8 N/A 5.8 4.8 Risk-free interest rate 3.1 % N/A 1.9 % 0.5 % As of June 30, 2022, there were 282,221 shares subject to repurchase related to stock options exercised early and not yet vested, but that are expected to vest. As of June 30, 2022, the Company recorded a liability related to these shares subject to repurchase in the amount of $5.8 million, which is included within Accrued expenses and other current liabilities in the accompanying condensed consolidated balance sheets. Chief Executive Officer performance award During the three and six months ended June 30, 2022, stock-based compensation expense of $1.0 million and $1.9 million, respectively, was recognized related to this award. During both the three and six months ended June 30, 2021, compensation expense of $6.4 million was recognized related to this award. Restricted stock units The Company’s RSUs vest upon the satisfaction of a service-based condition. In general, the RSUs vest over a service period ranging from one Activity of RSUs outstanding are as follows (in thousands, except per share data): Number of shares Weighted-Average Grant Date Fair Value Per Share Balance at January 1, 2022 7,482 $ 157.22 Granted 7,026 154.38 Vested (4,903) 150.95 Forfeited and cancelled (1,276) 168.05 Balance at June 30, 2022 8,329 156.86 For RSUs granted during the three months and six months ended June 30, 2022, the closing price of the Company’s Class A common stock as reported on The Nasdaq Global Select Market on the grant date was used as the fair value. As of June 30, 2022, there was total unrecognized compensation cost of $1.2 billion related to unvested RSUs. These costs are expected to be recognized over a weighted-average period of approximately 1.76 years. Restricted common stock As part of the Company’s acquisitions, the Company issued restricted Class A common stock. Vesting of this restricted Class A common stock is dependent on a service-based vesting condition that is generally satisfied over three years. The Company has the right to repurchase shares at par value for which the vesting condition is not satisfied. Activity of restricted Class A common stock is as follows (in thousands, except per share data): Number of shares Weighted-Average Grant Date Fair Value Per Share Balance at January 1, 2022 2,014 $ 137.57 Granted 323 137.05 Vested (667) 141.18 Forfeited and cancelled — — Balance at June 30, 2022 1,670 136.03 As of June 30, 2022, there was total unrecognized compensation cost of $191.1 million related to unvested restricted Class A common stock. These costs are expected to be recognized over a weighted-average period of approximately 1.85 years. Employee Stock Purchase Plan The ESPP allows eligible employees the option to purchase shares of the Company's Class A common stock at a 15% discount, over a series of offering periods through accumulated payroll deductions over the period. The ESPP also includes a look-back provision for the purchase price if the stock price on the purchase date is lower than the stock price on the offering date. The Company recognizes stock-based compensation expenses related to purchase rights issued pursuant to its ESPP on a straight-line basis over the offering period, which is 24 months. The fair value of purchase rights under the ESPP are estimated on the date of grant using the Black-Scholes-Merton option valuation model. The grant date of the initial offering period was May 3, 2021, and that offering period shall end on April 30, 2023. As of June 30, 2022, the Company recorded a liabili ty of $4.6 million related to the accumulated payroll deductions, which are refundable to employees who withdraw from the ESPP. T his amount is included within Accrued expenses and other current liabilities in the accompanying condensed consolidated balance sheets. Stock-based compensation expense Stock-based compensation is included in the following components of expenses on the accompanying condensed consolidated statements of operations (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 Technology and development $ 261,232 $ 130,988 $ 517,756 $ 204,245 Sales and marketing 19,396 6,674 34,352 10,204 General and administrative 110,868 51,673 191,529 79,514 Total $ 391,496 $ 189,335 $ 743,637 $ 293,963 During the three and six months ended June 30, 2022 , $70.1 million and $71.5 million of stock-based compensation expense was included in Capitalized software, respectively. During the three and six months ended June 30, 2021, $0 and $0.7 million of stock-based compensation expense was included in Capitalized software, respectively. |
INCOME TAXES
INCOME TAXES | 6 Months Ended |
Jun. 30, 2022 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES The Company calculates the tax provision for interim periods using an estimated annual effective tax rate applied to year-to-date ordinary income and adjusts for discrete items in the quarter. In each quarter, the estimate of the annual effective tax rate is updated and an adjustment is made in the year-to-date provision. The annual effective tax rate is subject to fluctuation due to factors including changing assumptions on forecasted annual pretax income, certain book and tax differences, valuation allowances against deferred tax assets, or changes in or interpretation of tax laws. The Company’s effective tax rate (“ETR”) for the three months ended June 30, 2022 and June 30, 2021 was 11.8% and (84.9)%, respectively. The ETR of 11.8% for the three months ended June 30, 2022 was lower than the U.S. statutory rate of 21.0% due primarily to a valuation allowance on deferred tax assets associated with impairment charges and lower deductible stock compensation expense during the quarter. The Company’s ETR for the six months ended June 30, 2022 and June 30, 2021 was 17.7% and (27.5)%, respectively. The ETR of 17.7% for the six months ended June 30, 2022 was lower than the U.S. statutory rate of 21.0% primarily due to a valuation allowance on deferred tax assets associated with impairment charges and non-deductible compensation, offset by a tax benefit for U.S. state taxes and U.S. federal research and development credits. |
NET (LOSS) INCOME PER SHARE
NET (LOSS) INCOME PER SHARE | 6 Months Ended |
Jun. 30, 2022 | |
Earnings Per Share [Abstract] | |
NET (LOSS) INCOME PER SHARE | NET (LOSS) INCOME PER SHARE The computation of net (loss) income per share is as follows (in thousands, except per share amounts): Three Months Ended June 30 , Six Months Ended June 30, 2022 2021 2022 2021 Basic net (loss) income per share: Numerator Net (loss) income $ (1,093,654) $ 1,606,349 $ (1,523,313) $ 2,377,812 Less: Income allocated to participating securities — (16,636) — (699,903) Net (loss) income attributable to common stockholders, basic $ (1,093,654) $ 1,589,713 $ (1,523,313) $ 1,677,909 Denominator Weighted-average shares of common stock used to compute net (loss) income per share attributable to common stockholders, basic 220,988 204,728 219,240 142,397 Net (loss) income per share attributable to common stockholders, basic $ (4.95) $ 7.77 $ (6.95) $ 11.78 Diluted net (loss) income per share: Numerator Net (loss) income $ (1,093,654) $ 1,606,349 $ (1,523,313) $ 2,377,812 Less: Income allocated to participating securities — (13,750) — (573,503) Add: Interest on convertible notes, net of tax — 551 — 551 Less: Fair value gain on contingent consideration arrangement, net of tax (6,184) — (6,184) — Net (loss) income attributable to common stockholders - diluted $ (1,099,838) $ 1,593,150 $ (1,529,497) $ 1,804,860 Denominator Weighted-average shares of common stock used to compute net (loss) income per share attributable to common stockholders, basic 220,988 204,728 219,240 142,397 Weighted-average effect of potentially dilutive securities: Stock options — 37,644 — 41,068 RSUs — 4,047 — 3,444 Restricted common stock — 3 — 1 Warrants — — — 145 Convertible notes — 1,725 — 863 Contingent consideration 46 — 46 — Weighted-average shares of common stock used to compute net (loss) income per share attributable to common stockholders, diluted 221,034 248,147 219,286 187,918 Net (loss) income per share attributable to common stockholders, diluted $ (4.98) $ 6.42 $ (6.97) $ 9.60 Certain shares of restricted Class A common stock granted as consideration in acquisitions and the Company’s convertible preferred stock outstanding during 2021 are participating securities. These participating securities do not contractually require the holders of such shares to participate in the Company’s losses. The rights, including the liquidation and dividend rights, of the holders of Class A common stock and Class B common stock are identical, except with respect to voting. As a result, th e undistributed earnings are allocated on a proportionate basis and the resulting income (loss) per share will, therefore, be the same for both Class A common stock and Class B common stock on an individual or combined basis. The following potentially dilutive shares were not included in the calculation of diluted shares outstanding as the effect would have been anti-dilutive (in thousands): Three Months Ended June 30 Six Months Ended June 30 2022 2021 2022 2021 Stock options 34,407 6,134 34,407 6,134 RSUs 8,330 1,807 8,330 1,807 Convertible notes 3,880 — 3,880 — Restricted common stock 1,998 — 1,998 — Employee stock purchase plan 1,596 263 1,596 263 Total 50,211 8,204 50,211 8,204 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 6 Months Ended |
Jun. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Indemnifications In the event any registrable securities are included in a registration statement, the Company’s Amended and Restated Investors’ Rights Agreement (the “IRA”) entered into with certain of the Company’s stockholders provides indemnity to each stockholder, their partners, members, officers, directors, and stockholders, legal counsel, and accountants; each underwriter, if any; and each person who controls each stockholder or underwriter, against any damages incurred in connection with investigating or defending any claim or proceeding arising as a result of such registration from which damages may result. The Company will reimburse each such party for any legal and any other expenses reasonably incurred, provided that the Company will not be liable in any such case to the extent the damages arise out of or are based upon any actions or omissions made in reliance upon and in conformity with written information furnished by or on behalf of such stockholder or underwriter and stated to be specifically for use therein. The Company also has indemnity agreements with certain officers and directors of the Company pursuant to which the Company must indemnify the officer or director against all expenses, judgments, fines, and amounts paid in settlement reasonably incurred in connection with a third party proceeding, if the indemnitee acted in good faith and in a manner reasonably believed to be in or not opposed to the best interests of the Company, and in the case of a criminal proceeding, had no reasonable cause to believe the indemnitee’s conduct was unlawful. It is not possible to determine the maximum potential exposure under these indemnification agreements: (i) because the facts and circumstances involved in each claim are unique and the Company cannot predict the number or nature of claims that may be made; (ii) due to the unique facts and circumstances involved in each particular agreement; and (iii) due to the requirement for a registration of the Company’s securities before any of the indemnification obligations contemplated in the IRA become effective. The Company has also provided indemnities or similar commitments on standard commercial terms in the ordinary course of business. Legal and regulatory proceedings The Company is subject to various litigation, regulatory investigations, and other legal proceedings that arise in the ordinary course of its business. The Company is also subject to regulatory oversight by numerous regulatory and other governmental agencies. The Company reviews its lawsuits, regulatory investigations, and other legal proceedings on an ongoing basis and provides disclosure and records loss contingencies in accordance with the loss contingencies accounting guidance. In accordance with such guidance, the Company establishes accruals for such matters when potential losses become probable and can be reasonably estimated. If the Company determines that a loss is reasonably possible and the loss or range of loss can be estimated, the Company discloses the possible loss in the condensed consolidated financial statements. In July and August 2021, three purported securities class actions were filed in the U.S. District Court for the Northern District of California against the Company, its directors, certain of its officers and employees, and certain venture capital and investment firms. The complaints alleged violations of Sections 11, 12(a)(2) and 15 of the Securities Act, in connection with the registration statement and prospectus filed in connection with the Direct Listing. In November 2021, these actions were consolidated and recaptioned as In re Coinbase Global Securities Litigation , and an amended complaint was filed. The Company disputes the claims in this matter and is vigorously defending against them. The plaintiff seeks, among other relief, unspecified compensatory damages, attorneys’ fees, and costs. Based on the preliminary nature of the proceedings in this matter, the outcome of this matter remains uncertain and the Company cannot estimate the potential impact, if any, on its business or financial statements at this time. In October 2021, a purported class action captioned Underwood et al. v. Coinbase Global, Inc., was filed in the U.S. District Court for the Southern District of New York against the Company alleging claims under Sections 5, 15(a)(1) and 29(b) of the Exchange Act and violations of certain California and Florida state statutes. On March 11, 2022, plaintiffs filed an amended complaint adding Coinbase, Inc. and Brian Armstrong as defendants and adding causes of action. Among other relief requested, the plaintiffs seek injunctive relief, unspecified damages, attorneys’ fees and costs. The Company and other defendants dispute the claims in this case and intend to vigorously defend against them. Based on the preliminary nature of the proceedings in this case, the outcome of this matter remains uncertain and the Company cannot estimate the potential impact, if any, on its business or financial statements at this time. In December 2021, a shareholder derivative suit captioned Shin v. Coinbase Global, Inc. , was filed in New York state court against the Company and its directors, alleging breach of fiduciary duties, unjust enrichment, abuse of control, gross mismanagement, and waste of corporate assets, and seeking unspecified damages and injunctive relief. The Company has subsequently received, and expects to receive in the future, similar derivative claims. The Company disputes the claims in these cases and intends to vigorously defend against them. Based on the preliminary nature of the proceedings in these cases, the outcome of these matters remain uncertain and the Company cannot estimate the potential impact, if any, on its business or financial statements at this time. The Company’s subsidiary, Coinbase, Inc., which holds a BitLicense from the New York Department of Financial Services (“NYDFS”) and is therefore subject to examinations and investigations by the NYDFS, is currently subject to an investigation by the NYDFS relating to its compliance program including compliance with the Bank Secrecy Act and sanctions laws, cybersecurity, and customer support. Coinbase, Inc. is cooperating fully and has undertaken initial remedial measures, and may face additional remedial and other measures. Based on the ongoing nature of the investigation, the outcome of this matter remains uncertain and the Company cannot estimate the potential impact, if any, on its business or financial statements at this time. The Company has received investigative subpoenas and requests from the SEC for documents and information about certain customer programs, operations, and existing and intended future products, including the Company’s processes for listing assets, the classification of certain listed assets, its staking programs, and its stablecoin and yield-generating products. Based on the ongoing nature of these matters, the outcomes remain uncertain and the Company cannot estimate the potential impact, if any, on its business or financial statements at this time. The Company believes the ultimate resolution of existing legal and regulatory investigation matters will not have a material adverse effect on the financial condition, results of operations, or cash flows of the Company. However, in light of the uncertainties inherent in these matters, it is possible that the ultimate resolution of one or more of these matters may have a material adverse effect on the Company’s results of operations for a particular period, and future changes in circumstances or additional information could result in additional accruals or resolution in excess of established accruals, which could adversely affect the Company’s results of operations, potentially materially. Tax regulation Current promulgated tax rules related to crypto assets are unclear and require significant judgments to be made in interpretation of the law, including but not limited to the areas of income tax, information reporting, transaction level taxes and the withholding of tax at source. Additional legislation or guidance may be issued by U.S. and non-U.S. governing bodies that may differ significantly from the Company's practices or interpretation of the law, which could have unforeseen effects on the Company’s financial condition and results of operations, and accordingly, the related impact on the Company’s financial condition and results of operations is not estimable. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 6 Months Ended |
Jun. 30, 2022 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTS[OPEN] |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 6 Months Ended |
Jun. 30, 2022 | |
Accounting Policies [Abstract] | |
Basis of presentation and principles of consolidation | Basis of presentation and principles of consolidation The accompanying condensed consolidated financial statements of the Company are unaudited. These unaudited condensed consolidated financial statements have been prepared in accordance with United States generally accepted accounting principles (“GAAP”), on the same basis as the audited consolidated financial statements, and in management’s opinion, reflect all adjustments, consisting only of normal, recurring adjustments, that are necessary for the fair statement of the Company’s condensed consolidated financial statements for the periods presented. The unaudited condensed consolidated results of operations for the three and six months ended June 30, 2022 are not necessarily indicative of the results to be expected for the full year or any other period. These condensed consolidated financial statements and accompanying notes should be read in conjunction with the audited consolidated financial statements and notes included in the Company’s annual report on Form 10-K for the year ended December 31, 2021 filed with the Securities and Exchange Commission (the “SEC”) on February 25, 2022 (the “Annual Report”). These condensed consolidated financial statements include the accounts of the Company and its subsidiaries. The Company’s subsidiaries are entities in which the Company holds, directly or indirectly, more than 50% of the voting rights or where it exercises control. Certain subsidiaries of the Company have a basis of presentation different from GAAP. For the purposes of these unaudited condensed consolidated financial statements, the basis of presentation of such subsidiaries is converted to GAAP. All intercompany accounts and transactions have been eliminated in consolidation. There were no changes to the significant accounting policies or recent accounting pronouncements that were disclosed in Note 2. Summary of Significant Accounting Policies |
Reclassifications | Reclassifications Certain prior period amounts have been reclassified in order to conform with the current period presentation. These reclassifications have no impact on the Company’s previously reported consolidated net income. |
Use of estimates | Use of estimates The preparation of th e condensed consolidated financial statements in accordance with GAAP requires management to make estimates and assumptions in the Company’s condensed consolidated financial statements and notes thereto. Significant estimates and assumptions include the determination of the recognition, measurement, and valuation of current and deferred income taxes; the fair value of stock-based awards issued; the useful lives of long-lived assets; the impairment of long-lived assets; the valuation of privately-held strategic investments, including impairments; the Company’s incremental borrowing rate; the fair value of Customer crypto assets and liabilities; the fair value of assets acquired and liabilities assumed in business combinations, including contingent consideration arrangements; the fair value of derivatives and related hedges; the fair value of long-term debt; assessing the likelihood of adverse outcomes from claims and disputes; and loss provisions. Actual results and outcomes may differ from management’s estimates and assumptions due to risks and uncertainties. To the extent that there are material differences between these estimates and actual results, the Comp any’s condensed c onsolidated financial statements will be affected. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable, the result of which forms the basis for making judgments about the carrying values of assets and liabilities. |
Customer custodial cash and Customer cash liabilities | Customer custodial cash and Customer custodial cash liabilities Customer custodial cash represents restricted cash and cash equivalents maintained in segregated Company bank accounts that are held for the exclusive benefit of customers. Customer custodial cash liabilities represent cash deposits held by customers in their fiat wallets and unsettled deposits and withdrawals. The Company restricts the use of the assets underlying the Customer custodial cash to meet regulatory requirements and classifies the assets as current based on their purpose and availability to fulfill its direct obligation under Customer custodial cash liabilities. Certain jurisdictions where the Company operates require the Company to hold eligible liquid assets, as defined by applicable regulatory requirements and commercial law in these jurisdictions, equal to at least 100% of the aggregate amount of all Customer custodial cash liabilities. Depending on the jurisdiction, eligible liquid assets can include Cash and cash equivalents, Customer custodial cash, and In-transit funds receivable. As of June 30, 2022 and December 31, 2021, the Company’s eligible liquid assets were greater than the aggregate amount of Customer custodial cash liabilities. |
Concentration of credit risk | Concentration of credit risk The Company’s Cash and cash equivalents, Restricted cash, Customer custodial cash, and Accounts and loans receivable are potentially subject to concentration of credit risk. Cash and cash equivalents, Restricted cash, and Customer custodial cash are placed with financial institutions which are of high credit quality. The Company invests Cash and cash equivalents, and Customer custodial accounts primarily in highly liquid, highly rated instruments which are uninsured. The Company may also have deposit balances with financial institutions which exceed the Federal Deposit Insurance Corporation insurance limit of $250,000. The Company also holds cash at crypto trading venues and performs a regular assessment of these crypto trading venues as part of its risk management process. The Company held $361.7 million and $100.1 million of USD Coin (“USDC”) as of June 30, 2022 and December 31, 2021, respectively. In July 2022, the issuer of USDC stated that, as of June 30, 2022, underlying reserves were held in cash and 3-month U.S. Treasuries within segregated accounts for the benefit of USDC holders. |
Derivatives contracts | Derivative contracts Derivative contracts derive their value from underlying asset prices, other inputs or a combination of these factors. Derivative contracts are recognized as either assets or liabilities in the condensed consolidated balance sheets at fair value, with changes in fair value recognized in Other operating expense, net. The Company enters into arrangements that result in obtaining the right to receive or obligation to deliver a fixed amount of crypto assets in the future. These are hybrid instruments, consisting of a debt host contract that is initially measured at the fair value of the underlying crypto assets and is subsequently carried at amortized cost, and an embedded forward feature based on the changes in the fair value of the underlying crypto asset. The embedded forward is bifurcated from the host contract, and is subsequently measured at fair value. Derivatives designated as hedges The Company applies hedge accounting to certain derivatives executed for risk management purposes. To qualify for hedge accounting, a derivative must be highly effective at reducing the risk associated with the exposure being hedged. The Company uses fair value hedges primarily to hedge the fair value exposure of crypto asset prices. For qualifying fair value hedges, the changes in the fair value of the derivative and the fair value of the hedged item, the crypto assets, are recognized in current-period earnings in Other operating expense, net in the condensed consolidated statements of operations. Derivative amounts affecting earnings are recognized in the same line item as the earnings effect of the hedged item. |
Customer crypto assets and liabilities | Customer crypto assets and liabilities Customer crypto assets and liabilities represent the Company’s obligation to safeguard customers’ crypto assets in digital wallets on the Company’s platform. The Company safeguards these assets for customers and is obligated to safeguard them from loss, theft, or other misuse. The Company recognizes Customer crypto liabilities and corresponding Customer crypto assets, on initial recognition and at each reporting date, at fair value of the crypto assets. Any loss, theft, or other misuse would impact the measurement of Customer crypto assets. |
Recent accounting pronouncements | Recent accounting pronouncements Recently adopted accounting pronouncements On October 28, 2021, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No. 2021-08, Accounting for Contract Assets and Contract Liabilities from Contracts with Customers (“ASU 2021-08”). ASU 2021-08 amends Accounting Standards Codification 805 (“ASC 805”) to require acquiring entities to apply Topic 606 - Revenue from Contracts with Customer s to recognize and measure contract assets and contract liabilities in a business combination. The Company early adopted the standard on January 1, 2022. The adoption of the standard did not have a material impact on the Company’s condensed consolidated financial statements. On March 31, 2022, the SEC issued Staff Accounting Bulletin No. 121 (“SAB 121”). SAB 121 sets out interpretive guidance from the staff of the SEC regarding the accounting for obligations to safeguard crypto assets that an entity holds for its customers. Safeguarding is defined as taking actions to secure customer crypto assets and the associated cryptographic key information and protecting them from loss, theft, or other misuse. The guidance requires an entity to recognize a liability for the obligation to safeguard the users’ assets, and recognize an associated asset for the crypto assets safeguarded. Both the liability and asset should be measured initially and subsequently at the fair value of the crypto assets being safeguarded. The guidance also requires additional disclosures related to the nature and amount of crypto assets that the entity is responsible for holding for its customers, with separate disclosure for each significant crypto asset, and the vulnerabilities the entity has due to any concentration in such activities. The Company has adopted this guidance as of June 30, 2022 with retrospective application as of January 1, 2022. The balances as of January 1, 2022 for the Customer crypto assets and Customer crypto liabilities were both $267.6 billion. Accounting pronouncements pending adoption On June 30, 2022, FASB issued Accounting Standards Update No. 2022-03, Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions (“ASU 2022-03”). ASU 2022-03 clarifies that a contractual sale restriction prohibiting the sale of an equity security is a characteristic of the reporting entity holding the equity security and is not included in the equity security's unit of account. The standard requires specific disclosures related to equity securities that are subject to contractual sale restrictions, including (1) the fair value of such equity securities reflected in the balance sheet, (2) the nature and remaining duration of the corresponding restrictions, and (3) any circumstances that could cause a lapse in the restrictions. The new standard is effective for the Company for its fiscal year beginning January 1, 2024, with early adoption permitted. The Company is currently evaluating the impact of adopting the standard. |
Revenue recognition | Revenue recognition The Company determines revenue recognition from contracts with customers through the following steps: • identification of the contract, or contracts, with the customer; • identification of the performance obligations in the contract; • determination of the transaction price; • allocation of the transaction price to the performance obligations in the contract; and • recognition of the revenue when, or as, the Company satisfies a performance obligation. Revenue is recognized when control of the promised goods or services is transferred to the customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services. The Company primarily generates revenue through transaction fees charged on the platform. Transaction revenue Retail transaction revenue represents transaction fees earned from customers that are primarily individuals, while institutional transaction revenue represents transaction fees earned from institutional customers, such as hedge funds, family offices, principal trading firms, and financial institutions on the institutional platform. Institutional clients can trade via the Company’s trading platform or utilize Coinbase Prime services depending on their needs. High-frequency trading firms, such as market makers and principal traders, benefit from lower latency by connecting through the trading platform, while corporations and family offices can access an integrated suite of investment services through Coinbase Prime. The Company’s service is comprised of a single performance obligation to provide a crypto asset matching service when customers buy, sell, or convert crypto assets on the platform. That is, the Company is an agent in transactions between customers and presents revenue for the fees earned on a net basis. Judgment is required in determining whether the Company is the principal or the agent in transactions between customers. The Company evaluates the presentation of revenue on a gross or net basis based on whether it controls the crypto asset provided before it is transferred to the customer (gross) or whether it acts as an agent by arranging for other customers on the platform to provide the crypto asset to the customer (net). The Company does not control the crypto asset being provided before it is transferred to the buyer, does not have inventory risk related to the crypto asset, and is not responsible for the fulfillment of the crypto asset. The Company also does not set the price for the crypto asset as the price is a market rate established by users of the platform. As a result, the Company acts as an agent in facilitating the ability for a customer to purchase crypto assets from another customer. The Company considers its performance obligation satisfied, and recognizes revenue, at the point in time the transaction is processed. Contracts with customers are usually open-ended and can be terminated by either party without a termination penalty. Therefore, contracts are defined at the transaction level and do not extend beyond the service already provided. The Company charges a fee at the transaction level. The transaction price, represented by the trading fee, is calculated based on volume and varies depending on payment type and the value of the transaction. Crypto asset purchase or sale transactions executed by a customer on the Company’s platform is based on tiered pricing that is driven primarily by transaction volume processed for a specific historical period. The Company has concluded that this volume-based pricing approach does not constitute a future material right since the discount is within a range typically offered to a class of customers with similar volume. The transaction fee is collected from the customer at the time the transaction is executed. In certain instances, the transaction fee can be collected in crypto assets, with revenue measured based on the amount of crypto assets received and the fair value of the crypto assets at the time of the transaction. The transaction price includes estimates for reductions in revenue from transaction fee reversals that may not be recovered from customers. Such reversals occur when the customer disputes a transaction processed on their credit card or their bank account for a variety of reasons and seeks to have the charge reversed after the Company has processed the transaction. These amounts are estimated based upon the most likely amount of consideration to which the Company will be entitled. All estimates are based on historical experience and the Company’s best judgment at the time to the extent it is probable that a significant reversal of revenue recognized will not occur. All estimates of variable consideration are reassessed periodically. The total transaction price is allocated to the single performance obligation. While the Company recognizes transaction fee reversals as a reduction of net revenue, crypto asset losses related to those same transaction reversals are included in Transaction expense. Blockchain rewards The Company generates revenues in crypto assets through various blockchain protocols. These blockchain protocols, or the participants that form the protocol networks, reward users for performing various activities on the blockchain, such as participating in proof-of-stake networks and other consensus algorithms. The Company considers itself the principal in transactions with the blockchain networks, and therefore presents such blockchain rewards earned on a gross basis. Blockchain rewards are primarily comprised of Staking revenue in which the Company participates in networks with proof-of-stake consensus algorithms, through creating or validating blocks on the network using the staking validators that it controls. In exchange for participating in the consensus mechanism of these networks, the Company earns rewards in the form of the native token of the network. Each block creation or validation is a performance obligation. Revenue is recognized at the point when the block creation or validation is complete and the rewards are transferred into a digital wallet that the Company controls. Revenue is measured based on the number of tokens received and the fair value of the token at contract inception. Blockchain services offered as part of Coinbase Cloud’s blockchain infrastructure solutions are included in Other subscription and services revenue. Custodial fee revenue Earn campaign revenue The Company provides a platform for crypto asset issuers, the customer, to engage with the Company’s retail users and teach them about new crypto assets through the use of educational tools, videos, and tutorials. In exchange for completing a task, such as watching the video or downloading an application, retail users may be eligible to receive crypto assets from the crypto asset issuer. The Company is the agent with respect to the delivery of the crypto assets. The Company earns a commission from the crypto asset issuer based on the amount of crypto assets that are distributed to users. Interest income and corporate interest and other income The Company holds Customer custodial cash and Cash and cash equivalents at certain third-party banks which earn interest. The Company also earns interest income under a revenue sharing arrangement and on loans granted to retail and institutional users. Interest income is calculated using the interest method and is not within the scope of Topic 606 – Revenue from Contracts with Customers. Interest earned on Customer custodial cash, revenue sharing, and loans is included in Interest income within Subscription and services revenue. Interest earned on Cash and cash equivalents is included in Corporate interest and other income, within Other revenue. Other subscription and services revenue Other subscription and services revenue primarily includes revenue from Coinbase Cloud, which includes staking application, delegation, and infrastructure services, Coinbase One, and other subscription licenses. Generally, revenue from other subscription and services contains one performance obligation, may have variable and non-cash consideration, and is recognized at a point in time or over the period that services are provided. Other revenue includes the sale of crypto assets and Corporate interest and other income. Periodically, as an accommodation to customers, the Company may fulfill customer transactions using the Company’s own crypto assets held for operating purposes. The Company has custody and control of the crypto assets prior to the sale to the customer and records revenue at the point in time when the sale to the customer is processed. Accordingly, the Company records the total value of the sale in Other revenue and the cost of the crypto assets in Other operating expense, net within th e condensed c |
Loans receivable | The Company’s credit exposure is significantly limited and no allowance was recorded against these loans receivable. Loans receivable are measured at amortized cost. |
RESTRUCTURING (Tables)
RESTRUCTURING (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Restructuring and Related Activities [Abstract] | |
Restructuring and Related Costs | The following expenses were recognized within Restructuring expenses in the condensed consolidated statements of operations for the three and six months ended June 30, 2022 (in thousands), and the associated liability remains outstanding as of June 30, 2022 and is recorded in Accrued expenses and other current liabilities in the condensed consolidated balance sheets: Separation pay $ 39,259 Post-employment benefits 3,194 Total $ 42,453 |
ACQUISITIONS (Tables)
ACQUISITIONS (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
Schedule of business acquisitions by acquisition | The total consideration transferred in the acquisition was $258.0 million, consisting of the following (in thousands): Cash $ 151,424 Cash payable 126 Class A common stock of the Company 103,977 RSUs for shares of the Company’s Class A common stock 2,457 Total purchase consideration $ 257,984 The total consideration transferred in the acquisition was $275.1 million, consisting of the following (in thousands): Cash $ 56,726 Cash payable 10,442 Class A common stock of the Company - issued 174,229 Class A common stock of the Company - to be issued 33,693 Total purchase consideration $ 275,090 The total consideration transferred in the acquisition was $457.3 million, consisting of the following (in thousands): Common stock of the Company $ 389,314 Previously held interest on acquisition date 10,863 Cash 28,726 Replacement of Bison Trails options 28,365 Total purchase consideration $ 457,268 |
Schedule of recognized identified assets acquired and liabilities assumed | The following table summarizes the preliminary fair values of assets acquired and liabilities assumed as of the date of acquisition (in thousands): Cash and cash equivalents $ 10,560 Restricted cash 573 Accounts and loans receivable, net of allowance 4,981 Prepaid expenses and other current assets 4,182 Lease right-of-use assets 1,059 Property and equipment, net 1,248 Goodwill 222,732 Intangible assets 28,500 Other non-current assets 3,476 Total assets 277,311 Accounts payable 719 Accrued expenses and other current liabilities 11,325 Lease liabilities 1,059 Other non-current liabilities 6,224 Total liabilities 19,327 Net assets acquired $ 257,984 Cash and cash equivalents $ 10,867 Accounts and loans receivable, net of allowance 411 Prepaid expenses and other current assets 20 Intangible assets 41,000 Goodwill 231,685 Other non-current assets 8,295 Total assets 292,278 Accounts payable 472 Accrued expenses and other current liabilities 5,796 Other non-current liabilities 10,920 Total liabilities 17,188 Net assets acquired $ 275,090 Cash and cash equivalents $ 12,201 Crypto assets held 5,177 Accounts and loans receivable, net of allowance 2,323 Prepaid expenses and other current assets 122 Intangible assets 39,100 Goodwill 404,167 Other non-current assets 1,221 Lease right-of-use assets 808 Total assets 465,119 Accounts payable 526 Accrued expenses and other current liabilities 1,920 Lease liabilities 808 Other non-current liabilities 4,597 Total liabilities 7,851 Net assets acquired $ 457,268 |
Schedule of components of finite lived and indefinite lived identifiable intangible assets acquired | The following table sets forth the components of identifiable intangible assets acquired and their estimated useful lives as of the date of acquisition (in thousands, except for years data): Fair Value Useful Life at Acquisition (in years) Developed technology $ 15,700 1 - 5 In-process research and development ("IPR&D") 2,500 N/A Customer relationships 10,300 2 The following table sets forth the components of identifiable intangible assets acquired and their estimated useful lives as of the date of acquisition (in thousands, except for years data): Fair Value Useful Life at Acquisition (in years) DCM License $ 26,900 Indefinite Developed technology 10,700 5 Trading relationships 3,400 3 The following table sets forth the components of identifiable intangible assets acquired and their estimated useful lives as of the date of acquisition (in thousands, except for years data): Fair Value Useful Life at Acquisition (in years) Developed technology $ 36,000 3 IPR&D 1,200 N/A User base 1,900 3 |
REVENUE (Tables)
REVENUE (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of disaggregated revenue by source | The following table presents revenue of the Company disaggregated by revenue source (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 Net revenue Transaction revenue Retail, net $ 616,212 $ 1,827,951 $ 1,582,054 $ 3,283,121 Institutional, net 39,001 102,431 86,196 187,840 Total transaction revenue 655,213 1,930,382 1,668,250 3,470,961 Subscription and services revenue Blockchain rewards 68,410 34,421 150,305 43,673 Custodial fee revenue 22,178 31,698 53,872 55,148 Earn campaign revenue 2,495 16,947 8,400 28,058 Interest income 32,514 6,481 42,968 9,801 Other subscription and services revenue 21,793 13,082 43,699 22,350 Total subscription and services revenue 147,390 102,629 299,244 159,030 Total net revenue 802,603 2,033,011 1,967,494 3,629,991 Other revenue Crypto asset sales revenue 48 194,524 617 398,323 Corporate interest and other income 5,674 427 6,650 759 Total other revenue 5,722 194,951 7,267 399,082 Total revenue $ 808,325 $ 2,227,962 $ 1,974,761 $ 4,029,073 |
Schedule of revenues disaggregated by geography | In the table below are the revenues disaggregated by geography, based on domicile of the client or booking location, as applicable (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 United States $ 667,214 $ 1,870,465 $ 1,623,047 $ 3,335,900 Rest of the World (1) 141,111 357,497 351,714 693,173 Total revenue $ 808,325 $ 2,227,962 $ 1,974,761 $ 4,029,073 __________________ (1) No other individual country accounted for more than 10% of total revenue |
ACCOUNTS AND LOANS RECEIVABLE_2
ACCOUNTS AND LOANS RECEIVABLE, NET OF ALLOWANCE (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Receivables [Abstract] | |
Schedule of accounts receivable, net of allowance | Accounts and loans receivable, net of allowance consisted of the following (in thousands): June 30, December 31, 2022 2021 In-transit customer receivables $ 60,724 $ 102,720 Trade finance receivables 144 1,865 Custodial fee revenue receivable 12,755 23,727 Loans receivable (1) 126,004 218,461 Interest and other receivables (2) 61,524 73,803 Allowance for doubtful accounts (3) (15,535) (24,551) Total accounts and loans receivable, net of allowance $ 245,616 $ 396,025 __________________ (1) The fair value of collateral held as security exceeded the outstanding loans receivable as of June 30, 2022 and December 31, 2021, so no allowance was recorded. (2) Includes Accounts receivables denominated in crypto assets of $6.7 million and $26.4 million as of June 30, 2022 and December 31, 2021, respectively. See Note 12. Derivatives for additional details. (3) Includes provision for transaction losses of $4.3 million and $16.8 million as of June 30, 2022 and December 31, 2021, respectively. |
GOODWILL, INTANGIBLE ASSETS, _2
GOODWILL, INTANGIBLE ASSETS, NET AND CRYPTO ASSETS HELD (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of goodwill | The following table reflects the changes in the carrying amount of goodwill (in thousands): Six Months Ended June 30, 2022 Year Ended December 31, 2021 Balance, beginning of period $ 625,758 $ 77,212 Additions due to business combinations 454,418 548,546 Measurement period adjustments (1) (6,270) — Balance, end of period $ 1,073,906 $ 625,758 __________________ |
Schedule of finite-lived intangible assets | Intangible assets, net consisted of the following (in thousands, except years data): As of June 30, 2022 Gross Carrying Amount Accumulated Amortization Intangible Assets, Net Weighted Average Remaining Useful Life (in years) Amortizing intangible assets Acquired developed technology $ 128,292 $ (57,805) $ 70,487 2.47 User base 2,997 (1,585) 1,412 1.25 Customer relationships 86,691 (36,621) 50,070 3.03 Non-compete agreement 2,402 (1,401) 1,001 2.09 Assembled workforce 60,800 (26,541) 34,259 0.94 Trade Relationships 3,400 (472) 2,928 2.59 In-process research and development (1) 2,201 — 2,201 N/A Indefinite-lived intangible assets Domain name 250 — 250 N/A Licenses 26,900 — 26,900 N/A Total $ 313,933 $ (124,425) $ 189,508 __________________ (1) Amortization begins once the technology is placed in service. IPR&D is expected to have a useful life of three years. As of December 31, 2021 Gross Carrying Amount Accumulated Amortization Intangible Assets, Net Weighted Average Remaining Useful Life (in years) Amortizing intangible assets Acquired developed technology $ 100,908 $ (34,865) $ 66,043 1.97 User base 2,997 (1,020) 1,977 1.75 Customer relationships 79,491 (27,789) 51,702 3.68 Non-compete agreement 2,402 (1,161) 1,241 2.58 Assembled workforce 60,800 (8,324) 52,476 1.43 In-process research and development (1) 3,000 — 3,000 N/A Indefinite-lived intangible assets Domain name 250 — 250 N/A Total $ 249,848 $ (73,159) $ 176,689 __________________ (1) Amortization begins once the technology is placed in service. IPR&D is expected to have a useful life of three years. Crypto assets held consisted of the following (in thousands): June 30, December 31, 2022 2021 Recorded at impaired cost Crypto assets held as investments $ 289,744 $ 209,415 Crypto assets held for operating purposes 113,653 357,093 Total Crypto assets held recorded at impaired cost 403,397 566,508 Recorded at fair value (1) Crypto assets held as investments 1,896 — Crypto assets borrowed 134,390 421,685 Total Crypto assets held recorded at fair value 136,286 421,685 Total Crypto assets held $ 539,683 $ 988,193 __________________ (1) Recorded at fair value as these Crypto assets are held as the hedged item in qualifying fair value hedges. |
Schedule of indefinite-lived intangible assets | Intangible assets, net consisted of the following (in thousands, except years data): As of June 30, 2022 Gross Carrying Amount Accumulated Amortization Intangible Assets, Net Weighted Average Remaining Useful Life (in years) Amortizing intangible assets Acquired developed technology $ 128,292 $ (57,805) $ 70,487 2.47 User base 2,997 (1,585) 1,412 1.25 Customer relationships 86,691 (36,621) 50,070 3.03 Non-compete agreement 2,402 (1,401) 1,001 2.09 Assembled workforce 60,800 (26,541) 34,259 0.94 Trade Relationships 3,400 (472) 2,928 2.59 In-process research and development (1) 2,201 — 2,201 N/A Indefinite-lived intangible assets Domain name 250 — 250 N/A Licenses 26,900 — 26,900 N/A Total $ 313,933 $ (124,425) $ 189,508 __________________ (1) Amortization begins once the technology is placed in service. IPR&D is expected to have a useful life of three years. As of December 31, 2021 Gross Carrying Amount Accumulated Amortization Intangible Assets, Net Weighted Average Remaining Useful Life (in years) Amortizing intangible assets Acquired developed technology $ 100,908 $ (34,865) $ 66,043 1.97 User base 2,997 (1,020) 1,977 1.75 Customer relationships 79,491 (27,789) 51,702 3.68 Non-compete agreement 2,402 (1,161) 1,241 2.58 Assembled workforce 60,800 (8,324) 52,476 1.43 In-process research and development (1) 3,000 — 3,000 N/A Indefinite-lived intangible assets Domain name 250 — 250 N/A Total $ 249,848 $ (73,159) $ 176,689 __________________ (1) Amortization begins once the technology is placed in service. IPR&D is expected to have a useful life of three years. |
Schedule of finite-lived intangible assets, future amortization expense | The expected future amortization expense for intangible assets other than IPR&D as of June 30, 2022 is as follows (in thousands): 2022 (for the remainder of) $ 51,813 2023 68,869 2024 21,360 2025 13,119 2026 4,818 Thereafter 178 Total expected future amortization expense $ 160,157 |
CUSTOMER ASSETS AND LIABILITI_2
CUSTOMER ASSETS AND LIABILITIES (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Schedule of Customers' Cash and Crypto Positions | The following table presents customers’ cash and crypto positions (in thousands): June 30, December 31, 2022 2021 Customer custodial cash $ 7,181,148 $ 10,526,233 Customer crypto assets 88,453,873 — Total customer assets $ 95,635,021 $ 10,526,233 Customer custodial cash liabilities $ 7,071,557 $ 10,480,612 Customer crypto liabilities 88,453,873 — Total customer liabilities $ 95,525,430 $ 10,480,612 |
Schedule of Crypto Safeguarding Indemnification Asset and Crypto Asset Safeguarding Liability | The following table sets forth the fair value of Customer crypto assets, as shown in the condensed consolidated balance sheets, as Customer crypto assets and Customer crypto liabilities, as of June 30, 2022 (in billions): Fair Value Percentage of total (1) Bitcoin $ 41.7 47.2 % Ethereum 18.8 21.2 % Other crypto assets 28.0 31.6 % Total customer crypto assets $ 88.5 100.0 % __________________ |
PREPAID EXPENSES AND OTHER AS_2
PREPAID EXPENSES AND OTHER ASSETS (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Schedule of prepaid expenses and other current and non-current assets | Prepaid expenses and other current assets, and Other non-current assets consisted of the following (in thousands): June 30, December 31, 2022 2021 Prepaid expenses and other current assets Prepaid expenses $ 129,797 $ 123,246 Deposits 5,538 9,658 Other 11,128 2,945 Total prepaid expenses and other current assets $ 146,463 $ 135,849 Other non-current assets Strategic investments $ 350,910 $ 363,950 Deferred tax assets 909,557 573,547 Deposits 12,425 13,347 Other 1,823 1,463 Total other non-current assets $ 1,274,715 $ 952,307 |
Schedule of other investments accounted for under the measurement alternative | The changes in the carry value of strategic investments accounted for under the measurement alternative are presented below (in thousands): Six Months Ended June 30, 2022 2021 Carrying amount, beginning of period $ 352,431 $ 26,146 Net additions (1) 47,208 40,071 Upward adjustments 879 2,379 Previously held interest in Bison Trails (see Note 4) — (2,000) Impairments and downward adjustments (69,054) (50) Carrying amount, end of period (2) $ 331,464 $ 66,546 __________________ (1) Net additions include additions from purchases and reductions due to exits of securities and reclassifications due to changes to capital structure. (2) Excludes $19.4 million and $11.5 million as at June 30, 2022 and June 30, 2021, respectively, of strategic investments that are not accounted for under the measurement alternative. |
ACCRUED EXPENSES AND OTHER CU_2
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Payables and Accruals [Abstract] | |
Schedule of accounts payable and accrued expenses | Accrued expenses and other current liabilities consisted of the following (in thousands): June 30, December 31, 2022 2021 Accrued expenses $ 220,566 $ 195,810 Accrued payroll and payroll related 143,882 146,313 Income taxes payable 9,652 4,553 Short-term borrowings 504 20,060 Other payables (1) 82,795 72,823 Total accrued expenses and other current liabilities $ 457,399 $ 439,559 __________________ (1) Includes Other payables denominated in crypto assets of $7.2 million as of June 30, 2022 and an immaterial amount as of December 31, 2021. |
INDEBTEDNESS (Tables)
INDEBTEDNESS (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of Long-Term Debt Instruments | The components of Indebtedness were as follows as of June 30, 2022 (in thousands, except percentages): Indebtedness Effective interest rate Principal Amount Unamortized Debt Discount and Issuance Costs Net Carrying Amount 0.50% 2026 Convertible Notes due on June 1, 2026 0.98 % $ 1,437,500 $ (26,465) $ 1,411,035 3.38% 2028 Senior Notes due on October 1, 2028 3.57 % 1,000,000 (10,801) 989,199 3.63% 2031 Senior Notes due on October 1, 2031 3.77 % 1,000,000 (11,201) 988,799 Total $ 3,437,500 $ (48,467) $ 3,389,033 The components of Indebtedness were as follows as of December 31, 2021 (in thousands, except percentages): Indebtedness Effective interest rate Principal Amount Unamortized Debt Discount and Issuance Costs Net Carrying Amount 0.50% 2026 Convertible Notes due on June 1, 2026 0.98 % $ 1,437,500 $ (29,436) $ 1,408,064 3.38% 2028 Senior Notes due on October 1, 2028 3.57 % 1,000,000 (11,565) 988,435 3.63% 2031 Senior Notes due on October 1, 2031 3.77 % 1,000,000 (11,704) 988,296 Total $ 3,437,500 $ (52,705) $ 3,384,795 |
Interest Expense Disclosure | The following table summarizes the Interest expense for the 2026 Convertible Notes, the 2028 Senior Notes and the 2031 Senior Notes (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 Coupon interest $ 19,234 $ 800 $ 38,641 $ 800 Amortization of debt discount and issuance costs 2,168 700 4,238 700 Total $ 21,402 $ 1,500 $ 42,879 $ 1,500 |
DERIVATIVES (Tables)
DERIVATIVES (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Description of derivatives and related hedge accounting designation | The following outlines the Company’s derivatives and the related hedge accounting designation, as applicable. Type of derivative Description of derivative Location of host contract and derivative on balance sheet Crypto asset borrowings (1) The Company borrows crypto assets that result in the obligation to deliver a fixed amount of crypto assets in the future. Crypto asset borrowings Accounts receivable denominated in crypto assets The Company provides services for which, under the contract, the customer pays in crypto assets. The amount of crypto assets are fixed at the time of invoicing. The right to receive fixed amounts of crypto assets consists of a receivable host contract and an embedded forward contract to purchase crypto assets. Accounts and loans receivable, net of allowance Other payables denominated in crypto assets The Company enters into arrangements that result in the obligation to deliver a fixed amount of crypto assets in the future. Accrued expenses and other current liabilities Crypto asset futures (1) The Company enters into short positions on futures contracts to minimize the exposure on the change in the fair value price of Crypto assets held. Accounts and loans receivable, net of allowance __________________ (1) For risk management purposes, the Company applies hedge accounting using these derivative instruments in qualifying fair value hedges to primarily hedge the fair value exposure of crypto asset prices. |
Schedule of the notional amount of derivative contracts outstanding | The following table summarizes the notional amounts of derivative instruments outstanding, measured in U.S. dollar equivalents (in thousands): June 30, December 31, 2022 2021 Designated as hedging instrument Crypto asset borrowings with embedded derivatives $ 234,805 $ 669,445 Crypto asset futures 2,342 — Not designated as hedging instrument Accounts receivable denominated in crypto assets 15,523 17,415 Other payables denominated in crypto assets 16,815 — The following tables summarize information on derivative assets and liabilities that are reflected in the Compan y’s condensed consolidated balance sheets, by accounting designation (in thousands): Gross derivative assets Gross derivative liabilities June 30, 2022 Not designated as hedges Designated as hedges Total derivative assets Not designated as hedges Designated as hedges Total derivative liabilities Crypto asset borrowings with embedded derivatives (1) $ — $ 99,989 $ 99,989 $ — $ 1,732 $ 1,732 Accounts receivable denominated in crypto assets — — — 8,824 — 8,824 Other payables denominated in crypto assets 9,574 — 9,574 — — — Total fair value of derivative assets and liabilities $ 9,574 $ 99,989 $ 109,563 $ 8,824 $ 1,732 $ 10,556 __________________ (1) During the six months ended June 30, 2022, the fee on these borrowings ranged from 0.0% to 7.5%. During the six months ended June 30, 2021, the fee on these borrowings ranged from 0.0% to 3.5%. During the three and six months ended June 30, 2022, the Company incurred $1.6 million and $3.0 million, respectively, of borrowing fees in crypto assets. During the three and six months ended June 30, 2021, the Company incurred $2.9 million and $7.2 million, respectively, of borrowing fees in crypto assets. Borrowing fees are included in Other operating expense, net in the condensed consolidated statements of operations. Gross derivative assets Gross derivative liabilities December 31, 2021 Not designated as hedges Designated as hedges Total derivative assets Not designated as hedges Designated as hedges Total derivative liabilities Crypto asset borrowings with embedded derivatives $ — $ 336,396 $ 336,396 $ — $ 93,616 $ 93,616 Accounts receivable denominated in crypto assets 9,033 — 9,033 — — — Total fair value of derivative assets and liabilities $ 9,033 $ 336,396 $ 345,429 $ — $ 93,616 $ 93,616 The following amounts were recorded in the condensed consolidated balance sheets related to certain cumulative fair value hedge basis adjustments that are expected to reverse through the condensed consolidated statements of operations in future periods as an adjustment to Other operating expense, net (in thousands): Cumulative amount of fair value hedging adjustments included in the carrying amount of hedged items June 30, 2022 Carrying amount of the hedged items Active hedging relationships Discontinued hedging relationships Total Crypto assets held $ 136,286 $ 93,318 $ (3,333) $ 89,985 Cumulative amount of fair value hedging adjustments included in the carrying amount of hedged items December 31, 2021 Carrying amount of the hedged items Active hedging relationships Discontinued hedging relationships Total Crypto assets held $ 421,685 $ (240,771) $ — $ (240,771) |
Schedule of gains (losses) recorded in income | Gains (losses) on derivative instruments recognized in the Company’s condensed consolidated statements of operations were as follows (in thousands): Gains (losses) recorded in Other operating expense, net Three Months Ended June 30, 2022 Three Months Ended June 30, 2021 Derivatives Hedged items Income statement impact Derivatives Hedged items Income statement impact Designated as fair value hedging instruments Crypto asset borrowings with embedded derivatives $ 355,071 $ (356,416) $ (1,345) $ 448,957 $ (427,240) $ 21,717 Crypto asset futures 15,678 (15,005) 673 — — — Not designated as hedging instruments Crypto asset borrowings with embedded derivatives 6,626 — 6,626 — — — Accounts receivable denominated in crypto assets (5,350) — (5,350) — — — Other payables denominated in crypto assets 2,510 — 2,510 — — — Crypto asset futures 1,181 — 1,181 — — — Total $ 375,716 $ (371,421) $ 4,295 $ 448,957 $ (427,240) $ 21,717 Gains (losses) recorded in Other operating expense, net Six Months Ended June 30, 2022 Six Months Ended June 30, 2021 Derivatives Hedged items Income statement impact Derivatives Hedged items Income statement impact Designated as fair value hedging instruments Crypto asset borrowings with embedded derivatives $ 360,069 $ (361,340) $ (1,271) $ 181,557 $ (169,116) $ 12,441 Crypto asset futures 13,012 (12,262) 750 — — — Not designated as hedging instruments Crypto asset borrowings with embedded derivatives 6,626 — 6,626 — — — Accounts receivable denominated in crypto assets (10,263) — (10,263) — — — Other payables denominated in crypto assets 2,510 — 2,510 — — — Crypto asset futures (511) — (511) — — — Total $ 371,443 $ (373,602) $ (2,159) $ 181,557 $ (169,116) $ 12,441 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
Schedule of fair value of assets and liabilities | The following table sets forth by level, within the fair value hierarchy, the Company’s assets and liabilities measured and recorded at fair value on a recurring basis (in thousands): June 30, 2022 Level 1 Level 2 Level 3 Total Assets Cash equivalents (1) $ 2,773,062 $ — $ — $ 2,773,062 Customer custodial cash (2) 1,819,169 — — 1,819,169 Crypto assets held (3) 136,286 — — 136,286 Derivative assets (4) — 109,563 — 109,563 Customer crypto assets — 88,453,873 — 88,453,873 Total assets $ 4,728,517 $ 88,563,436 $ — $ 93,291,953 Liabilities Derivative liabilities (4) $ — $ 10,556 $ — $ 10,556 Contingent consideration arrangement — — 6,605 6,605 Customer crypto liabilities — 88,453,873 — 88,453,873 Total liabilities $ — $ 88,464,429 $ 6,605 $ 88,471,034 December 31, 2021 Level 1 Level 2 Level 3 Total Assets Cash equivalents (1) $ 4,813,621 $ — $ — $ 4,813,621 Customer custodial cash (2) 3,566,072 — — 3,566,072 Crypto assets held (3) — 421,685 — 421,685 Derivative assets (4) — 345,429 — 345,429 Total assets $ 8,379,693 $ 767,114 $ — $ 9,146,807 Liabilities Derivative liabilities (4) $ — $ 93,616 $ — $ 93,616 Contingent consideration arrangement — — 14,828 14,828 Total liabilities $ — $ 93,616 $ 14,828 $ 108,444 __________________ (1) Represents money market funds. Excludes $2.7 billion of corporate cash held in deposit at banks and $168.9 million held at venues, which were not measured and recorded at fair value as of June 30, 2022. Excludes $2.1 billion of corporate cash held in deposit at banks and $168.9 million held at venues, which were not measured and recorded at fair value as of December 31, 2021. (2) Represents money market funds. Excludes Customer custodial cash of $5.4 billion and $7.0 billion held in deposit at financial institutions and not measured and recorded at fair value as of June 30, 2022 and December 31, 2021. (3) Includes Crypto assets held that have been designated as hedged items in fair value hedges and excludes crypto assets of $403.4 million and $566.5 million held at cost as of June 30, 2022 and December 31, 2021, respectively. (4) Excludes crypto asset borrowings of $234.8 million and $669.4 million, representing the host liability contract which is not measured and recorded at fair value as of June 30, 2022 and December 31, 2021, respectively. Excludes the host contract of $15.5 million and $17.4 million related to Accounts receivable denominated in crypto assets as of June 30, 2022 and December 31, 2021, respectively. Excludes the host contract of $16.8 million and an immaterial amount related to Other payables denominated in crypto assets as of June 30, 2022 and December 31, 2021, respectively. |
COMMON STOCK (Tables)
COMMON STOCK (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Equity [Abstract] | |
Schedule of common stock reserved for issuance | The Company has reserved shares of Class A common stock and Class B common stock for issuance for the following purposes (in thousands): June 30, December 31, 2022 2021 Class A common stock Options issued and outstanding under the 2013 Amended and Restated Stock Plan (the “2013 Plan”) 1,083 1,569 Options issued and outstanding under the 2019 Equity Incentive Plan (the “2019 Plan”) 27,035 29,311 RSUs issued and outstanding under the 2019 Plan 3,571 5,851 Options issued and outstanding under the 2021 Equity Incentive Plan (the “2021 Plan”) 788 — RSUs issued and outstanding under the 2021 Plan 4,529 1,402 Shares available for future issuance under the 2021 Plan 43,417 35,856 Shares available for future issuance under the 2021 Employee Stock Purchase Plan (the “ESPP”) 7,097 5,125 Replacement options issued and outstanding from the Tagomi acquisition 4 4 Replacement options issued and outstanding from the Bison Trails acquisition 175 223 RSUs issued and outstanding from other acquisitions 229 229 Shares available for future issuance of warrants 2,296 2,296 Total Class A common stock shares reserved 90,224 81,866 Class B common stock Options issued and outstanding under the 2013 Plan 5,322 6,101 Total Class B common stock shares reserved 5,322 6,101 |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of activity of options outstanding | Activity of options outstanding are as follows (in thousands, except per share and years data): Options Outstanding Weighted Average Exercise Price per Share Weighted Average Remaining Contractual Life (Years) Aggregate Intrinsic Value Balance at January 1, 2022 37,208 $ 18.60 7.83 $ 8,698,078 Issued 793 200.19 Exercised (2,207) 14.47 Forfeited and cancelled (1,387) 21.96 Balance at June 30, 2022 34,407 22.91 7.40 950,079 Vested and exercisable at June 30, 2022 17,629 17.04 6.58 547,220 Vested and expected to vest at June 30, 2022 28,273 22.80 7.25 805,562 |
Schedule of share-based payment award, options, valuation assumptions | The assumptions used under the Black-Scholes-Merton option pricing model and the weighted average calculated value of the options granted to employees were as follows: Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 Dividend yield 0.0 % N/A 0.0 % 0.0 % Expected volatility 67.6 % N/A 56.2 % 44.0 % Expected term (in years) 5.8 N/A 5.8 4.8 Risk-free interest rate 3.1 % N/A 1.9 % 0.5 % |
Schedule of activity of RSUs outstanding | Activity of RSUs outstanding are as follows (in thousands, except per share data): Number of shares Weighted-Average Grant Date Fair Value Per Share Balance at January 1, 2022 7,482 $ 157.22 Granted 7,026 154.38 Vested (4,903) 150.95 Forfeited and cancelled (1,276) 168.05 Balance at June 30, 2022 8,329 156.86 |
Schedule of activity of restricted Class A common stock | Activity of restricted Class A common stock is as follows (in thousands, except per share data): Number of shares Weighted-Average Grant Date Fair Value Per Share Balance at January 1, 2022 2,014 $ 137.57 Granted 323 137.05 Vested (667) 141.18 Forfeited and cancelled — — Balance at June 30, 2022 1,670 136.03 |
Schedule of stock based compensation | Stock-based compensation is included in the following components of expenses on the accompanying condensed consolidated statements of operations (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 Technology and development $ 261,232 $ 130,988 $ 517,756 $ 204,245 Sales and marketing 19,396 6,674 34,352 10,204 General and administrative 110,868 51,673 191,529 79,514 Total $ 391,496 $ 189,335 $ 743,637 $ 293,963 |
NET (LOSS) INCOME PER SHARE (Ta
NET (LOSS) INCOME PER SHARE (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Earnings Per Share [Abstract] | |
Schedule of computation of net (loss) income per share | The computation of net (loss) income per share is as follows (in thousands, except per share amounts): Three Months Ended June 30 , Six Months Ended June 30, 2022 2021 2022 2021 Basic net (loss) income per share: Numerator Net (loss) income $ (1,093,654) $ 1,606,349 $ (1,523,313) $ 2,377,812 Less: Income allocated to participating securities — (16,636) — (699,903) Net (loss) income attributable to common stockholders, basic $ (1,093,654) $ 1,589,713 $ (1,523,313) $ 1,677,909 Denominator Weighted-average shares of common stock used to compute net (loss) income per share attributable to common stockholders, basic 220,988 204,728 219,240 142,397 Net (loss) income per share attributable to common stockholders, basic $ (4.95) $ 7.77 $ (6.95) $ 11.78 Diluted net (loss) income per share: Numerator Net (loss) income $ (1,093,654) $ 1,606,349 $ (1,523,313) $ 2,377,812 Less: Income allocated to participating securities — (13,750) — (573,503) Add: Interest on convertible notes, net of tax — 551 — 551 Less: Fair value gain on contingent consideration arrangement, net of tax (6,184) — (6,184) — Net (loss) income attributable to common stockholders - diluted $ (1,099,838) $ 1,593,150 $ (1,529,497) $ 1,804,860 Denominator Weighted-average shares of common stock used to compute net (loss) income per share attributable to common stockholders, basic 220,988 204,728 219,240 142,397 Weighted-average effect of potentially dilutive securities: Stock options — 37,644 — 41,068 RSUs — 4,047 — 3,444 Restricted common stock — 3 — 1 Warrants — — — 145 Convertible notes — 1,725 — 863 Contingent consideration 46 — 46 — Weighted-average shares of common stock used to compute net (loss) income per share attributable to common stockholders, diluted 221,034 248,147 219,286 187,918 Net (loss) income per share attributable to common stockholders, diluted $ (4.98) $ 6.42 $ (6.97) $ 9.60 |
Schedule of potentially dilutive shares | The following potentially dilutive shares were not included in the calculation of diluted shares outstanding as the effect would have been anti-dilutive (in thousands): Three Months Ended June 30 Six Months Ended June 30 2022 2021 2022 2021 Stock options 34,407 6,134 34,407 6,134 RSUs 8,330 1,807 8,330 1,807 Convertible notes 3,880 — 3,880 — Restricted common stock 1,998 — 1,998 — Employee stock purchase plan 1,596 263 1,596 263 Total 50,211 8,204 50,211 8,204 |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Jan. 01, 2022 | Dec. 31, 2021 | |
Accounting Policies [Abstract] | ||||
USDC held | $ 361,714 | $ 100,096 | ||
Customer crypto assets | 88,453,873 | [1] | $ 267,600,000 | |
Customer crypto liabilities | $ 88,453,873 | [2] | $ 267,600,000 | |
[1]Safeguarding assets[2]Safeguarding liabilities |
RESTRUCTURING - Narrative (Deta
RESTRUCTURING - Narrative (Details) | 1 Months Ended |
Jun. 30, 2022 employee | |
Restructuring and Related Activities [Abstract] | |
Number of positions eliminated, period percent | 18% |
Number of positions eliminated | 1,100 |
RESTRUCTURING - Schedule of Res
RESTRUCTURING - Schedule of Restructuring Expenses (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring charges | $ 42,453 | $ 0 | $ 42,453 | $ 0 |
Separation pay | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring charges | 39,259 | 39,259 | ||
Post-employment benefits | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring charges | $ 3,194 | $ 3,194 |
ACQUISITIONS - Narrative (Detai
ACQUISITIONS - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Feb. 01, 2022 | Jan. 04, 2022 | Feb. 08, 2021 | Jun. 30, 2022 | Jun. 30, 2022 | Dec. 31, 2021 | |
Business Acquisition [Line Items] | ||||||
Measurement period adjustments | $ 6,270 | $ 0 | ||||
Unbound Security, Inc. | ||||||
Business Acquisition [Line Items] | ||||||
Measurement period adjustments | $ 4,100 | 4,100 | ||||
Business combination, provisional information, initial accounting incomplete, adjustment, other noncurrent assets | 4,100 | 4,100 | ||||
Total purchase consideration | $ 257,984 | |||||
Cash subject to an indemnity holdback | $ 21,700 | |||||
Holdback release term | 18 months | |||||
Total acquisition costs | $ 3,000 | |||||
Unbound Security, Inc. | Class A common stock | ||||||
Business Acquisition [Line Items] | ||||||
Number of shares to subject to indemnity holdback (in shares) | 85,324 | |||||
FairXchange, Inc. | ||||||
Business Acquisition [Line Items] | ||||||
Measurement period adjustments | 300 | 300 | ||||
Business combination, provisional information, initial accounting incomplete, adjustment, other noncurrent assets | $ 300 | $ 300 | ||||
Total purchase consideration | $ 275,090 | |||||
Cash subject to an indemnity holdback | $ 4,700 | |||||
Holdback release term | 15 months | |||||
FairXchange, Inc. | Class A common stock | ||||||
Business Acquisition [Line Items] | ||||||
Number of shares to subject to indemnity holdback (in shares) | 83,035 | |||||
FairXchange, Inc. | Common Stock, Not Subject to Indemnity Holdback | Class A common stock | ||||||
Business Acquisition [Line Items] | ||||||
Number of shares included in purchase consideration (in shares) | 170,397 | |||||
FairXchange, Inc. | General and administrative | ||||||
Business Acquisition [Line Items] | ||||||
Total acquisition costs | $ 1,100 | |||||
Bison Trails Co. | ||||||
Business Acquisition [Line Items] | ||||||
Total purchase consideration | $ 457,268 | |||||
Holdback release term | 18 months | |||||
Total acquisition costs | $ 3,700 | |||||
Gain on remeasurement | $ 8,800 | |||||
Bison Trails Co. | Class A common stock | ||||||
Business Acquisition [Line Items] | ||||||
Number of shares to subject to indemnity holdback (in shares) | 496,434 |
ACQUISITIONS - Schedule of Unbo
ACQUISITIONS - Schedule of Unbound purchase consideration (Details) - Unbound Security, Inc. $ in Thousands | Jan. 04, 2022 USD ($) |
Business Acquisition [Line Items] | |
Cash | $ 151,424 |
Cash payable | 126 |
Total purchase consideration | 257,984 |
Class A common stock | |
Business Acquisition [Line Items] | |
Equity interests issued and issuable | 103,977 |
RSUs | |
Business Acquisition [Line Items] | |
Equity interests issued and issuable | $ 2,457 |
ACQUISITIONS - Schedule of Un_2
ACQUISITIONS - Schedule of Unbound net assets acquired (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Jan. 04, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Business Acquisition [Line Items] | ||||
Goodwill | $ 1,073,906 | $ 625,758 | $ 77,212 | |
Unbound Security, Inc. | ||||
Business Acquisition [Line Items] | ||||
Cash and cash equivalents | $ 10,560 | |||
Restricted cash | 573 | |||
Accounts and loans receivable, net of allowance | 4,981 | |||
Prepaid expenses and other current assets | 4,182 | |||
Lease right-of-use assets | 1,059 | |||
Property and equipment, net | 1,248 | |||
Goodwill | 222,732 | |||
Intangible assets | 28,500 | |||
Other non-current assets | 3,476 | |||
Total assets | 277,311 | |||
Accounts payable | 719 | |||
Accrued expenses and other current liabilities | 11,325 | |||
Lease liabilities | 1,059 | |||
Other non-current liabilities | 6,224 | |||
Total liabilities | 19,327 | |||
Net assets acquired | $ 257,984 |
ACQUISITIONS - Schedule of Un_3
ACQUISITIONS - Schedule of Unbound finite-lived intangible assets acquired (Details) - Unbound Security, Inc. $ in Thousands | Jan. 04, 2022 USD ($) |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Intangible assets | $ 28,500 |
Developed technology | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Intangible assets | $ 15,700 |
Developed technology | Minimum | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Useful Life at Acquisition (in years) | 1 year |
Developed technology | Maximum | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Useful Life at Acquisition (in years) | 5 years |
IPR&D | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Intangible assets | $ 2,500 |
Customer relationships | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Intangible assets | $ 10,300 |
Useful Life at Acquisition (in years) | 2 years |
ACQUISITIONS - Schedule of Fair
ACQUISITIONS - Schedule of FairXchange purchase consideration (Details) - FairXchange, Inc. $ in Thousands | Feb. 01, 2022 USD ($) |
Business Acquisition [Line Items] | |
Cash | $ 56,726 |
Cash payable | 10,442 |
Total purchase consideration | 275,090 |
Common Stock Issued | Class A common stock | |
Business Acquisition [Line Items] | |
Common stock of the Company | 174,229 |
Common Stock to be Issued | Class A common stock | |
Business Acquisition [Line Items] | |
Common stock of the Company | $ 33,693 |
ACQUISITIONS - Schedule of Fa_2
ACQUISITIONS - Schedule of FairXchange net assets acquired (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Feb. 01, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Business Acquisition [Line Items] | ||||
Goodwill | $ 1,073,906 | $ 625,758 | $ 77,212 | |
FairXchange, Inc. | ||||
Business Acquisition [Line Items] | ||||
Cash and cash equivalents | $ 10,867 | |||
Accounts and loans receivable, net of allowance | 411 | |||
Prepaid expenses and other current assets | 20 | |||
Intangible assets | 41,000 | |||
Goodwill | 231,685 | |||
Other non-current assets | 8,295 | |||
Total assets | 292,278 | |||
Accounts payable | 472 | |||
Accrued expenses and other current liabilities | 5,796 | |||
Other non-current liabilities | 10,920 | |||
Total liabilities | 17,188 | |||
Net assets acquired | $ 275,090 |
ACQUISITIONS - Schedule of Fa_3
ACQUISITIONS - Schedule of FairXchange finite-lived intangible assets acquired (Details) - FairXchange, Inc. $ in Thousands | Feb. 01, 2022 USD ($) |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Intangible assets | $ 41,000 |
DCM License | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Intangible assets | 26,900 |
Developed technology | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Intangible assets | $ 10,700 |
Useful Life at Acquisition (in years) | 5 years |
Trading relationships | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Intangible assets | $ 3,400 |
Useful Life at Acquisition (in years) | 3 years |
ACQUISITIONS - Schedule of Biso
ACQUISITIONS - Schedule of Bison Trails purchase consideration (Details) - Bison Trails Co. $ in Thousands | Feb. 08, 2021 USD ($) |
Business Acquisition [Line Items] | |
Common stock of the Company | $ 389,314 |
Previously held interest on acquisition date | 10,863 |
Cash | 28,726 |
Replacement of Bison Trails options | 28,365 |
Total purchase consideration | $ 457,268 |
ACQUISITIONS - Schedule of Bi_2
ACQUISITIONS - Schedule of Bison Trails net assets acquired (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 | Feb. 08, 2021 | Dec. 31, 2020 |
Business Acquisition [Line Items] | ||||
Goodwill | $ 1,073,906 | $ 625,758 | $ 77,212 | |
Bison Trails Co. | ||||
Business Acquisition [Line Items] | ||||
Cash and cash equivalents | $ 12,201 | |||
Crypto assets held | 5,177 | |||
Accounts and loans receivable, net of allowance | 2,323 | |||
Prepaid expenses and other current assets | 122 | |||
Intangible assets | 39,100 | |||
Goodwill | 404,167 | |||
Other non-current assets | 1,221 | |||
Lease right-of-use assets | 808 | |||
Total assets | 465,119 | |||
Accounts payable | 526 | |||
Accrued expenses and other current liabilities | 1,920 | |||
Lease liabilities | 808 | |||
Other non-current liabilities | 4,597 | |||
Total liabilities | 7,851 | |||
Net assets acquired | $ 457,268 |
ACQUISITIONS - Schedule of Bi_3
ACQUISITIONS - Schedule of Bison Trails finite-lived intangible assets acquired (Details) - Bison Trails Co. $ in Thousands | Feb. 08, 2021 USD ($) |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Intangible assets | $ 39,100 |
IPR&D | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Intangible assets | 1,200 |
Developed technology | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Intangible assets | $ 36,000 |
Useful Life at Acquisition (in years) | 3 years |
User base | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Intangible assets | $ 1,900 |
Useful Life at Acquisition (in years) | 3 years |
REVENUE - Schedule of revenue d
REVENUE - Schedule of revenue disaggregated by source (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Disaggregation of Revenue [Line Items] | ||||
Interest income | $ 32,514 | $ 6,481 | $ 42,968 | $ 9,801 |
Total revenue | 808,325 | 2,227,962 | 1,974,761 | 4,029,073 |
Net revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 802,603 | 2,033,011 | 1,967,494 | 3,629,991 |
Transaction revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 655,213 | 1,930,382 | 1,668,250 | 3,470,961 |
Retail, net | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 616,212 | 1,827,951 | 1,582,054 | 3,283,121 |
Institutional, net | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 39,001 | 102,431 | 86,196 | 187,840 |
Subscription and services revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 147,390 | 102,629 | 299,244 | 159,030 |
Blockchain rewards | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 68,410 | 34,421 | 150,305 | 43,673 |
Custodial fee revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 22,178 | 31,698 | 53,872 | 55,148 |
Earn campaign revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 2,495 | 16,947 | 8,400 | 28,058 |
Other subscription and services revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 21,793 | 13,082 | 43,699 | 22,350 |
Other revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 5,722 | 194,951 | 7,267 | 399,082 |
Crypto asset sales revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 48 | 194,524 | 617 | 398,323 |
Corporate interest and other income | ||||
Disaggregation of Revenue [Line Items] | ||||
Corporate interest and other income | $ 5,674 | $ 427 | $ 6,650 | $ 759 |
REVENUE - Narrative (Details)
REVENUE - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Dec. 31, 2021 | |
Disaggregation of Revenue [Line Items] | |||||
Payment period | 30 days | ||||
Recognized revenue with related parties | $ 2.6 | $ 8 | $ 7.6 | $ 13.3 | |
Amounts receivable from related parties | 1.3 | 1.3 | $ 4.5 | ||
Due to related parties | 2 | 2 | 0 | ||
Custodial fee revenue | |||||
Disaggregation of Revenue [Line Items] | |||||
Amounts receivable from customers, net of allowance | 11 | 11 | $ 22.4 | ||
Crypto asset sales revenue | |||||
Disaggregation of Revenue [Line Items] | |||||
Cost of crypto assets used in fulfilling customer transactions | $ 0 | $ 178.8 | $ 0.3 | $ 365.2 |
REVENUE - Schedule of revenue_2
REVENUE - Schedule of revenue disaggregated by geographic area (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Disaggregation of Revenue [Line Items] | ||||
Total revenue | $ 808,325 | $ 2,227,962 | $ 1,974,761 | $ 4,029,073 |
United States | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 667,214 | 1,870,465 | 1,623,047 | 3,335,900 |
Rest of the World | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | $ 141,111 | $ 357,497 | $ 351,714 | $ 693,173 |
ACCOUNTS AND LOANS RECEIVABLE_3
ACCOUNTS AND LOANS RECEIVABLE, NET OF ALLOWANCE - Schedule of accounts and loans receivable (Details) - USD ($) | Jun. 30, 2022 | Dec. 31, 2021 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
In-transit customer receivables | $ 60,724,000 | $ 102,720,000 |
Trade finance receivables | 144,000 | 1,865,000 |
Custodial fee revenue receivable | 12,755,000 | 23,727,000 |
Loans receivable | 126,004,000 | 218,461,000 |
Interest and other receivables | 61,524,000 | 73,803,000 |
Allowance for doubtful accounts | (15,535,000) | (24,551,000) |
Accounts and loans receivable, net of allowance | 245,616,000 | 396,025,000 |
Loans receivable, allowance for credit loss, excluding accrued interest | 0 | 0 |
Accounts receivable denominated in crypto assets | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Interest and other receivables | 6,700,000 | 26,400,000 |
Unlikely to be Collected Financing Receivable | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Allowance for doubtful accounts | $ (4,300,000) | $ (16,800,000) |
ACCOUNTS AND LOANS RECEIVABLE_4
ACCOUNTS AND LOANS RECEIVABLE, NET OF ALLOWANCE - Narrative (Details) - USD ($) | Jun. 30, 2022 | Dec. 31, 2021 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Financing receivable, excluding accrued interest, after allowance for credit loss, current | $ 126,000,000 | $ 218,500,000 |
Interest receivable | 1,000,000 | 1,300,000 |
Financing receivable, allowance for credit loss, excluding accrued interest, current | 0 | |
Loans receivable | 126,004,000 | 218,461,000 |
Financial Asset, Past Due | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans receivable | $ 0 | $ 0 |
GOODWILL, INTANGIBLE ASSETS, _3
GOODWILL, INTANGIBLE ASSETS, NET AND CRYPTO ASSETS HELD - Schedule of goodwill (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended |
Jun. 30, 2022 | Jun. 30, 2022 | Dec. 31, 2021 | |
Goodwill [Roll Forward] | |||
Balance, beginning of period | $ 625,758 | $ 77,212 | |
Additions due to business combinations | 454,418 | 548,546 | |
Measurement period adjustments | (6,270) | 0 | |
Balance, end of period | $ 1,073,906 | 1,073,906 | $ 625,758 |
Unbound Security, Inc. | |||
Goodwill [Roll Forward] | |||
Measurement period adjustments | (4,100) | (4,100) | |
FairXchange, Inc. | |||
Goodwill [Roll Forward] | |||
Measurement period adjustments | $ (300) | (300) | |
Other Acquisitions | |||
Goodwill [Roll Forward] | |||
Measurement period adjustments | $ (1,900) |
GOODWILL, INTANGIBLE ASSETS, _4
GOODWILL, INTANGIBLE ASSETS, NET AND CRYPTO ASSETS HELD - Narrative (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||||||
Accumulated impairment | $ 0 | $ 0 | $ 0 | $ 0 | ||
Amortization expense of intangible assets | 26,400,000 | $ 8,300,000 | 52,300,000 | $ 15,200,000 | ||
Impairment of intangible assets (excluding goodwill and crypto assets held) | 3,200,000 | 0 | 4,400,000 | 0 | ||
Indefinite-lived Intangible Assets [Line Items] | ||||||
Crypto asset impairment expense | 435,200,000 | $ 174,800,000 | 663,159,000 | $ 175,636,000 | ||
Crypto asset impairment expense | 377,000,000 | 586,800,000 | ||||
Crypto Assets, Loaned To Customers | ||||||
Indefinite-lived Intangible Assets [Line Items] | ||||||
Indefinite-lived intangible assets | $ 100,000 | $ 100,000 | $ 38,100,000 |
GOODWILL, INTANGIBLE ASSETS, _5
GOODWILL, INTANGIBLE ASSETS, NET AND CRYPTO ASSETS HELD - Schedule of intangible assets (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2022 | Dec. 31, 2021 | |
Finite-Lived Intangible Assets [Line Items] | ||
Accumulated Amortization | $ (124,425) | $ (73,159) |
Total expected future amortization expense | 160,157 | |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ||
Total intangible assets, gross carrying amount | 313,933 | 249,848 |
Total accumulated amortization | (124,425) | (73,159) |
Intangible assets, net | 189,508 | 176,689 |
Domain name | ||
Indefinite-lived Intangible Assets [Line Items] | ||
Indefinite-lived intangible assets | 250 | 250 |
Licenses | ||
Indefinite-lived Intangible Assets [Line Items] | ||
Indefinite-lived intangible assets | 26,900 | |
Acquired developed technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, gross carrying amount | 128,292 | 100,908 |
Accumulated Amortization | (57,805) | (34,865) |
Total expected future amortization expense | $ 70,487 | $ 66,043 |
Weighted Average Remaining Useful Life (in years) | 2 years 5 months 19 days | 1 year 11 months 19 days |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ||
Total accumulated amortization | $ (57,805) | $ (34,865) |
User base | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, gross carrying amount | 2,997 | 2,997 |
Accumulated Amortization | (1,585) | (1,020) |
Total expected future amortization expense | $ 1,412 | $ 1,977 |
Weighted Average Remaining Useful Life (in years) | 1 year 3 months | 1 year 9 months |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ||
Total accumulated amortization | $ (1,585) | $ (1,020) |
Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, gross carrying amount | 86,691 | 79,491 |
Accumulated Amortization | (36,621) | (27,789) |
Total expected future amortization expense | $ 50,070 | $ 51,702 |
Weighted Average Remaining Useful Life (in years) | 3 years 10 days | 3 years 8 months 4 days |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ||
Total accumulated amortization | $ (36,621) | $ (27,789) |
Non-compete agreement | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, gross carrying amount | 2,402 | 2,402 |
Accumulated Amortization | (1,401) | (1,161) |
Total expected future amortization expense | $ 1,001 | $ 1,241 |
Weighted Average Remaining Useful Life (in years) | 2 years 1 month 2 days | 2 years 6 months 29 days |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ||
Total accumulated amortization | $ (1,401) | $ (1,161) |
Assembled workforce | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, gross carrying amount | 60,800 | 60,800 |
Accumulated Amortization | (26,541) | (8,324) |
Total expected future amortization expense | $ 34,259 | $ 52,476 |
Weighted Average Remaining Useful Life (in years) | 11 months 8 days | 1 year 5 months 4 days |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ||
Total accumulated amortization | $ (26,541) | $ (8,324) |
Trade Relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, gross carrying amount | 3,400 | |
Accumulated Amortization | (472) | |
Total expected future amortization expense | $ 2,928 | |
Weighted Average Remaining Useful Life (in years) | 2 years 7 months 2 days | |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ||
Total accumulated amortization | $ (472) | |
In process research and development | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, gross carrying amount | 2,201 | 3,000 |
Total expected future amortization expense | $ 2,201 | $ 3,000 |
In process research and development | Pro Forma | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible asset useful life | 3 years | 3 years |
GOODWILL, INTANGIBLE ASSETS, _6
GOODWILL, INTANGIBLE ASSETS, NET AND CRYPTO ASSETS HELD - Schedule of future amortization expense (Details) $ in Thousands | Jun. 30, 2022 USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2022 (for the remainder of) | $ 51,813 |
2023 | 68,869 |
2024 | 21,360 |
2025 | 13,119 |
2026 | 4,818 |
Thereafter | 178 |
Total expected future amortization expense | $ 160,157 |
GOODWILL, INTANGIBLE ASSETS, _7
GOODWILL, INTANGIBLE ASSETS, NET AND CRYPTO ASSETS HELD - Crypto assets held (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Recorded at impaired cost | ||
Indefinite-lived Intangible Assets [Line Items] | ||
Indefinite-lived intangible assets | $ 403,397 | $ 566,508 |
Recorded at fair value | ||
Indefinite-lived Intangible Assets [Line Items] | ||
Indefinite-lived intangible assets | 136,286 | 421,685 |
Total Crypto assets held | ||
Indefinite-lived Intangible Assets [Line Items] | ||
Indefinite-lived intangible assets | 539,683 | 988,193 |
Crypto assets held as investments | Recorded at impaired cost | ||
Indefinite-lived Intangible Assets [Line Items] | ||
Indefinite-lived intangible assets | 289,744 | 209,415 |
Crypto assets held as investments | Recorded at fair value | ||
Indefinite-lived Intangible Assets [Line Items] | ||
Indefinite-lived intangible assets | 1,896 | 0 |
Crypto assets held for operating purposes | Recorded at impaired cost | ||
Indefinite-lived Intangible Assets [Line Items] | ||
Indefinite-lived intangible assets | 113,653 | 357,093 |
Crypto assets borrowed | Recorded at fair value | ||
Indefinite-lived Intangible Assets [Line Items] | ||
Indefinite-lived intangible assets | $ 134,390 | $ 421,685 |
CUSTOMER ASSETS AND LIABILITI_3
CUSTOMER ASSETS AND LIABILITIES (Schedule of Customers' Cash and Crypto Positions) (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Jan. 01, 2022 | Dec. 31, 2021 | Jun. 30, 2021 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |||||
Customer custodial cash | $ 7,181,148 | $ 10,526,233 | $ 8,961,812 | ||
Customer crypto assets | 88,453,873 | [1] | $ 267,600,000 | ||
Total customer assets | 95,635,021 | 10,526,233 | |||
Customer custodial cash liabilities | 7,071,557 | 10,480,612 | |||
Customer crypto liabilities | 88,453,873 | [2] | $ 267,600,000 | ||
Total customer liabilities | $ 95,525,430 | $ 10,480,612 | |||
[1]Safeguarding assets[2]Safeguarding liabilities |
CUSTOMER ASSETS AND LIABILITI_4
CUSTOMER ASSETS AND LIABILITIES (Narrative) (Details) | 6 Months Ended |
Jun. 30, 2022 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Crypto assets to cash ratio | 1 |
CUSTOMER ASSETS AND LIABILITI_5
CUSTOMER ASSETS AND LIABILITIES (Fair Value of Customer Crypto Assets) (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Jan. 01, 2022 | |
Cryptocurrency, by Type [Line Items] | |||
Customer crypto assets | $ 88,453,873 | [1] | $ 267,600,000 |
Percentage of total | 100% | ||
Bitcoin | |||
Cryptocurrency, by Type [Line Items] | |||
Customer crypto assets | $ 41,700,000 | ||
Percentage of total | 47.20% | ||
Ethereum | |||
Cryptocurrency, by Type [Line Items] | |||
Customer crypto assets | $ 18,800,000 | ||
Percentage of total | 21.20% | ||
Other crypto assets | |||
Cryptocurrency, by Type [Line Items] | |||
Customer crypto assets | $ 28,000,000 | ||
Percentage of total | 31.60% | ||
[1]Safeguarding assets |
PREPAID EXPENSES AND OTHER AS_3
PREPAID EXPENSES AND OTHER ASSETS - Schedule of prepaid expenses and other current and non-current assets (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Prepaid expenses and other current assets | ||
Prepaid expenses | $ 129,797 | $ 123,246 |
Deposits | 5,538 | 9,658 |
Other | 11,128 | 2,945 |
Total prepaid expenses and other current assets | 146,463 | 135,849 |
Other non-current assets | ||
Strategic investments | 350,910 | 363,950 |
Deferred tax assets | 909,557 | 573,547 |
Deposits | 12,425 | 13,347 |
Other | 1,823 | 1,463 |
Total other non-current assets | $ 1,274,715 | $ 952,307 |
PREPAID EXPENSES AND OTHER AS_4
PREPAID EXPENSES AND OTHER ASSETS - Schedule of other investments accounted for under the measurement alternative (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Equity Securities without Readily Determinable Fair Value [Roll Forward] | ||
Carrying amount, beginning of period | $ 352,431 | $ 26,146 |
Net additions | 47,208 | 40,071 |
Upward adjustments | 879 | 2,379 |
Previously held interest in Bison Trails (see Note 4) | 0 | (2,000) |
Impairments and downward adjustments | (69,054) | (50) |
Carrying amount, end of period | 331,464 | 66,546 |
Strategic investments that are not accounted for under the measurement alternative | $ 19,400 | $ 11,500 |
PREPAID EXPENSES AND OTHER AS_5
PREPAID EXPENSES AND OTHER ASSETS - Narrative (Details) - USD ($) $ in Millions | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Dec. 31, 2021 | |
Schedule of Equity Method Investments [Line Items] | |||
Upward adjustments due to remeasurement of investments | $ 4.8 | $ 4.6 | |
Impairments and downward adjustments due to remeasurement of investments | 69.6 | $ 0.5 | |
Affiliated Entity | |||
Schedule of Equity Method Investments [Line Items] | |||
Purchase of preferred shares | $ 3.9 | $ 1.2 |
ACCRUED EXPENSES AND OTHER CU_3
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES - Schedule of accounts payable and accrued expenses (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Payables and Accruals [Abstract] | ||
Accrued expenses | $ 220,566 | $ 195,810 |
Accrued payroll and payroll related | 143,882 | 146,313 |
Income taxes payable | 9,652 | 4,553 |
Short-term borrowings | 504 | 20,060 |
Other payables | 82,795 | 72,823 |
Total accrued expenses and other current liabilities | 457,399 | 439,559 |
Other payables denominated in crypto assets | $ 7,200 | $ 0 |
ACCRUED EXPENSES AND OTHER CU_4
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES - Narrative (Details) - USD ($) $ in Thousands | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Dec. 31, 2021 | |
Payables and Accruals [Abstract] | |||
Debt instrument, stated percentage | 4.25% | 5% | |
Short-term Debt [Line Items] | |||
Repayment of short-term borrowings | $ 170,000 | $ 0 | |
Secured Debt | Debt Secured By Bitcoin | |||
Short-term Debt [Line Items] | |||
Debt instrument, collateral, value, percentage of outstanding principal amount | 200% |
INDEBTEDNESS - Schedule of Long
INDEBTEDNESS - Schedule of Long Term Debt (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Debt Instrument [Line Items] | ||
Debt instrument, stated percentage | 4.25% | 5% |
Principal Amount | $ 3,437,500 | $ 3,437,500 |
Unamortized Debt Discount and Issuance Costs | (48,467) | (52,705) |
Net Carrying Amount | $ 3,389,033 | $ 3,384,795 |
Convertible notes | 2026 Convertible Notes | ||
Debt Instrument [Line Items] | ||
Debt instrument, stated percentage | 0.50% | |
Effective interest rate | 0.98% | 0.98% |
Principal Amount | $ 1,437,500 | $ 1,437,500 |
Unamortized Debt Discount and Issuance Costs | (26,465) | (29,436) |
Net Carrying Amount | $ 1,411,035 | $ 1,408,064 |
Senior Notes | 2028 Senior Notes | ||
Debt Instrument [Line Items] | ||
Debt instrument, stated percentage | 3.38% | |
Effective interest rate | 3.57% | 3.57% |
Principal Amount | $ 1,000,000 | $ 1,000,000 |
Unamortized Debt Discount and Issuance Costs | (10,801) | (11,565) |
Net Carrying Amount | $ 989,199 | $ 988,435 |
Senior Notes | 2031 Senior Notes | ||
Debt Instrument [Line Items] | ||
Debt instrument, stated percentage | 3.63% | |
Effective interest rate | 3.77% | 3.77% |
Principal Amount | $ 1,000,000 | $ 1,000,000 |
Unamortized Debt Discount and Issuance Costs | (11,201) | (11,704) |
Net Carrying Amount | $ 988,799 | $ 988,296 |
INDEBTEDNESS - Narrative (Detai
INDEBTEDNESS - Narrative (Details) - USD ($) | Sep. 30, 2021 | May 31, 2021 |
Convertible Senior Notes due 2026 | Convertible notes | ||
Debt Instrument [Line Items] | ||
Face amount of debt | $ 1,440,000,000 | |
2028 Senior Notes | Senior Notes | ||
Debt Instrument [Line Items] | ||
Face amount of debt | $ 1,000,000,000 | |
2031 Senior Notes | Senior Notes | ||
Debt Instrument [Line Items] | ||
Face amount of debt | $ 1,000,000,000 |
INDEBTEDNESS - Schedule of Inte
INDEBTEDNESS - Schedule of Interest Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Debt Disclosure [Abstract] | ||||
Coupon interest | $ 19,234 | $ 800 | $ 38,641 | $ 800 |
Amortization of debt discount and issuance costs | 2,168 | 700 | 4,238 | 700 |
Total | $ 21,402 | $ 1,500 | $ 42,879 | $ 1,500 |
DERIVATIVES - Schedule of notio
DERIVATIVES - Schedule of notional amount of derivative contracts outstanding (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Crypto asset borrowings with embedded derivatives | Designated as fair value hedging instruments | ||
Not designated as hedging instruments | ||
Notional amount of derivative contracts outstanding in native units | 234,805 | 669,445 |
Crypto asset futures | Designated as fair value hedging instruments | ||
Not designated as hedging instruments | ||
Notional amount of derivative contracts outstanding in native units | 2,342 | 0 |
Accounts receivable denominated in crypto assets | Not designated as hedging instruments | ||
Not designated as hedging instruments | ||
Notional amount of derivative contracts outstanding in native units | 15,523 | 17,415 |
Other payables denominated in crypto assets | Not designated as hedging instruments | ||
Not designated as hedging instruments | ||
Notional amount of derivative contracts outstanding in native units | 16,815 | 0 |
DERIVATIVES - Schedule of deriv
DERIVATIVES - Schedule of derivative assets and liabilities (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Gross derivative assets | $ 109,563 | $ 345,429 |
Gross derivative liabilities | 10,556 | 93,616 |
Crypto asset borrowings with embedded derivatives | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Gross derivative assets | 99,989 | 336,396 |
Gross derivative liabilities | 1,732 | 93,616 |
Accounts receivable denominated in crypto assets | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Gross derivative assets | 0 | 9,033 |
Gross derivative liabilities | 8,824 | 0 |
Other payables denominated in crypto assets | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Gross derivative assets | 9,574 | |
Gross derivative liabilities | 0 | |
Not designated as hedging instruments | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Gross derivative assets | 9,574 | 9,033 |
Gross derivative liabilities | 8,824 | 0 |
Not designated as hedging instruments | Crypto asset borrowings with embedded derivatives | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Gross derivative assets | 0 | 0 |
Gross derivative liabilities | 0 | 0 |
Not designated as hedging instruments | Accounts receivable denominated in crypto assets | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Gross derivative assets | 0 | 9,033 |
Gross derivative liabilities | 8,824 | 0 |
Not designated as hedging instruments | Other payables denominated in crypto assets | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Gross derivative assets | 9,574 | |
Gross derivative liabilities | 0 | |
Designated as fair value hedging instruments | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Gross derivative assets | 99,989 | 336,396 |
Gross derivative liabilities | 1,732 | 93,616 |
Designated as fair value hedging instruments | Crypto asset borrowings with embedded derivatives | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Gross derivative assets | 99,989 | 336,396 |
Gross derivative liabilities | 1,732 | 93,616 |
Designated as fair value hedging instruments | Accounts receivable denominated in crypto assets | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Gross derivative assets | 0 | 0 |
Gross derivative liabilities | 0 | $ 0 |
Designated as fair value hedging instruments | Other payables denominated in crypto assets | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Gross derivative assets | 0 | |
Gross derivative liabilities | $ 0 |
DERIVATIVES - Description of De
DERIVATIVES - Description of Derivatives and Related Hedge Accounting Designation (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Not designated as hedging instruments | ||||
Borrowing fees paid in crypto assets | $ 1.6 | $ 2.9 | $ 3 | $ 7.2 |
Minimum | ||||
Not designated as hedging instruments | ||||
Borrowing rate on derivatives | 0% | 0% | 0% | 0% |
Maximum | ||||
Not designated as hedging instruments | ||||
Borrowing rate on derivatives | 7.50% | 3.50% | 7.50% | 3.50% |
DERIVATIVES - Schedule of gains
DERIVATIVES - Schedule of gains (losses) recorded in income (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Not designated as hedging instruments | ||||
Not designated as hedging instruments | ||||
Derivatives | $ 375,716 | $ 448,957 | $ 371,443 | $ 181,557 |
Hedged items | (371,421) | (427,240) | (373,602) | (169,116) |
Income statement impact | 4,295 | 21,717 | (2,159) | 12,441 |
Crypto asset borrowings with embedded derivatives | Designated as fair value hedging instruments | ||||
Not designated as hedging instruments | ||||
Derivatives | 355,071 | 448,957 | 360,069 | 181,557 |
Hedged items | (356,416) | (427,240) | (361,340) | (169,116) |
Income statement impact | (1,345) | 21,717 | (1,271) | 12,441 |
Crypto asset borrowings with embedded derivatives | Not designated as hedging instruments | ||||
Not designated as hedging instruments | ||||
Derivatives | 6,626 | 0 | 6,626 | 0 |
Hedged items | 0 | 0 | 0 | 0 |
Income statement impact | 6,626 | 0 | 6,626 | 0 |
Crypto asset futures | Designated as fair value hedging instruments | ||||
Not designated as hedging instruments | ||||
Derivatives | 15,678 | 0 | 13,012 | 0 |
Hedged items | (15,005) | 0 | (12,262) | 0 |
Income statement impact | 673 | 0 | 750 | 0 |
Crypto asset futures | Not designated as hedging instruments | ||||
Not designated as hedging instruments | ||||
Derivatives | 1,181 | 0 | (511) | 0 |
Hedged items | 0 | 0 | 0 | 0 |
Income statement impact | 1,181 | 0 | (511) | 0 |
Accounts receivable denominated in crypto assets | Not designated as hedging instruments | ||||
Not designated as hedging instruments | ||||
Derivatives | (5,350) | 0 | (10,263) | 0 |
Hedged items | 0 | 0 | 0 | 0 |
Income statement impact | (5,350) | 0 | (10,263) | 0 |
Other payables denominated in crypto assets | Not designated as hedging instruments | ||||
Not designated as hedging instruments | ||||
Derivatives | 2,510 | 0 | 2,510 | 0 |
Hedged items | 0 | 0 | 0 | 0 |
Income statement impact | $ 2,510 | $ 0 | $ 2,510 | $ 0 |
DERIVATIVES - Schedule of cumul
DERIVATIVES - Schedule of cumulative fair value hedge basis adjustments (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||
Carrying amount of the hedged items, Crypto assets held | $ 136,286 | $ 421,685 |
Cumulative amount of fair value hedging adjustments included in the carrying amount of hedged items, active hedging relationships, Crypto assets held | 93,318 | (240,771) |
Cumulative amount of fair value hedging adjustments included in the carrying amount of hedged items, discontinued hedging relationships, Crypto assets held | (3,333) | 0 |
Cumulative amount of fair value hedging adjustments included in the carrying amount of hedged items, total, Crypto assets held | $ 89,985 | $ (240,771) |
FAIR VALUE MEASUREMENTS (Detail
FAIR VALUE MEASUREMENTS (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Jan. 01, 2022 | Dec. 31, 2021 | Jun. 30, 2021 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Cash and cash equivalents | $ 5,682,068 | $ 7,123,478 | $ 4,365,982 | ||
Customer crypto assets | 88,453,873 | [1] | $ 267,600,000 | ||
Customer crypto liabilities | 88,453,873 | [2] | $ 267,600,000 | ||
Customer custodial funds excluded from fair value assets | 5,400,000 | 7,000,000 | |||
Crypto assets held at cost excluded from fair value assets | 403,400 | 566,500 | |||
Carrying value of the outstanding host contract | 234,800 | 669,400 | |||
Accounts receivable denominated in crypto assets | 15,500 | 17,400 | |||
Other payables denominated in crypto assets | 16,800 | 0 | |||
Held in Deposit at Financial Institutions | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Cash and cash equivalents | 2,700,000 | 2,100,000 | |||
Held in Deposit at Venues | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Cash and cash equivalents | 168,900 | 168,900 | |||
Fair Value, Recurring | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Cash and cash equivalents | 2,773,062 | 4,813,621 | |||
Customer custodial cash | 1,819,169 | 3,566,072 | |||
Crypto assets held | 136,286 | 421,685 | |||
Derivative assets | 109,563 | 345,429 | |||
Customer crypto assets | 88,453,873 | ||||
Total assets | 93,291,953 | 9,146,807 | |||
Derivative liabilities | 10,556 | 93,616 | |||
Contingent consideration arrangement | 6,605 | 14,828 | |||
Customer crypto liabilities | 88,453,873 | ||||
Total liabilities | 88,471,034 | 108,444 | |||
Level 1 | Fair Value, Recurring | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Cash and cash equivalents | 2,773,062 | 4,813,621 | |||
Customer custodial cash | 1,819,169 | 3,566,072 | |||
Crypto assets held | 136,286 | 0 | |||
Derivative assets | 0 | 0 | |||
Customer crypto assets | 0 | ||||
Total assets | 4,728,517 | 8,379,693 | |||
Derivative liabilities | 0 | 0 | |||
Contingent consideration arrangement | 0 | 0 | |||
Customer crypto liabilities | 0 | ||||
Total liabilities | 0 | 0 | |||
Level 2 | Fair Value, Recurring | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Cash and cash equivalents | 0 | 0 | |||
Customer custodial cash | 0 | 0 | |||
Crypto assets held | 0 | 421,685 | |||
Derivative assets | 109,563 | 345,429 | |||
Customer crypto assets | 88,453,873 | ||||
Total assets | 88,563,436 | 767,114 | |||
Derivative liabilities | 10,556 | 93,616 | |||
Contingent consideration arrangement | 0 | 0 | |||
Customer crypto liabilities | 88,453,873 | ||||
Total liabilities | 88,464,429 | 93,616 | |||
Level 3 | Fair Value, Recurring | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Cash and cash equivalents | 0 | 0 | |||
Customer custodial cash | 0 | 0 | |||
Crypto assets held | 0 | 0 | |||
Derivative assets | 0 | 0 | |||
Customer crypto assets | 0 | ||||
Total assets | 0 | 0 | |||
Derivative liabilities | 0 | 0 | |||
Contingent consideration arrangement | 6,605 | 14,828 | |||
Customer crypto liabilities | 0 | ||||
Total liabilities | $ 6,605 | $ 14,828 | |||
[1]Safeguarding assets[2]Safeguarding liabilities |
FAIR VALUE MEASUREMENTS - Narra
FAIR VALUE MEASUREMENTS - Narrative (Details) - Level 2 $ in Millions | Jun. 30, 2022 USD ($) |
Convertible notes | Convertible Senior Notes due 2026 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Fair value of notes | $ 820 |
Senior Notes | 2028 and 2031 Senior Notes | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Fair value of notes | $ 1,190 |
COMMON STOCK - Narrative (Detai
COMMON STOCK - Narrative (Details) | Apr. 01, 2021 vote | Jun. 30, 2022 shares | Dec. 31, 2021 shares |
Class A common stock | |||
Class of Stock [Line Items] | |||
Common stock, authorized (in shares) | 10,000,000,000 | 10,000,000,000 | |
Common stock, voting rights per share | vote | 1 | ||
Class B common stock | |||
Class of Stock [Line Items] | |||
Common stock, authorized (in shares) | 500,000,000 | 500,000,000 | |
Common stock, voting rights per share | vote | 20 | ||
Common stock, conversion ratio | 1 | ||
Undesignated common stock | |||
Class of Stock [Line Items] | |||
Common stock, authorized (in shares) | 500,000,000 | ||
Undesignated preferred stock | |||
Class of Stock [Line Items] | |||
Common stock, authorized (in shares) | 500,000,000 |
COMMON STOCK - Schedule of shar
COMMON STOCK - Schedule of shares reserved for future issuance (Details) - shares | Jun. 30, 2022 | Dec. 31, 2021 |
Class A common stock | ||
Class of Stock [Line Items] | ||
Common stock reserved for future issuance (in shares) | 90,224,000 | 81,866,000 |
Options issued and outstanding under the 2013 Amended and Restated Stock Plan (the “2013 Plan”) | ||
Class of Stock [Line Items] | ||
Common stock reserved for future issuance (in shares) | 1,083,000 | 1,569,000 |
Options issued and outstanding under the 2019 Equity Incentive Plan (the “2019 Plan”) | ||
Class of Stock [Line Items] | ||
Common stock reserved for future issuance (in shares) | 27,035,000 | 29,311,000 |
RSUs issued and outstanding under the 2019 Plan | ||
Class of Stock [Line Items] | ||
Common stock reserved for future issuance (in shares) | 3,571,000 | 5,851,000 |
Options issued and outstanding under the 2021 Equity Incentive Plan (the “2021 Plan”) | ||
Class of Stock [Line Items] | ||
Common stock reserved for future issuance (in shares) | 788,000 | 0 |
RSUs issued and outstanding under the 2021 Plan | ||
Class of Stock [Line Items] | ||
Common stock reserved for future issuance (in shares) | 4,529,000 | 1,402,000 |
Shares available for future issuance under the 2021 Plan | ||
Class of Stock [Line Items] | ||
Common stock reserved for future issuance (in shares) | 43,417,000 | 35,856,000 |
Shares available for future issuance under the 2021 Employee Stock Purchase Plan (the “ESPP”) | ||
Class of Stock [Line Items] | ||
Common stock reserved for future issuance (in shares) | 7,097,000 | 5,125,000 |
Replacement options issued and outstanding from the Tagomi acquisition | ||
Class of Stock [Line Items] | ||
Common stock reserved for future issuance (in shares) | 4,000 | 4,000 |
Replacement options issued and outstanding from the Bison Trails acquisition | ||
Class of Stock [Line Items] | ||
Common stock reserved for future issuance (in shares) | 175,000 | 223,000 |
RSUs issued and outstanding from other acquisitions | ||
Class of Stock [Line Items] | ||
Common stock reserved for future issuance (in shares) | 229,000 | 229,000 |
Shares available for future issuance of warrants | ||
Class of Stock [Line Items] | ||
Common stock reserved for future issuance (in shares) | 2,296,000 | 2,296,000 |
Class B common stock | ||
Class of Stock [Line Items] | ||
Common stock reserved for future issuance (in shares) | 5,322,000 | 6,101,000 |
Options issued and outstanding under the 2013 Plan | ||
Class of Stock [Line Items] | ||
Common stock reserved for future issuance (in shares) | 5,322,000 | 6,101,000 |
STOCK-BASED COMPENSATION - Sche
STOCK-BASED COMPENSATION - Schedule of stock option activity (Details) $ / shares in Units, shares in Thousands, $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2022 USD ($) $ / shares shares | Dec. 31, 2021 USD ($) $ / shares shares | |
Options Outstanding | ||
Beginning balance (in shares) | shares | 37,208 | |
Issued (in shares) | shares | 793 | |
Exercised (in shares) | shares | (2,207) | |
Forfeited and cancelled (in shares) | shares | (1,387) | |
Ending balance (in shares) | shares | 34,407 | 37,208 |
Weighted Average Exercise Price per Share | ||
Options outstanding, weighted average exercise price per share - Beginning balance (in dollars per share) | $ / shares | $ 18.60 | |
Options issued, weighted average exercise price per share (in dollars per share) | $ / shares | 200.19 | |
Options exercised, weighted average exercise price per share (in dollars per share) | $ / shares | 14.47 | |
Options forfeited and cancelled, weighted average exercise price per share (in dollars per share) | $ / shares | 21.96 | |
Options outstanding, weighted average exercise price per share - Ending balance (in dollars per share) | $ / shares | $ 22.91 | $ 18.60 |
Stock Option Activity, Additional Disclosures | ||
Options outstanding, Weighted average remaining contractual term | 7 years 4 months 24 days | 7 years 9 months 29 days |
Options outstanding, Aggregate intrinsic value | $ | $ 950,079 | $ 8,698,078 |
Options vested and exercisable, Number of options (in shares) | shares | 17,629 | |
Options vested and exercisable , Weighted average exercise price per share (in dollars per share) | $ / shares | $ 17.04 | |
Options vested and exercisable, Weighted average remaining contractual term | 6 years 6 months 29 days | |
Options vested and exercisable, Aggregate intrinsic value | $ | $ 547,220 | |
Options vested and expected to vest, Number of options (in shares) | shares | 28,273 | |
Options vested and expected to vest, Weighted average exercise price per share (in dollars per share) | $ / shares | $ 22.80 | |
Options vested and expected to vest, Weighted average remaining contractual term | 7 years 3 months | |
Options vested and expected to vest, Aggregate intrinsic value | $ | $ 805,562 |
STOCK-BASED COMPENSATION - Narr
STOCK-BASED COMPENSATION - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Issued (in shares) | 793,000 | |||
Options issued, weighted average exercise price per share (in dollars per share) | $ 200.19 | |||
Total unrecognized compensation cost related to unvested stock options | $ 186,200 | $ 186,200 | ||
Stock based compensation expense | 391,496 | $ 189,335 | 743,637 | $ 293,963 |
Share based payment arrangement, capitalized | $ 70,100 | 0 | $ 71,500 | 700 |
Class A common stock | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Issued (in shares) | 68,745 | 793,496 | ||
Options issued, weighted average exercise price per share (in dollars per share) | $ 49.09 | $ 90.60 | ||
Stock options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock based compensation vesting period | 3 years | |||
Vesting rights, percentage | 8.33% | |||
Unrecognized compensation cost, weighted-average period of recognition | 2 years 7 months 6 days | |||
Number of shares subject to repurchase (in shares) | 282,221 | 282,221 | ||
Value of shares related to repurchase | $ 5,800 | $ 5,800 | ||
Share-based Payment Arrangement | Chief Executive Officer | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock based compensation expense | 1,000 | $ 6,400 | $ 1,900 | $ 6,400 |
RSUs | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Unrecognized compensation cost, weighted-average period of recognition | 1 year 9 months 3 days | |||
Total unrecognized compensation cost | 1,200,000 | $ 1,200,000 | ||
RSUs | Minimum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock based compensation vesting period | 1 year | |||
RSUs | Maximum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock based compensation vesting period | 4 years | |||
Restricted common stock | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock based compensation vesting period | 3 years | |||
Unrecognized compensation cost, weighted-average period of recognition | 1 year 10 months 6 days | |||
Total unrecognized compensation cost | 191,100 | $ 191,100 | ||
Employee stock purchase plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock plan offering period | 24 months | |||
Accumulated payroll deductions | $ 4,600 | $ 4,600 | ||
Employee stock purchase plan | Class A common stock | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Discount on purchase price of common stock | 15% |
STOCK-BASED COMPENSATION - Valu
STOCK-BASED COMPENSATION - Valuation Assumptions (Details) - Stock options | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2022 | Jun. 30, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Dividend yield | 0% | 0% | 0% |
Expected volatility | 67.60% | 56.20% | 44% |
Expected term (in years) | 5 years 9 months 18 days | 5 years 9 months 18 days | 4 years 9 months 18 days |
Risk-free interest rate | 3.10% | 1.90% | 0.50% |
STOCK-BASED COMPENSATION - Sc_2
STOCK-BASED COMPENSATION - Schedule of restricted stock unit and restricted stock activity (Details) shares in Thousands | 6 Months Ended |
Jun. 30, 2022 $ / shares shares | |
RSUs | |
Number of shares | |
Beginning balance (in shares) | shares | 7,482 |
Granted (in shares) | shares | 7,026 |
Vested (in shares) | shares | (4,903) |
Forfeited and cancelled (in shares) | shares | (1,276) |
Ending balance (in shares) | shares | 8,329 |
Weighted-Average Grant Date Fair Value Per Share | |
Beginning balance, weighted-average grant date fair value per share (in dollars per share) | $ / shares | $ 157.22 |
Granted, Weighted-average grant date fair value per share (in dollars per share) | $ / shares | 154.38 |
Vested, Weighted-average grant date fair value per share (in dollars per share) | $ / shares | 150.95 |
Forfeited and cancelled, Weighted-average grant date fair value per share (in dollars per share) | $ / shares | 168.05 |
Ending balance, weighted-average grant date fair value per share (in dollars per share) | $ / shares | $ 156.86 |
Restricted common stock | |
Number of shares | |
Beginning balance (in shares) | shares | 2,014 |
Granted (in shares) | shares | 323 |
Vested (in shares) | shares | (667) |
Forfeited and cancelled (in shares) | shares | 0 |
Ending balance (in shares) | shares | 1,670 |
Weighted-Average Grant Date Fair Value Per Share | |
Beginning balance, weighted-average grant date fair value per share (in dollars per share) | $ / shares | $ 137.57 |
Granted, Weighted-average grant date fair value per share (in dollars per share) | $ / shares | 137.05 |
Vested, Weighted-average grant date fair value per share (in dollars per share) | $ / shares | 141.18 |
Forfeited and cancelled, Weighted-average grant date fair value per share (in dollars per share) | $ / shares | 0 |
Ending balance, weighted-average grant date fair value per share (in dollars per share) | $ / shares | $ 136.03 |
STOCK-BASED COMPENSATION - Sc_3
STOCK-BASED COMPENSATION - Schedule of stock based compensation (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Stock based compensation expense | $ 391,496 | $ 189,335 | $ 743,637 | $ 293,963 |
Technology and development | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Stock based compensation expense | 261,232 | 130,988 | 517,756 | 204,245 |
Sales and marketing | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Stock based compensation expense | 19,396 | 6,674 | 34,352 | 10,204 |
General and administrative | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Stock based compensation expense | $ 110,868 | $ 51,673 | $ 191,529 | $ 79,514 |
INCOME TAXES (Details)
INCOME TAXES (Details) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Income Tax Disclosure [Abstract] | ||||
Effective income tax rate | 11.80% | (84.90%) | 17.70% | (27.50%) |
NET (LOSS) INCOME PER SHARE - S
NET (LOSS) INCOME PER SHARE - Schedule of net income per share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Numerator | ||||
Net (loss) income | $ (1,093,654) | $ 1,606,349 | $ (1,523,313) | $ 2,377,812 |
Less: Income allocated to participating securities | 0 | (16,636) | 0 | (699,903) |
Net (loss) income attributable to common stockholders, basic | $ (1,093,654) | $ 1,589,713 | $ (1,523,313) | $ 1,677,909 |
Denominator | ||||
Weighted-average shares of common stock used to compute net (loss) income per share attributable to common stockholders, basic (in shares) | 220,988 | 204,728 | 219,240 | 142,397 |
Net (loss) income per share attributable to common stockholders, basic (in dollars per share) | $ (4.95) | $ 7.77 | $ (6.95) | $ 11.78 |
Numerator | ||||
Net (loss) income | $ (1,093,654) | $ 1,606,349 | $ (1,523,313) | $ 2,377,812 |
Less: Income allocated to participating securities | 0 | (13,750) | 0 | (573,503) |
Add: Interest on convertible notes, net of tax | 0 | 551 | 0 | 551 |
Less: Fair value gain on contingent consideration arrangement, net of tax | (6,184) | 0 | (6,184) | 0 |
Net (loss) income attributable to common stockholders - diluted | $ (1,099,838) | $ 1,593,150 | $ (1,529,497) | $ 1,804,860 |
Denominator | ||||
Weighted-average shares of common stock used to compute net (loss) income per share attributable to common stockholders, basic (in shares) | 220,988 | 204,728 | 219,240 | 142,397 |
Weighted-average effect of potentially dilutive securities: | ||||
Warrants (in shares) | 0 | 0 | 0 | 145 |
Convertible notes (in shares) | 0 | 1,725 | 0 | 863 |
Contingent consideration (in shares) | 46 | 0 | 46 | 0 |
Weighted-average shares of common stock used to compute net (loss) income per share attributable to common stockholders, diluted (in shares) | 221,034 | 248,147 | 219,286 | 187,918 |
Net (loss) income per share attributable to common stockholders, diluted (in dollars per share) | $ (4.98) | $ 6.42 | $ (6.97) | $ 9.60 |
Stock options | ||||
Weighted-average effect of potentially dilutive securities: | ||||
Share-based compensation plan (in shares) | 0 | 37,644 | 0 | 41,068 |
RSUs | ||||
Weighted-average effect of potentially dilutive securities: | ||||
Share-based compensation plan (in shares) | 0 | 4,047 | 0 | 3,444 |
Restricted common stock | ||||
Weighted-average effect of potentially dilutive securities: | ||||
Share-based compensation plan (in shares) | 0 | 3 | 0 | 1 |
NET (LOSS) INCOME PER SHARE -_2
NET (LOSS) INCOME PER SHARE - Schedule of potentially dilutive shares (Details) - shares shares in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Number of shares excluded in the computation of diluted earnings per share | 50,211 | 8,204 | 50,211 | 8,204 |
Stock options | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Number of shares excluded in the computation of diluted earnings per share | 34,407 | 6,134 | 34,407 | 6,134 |
RSUs | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Number of shares excluded in the computation of diluted earnings per share | 8,330 | 1,807 | 8,330 | 1,807 |
Convertible notes | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Number of shares excluded in the computation of diluted earnings per share | 3,880 | 0 | 3,880 | 0 |
Restricted common stock | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Number of shares excluded in the computation of diluted earnings per share | 1,998 | 0 | 1,998 | 0 |
Employee stock purchase plan | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Number of shares excluded in the computation of diluted earnings per share | 1,596 | 263 | 1,596 | 263 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) | 2 Months Ended |
Aug. 31, 2021 class_action_case | |
Commitments and Contingencies Disclosure [Abstract] | |
Number of purported securities class actions filed | 3 |