Coinbase Global, Inc.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of presentation and preparation

The accompanying Consolidated Financial Statements include the accounts of the Company and its subsidiaries – entities in which the Company holds, directly or indirectly, more than 50% of the voting rights, or where it exercises control. The Consolidated Financial Statements have been prepared in accordance with United States (“U.S.”) generally accepted accounting principles (“GAAP”), and in management’s opinion, reflect all adjustments, consisting only of normal, recurring adjustments, that are necessary for the fair presentation of the Company’s Financial Statements.

Preparation of the Consolidated Financial Statements in accordance with GAAP requires management to make estimates and assumptions in the Consolidated Financial Statements and notes thereto.

Significant estimates and assumptions include the identification and valuation of assets acquired and liabilities assumed in business combinations; the valuation of goodwill and intangible assets, including impairments; the valuation of privately-held strategic investments, including impairments; the determination of the recognition, measurement, and valuation of current and deferred income taxes; the fair value of performance stock-based awards issued; the useful lives of long-lived assets; the impairment of long-lived assets; the fair value of derivatives and loss contingency identification and valuation, including assessing the likelihood of adverse outcomes from positions, claims, and disputes, recoveries of losses recorded, and associated timing.

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 Consolidated 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.

Certain prior period amounts in the Consolidated Financial Statements have been reclassified to conform to the current period’s presentation.

Change in accounting principle

Accounting for payment stablecoins

Effective December 31, 2025, the Company voluntarily elected to change its method of accounting for payment stablecoins to classify them as cash equivalents and to apply the Company’s accounting policies for crypto lending, borrowing, and collateral to payment stablecoin lending, borrowing, and collateral. Payment stablecoins include USDC, EURC, and PYUSD. In prior periods, EURC and PYUSD balances were not material and were presented together with USDC; accordingly, references to “USDC” in prior period disclosures include these stablecoins. The Company previously accounted for payment stablecoins as financial instruments under Accounting Standards Codification (“ASC”) 310, Receivables, and applied the recognition and derecognition criteria under ASC 860, Transfers and Servicing, when transferring (or receiving) payment stablecoins.

The Company believes the reclassification of USDC to Cash and cash equivalents is preferable because it better reflects its economic substance and the manner in which it is utilized by the Company. USDC is readily convertible to known amounts of cash, allowing for near-instant, one-to-one redemption of USDC for U.S. dollars. Furthermore, the underlying reserves backing USDC, comprising cash in segregated accounts titled for benefit of USDC holders and a government money market fund that holds cash, short-duration U.S. Treasuries, and overnight U.S. Treasury repurchase agreements, exhibit the risk and liquidity characteristics of cash equivalents as defined in ASC 230, Statement of Cash Flows.

The Company further believes the application of our accounting policies for crypto lending, borrowing, and collateral to USDC lending, borrowing, and collateral is preferable as it aligns the accounting with our other crypto collateralized arrangements and financing activities and better reflects the risks and transfer of economic benefits of the related transactions.

This change in accounting principle has been applied retrospectively to all periods presented, including in the Consolidated Balance Sheets and Statements of Cash Flows. This reclassification had no effect on previously reported total assets, total liabilities, equity, net income, or earnings per share for any period presented.

The following tables show the changes in presentation in the Consolidated Balance Sheets and Statements of Cash Flows upon the Company’s change in accounting principle (in thousands):

Consolidated Balance Sheets Extract

Consolidated Statements of Cash Flows Extracts

Recent accounting pronouncements

Recently adopted accounting pronouncements

Disaggregation of income statement expenses

On November 4, 2024, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2024-03, Expense Disaggregation Disclosures (“ASU 2024-03”). ASU 2024-03 amends ASC 220, Comprehensive Income, to expand income statement expense disclosures and require disclosure in the notes to the financial statements of specified information about certain costs and expenses. ASU 2024-03 is required to be adopted for fiscal years commencing after December 15, 2026, with early adoption permitted. The Company early adopted ASU 2024-03 on December 31, 2025 on a retrospective basis. See Note 17. Other Consolidated Statements of Operations Details for the disaggregation of relevant expense captions.

Accounting pronouncements pending adoption

On September 18, 2025, the FASB issued ASU No. 2025-06, Targeted Improvements to the Accounting for Internal-Use Software (“ASU 2025-06”). ASU 2025-06 amends ASC 350-40, Intangibles-Goodwill and Other-Internal Use Software, to reflect that software is not always developed in a linear manner, removing all references to development stages and adding new guidance on how to evaluate whether the probable-to-complete threshold has been met. ASU 2025-06 is required to be adopted for fiscal years commencing after December 15, 2027, with early adoption permitted. ASU 2025-06 allows for a prospective, retrospective, or modified transition approach to adoption, based on the status of the project and whether software costs were capitalized before the date of adoption. The Company anticipates using a prospective transition approach and is evaluating the impact of adopting the standard on the Consolidated Financial Statements.

Segment reporting

The Company reports its segment information to reflect the manner in which the CODM reviews and assesses performance. The Company’s Chief Executive Officer and President and Chief Operating Officer have joint responsibility as the CODM and review and assess the performance of the Company as a whole.

The primary financial measures used by the CODM to evaluate performance and allocate resources are net income and operating income (loss). The CODM uses net income and operating income (loss) to evaluate the performance of the Company’s ongoing operations and as part of the Company’s internal planning and forecasting processes. Information on Net income and Operating income (loss) is disclosed in the Consolidated Statements of Operations. Segment expenses and other segment items are provided to the CODM on the same basis as disclosed in the Consolidated Statements of Operations.

The CODM does not evaluate performance or allocate resources based on segment assets, and therefore such information is not presented in the notes to the financial statements.

Revenue recognition

Revenue is recognized when control of the promised goods or services is transferred to the customers, in an amount that reflects the consideration to which the Company expects to be entitled.

Transaction revenue

Consumer and institutional revenue

The Company earns transaction fees primarily from providing crypto asset matching services and executing trades on the Company’s derivative exchanges. The Company considers the matching of buyers and sellers to buy, sell or convert crypto assets or the execution of a derivative trade to be a single performance obligation. The Company considers its performance obligation satisfied, and recognizes revenue, at the point in time the transaction is processed or the trade is executed. Contracts with customers are defined at the transaction level as they are open-ended and may be terminated by either party without penalty.

The transaction price, determined at the transaction level, is calculated based on volume and varies depending on payment type, transaction value, and the Company’s published fee disclosures. Transaction fees may be variable based on tiered discounts driven by trading volume in a prior historical period. Volume-based tiered discounts are not considered material rights as they correspond to the standalone selling prices typically offered to the respective customer class. Transaction fees are reduced by any transaction-specific rebates provided to the customer. In instances where transaction fees are collected in crypto assets, revenue is measured based on the fair value of the crypto assets received at the time of the transaction.

Transaction revenue is recognized net of an allowance for estimated transaction fee reversals (such as credit card chargebacks or bank disputes). These estimates are determined using the most likely amount method, relying on historical experience and judgment regarding the probability of significant reversals. These estimates of variable consideration are reassessed each reporting period. While the reversal of the transaction fee is recorded as a reduction of net revenue, any loss of the underlying crypto asset resulting from the reversal is included in Transaction expense.

The Company applies judgment to determine whether it is the principal or the agent in transactions. The Company evaluates the presentation of revenue on a gross or net basis based on whether it controls the crypto asset or derivative instrument before it is transferred to the customer (gross) or whether it acts as an agent by matching buyers and sellers of crypto assets or executing trades between customers (net). The Company does not control the crypto asset or derivative instrument provided before it is transferred to the buyer, does not have inventory risk, and is not responsible for fulfillment. The Company also does not set the price for the crypto asset or derivative instrument as the price is a market rate established by users of the platform. As a result, the Company has determined that it acts as an agent in transactions between customers.

Other transaction revenue

Other transaction revenue primarily comprises Base sequencer revenue and fees the Company charges customers at the transaction level to process deposits to, and withdrawals from, the Company’s platform. Generally, Other transaction revenue consists of a single performance obligation and is recognized at the time that a transaction is executed. Base sequencer revenue is denominated 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.

Subscription and services revenue

Stablecoin revenue

The Company earns revenue through an arrangement, as updated in August 2023 and further updated in November 2024, with Circle Internet Financial, LLC (“Circle”). The Company’s revenue from this arrangement is determined based on the daily income generated from the reserves backing USDC, which is dependent on the total USDC market capitalization, defined as the total amount of USDC in circulation, less the management fees charged by non-affiliated third parties managing such reserves and certain other expenses (the “Payment Base”). From the Payment Base, (i) Circle retains a portion in consideration of its role as issuer of USDC, (ii) the Company and Circle earn an amount based on the share of USDC held on their respective platforms, (iii) other approved participants in the USDC ecosystem earn an amount based on terms agreed between the approved participant, Circle, and the Company, and (iv) the Company receives 50% of the remaining Payment Base. The arrangement is not within the scope of ASC 606, Revenue from Contracts with Customers (“ASC 606”) as Circle is not a customer of the Company. Revenue is accrued on a monthly basis as it becomes realizable.

Blockchain rewards

Blockchain rewards primarily comprises 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. Blockchain protocols, or the participants that form the protocol networks, reward users for performing various activities on the blockchain. The Company considers itself the principal in transactions with the blockchain networks, and therefore presents such blockchain rewards earned on a gross basis. In exchange for participating in the consensus mechanism of these networks, the Company recognizes revenue 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.

Interest and finance fee income

The Company holds customer custodial funds at certain third-party depository institutions and asset managers, which earn interest. Interest income earned from customer custodial funds is calculated using the interest method and is not within the scope of ASC 606. Financing interest income on fiat and payment stablecoin loan receivables is accrued using the interest method over the term of the loan, and is not within the scope of ASC 606. Financing fees earned on crypto asset loan receivables are denominated in crypto assets and are recognized on an accrual basis over the over term of the loan. The amount earned depends on the total loans issued and the contractual rates.

Other subscription and services revenue

Other subscription and services revenue primarily comprises revenue from: Coinbase One; developer product revenue, including items such as delegation, participation and infrastructure services; custodial fees for a dedicated cold storage solution provided to customers through Prime Custody; and revenue from 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

Corporate interest and other income

Corporate interest and other income primarily comprises interest income earned on corporate cash and cash equivalents, calculated using the interest method and reported within Other revenue in the Consolidated Statements of Operations.

Collateralized arrangements and financing

Lending and related collateral

The Company lends fiat, payment stablecoins, crypto assets borrowed, and crypto assets held for investment to eligible institutional customers. Institutional financing loans may have open ended or fixed terms that are less than one year, with the exception of trade finance arrangements. These arrangements are typically settled in one to three days.

Loan receivables are recorded in Loan receivables in the Consolidated Balance Sheets. Fiat and payment stablecoin loan receivables are measured at amortized cost, which approximates fair value given their short-term nature (generally less than 12 months) and fully collateralized structure. Crypto asset loan receivables are measured at the fair value of the underlying crypto asset loaned, with changes in fair value recognized in Transaction expense in the Consolidated Statements of Operations. Accrued interest is recorded separately within Accounts receivable, net in the Consolidated Balance Sheets. Fee income is recorded in Interest and finance fee income within Net revenue in the Consolidated Statements of Operations.

Institutional financing loans are fully collateralized by a customer’s pledged fiat, payment stablecoins, or crypto assets, as applicable. The Company adheres to strict internal risk management and liquidation protocols for loan counterparty defaults, including restricting trading and withdrawals and liquidating assets in borrowers’ accounts as contractually permitted. The Company continuously and systematically monitors the fair value of the related collateral assets pledged compared to the fair value of the related loan receivable, and if the value of the borrower’s eligible collateral falls below the required collateral requirement, the customer is obligated to deposit additional collateral up to the required collateral level. Accordingly, the Company applies the collateral maintenance provision practical expedient to determine if an allowance for doubtful accounts is required on loan receivables. The Company’s credit exposure is significantly limited and no allowance, write-offs, or recoveries have been recorded against loan receivables for the periods presented due to the collateral requirements the Company applies to such loans, the Company’s process for collateral maintenance, and collateral held on the Company’s platform. The Company would recognize credit losses on these loans if there is a collateral shortfall and it is not reasonably expected that the borrower will replenish such a shortfall. Due to the nature of the collateral the Company requires to be pledged, the Company is readily able to liquidate in the case of the borrower’s default.

The Company recognizes collateral it receives, with an associated obligation to return collateral, when it obtains control of the collateral. The Company does not reuse or rehypothecate customer payment stablecoins or crypto assets nor grant security interests in such assets, in each case unless required by law or expressly agreed to by the customer.

Crypto assets held as collateral are initially recorded at cost and are subsequently remeasured at fair value with changes in fair value recognized in Transaction expense in the Consolidated Statements of Operations. Fair value is measured using quoted crypto asset prices within the Company’s principal market at the time of measurement. Crypto assets held as collateral includes collateral within the Company’s control and may exceed the required contractual amounts. Crypto assets held as collateral are derecognized from the Consolidated Balance Sheets when the collateral is returned to the borrower or when the collateral is sold or rehypothecated. Gains and losses at the time of derecognition are determined on a weighted average cost basis.

Obligation to return collateral in the form of crypto assets is accounted for as a hybrid instrument, with a liability host contract that contains an embedded derivative based on the changes in fair value of the underlying crypto asset. The gain or loss on remeasurement of the Obligation to return collateral is recorded in Transaction expense.

See Note 23. Supplemental Disclosures of Cash Flow Information for details on flows of non-cash collateral, including crypto assets.

Borrowings and related collateral

To facilitate institutional financing loans, the Company may borrow fiat, payment stablecoins and crypto assets from third parties.

Payment stablecoins borrowed by the Company that have not been subsequently sold or rehypothecated are recognized within Cash and cash equivalents with a corresponding liability in Short-term borrowings in the Consolidated Balance Sheets.

Crypto assets borrowed by the Company are recorded in Crypto assets borrowed, and the associated liabilities are recorded in Short-term borrowings in the Consolidated Balance Sheets.

Crypto assets borrowed are initially recorded at cost and are subsequently remeasured at fair value at the end of each reporting period, with changes in fair value recognized in Transaction expense in the Consolidated Statements of Operations. Fair value is measured using quoted crypto asset prices within the Company’s principal market at the time of measurement. Crypto assets borrowed are derecognized from the Consolidated Balance Sheets when they are used to originate loans with customers, in which case they are recorded as Loan receivables in the Consolidated Balance Sheets, or when they are repaid to third parties. Gains and losses at the time of derecognition are determined using the specific identification method.

Crypto asset borrowings are accounted for as hybrid instruments. The liability host contract is not accounted for as a debt instrument because it is not a financial liability and is carried at the initial fair value of the assets acquired. The embedded derivative relates to the changes in the fair value of the underlying crypto asset and is subsequently measured at fair value, with changes in fair value recognized in Transaction expense in the Consolidated Statements of Operations.

The term of these crypto asset borrowings either can be for a fixed term of less than one year or open-ended and repayable at the option of the Company or the lender. These borrowings bear a fee payable by the Company to the lender, which is based on a percentage of the amount borrowed. Fee expenses for crypto asset borrowings are accrued and expensed over the term of the loan and are included in Transaction expense in the Consolidated Statements of Operations.

Under the terms of the Company’s payment stablecoin and crypto asset borrowing arrangements, the Company may be required to maintain a collateral to borrowing ratio and pledge fiat, payment stablecoins, or crypto assets as collateral. The lender is not obligated to return collateral equal to the fair value of the borrowings if the Company defaults on its borrowings. As of December 31, 2025, the Company has not defaulted on any of its borrowings.

The Company’s accounting for pledged collateral is determined by whether control is retained or surrendered. The Company derecognizes collateral it pledges when it loses control of the collateral, resulting in the recognition of the related collateral receivable within Other current assets in the Consolidated Balance Sheets. When the Company retains control of the collateral, fiat and payment stablecoins pledged as collateral are reclassified to Restricted cash and cash equivalents and where crypto assets are pledged, the collateral remains recorded within Crypto assets borrowed or Crypto assets held for investment, each within the Consolidated Balance Sheets.

Customer derivatives and margin

The Company executes trade matching and other trading activities of derivative contracts between customers on its platform. These transactions are subject to margin requirements with customers to help the Company mitigate its exposure to credit risk from a customer’s failure to fulfill its obligations in a trade.

Crypto assets and payment stablecoins pledged by customers to meet margin requirements are not recognized in the Consolidated Balance Sheets unless the customer expressly agrees to transfer control to the Company, in which case they are recognized on the same basis as discussed in the Lending and related collateral section above. Fiat pledged by customers to meet margin requirements is recognized in Customer custodial funds with an offsetting liability in Customer custodial fund liabilities in the Consolidated Balance Sheets.

Cash and cash equivalents

Cash and cash equivalents comprise cash that is not restricted as to withdrawal or use, payment stablecoins, and interest-bearing highly liquid investments, such as money market funds with an initial maturity of three months or less, held in accounts at financial institutions or venues. Financial institutions include asset managers, while venues include payment processors, clearing brokers, and other financial services providers.

Payment stablecoins

Payment stablecoins, which include USDC, EURC, and PYUSD, are redeemable on a one-to-one basis for cash and cash equivalents and are classified as Cash and cash equivalents in the Consolidated Balance Sheets. As of December 31, 2025 and 2024, the reserves backing these payment stablecoins were held by the issuer in cash and cash equivalents in segregated accounts titled for the benefit of payment stablecoins holders.

Funds held at financial institutions

Cash and cash equivalents, excluding payment stablecoins which are held on our platform, are primarily placed with financial institutions which are of high credit quality, primarily in highly liquid, highly rated instruments which are uninsured. The Company may also have corporate deposit balances with financial institutions which exceed the Federal Deposit Insurance Corporation insurance limit of $250,000. The Company has not experienced losses on these accounts and does not believe it is exposed to any significant credit risk with respect to these accounts.

Funds held at venues

The Company holds cash at venues, and performs a regular assessment of these venues as part of its risk management process. As of December 31, 2025 and 2024, the Company held $110.8 million and $88.2 million, respectively, in cash at venues.

Restricted cash and cash equivalents

The Company has restricted cash deposits and interest-bearing highly liquid investments held at financial institutions related to operational reserves. Restricted cash and cash equivalents also includes payment stablecoins pledged as collateral where the Company retains control of the payment stablecoins. These payment stablecoins are contractually restricted and not available for general corporate use until the related borrowings are repaid.

Crypto assets held for operations

The Company may receive crypto assets as a form of payment for transaction revenue, blockchain rewards, and other subscriptions and services revenue, which are recorded in Crypto assets held for operations in the Consolidated Balance Sheets when received. Crypto assets received as a form of payment are converted to cash or used to fulfill expenses, primarily blockchain rewards fees, nearly immediately. Therefore, the associated risk of exposure of these assets to crypto asset price fluctuations, even during periods of significant volatility, has been immaterial. Crypto assets held for operations are initially recorded at the transaction price of the crypto assets at initial recognition and are subsequently remeasured at fair value at the end of each reporting period, with changes in fair value recognized in Losses (gains) on crypto assets held for operations, net in the Consolidated Statements of Operations. Realized gains and losses on disposition are recognized on a first-in-first-out basis. Fair value is measured using quoted crypto asset prices within the Company’s principal market at the time of measurement. Gains and losses are influenced by the volume and mix of crypto assets received and used, and the timing of the turnover of these crypto assets. Cash flows from crypto assets held for operations are recorded as Changes in operating assets and liabilities in the Consolidated Statements of Cash Flows.

Accounts receivable and allowance for doubtful accounts

Accounts receivable are contractual rights to receive cash or crypto assets and consist of stablecoin revenue receivable, customer accounts receivable, and other receivables.

Stablecoin revenue receivable represents the Company’s portion of income earned and receivable on payment stablecoin reserves through its arrangements with the issuers of these stablecoins.

Customer accounts receivable primarily comprises receivables from custodial fee revenue and other transaction fee and subscription and services revenue.

Receivables are recorded at the transaction price when the Company’s performance obligations are satisfied, either at a point in time or over time (typically monthly). Accounts receivable denominated in crypto assets represent rights to receive a fixed amount of crypto assets at the time of invoicing and are initially and subsequently measured at the fair value of the underlying crypto assets to be received, with changes in the fair value recorded in Other operating expense, net in the Consolidated Statements of Operations.

The Company recognizes an allowance for doubtful accounts for accounts receivable based on expected credit losses. In determining expected credit losses, the Company considers historical loss experience and the aging of its accounts receivable balances.

Crypto assets held for investment

Crypto assets held for investment are primarily held long term. The Company does not engage in regular trading of these assets but may lend them or stake them. When crypto assets that were loaned are returned, they continue to be held for investment. See Note 5. Collateralized Arrangements and Financing for details on institutional financing activities.

Crypto assets held for investment are initially recorded at cost and are subsequently remeasured at fair value at the end of each reporting period, with changes in fair value recognized in Losses (gains) on crypto assets held for investment, net in the Consolidated Statements of Operations. Realized gains and losses on disposition are recognized on a specific identification basis. Fair value is measured using quoted crypto asset prices within the Company’s principal market at the time of measurement.

Crypto assets held for investment that are loaned are derecognized and related crypto asset loan receivables are recognized for the period that the loan is outstanding. See discussion of accounting for crypto asset loan receivables under—Lending and related collateral above.

Crypto assets held for investment that are staked remain recorded within Crypto assets held for investment in the Consolidated Balance Sheets. Staking rewards earned by the Company through staking of these assets are recognized as an addition to Crypto assets held for investment and in Other income, net in the Consolidated Statements of Operations in the period received.

Software and equipment, net

Software and equipment, net is stated at cost less associated accumulated depreciation and amortization, and consists mainly of capitalized internally developed software. Depreciation and amortization is computed using the straight-line method over the lesser of the estimated useful life of the asset or the remaining lease term, as applicable. The estimated useful lives of capitalized internally developed software isthree years. The remaining balance of software and equipment consists of furniture and fixtures, computer equipment, and leasehold improvements, for which the useful lives generally range fromone to 10 years.

Capitalized software consists of costs incurred during the application development stage of internal-use software or implementation of a hosting arrangement that is a service contract. Capitalized costs consist of salaries and other compensation costs for employees, fees paid to third-party consultants who are directly involved in development efforts, and costs incurred for upgrades and enhancements to add functionality of the software. Other costs that do not meet the capitalization criteria are expensed as incurred.

Business combinations, goodwill, and acquired intangible assets

The Company accounts for business combinations using the acquisition method. Purchase consideration is allocated to the tangible and identifiable intangible assets acquired and liabilities assumed based on their estimated acquisition-date fair values, with any excess consideration recognized as goodwill. The results of acquired businesses are included in the Consolidated Financial Statements from the date of the acquisition. Acquisition-related costs are expensed as incurred in General and administrative expenses within the Consolidated Statements of Operations.

Estimates of fair value are subject to refinement. During the measurement period, which may be up to one year from the acquisition date, we may record adjustments to the assets acquired and liabilities assumed with the corresponding offset to goodwill, if new information is obtained about facts and circumstances that existed at the acquisition date. Upon the conclusion of the measurement period or final determination of the fair value of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded to the Consolidated Statements of Operations.

Goodwill and indefinite-lived intangible assets are not amortized but are tested for impairment annually on October 1, or more frequently if events or changes in circumstances indicate that it is more likely than not that the asset is impaired. Goodwill is tested at the reporting unit level. If the carrying value of a reporting unit exceeds its fair value, an impairment loss is recognized for the amount of the excess, limited to the total amount of goodwill allocated to that reporting unit.

Acquired intangible assets with a definite useful life are amortized over their estimated useful lives on a straight-line basis. Each period, the Company evaluates the estimated remaining useful life of its intangible assets and whether events or changes in circumstances warrant a revision to the remaining period of amortization. Amortization of acquired developed technology is recorded under Technology and development expense and amortization of other acquired intangible assets is recorded under General and administrative expense in the Consolidated Statements of Operations.

The Company evaluates the recoverability of acquired intangible assets on an annual basis, or more frequently whenever circumstances indicate an intangible asset may be impaired. When indicators of impairment exist, the Company estimates future undiscounted cash flows attributable to such assets. If the future undiscounted cash flows do not exceed the carrying amount of the assets, an impairment loss is measured based upon the difference between the carrying amount and the fair value of the assets.

Long-term debt and interest expense

Long-term debt is carried at amortized cost. The Company accounts for the 2026, 2029, 2030, and 2032 Convertible Notes wholly as debt because (1) the conversion features do not require bifurcation as a derivative under ASC 815, Derivatives and Hedging (“ASC 815”), and (2) these convertible notes were not issued at a substantial discount.

Coupon interest on the Company’s long-term debt comprises the majority of Interest expense in the Consolidated Statements of Operations. Debt discounts and debt issuance costs are also amortized to Interest expense in the Consolidated Statements of Operations using the effective interest method over the contractual term of the respective note.

Capped calls entered into in connection with the Company’s long-term debt meet the criteria for classification in equity, are not remeasured each reporting period, and are included as a reduction to Additional paid-in capital within Total shareholders’ equity in the Consolidated Balance Sheets.

The Company recognizes gains and losses on extinguishment of long-term debt as the difference between the reacquisition price and the net carrying amount of the debt, and these gains and losses are recognized in current-period earnings in Other income, net in the Consolidated Statements of Operations.

Customer custodial funds and Customer custodial fund liabilities

Customer custodial funds represent restricted cash and cash equivalents maintained in segregated accounts of the Company at financial institutions and asset managers that are held for the exclusive benefit of customers and deposits in transit from payment processors and financial institutions. Customer custodial fund liabilities represent the obligation to return cash deposits held by customers in their fiat wallets and unsettled fiat deposits and withdrawals. Deposits in transit represent settlements from third-party payment processors and banks for customer transactions. Deposits in transit are typically received within five business days of the transaction date. The Company establishes withdrawal-based limits in order to mitigate potential losses by preventing customers from withdrawing the associated crypto asset to an external blockchain address until the deposit settles. In certain jurisdictions, deposits in transit qualify as eligible liquid assets to meet regulatory requirements to fulfill the Company’s direct obligations under customer custodial fund liabilities. In these cases, the Company restricts the use of these assets and classifies them as current based on their purpose and availability to fulfill the Company’s direct obligation under Customer custodial fund liabilities in the Consolidated Balance Sheets.

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 applicable customer custodial fund liabilities. Depending on the jurisdiction, eligible liquid assets can include cash and cash equivalents, customer custodial funds, and in-transit customer receivables. As of December 31, 2025 and 2024, the Company’s eligible liquid assets were greater than the aggregate amount of Customer custodial fund liabilities.

Customer custodial funds are primarily placed with financial institutions which are of high credit quality, primarily in highly liquid, highly rated instruments which are uninsured. The Company has not experienced losses on these accounts and does not believe it is exposed to any significant credit risk with respect to these accounts.

Leases

The Company determines if an arrangement is a lease at inception. The Company’s leases are primarily operating leases for corporate offices. Operating lease right-of-use (“ROU”) assets are included in Other non-current assets, and current and non-current lease liabilities are included in Accrued expenses and other current liabilities and Other non-current liabilities, respectively, in the Consolidated Balance Sheets. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of future minimum lease payments over the lease term. Operating lease ROU assets also include any lease payments made before commencement and exclude lease incentives. As the Company’s leases do not generally provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at commencement to determine the present value of future payments. Lease terms include options to extend or terminate the lease when it is reasonably certain that the option will be exercised.

Lease expense is recognized on a straight-line basis over the lease term. The Company has made the policy election to account for short-term leases by recognizing the lease payments in the Consolidated Statements of Operations on a straight-line basis over the lease term and not recognizing these leases in the Consolidated Balance Sheets. The Company has real estate lease agreements with lease and non-lease components for which the Company has made the accounting policy election to account for these agreements as a single lease component.

Derivative contracts

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 receivable or 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.

These 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 Consolidated Balance Sheets at fair value, with changes in fair value recognized in Transaction expense, Other operating expense, net, or Other income, net in the Consolidated Statements of Operations, depending on the nature of the derivative. Cash flows from derivative contracts are recognized as investing activities and adjustments to reconcile Net income to Net cash provided by operating activities in the Consolidated Statements of Cash Flows, depending on the nature of the derivative.

Investments

The Company holds marketable securities and strategic investments, which are recorded within Marketable investments and Strategic investments in the Consolidated Balance Sheets.

Marketable investments primarily include equity securities and are measured and recorded at fair value on a recurring basis. These investments are available for trading subject to any associated lock up.

The Company’s 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. These investments are recorded at cost and adjusted for: (i) observable transactions for same or similar investments of the same issuer (referred to as the measurement alternative) or (ii) impairment.

Marketable and strategic investments activities are recorded in Other income, net in the Consolidated Statements of Operations.

Fair value measurements

The Company measures certain assets and liabilities at fair value. The Company defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value is estimated by applying the following hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement:

•Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.

•Level 2: Observable inputs other than quoted prices in active markets for identical assets and liabilities, quoted prices for identical or similar assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

•Level 3: Inputs that are generally unobservable and typically reflect management’s estimate of assumptions that market participants would use in pricing the asset or liability.

Transaction expense

Transaction expense includes certain costs incurred to operate the Company’s platform, process crypto asset trades, and perform wallet services, and are directly associated with generating revenue. Primary components include blockchain rewards distributed to customers for their participation in blockchain activities such as staking, account verification fees, fees paid to payment processors and other financial institutions for customer transaction activity, blockchain network fees, transaction rebates, and crypto asset losses from transaction reversals. Transaction expense also includes gains and losses from the fair value remeasurement of crypto asset borrowings, obligations to return crypto asset collateral, crypto assets borrowed, crypto assets held as collateral, and crypto asset loan receivables originated with borrowed assets. These items are offsetting by nature and generally net to an immaterial amount. Transaction-level costs are expensed as incurred, while fixed-fee costs are expensed over the contract term. The Company has elected to apply the practical expedient to recognize the incremental costs of obtaining a contract as an expense when incurred if the amortization period of the asset that would otherwise have been recognized is one year or less.

Sales and marketing

The Company defines its selling expenses in accordance with ASC 220 as Sales and marketing expenses as presented in the Consolidated Statements of Operations. These expenses primarily comprise employee-related expenses, marketing programs, USDC rewards, and customer acquisition expenses. Employee-related costs include employee cash, stock-based compensation, and other employee benefits. Marketing programs costs primarily represent third-party advertising expenses. Employee-related advertising costs are immaterial for all periods presented.

Stock-based compensation

Stock plans

The Company maintains the 2021 Equity Incentive Plan (the “2021 Plan”) the 2021 Employee Stock Purchase Plan (the “ESPP”), and two legacy plans: the Amended and Restated 2013 Stock Plan and the 2019 Equity Incentive Plan (collectively, the “Prior Plans”). Following the direct listing in 2021, all new equity awards are granted under the 2021 Plan and ESPP. Additionally, certain awards assumed in connection with acquisitions are governed by their respective original plans.

Evergreen provisions

The 2021 Plan and ESPP provide for automatic annual increases in the number of shares available for issuance on January 1 of each year for 10 years. The increases are equal to the lesser of 5% (for the 2021 Plan) and 1% (for the ESPP) of the total outstanding shares of common stock on the preceding December 31, or a lesser amount determined by the Board.

Awards and vesting

The Company primarily grants restricted stock units (“RSUs”) and restricted stock awards (“RSAs”). The Company previously granted stock options under Prior Plans, which remain outstanding.

RSUs generally vest over a service period ranging fromone tofour years. Performance RSUs (“PRSUs”) vest upon the achievement of specified financial or market-based thresholds. RSAs issued in acquisitions generally vest over three years and are subject to repurchase at par value upon forfeiture.

Stock options outstanding have a contractual term of 10 years. Options under Prior Plans generally vest over four years (25% cliff followed by monthly vesting) and allow for aseven-year post-termination exercise window for certain employees. Outstanding options under the 2021 Plan generally vest quarterly over three years with athree-month post-termination exercise window. Outstanding options also include performance stock options granted to the Chief Executive Officer that vest upon the achievement of specific market conditions, subject to continued service.

Valuation and expense recognition

The Company accounts for stock-based compensation by measuring the fair value of awards at the grant date. For service-based awards, expense is recognized on a straight-line basis over the requisite service period. Forfeitures are recognized as they occur.

The fair value of RSUs is based on the closing market price of the Company’s Class A common stock on the grant date.

For stock options granted in prior periods, fair value was estimated using the Black-Scholes-Merton model. Key assumptions included the expected term (based on historical exercise behavior and contractual terms), historical volatility of the Company’s Class A common stock, risk-free rates based on U.S. Treasury yields, and a zero dividend yield.

Market-based awards, which are performance stock options and PRSUs, are valued using a Monte Carlo simulation. Expense is recognized using the accelerated attribution method and is not reversed if the market condition is not met, provided the requisite service is rendered.

PRSUs subject to financial performance conditions are valued based on the price of the Company’s Class A common stock on the grant date. Expense is recognized when achievement of the condition becomes probable, evaluated at each reporting date, with cumulative adjustments recorded in the period of change.

Income taxes

The Company accounts for income taxes using the asset and liability method whereby deferred tax asset and liability account balances are determined based on temporary differences between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to affect taxable income. A valuation allowance is established when management estimates that it is more likely than not that deferred tax assets will not be realized. Realization of deferred tax assets is dependent upon future pre-tax earnings, the reversal of temporary differences between book and tax income, and the expected tax rates in future periods.

The Company is required to evaluate the tax positions taken in the course of preparing its tax returns to determine whether tax positions are more likely than not of being sustained by the applicable tax authority. Tax benefits of positions not deemed to meet the “more-likely-than-not” threshold would be recorded as a tax expense in the current year. The amount recognized is subject to estimate and management judgment with respect to the likely outcome of each uncertain tax position. The amount that is ultimately sustained for an individual uncertain tax position or for all uncertain tax positions in the aggregate could differ from the amount that is initially recognized. It is the Company’s practice to recognize interest and penalties related to income tax matters in income tax expense.

For U.S. federal tax purposes, crypto asset transactions are treated under the same tax principles as property transactions. The Company recognizes a gain or loss when crypto assets are exchanged for other property, in the amount of the difference between the fair market value of the property received and the tax basis of the exchanged crypto assets. Receipts of crypto assets in exchange for goods or services are included in taxable income at the fair market value on the date of receipt.

Net income (loss) per share

The Company computes net income (loss) per share using the two-class method required for participating securities. The two-class method requires income available to common shareholders for the period to be allocated between common stock and participating securities based upon their respective rights to receive dividends as if all income for the period had been distributed. Certain shares of the Company’s restricted stock granted as consideration in past acquisitions are deemed participating securities. These participating securities do not contractually require the holders of such shares to participate in the Company’s losses.

Basic net income (loss) per share is computed using the weighted-average number of outstanding shares of common stock during the period. Diluted net income (loss) per share is computed using the weighted-average number of outstanding shares of common stock and, when dilutive, potential shares of common stock outstanding during the period. Potential shares of common stock consist of incremental shares issuable upon the assumed exercise of stock options and warrants, vesting of RSUs and restricted stock, conversion of the Company’s convertible notes, and settlement of contingent consideration.

Foreign currency transactions

The Company’s functional currency is the U.S. dollar. The Company has exposure to foreign currency translation gains and losses arising from the Company’s net investment in foreign subsidiaries. The revenues, expenses, and financial results of these foreign subsidiaries are recorded in their respective functional currencies. The financial statements of these subsidiaries are translated into U.S. dollars using a current rate of exchange, with gains or losses, net of tax as applicable, included in Accumulated other comprehensive income (loss) (“AOCI”) within the Consolidated Statements of Changes in Shareholders’ Equity. Cumulative translation adjustments are released from AOCI and recorded in the Consolidated Statements of Operations when the Company disposes or loses control of a consolidated subsidiary. Gains and losses resulting from remeasurement are recorded in Other income, net within the Consolidated Statements of Operations.

Realized gains and losses on changes in foreign currency exchange rates resulting from settlement of the Company’s foreign currency-denominated assets and liabilities and unrealized gains and losses resulting from remeasurement of transactions and monetary assets and liabilities denominated in non-functional currencies are recognized as a component of Other income, net in the Consolidated Statements of Operations.