Financial Analysis

4. ACQUISITIONS Information on acquisitions completed during the periods presented is set forth below. The results of operations of all business combinations have been recorded in the Financial Statements since the dates of acquisition. Deribit On August 14, 2025, the Company acquired the outstanding equity of Sentillia B.V. (Deribit), a crypto derivatives exchange. The Company believes this strategic acquisition will play a key role in its goal to be the premier global platform for crypto derivatives. Total consideration transferred in the acquisition, subject to customary post-closing adjustments, was $4.3 billion, consisting of the following (in thousands): Cash $ 721,460 Class A common stock of the Company (1) 3,573,092 Total purchase consideration $ 4,294,552 __________________ (1) Fair value, representing the closing market price of the Companys Class A common stock on the acquisition date. The aggregate purchase consideration includes $150.0 million in cash subject to an indemnity escrow that expires 15 months after the acquisition date. In accordance with ASC 805, Business Combinations (ASC 805), 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, as follows (in thousands): Goodwill $ 2,818,754 Intangible assets 1,390,00 …

BusinessCombinationDisclosureTextBlock · excerpt; the full note is in the filing

20. COMMITMENTS AND CONTINGENCIES Crypto assets and payment stablecoins on platform The Company is obligated to securely store all crypto assets and payment stablecoins held or managed on behalf of customers in digital wallets on the Companys platform, including those within the Companys custody services and all other assets for which the Company holds full keys. As such, the Company may be liable to its users for losses arising from the Companys failure to secure these assets from theft or loss. The Company has not incurred any losses related to such obligations and therefore has not accrued any liabilities as of June 30, 2026 and December 31, 2025. The Company holds full keys to crypto assets and payment stablecoins held or managed on behalf of its customers totaling $245.9 billion and $376.1 billion at fair value at June 30, 2026 and December 31, 2025, respectively. These assets are not recognized in the Condensed Consolidated Balance Sheets. Similarly, as the Company has an obligation to securely store all of these assets, it has a corresponding unrecognized liability of $245.9 billion and $376.1 billion at June 30, 2026 and December 31, 2025, respectively. Since the risk of loss is remote, the Company did not recognize a contingent liability at June 30, 2026 or December 31, 2025. 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 measur …

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11. LONG-TERM DEBT As of June 30, 2026 and December 31, 2025, the Company had fixed-rate convertible notes and senior notes with varying maturities for an aggregate carrying amount of $5.9 billion and $7.2 billion, respectively. As of June 30, 2026 and December 31, 2025, the fair value of the Companys convertible notes and senior notes, based on Level 2 valuation inputs, was $5.2 billion and $6.9 billion, respectively. The Company used cash to repay in full, at maturity, $1.3 billion of aggregate principal amount of its 0.50% convertible notes due June 1, 2026 (the 2026 Convertible Notes). See Note 11. Long-Term Debt to the Consolidated Financial Statements included in the Annual Report for more information regarding the Companys long-term debt. …

DebtDisclosureTextBlock · excerpt; the full note is in the filing

The following table presents revenue disaggregated by type (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Net revenue Transaction revenue Consumer, net $ 451,670 $ 649,908 $ 1,018,569 $ 1,745,414 Institutional, net 100,073 60,819 235,799 159,707 Other transaction revenue, net 47,413 53,543 100,613 121,357 Total transaction revenue 599,156 764,270 1,354,981 2,026,478 Subscription and services revenue Stablecoin revenue (1) 292,147 308,914 597,582 582,951 Blockchain rewards 83,342 144,535 184,191 341,127 Interest and finance fee income (2) 66,128 59,316 133,933 122,402 Other subscription and services revenue 113,528 119,478 222,962 260,376 Total subscription and services revenue 555,145 632,243 1,138,668 1,306,856 Total net revenue 1,154,301 1,396,513 2,493,649 3,333,334 Other revenue Corporate interest and other income (1) 65,767 100,695 139,401 198,169 Total other revenue 65,767 100,695 139,401 198,169 Total revenue $ 1,220,068 $ 1,497,208 $ 2,633,050 $ 3,531,503 __________________ (1) Amounts represent revenue that is not accounted for as revenue from contracts with customers, as defined in ASC 606, Revenue from Contracts with Customers (ASC 606). During the first quarter of 2026, the Company revised the presentation of revenue earned on corporate payment stablecoin balances, now presenting the amounts in Corporate interest and other income rather than in Stablecoin revenue. The associated $23.6 million and $47.1 million for the thr …

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16. STOCK-BASED COMPENSATION Stock options The following is a summary of stock option activity, including performance-based options (in thousands, except per share and years data): Weighted Average Options Outstanding Exercise Price Per Share Remaining Contractual Life (Years) Aggregate Intrinsic Value Balance at January 1, 2026 19,700 $ 25.58 4.3 $ 3,950,983 Exercised (1,070) 10.87 Forfeited and cancelled (13) 136.20 Balance at June 30, 2026 18,617 $ 26.35 3.9 $ 2,253,320 Vested and exercisable at June 30, 2026 14,937 $ 27.06 3.9 $ 1,801,626 Other awards A summary of restricted stock units and performance restricted stock units activity is as follows (in thousands, except per share data): Restricted Stock Units Performance Restricted Stock Units Number of Shares Fair Value (1) Number of Shares Fair Value (1) Balance at January 1, 2026 2,145 $ 247.04 643 $ 55.42 Granted 5,956 165.15 426 156.92 Vested (2,140) 203.75 (643) 55.70 Forfeited and cancelled (764) 174.32 Balance at June 30, 2026 5,197 $ 181.70 426 $ 156.92 __________________ (1) Represents the weighted-average grant date fair value per share. Stock-based compensation The following are the effects of stock-based compensation on the Condensed Consolidated Statements of Operations and Condensed Consolidated Balance Sheets (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Statements of Operations Technology and development $ 152,917 $ 117,240 $ 313,558 $ 225,332 Sales and marketing …

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14. FAIR VALUE MEASUREMENTS Assets and liabilities measured and recorded at fair value on a recurring basis The following table sets forth by level within the fair value hierarchy, the Companys assets and liabilities measured and recorded at fair value on a recurring basis (in thousands): June 30, 2026 December 31, 2025 Level 1 Level 2 Level 1 Level 2 Assets Cash equivalents (1) $ 3,095,370 $ $ 6,088,290 $ Restricted cash equivalents (2) 1,705 1,472 Customer custodial funds (3) 1,864,696 3,438,375 Crypto assets held for operations 86,469 120,831 Crypto asset loan receivables 35,455 14,479 Crypto assets held as collateral 1,645,051 822,827 Crypto assets borrowed 229,076 318,849 Marketable investments (4) 157,543 17,235 253,468 11,903 Crypto assets held for investment 1,468,395 1,998,871 Derivative assets (5) 654,681 181,433 Total assets $ 8,548,305 $ 707,371 $ 13,042,983 $ 207,815 Liabilities Derivative liabilities (5) $ $ 47,444 $ $ 66,590 __________________ (1) Represents money market funds and other short-duration U.S. Treasury holdings. Excludes cash and cash equivalents of $5.5 billion and $5.2 billion as of June 30, 2026 and December 31, 2025, respectively. (2) Represents money market funds. Excludes restricted cash and cash equivalents of $274.1 million and $332.8 million as of June 30, 2026 and December 31, 2025, respectively. (3) Represents customer custodial cash equivalents, which comprise money market funds. Excludes customer custodial funds of $2.4 billion and $1. …

FairValueDisclosuresTextBlock · excerpt; the full note is in the filing

10. GOODWILL AND INTANGIBLE ASSETS, NET Goodwill The following table reflects the changes in the carrying amount of goodwill (in thousands): Carrying Amount Balance at January 1, 2026 $ 4,168,967 Additions due to acquisitions 39,843 Foreign currency translation adjustments (69,320) Balance at June 30, 2026 $ 4,139,490 There was no impairment recognized against goodwill at the beginning or end of the period presented, and no measurement period adjustments during the period presented. Intangible assets, net Intangible assets, net excludes internally developed software and crypto assets, which are presented in Software and equipment, net within Note 13. Condensed Consolidated Balance Sheets Details and in the various crypto assets held line items within the Condensed Consolidated Balance Sheets, respectively. The effects of amortization of Intangible assets, net on the Condensed Consolidated Statements of Operations was as follows (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Technology and development $ 15,356 $ 1,973 $ 31,140 $ 3,697 Sales and marketing 17,774 35,793 General and administrative 1,714 3,317 3,523 6,698 Total amortization expense $ 34,844 $ 5,290 $ 70,456 $ 10,395 There were no material impairment charges associated with these assets during these periods. The Company estimates no significant residual value related to these amortizing intangible assets. The expected future amortization expense for amortizing intangible a …

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18. INCOME TAXES The Companys effective tax rate (ETR) for the three months ended June 30, 2026 and 2025 was 9.1% and 21.7%, respectively. The ETR of 9.1% for the three months ended June 30, 2026 was lower than the U.S. statutory rate of 21.0%, primarily due to a valuation allowance related to realized and unrealized capital losses, partially offset by state taxes. The Companys ETR for the six months ended June 30, 2026 and 2025 was 12.4% and 21.6%, respectively. The ETR of 12.4% for the six months ended June 30, 2026 was lower than the U.S. statutory rate of 21.0%, primarily due to the impact of non-deductible expenses (including stock-based compensation and certain non-US losses) and a valuation allowance related to realized and unrealized capital losses, partially offset by state taxes. The following is a supplemental schedule of cash paid for income taxes (in thousands): Six Months Ended June 30, 2026 2025 Cash paid during the period for income taxes, net of refunds $ 45,143 $ 131,310 As of June 30, 2026, the Company had a net deferred tax asset balance of $682.4 million, compared to $570.8 million as of December 31, 2025. As of each reporting date, management considers new evidence, both positive and negative, that could affect its view of the future realization of deferred tax assets. Management determined that there is sufficient positive evidence to conclude that it is more likely than not that the Companys net deferred tax asset will be fully realized. …

IncomeTaxDisclosureTextBlock · excerpt; the full note is in the filing

Recent accounting pronouncements Accounting pronouncements pending adoption On September 18, 2025, the Financial Accounting Standards Board issued Accounting Standards Update (ASU) No. 2025-06, Targeted Improvements to the Accounting for Internal-Use Software (ASU 2025-06). ASU 2025-06 amends Accounting Standards Codification (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 Financial Statements. …

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21. RELATED PARTY TRANSACTIONS Related party customer activity Certain of the Companys directors, executive officers, and principal owners, including immediate family members, are users of the Companys platform. The Company recognized the following from related party customer activity: Total revenue of $0.9 million and $1.6 million during the three months ended June 30, 2026 and 2025, respectively, and $2.7 million and $5.2 million during the six months ended June 30, 2026 and 2025, respectively; Accounts receivable, net of $0.2 million and $0.4 million as of June 30, 2026 and December 31, 2025, respectively; and Customer custodial funds and Customer custodial fund liabilities of each $6.8 million and $11.0 million as of June 30, 2026 and December 31, 2025, respectively. Related party investments The Company made strategic investments of $1.9 million during both the three and six months ended June 30, 2026, in which certain related parties of the Company held an interest over 10%. During the three and six months ended June 30, 2025, the Company made aggregate strategic investments of $4.7 million and $7.8 million, respectively, …

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3. RESTRUCTURING On May 5, 2026, the Company announced a restructuring plan (the Restructuring) to (i) manage its operating expenses in response to current market conditions and (ii) optimize the Companys operations. The Restructuring involved a reduction of the Company's workforce by approximately 700 employees, and was substantially completed during the second quarter of 2026. For both the three and six months ended June 30, 2026, the Company recognized $52.4 million in total restructuring expenses, consisting primarily of employee severance and other termination benefits, of which $4.0 million was stock-based compensation. …

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5. REVENUE The following table presents revenue disaggregated by type (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Net revenue Transaction revenue Consumer, net $ 451,670 $ 649,908 $ 1,018,569 $ 1,745,414 Institutional, net 100,073 60,819 235,799 159,707 Other transaction revenue, net 47,413 53,543 100,613 121,357 Total transaction revenue 599,156 764,270 1,354,981 2,026,478 Subscription and services revenue Stablecoin revenue (1) 292,147 308,914 597,582 582,951 Blockchain rewards 83,342 144,535 184,191 341,127 Interest and finance fee income (2) 66,128 59,316 133,933 122,402 Other subscription and services revenue 113,528 119,478 222,962 260,376 Total subscription and services revenue 555,145 632,243 1,138,668 1,306,856 Total net revenue 1,154,301 1,396,513 2,493,649 3,333,334 Other revenue Corporate interest and other income (1) 65,767 100,695 139,401 198,169 Total other revenue 65,767 100,695 139,401 198,169 Total revenue $ 1,220,068 $ 1,497,208 $ 2,633,050 $ 3,531,503 __________________ (1) Amounts represent revenue that is not accounted for as revenue from contracts with customers, as defined in ASC 606, Revenue from Contracts with Customers (ASC 606). During the first quarter of 2026, the Company revised the presentation of revenue earned on corporate payment stablecoin balances, now presenting the amounts in Corporate interest and other income rather than in Stablecoin revenue. The associated $23.6 million and $47.1 million …

RevenueFromContractWithCustomerTextBlock · excerpt; the full note is in the filing

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of presentation and preparation The accompanying Condensed Consolidated Financial Statements (the 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 Financial Statements are unaudited but have been prepared in accordance with United States (U.S.) generally accepted accounting principles (GAAP) on the same basis as the audited Consolidated Financial Statements, and in managements opinion, reflect all adjustments, consisting only of normal, recurring adjustments, that are necessary for the fair presentation of the Companys Financial Statements. Preparation of the Financial Statements in accordance with GAAP requires management to make estimates and assumptions in the Financial Statements and notes thereto. The unaudited Condensed Consolidated Results of Operations for the three and six months ended June 30, 2026 are not necessarily indicative of the results to be expected for the full year or any other period and should be read in conjunction with the audited Consolidated Financial Statements and notes thereto included in the Companys Annual Report on Form 10-K for the year ended December 31, 2025 filed with the Securities and Exchange Commission (the SEC) on February 12, 2026 (the Annual Report). Certain prior period amounts in the Financial Statements have been reclas …

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"15. CAPITAL STOCK Repurchase program In October 2024, the Companys board of directors (the Board) authorized and approved a share repurchase program, which provided for the repurchase of up to $1.0 billion of the Companys Class A common stock without expiration and in October 2025, the Board (i) increased the aggregate repurchase authorization under the program from $1.0 billion to $2.0 billion and (ii) expanded the scope of the repurchases to include a portion of the aggregate principal amount of the Companys then-outstanding 2026 Convertible Notes, 2029 Convertible Notes, 2030 Convertible Notes, 2032 Convertible Notes, and both series of Senior Notes (collectively, the ""Notes) (as modified, the Repurchase Program). In January 2026, the Board approved a $2.0 billion increase in the authorization under the previously announced Repurchase Program from $2.0 billion to $4.0 billion . Repurchases may be made from time to time in the open market (including through trading plans intended to qualify under Rule 10b5-1 under the Exchange Act), in privately negotiated transactions, in a tender offer, or by other methods in accordance with the applicable federal and state laws and regulations. The timing and amount of any repurchases will depend on market conditions and other considerations, and will be made at managements discretion. The Repurchase Program does not obligate the Company to repurchase any dollar amount or number of shares of the Companys Class A common stock or Notes a …

StockholdersEquityNoteDisclosureTextBlock · excerpt; the full note is in the filing