Coinbase Returns to Profit of $719 Million, but Most Comes from Crypto Asset Gains

Coinbase returned to profitability after two consecutive loss-making quarters: net income for the third quarter was $719 million, or $2.51 per diluted share. Analysts from Zacks had expected a loss of 15 cents per share. However, about $715 million of the profit came from the increase in value of crypto assets that Coinbase holds as an investment. Without these and other investment gains, adjusted net income was $78 million.

Total revenue was $1.22 billion, in line with expectations, unchanged from the second quarter, and down 35% year-over-year. Transactional revenue decreased by 1% to $590 million but exceeded analysts' expectations of around $527 million: cryptocurrency market volatility reached multi-year lows, and trading volumes fell.

The best performance was shown by the prediction markets: the segment's annual revenue exceeded $200 million, and the company calls it one of the fastest-growing products in its history. Daily traders increased by more than 60% compared to the previous quarter, and revenue grew by 82% quarterly since launch. "The product continued to grow even during months of sports lull," said CEO Brian Armstrong.

Revenue from subscriptions and services grew by 3% to $570 million - almost half of net revenue; stablecoins brought in $307 million. The average volume of USDC in Coinbase products reached a record $22 billion. Coinbase One subscribers are at a historic high, +24% year-over-year, and the company's share of the global cryptocurrency trading market increased to 10.7% - the fourth consecutive quarter of growth. "Prediction markets add another source of income and are less correlated with the volatility of crypto assets," noted CFO Alesia Haas. Coinbase reduced its forecast for adjusted expenses for 2026 by another $100 million at the midpoint - to $4.15–4.3 billion. Adjusted EBITDA increased by 60% to $333 million.

As of October 25, transactional revenue for the fourth quarter was approximately $165 million. Previously, Coinbase reported a $394 million loss in the first quarter and fell short of forecasts in the second amid a slowdown in trading. Shares closed Thursday at $160.59, down 1.1% before publication, and remained almost unchanged after closing. The stock is more than 55% below the 52-week high of $361.40.