Coinbase Swings to $719 Million Q3 Profit on Crypto Gains
In brief
- Coinbase posted $719 million in Q3 net income, or $2.51 per share, against an expected loss, though about $715 million came from gains on crypto it holds. Adjusted net income was $78 million.
- Revenue of $1.22 billion was in line with estimates and flat from the prior quarter, down 35% from a year earlier.
- Prediction markets topped $200 million in annualized revenue, and subscription and services revenue reached nearly half of net revenue.
Coinbase is back in the black, though much of that came from the crypto on its own balance sheet.
The exchange reported third-quarter net income of $719 million, or $2.51 per diluted share, on Thursday, ending a two-quarter losing streak. Analysts had expected a loss of 15 cents per share, according to Zacks. But about $715 million of the profit came from gains on crypto Coinbase holds as an investment. Excluding those and other investment gains, adjusted net income was $78 million.
Total revenue came in at $1.22 billion, in line with expectations, flat from the second quarter and down 35% from a year earlier. Transaction revenue slipped 1% to $590 million but beat the roughly $527 million analysts expected, as crypto volatility sank to multiyear lows and trading volume across the market fell.
The standout was prediction markets, which crossed $200 million in annualized revenue, making it one of the fastest-growing products in Coinbase’s history, the company said.
Daily traders grew more than 60% from the prior quarter, and revenue has compounded 82% per quarter since launch. CEO Brian Armstrong said the product kept “growing even through slower sports months.”
Subscription and services revenue rose 3% to $570 million, nearly half of net revenue, led by $307 million from stablecoins. Average USDC held in Coinbase products hit a record $22 billion. Paid Coinbase One subscribers reached an all-time high, up 24% from a year earlier, and the exchange’s share of global crypto trading volume rose to 10.7%, its fourth straight quarterly gain.
→“Prediction markets are adding another revenue stream and are less correlated to crypto volatility,” CFO Alesia Haas said.
Coinbase also cut its 2026 adjusted expense guidance by another $100 million at the midpoint, to between $4.15 billion and $4.3 billion, following cost reductions in May. Adjusted EBITDA jumped 60% from the prior quarter to $333 million. Through Oct. 25, fourth-quarter transaction revenue stood at about $165 million.
The positive results follow two consecutive losing quarters. Coinbase posted a $394 million loss in the first quarter and missed estimates in the second as trading activity slowed, though analysts said at the time they weren’t worried about the stock’s slide.
Shares closed Thursday at $160.59, down 1.1%, before the results came out, and were little changed in after-hours trading. The stock is down more than 55% from its 52-week high of $361.40.
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