Crypto exchange Coinbase reported third-quarter net income of $719 million, or $2.51 in diluted earnings per share, ending two consecutive quarters of losses. The market had previously expected a loss of $0.15 per share.
According to the company, about $715 million of that profit came from gains in crypto assets held as investments. Excluding those investment gains, adjusted net income was $78 million.
Revenue and trading business
Total revenue for the quarter was $1.22 billion, in line with expectations, flat quarter over quarter and down 35% from a year earlier. Transaction revenue fell 1% to $590 million, though it still came in above analyst expectations of about $527 million. During the quarter, crypto market volatility dropped to multi-year lows and total market trading volume declined.
Coinbase said its prediction markets business has now surpassed $200 million in annualized revenue, making it one of the fastest-growing products in the company’s history. Daily active traders rose more than 60% from the previous quarter, and revenue from the business has posted 82% compound quarterly growth since launch.
Chief executive Brian Armstrong said the product was still growing "even during the sports off-season."
Subscription and services revenue
Subscription and services revenue rose 3% to $570 million, accounting for nearly half of net revenue. Stablecoins contributed $307 million. Average USDC held across Coinbase products reached a record $22 billion, while paid subscribers to Coinbase One hit an all-time high, up 24% year over year.
Its share of global crypto trading volume rose to 10.7%, marking a fourth straight quarter of gains. Chief financial officer Alesia Haas said prediction markets added another source of revenue with lower correlation to crypto volatility.
Expense guidance and early Q4 figures
Coinbase lowered the midpoint of its 2026 adjusted expense guidance by another $100 million to a range of $4.15 billion to $4.3 billion, after already cutting costs in May. Adjusted EBITDA rose 60% from the prior quarter to $333 million.
As of Oct. 25, fourth-quarter transaction revenue was about $165 million. In the prior two quarters, the company had posted a $394 million loss and then reported second-quarter results that missed expectations.
Share performance
Before the earnings release, Coinbase shares closed at $160.59, down 1.1%. The stock moved little in after-hours trading and remained down more than 55% from its 52-week high of $361.4.
