Coinbase Q3 net income reaches $719 million on crypto holdings

By Tom Whitfield

Coinbase reported $719 million in third-quarter net income, 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, making the result a substantial swing from consensus.

What drove the $719 million profit?

About $715 million of the profit came from gains on cryptocurrency Coinbase holds as an investment. Excluding those gains and other investment gains, adjusted net income stood at $78 million, showing that the headline result depended heavily on Coinbase’s own balance sheet rather than exchange operations.

Revenue totaled $1.22 billion, matching estimates, unchanged from the second quarter and down 35% from a year earlier. The year-over-year contraction left recurring products and Coinbase’s crypto portfolio carrying greater weight in reported earnings.

How did trading and prediction markets perform?

Crypto volatility sank to multiyear lows, and trading volume across the broader market fell. Transaction revenue slipped 1% to $590 million, but beat the roughly $527 million analysts expected.

Prediction markets crossed $200 million in annualized revenue, which Coinbase called one of the fastest-growing products in its history. Daily traders increased more than 60% from the prior quarter, while revenue compounded at 82% per quarter since launch.

CEO Brian Armstrong said the product kept “growing even through slower sports months.” CFO Alesia Haas said: “Prediction markets are adding another revenue stream and are less correlated to crypto volatility.”

What changed in subscription and services?

Subscription and services revenue rose 3% to $570 million, nearly half of net revenue. Stablecoins generated $307 million of that total, while the average amount of USDC held in Coinbase products reached a record $22 billion.

Paid Coinbase One subscribers also reached an all-time high, increasing 24% from a year earlier. Coinbase’s share of global crypto trading volume rose to 10.7%, marking its fourth consecutive quarterly gain.

The product mix shows Coinbase diversifying beyond transaction revenue. Prediction markets supplied the fastest reported growth rate, while stablecoin balances and subscription revenue provided larger recurring revenue channels.

How did Coinbase adjust costs, and what is visible in Q4?

Coinbase reduced its 2026 adjusted-expense guidance by another $100 million at the midpoint, to a range of $4.15 billion to $4.30 billion. The change followed cost reductions announced in May.

Adjusted EBITDA increased 60% from the prior quarter to $333 million. Through Oct. 25, fourth-quarter transaction revenue stood at about $165 million, providing Coinbase with a partial read on the current quarter.

The profitable result followed consecutive losses in the first and second quarters. Coinbase posted a $394 million loss in the first quarter and missed estimates in the second as trading activity slowed. Analysts at the time said they were not worried about the stock’s decline.

How did shares react?

Shares closed Thursday at $160.59, down 1.1% before the results, and were little changed in after-hours trading. They remained more than 55% below the 52-week high of $361.40.

The next operating checkpoints are whether fourth-quarter transaction revenue builds beyond the roughly $165 million recorded through Oct. 25 and whether Coinbase holds its 10.7% trading share while containing adjusted expenses within the lowered 2026 range.