Coinbase Reports $719 Million Q3 Profit, Driven Largely by Crypto Holdings Gains

Coinbase posted third-quarter net income of $719 million, or $2.51 per diluted share, reversing losses from the prior two quarters. The result exceeded analyst expectations of a 15-cent loss per share.

However, the bulk of the profit came from investment gains. Approximately $715 million derived from gains on crypto Coinbase holds on its balance sheet. Excluding investment gains, adjusted net income was $78 million.

Total revenue reached $1.22 billion, matching analyst estimates and remaining flat from the second quarter, though down 35% year-over-year. Transaction revenue slipped to $590 million, down 1% from the prior quarter but beating analyst expectations of roughly $527 million despite declining crypto volatility and lower trading volumes.

Growth in Prediction Markets and Stablecoins

Prediction markets emerged as a standout performer, surpassing $200 million in annualized revenue. Daily traders in prediction markets grew more than 60% from the prior quarter, with revenue compounding 82% per quarter since the product's launch.

Subscription and services revenue rose 3% to $570 million, representing nearly half of net revenue. Stablecoins generated $307 million of this, with average USDC holdings in Coinbase products reaching a record $22 billion. Paid Coinbase One subscribers hit an all-time high, increasing 24% year-over-year.

Market Position and Forward Guidance

Coinbase's share of global crypto trading volume rose to 10.7%, marking the fourth consecutive quarterly gain. Adjusted EBITDA jumped 60% from the prior quarter to $333 million.

The company reduced its 2026 adjusted expense guidance by an additional $100 million at the midpoint, to between $4.15 billion and $4.3 billion, following earlier cost reductions. Through October 25, fourth-quarter transaction revenue stood at approximately $165 million.