Coinbase posted a net profit of $719 million in the third quarter, mainly driven by $715 million in crypto asset gains; revenue was flat at $1.22 billion.

Coinbase returned to profitability after two consecutive quarters of losses, but most of its profit did not come from its core business. The largest crypto asset exchange in the U.S. reported third-quarter net income of $719 million, or $2.51 per diluted share, far exceeding analysts’ forecast of a loss of $0.15 per share, according to Zacks. However, about $715 million of that came from gains on the crypto asset portfolio the company holds for investment purposes. Excluding those gains and other investment gains, adjusted net income was just $78 million.

Total revenue was $1.22 billion, in line with market expectations, unchanged from the second quarter but down 35% year over year. Transaction revenue fell 1% to $590 million, but remained above the approximately $527 million analysts had forecast. The results came as crypto asset price volatility fell to its lowest level in several years and trading volumes across the market declined.

Prediction markets emerge as a new growth driver

The quarter’s bright spot was the prediction markets business, with annualized revenue exceeding $200 million. According to the company, it is one of the fastest-growing products in Coinbase’s history. The number of daily traders rose more than 60% from the previous quarter, while revenue has grown at a compound rate of 82% per quarter since launch. CEO Brian Armstrong said the product continues to grow even during months when sports activity is subdued. CFO Alesia Haas emphasized the strategic value of the business: it is a new source of revenue that is less correlated with crypto asset price fluctuations.

Subscription and services revenue grew 3% to $570 million, accounting for nearly half of net revenue, with stablecoins contributing the most at $307 million. The average amount of USDC held across Coinbase products reached a record $22 billion. The number of paid Coinbase One subscribers also hit a record, up 24% year over year. The exchange’s share of global crypto asset trading volume rose to 10.7%, marking its fourth consecutive quarterly increase.

On expenses, following cuts in May, Coinbase further lowered its 2026 adjusted expense forecast by $100 million at the midpoint, to approximately $4.15–$4.3 billion. Adjusted earnings before interest, taxes, depreciation, and amortization rose 60% from the previous quarter to $333 million. As of October 25, fourth-quarter transaction revenue was approximately $165 million.

The third-quarter results came after a difficult period. Coinbase lost $394 million in the first quarter and fell short of expectations in the second quarter as trading activity slowed, although analysts said at the time they were not overly concerned about the stock’s decline.

The market reaction was cautious. Coinbase shares closed Thursday at $160.59, down 1.1% before the results were announced, and were nearly unchanged in after-hours trading. Compared with their 52-week high of $361.40, the shares have lost more than 55% of their value, reflecting investor concerns about the reliance of profits on crypto asset price cycles.