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- Coinbase reported $719 million in third-quarter net income following three consecutive losses.
- Crypto investment gains largely drove the quarterly earnings improvement rather than customer trading cash.
- Coinbase stated that prediction markets surpassed $200 million in annualized revenue during the quarter.
Coinbase recorded $719 million in third-quarter net income on Oct. 29, largely driven by crypto investment gains, as prediction markets expanded. Coinbase returned to profit after three quarterly losses, although total revenue fell 35% from a year earlier.
Crypto Investment Gains Drive Profit
Coinbase earned $718.7 million, or $2.51 per diluted share, for the quarter ended Sept. 30. That compared with $432.6 million a year earlier.
The results included $715 million in gains on crypto assets held for investment. Chief Financial Officer Alesia Haas said:
“Unrealized gains largely drove net income, meaning the earnings improvement did not represent equivalent cash generated by customer trading”
Coinbase’s adjusted net income, which excludes crypto investment gains, other investment gains and related tax effects, was $77.7 million. Its operating income, before investment gains and other nonoperating items, was $61.7 million.
Prediction Markets Expand Beyond Sports
Coinbase stated that the prediction markets surpassed $200 million in annualized revenue during the quarter. The figure expresses revenue at an annual rate; it does not mean the business generated $200 million during those three months.
Daily prediction-market traders increased more than 60% from the preceding quarter. Haas said more than half of contracts traded were outside sports, while prediction markets and derivatives together contributed approximately 25% of transaction revenue.
Coinbase plans to broaden engagement through event hubs and Coinbase One integration. It also plans to build in-house clearing infrastructure using USDC to process payment obligations arising from prediction-market trades.
Revenue Falls Despite Sequential Stability
Total revenue was approximately $1.22 billion, broadly unchanged from the preceding quarter but down 35% from a year earlier. Transaction revenue fell 44% year over year to $590 million, while subscription and services revenue declined 20% to $570 million. The figures indicate that revenue had stabilized quarterly, although both major businesses remained below their year-earlier levels.
Subscription and services revenue increased 3% from the preceding quarter and represented 49% of net revenue. This business helped offset softer trading activity, reducing Coinbase’s reliance on transaction fees. Its annual decline, however, shows that diversification has not insulated the company from broader revenue pressure.
Average USDC held in Coinbase products reached $22 billion, up 49% year over year, while paid Coinbase One subscribers increased 24% over the same period. These increases expand the customer balances and subscription base from which Coinbase can earn revenue. They do not translate directly into matching revenue growth: stablecoin income also depends on interest rates and commercial arrangements.
Adjusted EBITDA reached $333 million, up 60% sequentially, marking its fifteenth consecutive positive quarter. With total revenue broadly flat, that improvement indicates stronger earnings on this adjusted basis, supported by lower expenses. The measure excludes costs such as stock-based compensation and gains on crypto investments, so it differs from both net income and cash flow.
