Coinbase swings to a $719 million profit, almost all of it from the crypto it holds, as revenue falls 35 percent and prediction markets pass $200 million a year

Coinbase returned to profit in the third quarter, but the headline number owes almost everything to the market rather than the business. The exchange reported net income of $719 million, or $2.51 per diluted share, on Thursday, when analysts polled by Zacks expected a 15-cent loss, according to Decrypt. About $715 million of that came from gains on crypto Coinbase holds as an investment; stripped of those and other investment gains, adjusted net income was $78 million. Adjusted EBITDA was $333 million, up 60 percent from the second quarter and, per CoinDesk, well above the $282.9 million expected.

Revenue told a flatter story: $1.22 billion, unchanged from the second quarter and down 35 percent from a year earlier. Transaction revenue was $590 million, ahead of estimates, and subscriptions and services rose 3 percent to $570 million, nearly half of net revenue. Stablecoins brought in $307 million, with average USDC held on Coinbase products at a record $22 billion. Coinbase's share of global crypto trading volume rose for a fourth straight quarter, to 10.7 percent.

The fastest-growing line is the one Coinbase did not have a year ago. Prediction markets are generating more than $200 million in annualized revenue, with daily traders up more than 60 percent from the prior quarter. "Prediction markets are adding another revenue stream and are less correlated to crypto volatility," CFO Alesia Haas said.

Coinbase said fourth-quarter transaction revenue reached about $165 million through October 25 and trimmed its 2026 adjusted expense guidance by $100 million at the midpoint, to $4.15 billion to $4.3 billion. The shares closed at $160.59, down 1.1 percent, before the results and were little changed after hours. The report landed as Binance disclosed a multibillion-dollar hack; CEO Brian Armstrong said Coinbase was blocking transfers to the compromised wallets, per The Block.