exchange · · 2 outlets
Coinbase reports $719 million Q3 net income driven by crypto gains
Coinbase announced a third-quarter net income of $719 million, concluding a two-quarter period of losses.
This profitability was largely attributed to gains realized on the cryptocurrency assets held by the firm.
Total revenue for the quarter was $1.22 billion, which remained flat compared to the second quarter, although this figure represents a 35% decrease from the prior year. Adjusted net income stood at $78 million.
A significant portion of the profit, approximately $715 million, stemmed from unrealized gains on crypto holdings. Excluding these investment gains and other adjustments, the adjusted net income was $78 million, resulting in diluted earnings per share of $2.51.
Transaction revenue saw a 1% decrease to $590 million, surpassing analyst expectations of about $527 million, despite a decline in overall market trading volume to multiyear lows.
The prediction markets segment proved to be a growth driver, surpassing $200 million in annualized revenue. CEO Brian Armstrong noted that this product kept "growing even through slower sports months." CFO Alesia Haas stated that "Prediction markets are adding another revenue stream and are less correlated to crypto volatility."
Subscription and services revenue increased by 3% to $570 million, contributing nearly half of the net revenue. Average USDC held within Coinbase products reached a record $22 billion.
The exchange's market penetration improved, with its share of global crypto trading volume rising to 10.7%, marking its fourth consecutive quarterly gain. Paid Coinbase One subscribers reached a new high, increasing 24% year-over-year.
The positive financial outcome follows two consecutive quarters where the company reported losses, having posted a $394 million loss in the first quarter. This performance contrasts with the prior year's third quarter, where adjusted EBITDA was $801 million.
These results indicate that institutional and retail market participants are increasingly engaging with non-traditional revenue streams, such as prediction markets, which appear to offer a buffer against general crypto volatility.
Why it matters
This report shows Coinbase returning to profitability, though the reliance on crypto investment gains raises questions about sustained operational strength. The growth in prediction markets signals a diversification strategy that regulators and exchanges will be watching closely for stability.
Reported by Decrypt and crypto.news.
Topics: exchange.
