Coinbase returned to profit in the third quarter, reporting $719 million in net income after losses in the first two quarters of 2026. The biggest lift came from $715 million in gains on crypto assets it holds as investments, rather than fees earned from customers buying and selling coins.
There is an accounting distinction behind those similar-looking numbers. The crypto investment gain is before tax, while net income is after tax and other items. Subtracting $715 million from $719 million would not tell investors how much operating profit Coinbase made.
The adjusted profit was much smaller
The company's earnings release puts adjusted net income at $77.7 million, or about $78 million. That measure removes crypto investment gains, another $39.2 million in other investment gains and their related tax effects. The reconciliation includes a $113.3 million tax adjustment, with reported amounts rounded.
Coinbase says it treats its investment holdings separately because they are primarily long-term positions, and investing in crypto is not part of the revenue-generating business it runs through transactions, subscriptions and services. It does not plan to trade those holdings regularly.
The headline result beat expectations for another loss. Decrypt, citing Zacks, reported that analysts had expected a loss of 15 cents a share. Total revenue was $1.22 billion, broadly unchanged from the second quarter and down 35% from a year earlier.
Transaction revenue came to $590 million, down 1% from the preceding quarter. That is the part of the business most directly exposed to how actively customers trade, and crypto volatility had fallen to multiyear lows during the period. The return to profit therefore came alongside a much softer revenue picture than a year ago.
Prediction markets offer a different source of fees
Coinbase's prediction markets passed $200 million in annualized revenue, according to the company. That describes a yearly pace based on recent activity, rather than $200 million booked during the third quarter.
Daily traders grew more than 60% from the previous quarter, while prediction-market revenue has grown at a compound quarterly rate of 82% since launch. Chief Executive Brian Armstrong said in the announcement:
Prediction markets have been one of the fastest-growing products in Coinbase history, growing even through slower sports months driven by crypto contracts where we have a strong right to win.
As previously reported by Apex, crypto exchanges have been expanding into event contracts as they look for income beyond ordinary token trading. Coinbase also says users who trade predictions are generating additional spot trading volume.
Stablecoins and subscriptions keep growing
Subscription and services revenue rose 3% from the previous quarter to $570 million. That represented 49% of net revenue, a different measure from the total revenue figure above. Stablecoin revenue contributed $307 million, while average USDC held in Coinbase products reached a record $22 billion.
Chief Financial Officer Alesia Haas said:
Prediction markets are adding another revenue stream and are less correlated to crypto volatility.
Paid Coinbase One subscribers also reached a record, up 24% from a year earlier. The company's share of global crypto trading volume rose to 10.7%, its fourth consecutive quarterly increase. Gaining share, however, can happen even when the overall trading market is smaller.
Adjusted EBITDA, another company measure of earnings that excludes items including interest, tax and certain noncash costs, reached $333 million. It rose 60% from the previous quarter and marked the company's fifteenth consecutive positive quarter on that measure.
The stock's immediate response was subdued. At 21:36 UTC on October 29, Nasdaq data showed Coinbase at about $157.55, down 1.90% from its $160.59 regular-session close. The shares had already lost 1.07% during normal trading. Those were moving after-hours prices, rather than a final verdict on the results.