Coinbase Posts $718.7 Million Profit Despite 35% Annual Revenue Decline
Key Facts
Coinbase reported net income of $718.7 million on October 29 for the third quarter ended September 30, 2026, compared with a net loss of $359.5 million in the previous quarter and profit of $432.6 million a year earlier. The return to profitability followed 3 consecutive quarters of losses, according to Reuters, while total revenue fell 35% year over year to $1.2156 billion. Net revenue was $1.1605 billion, down 34% from the year-earlier period. On a quarterly basis, total revenue was broadly stable compared with $1.2201 billion in the second quarter. Adjusted net income, however, was $77.7 million, highlighting the gap between the reported result and the company’s adjusted measure.
The figures attributed the widening gap between net income and adjusted profit to investment gains on crypto assets. Coinbase recorded net gains of $715 million on crypto assets held for investment in the third quarter. The company said it excludes the after-tax impact of gains and losses on those assets when calculating adjusted net income. The $718.7 million figure alone therefore does not reflect the performance of trading and subscription activities during the period. Operating expenses, meanwhile, pointed to a lower cost base; they fell 17% year over year to $1.1539 billion from $1.3882 billion in the third quarter of 2025.
In its core business, transaction revenue fell 44% year over year to $590.2 million, but declined just 1% from the second quarter. Subscription and services revenue was $570.2 million, up 3% quarter over quarter, accounting for 49% of net revenue. Transaction weakness came as total crypto trading volume fell 10% quarter over quarter, while the average crypto market capitalization remained stable. Coinbase said crypto asset volatility was at its lowest levels in several years. These indicators put trading pressure in the context of weaker market activity, while subscription and services revenue maintained quarterly growth.
Consumer transaction revenue was $450 million, broadly stable quarter over quarter, despite a 9% decline in consumer spot crypto trading volume and a 6% drop in crypto derivatives trading volume. The company said growth in prediction markets offset the impact of the declines. Annualized revenue for prediction markets exceeded $200 million in the third quarter. Daily traders also increased by more than 60% quarter over quarter, while the activity’s compound revenue growth rate was 82% per quarter since launch. These figures provide an additional source of revenue alongside traditional trading, at a time when overall crypto market trading volume declined.
For stablecoins, the average USDC held in Coinbase products reached a record $22 billion in the third quarter, up 49% year over year. The company said it was a record for the fourteenth consecutive quarter. This came as part of growth in subscriptions and services, whose revenue reached $570.2 million and accounted for 49% of net revenue. The quarterly figures combine a broader customer base of stable assets with lower transaction revenue than a year earlier. Quarter over quarter, subscription and services revenue rose 3%, while transaction revenue fell 1%.
After the results were announced, Coinbase shares fell 3.3% in after-hours trading on October 29, according to Reuters. In the October 30 session, the stock declined 14.2% even though the company reported quarterly results stronger than analysts’ expectations, according to the Associated Press. The decline came amid a retreat in crypto stocks following a hack of the Binance platform. The agency reported that the attack affected crypto assets worth more than $6 billion. The stock had closed at $160.59 on October 29, according to EL7 data.
Looking ahead, Coinbase forecast subscription and services revenue of between $550 million and $630 million in the fourth quarter of 2026. It said transaction revenue was about $165 million from the start of the quarter through October 25, while cautioning against extrapolating the interim figure. It also lowered its 2026 adjusted expense guidance range to $4.15–$4.30 billion. The company said the midpoint of the new range is 1% below the midpoint of its initial guidance range. These forecasts will be a measure of whether subscription and services growth can continue to offset transaction revenue in the final quarter.