Coinbase returned to profitability in the third quarter, reporting net income of $719 million, or $2.51 per diluted share, on Thursday and closing out a two-quarter losing streak. Analysts had expected a loss of 15 cents per share, according to Zacks.

The exchange is back in the black, though much of the turnaround came from the crypto sitting on its own balance sheet: approximately $715 million of the profit came from gains on the cryptocurrency Coinbase holds as an investment. Excluding those and other investment gains, adjusted net income was $78 million. The gap between the two figures frames the quarter: balance-sheet gains did most of the work, while the core business turned in a slimmer but positive result as trading activity cooled.

Revenue Holds Steady as Trading Activity Cools

Total revenue came in at $1.22 billion, in line with expectations, flat from the second quarter and down 35% from a year earlier. Transaction revenue slipped 1% to $590 million, though it beat the roughly $527 million analysts expected, as crypto volatility sank to multiyear lows and trading volume across the market fell.

The company disclosed the results in its Q3 2026 earnings release.

Prediction Markets Emerge as a Growth Engine

The standout was prediction markets, which crossed $200 million in annualized revenue, making it one of the fastest-growing products in Coinbase's history, the company said. Daily traders grew more than 60% from the prior quarter, and revenue has compounded 82% per quarter since launch. CEO Brian Armstrong said the product kept “growing even through slower sports months.”

“Prediction markets are adding another revenue stream and are less correlated to crypto volatility,” CFO Alesia Haas said. In a quarter when volatility sank to multiyear lows and transaction revenue slipped, that decoupling from crypto swings is central to the company's push to build revenue beyond trading fees.

Subscriptions and Stablecoins Anchor Revenue

Subscription and services revenue rose 3% to $570 million, nearly half of net revenue, led by $307 million from stablecoins. Average USDC held in Coinbase products hit a record $22 billion. Paid Coinbase One subscribers reached an all-time high, up 24% from a year earlier, and the exchange's share of global crypto trading volume rose to 10.7%, its fourth straight quarterly gain. Taken together, those recurring revenue lines supplied much of the quarter's stability while transaction revenue slipped — a mix that now puts nearly half of net revenue outside pure trading.

Cost Cuts Lift Adjusted EBITDA

Coinbase also cut its 2026 adjusted expense guidance by another $100 million at the midpoint, to between $4.15 billion and $4.3 billion, following cost reductions announced in May. Adjusted EBITDA jumped 60% from the prior quarter to $333 million. Through Oct. 25, fourth-quarter transaction revenue stood at about $165 million, an early reading on whether trading activity recovers into year-end.

The positive results follow two consecutive losing quarters. Coinbase posted a $394 million loss in the first quarter and missed estimates in the second as trading activity slowed, though analysts said at the time they weren't worried about the stock's slide.

Shares closed Thursday at $160.59, down 1.1%, before the results came out, and were little changed in after-hours trading. The stock is down more than 55% from its 52-week high of $361.40.