Total revenue reached $1.22 billion for the three months ended September 30, down 35% year over year but broadly unchanged from the previous quarter. Net revenue, excluding other revenue, stood at $1.16 billion, comprising $590.2 million in transaction revenue and $570.2 million from subscriptions and services.
The results reflect Coinbase’s efforts to reduce its dependence on spot cryptocurrency trading through its expanding Everything Exchange strategy, which combines digital assets, derivatives, prediction markets and financial services.
How Much of Coinbase’s Profit Came From Crypto Gains?
Coinbase recorded a $715 million gain on crypto assets held for investment, compared with $423.9 million in the corresponding quarter last year. These investment gains substantially influenced the headline earnings improvement.
Adjusted net income, which excludes these gains and other specified non-operating items, was just $77.7 million, down from $420.7 million a year earlier. Adjusted EBITDA reached $332.9 million, compared with $800.7 million in the third quarter of 2025.
Meanwhile, transaction revenue declined approximately 44% year over year to $590.2 million, reflecting weaker spot trading activity. Subscription and services revenue also fell approximately 20% annually, although it increased 3% sequentially.
Investor Takeaway
The earnings increase overstates the improvement in underlying profitability, with adjusted net income falling sharply despite the return to GAAP profitability.
Can Prediction Markets Offset Weaker Crypto Trading?
Prediction markets emerged as one of Coinbase’s strongest growth areas. The business surpassed $200 million in annualized revenue during the quarter, doubling its approximately $100 million run rate in the previous quarter. Daily prediction traders increased by more than 60% quarter over quarter.
Coinbase launched its prediction markets offering in February through its partnership with Kalshi. The nationwide rollout followed an initial limited launch, giving customers access to contracts covering sports, politics, economics and other real-world events.
The expansion is beginning to affect the company’s transaction revenue mix. Chief Financial Officer Alesia Haas said prediction markets and derivatives together accounted for approximately 25% of transaction revenue in Q3.
Coinbase also gained crypto trading volume market share for the fourth consecutive quarter across spot and derivatives markets, reaching 10.7% of total crypto trading volume market share.
Management attributed the relative stability of quarterly revenue to prediction markets and subscription services offsetting weaker spot activity. Broader crypto spot trading volume declined 10% quarter over quarter, while Coinbase maintained approximately $1.2 billion in total revenue.
Why Are Subscriptions and Stablecoins Important?
Subscription and services revenue represented 49% of Coinbase’s net revenue, making it an increasingly important contributor alongside transaction fees.
Stablecoin revenue increased 5% quarter over quarter to $307 million, supported by stronger USDC balances. Average USDC held in Coinbase products reached a record $22 billion, approximately 30% of average USDC market capitalization.
Coinbase also reported record paid Coinbase One subscriptions, which increased 24% year over year. Its average daily loan book balance reached an all-time high, up 74% annually.
The company’s stablecoin business benefits from its commercial relationship with Circle, which renewed its USDC agreement with Coinbase in August. The arrangement remains an important component of Coinbase’s stablecoin distribution and revenue model.
Investor Takeaway
USDC balances and subscription growth provide additional revenue sources, although stablecoin economics remain sensitive to interest rates and reserve income.
What Will Determine Coinbase’s Next Growth Phase?
Coinbase’s next challenge is converting its expanding product portfolio into more consistent operating earnings. Prediction markets have demonstrated their ability to generate revenue when cryptocurrency trading slows, but their long-term contribution will depend on customer retention, trading activity and the economics of the underlying exchange infrastructure.
The derivatives business is another important part of this strategy. Following its integration of Deribit, Coinbase is combining global derivatives liquidity with its existing spot and institutional businesses. The company is also preparing to bring back Coinbase Pro, with spot, futures, perpetuals, options and equities expected within a unified trading platform.
Management plans to increase sales and marketing investment in prediction markets during the fourth quarter, using the product to attract new customers and re-engage existing users. That investment could increase near-term costs even as the business expands.
For investors, the distinction between revenue diversification and earnings diversification will remain important. Coinbase has made progress reducing its dependence on spot trading, but the latest results show that its reported profitability can still be heavily influenced by cryptocurrency valuations and investment gains.
