Coinbase Q3 Earnings: Profit Jumps 66% While Revenue Falls 35%

$715 million. That is how much of Coinbase's third quarter profit came from the rising value of crypto the company holds on its own balance sheet, and it explains why Coinbase Q3 earnings looked strong on paper yet pushed the stock lower. The exchange reported net income of $719 million for the three months ended September 30, up 66% from a year earlier, in its Q3 2026 earnings release on October 29.

Take the investment gains out and the quarter shrinks fast. Shares closed Thursday at $160.59, according to The Block. By Friday morning CoinDesk reported the stock was down about 12% near $140, in a market still reeling from the $6.3 billion Binance hack.

Coinbase's quarter in eight figures

• $719 million in net income, compared with about $433 million a year earlier.
• $78 million in adjusted net income once gains on crypto and other investments are removed.
• $715 million gain on crypto held for investment, up from $424 million in the year ago quarter, per The Block.
• $1.22 billion in total revenue, roughly flat from the second quarter and down 35% year over year, according to The Block.
• $333 million in adjusted EBITDA, up 60% from the second quarter and the 15th positive quarter in a row.
• $135 billion in spot trading volume, down 8% from the prior quarter (The Block).
• $22 billion in average USDC held in Coinbase products, a record and 49% higher than a year ago.
• $200 million and up in annualized prediction market revenue.

A $719 million profit, and only $78 million from running the business

Coinbase keeps a large pile of crypto as an investment. Accounting rules require the company to mark those holdings to market each quarter, so when prices rise, the paper gain flows straight into net income. In Q3 that gain was $715 million, nearly the entire headline profit.

Adjusted net income, which strips out those gains along with $39 million in other investment gains, came to $78 million. That is the figure closer to what the exchange earned from customers. Coinbase itself described the period as "a softer crypto market," and the numbers back that up: revenue was down by about a third from a year ago and spot volume slipped again.

Investors tend to look past mark to market swings, which is why a 66% jump in profit did not stop a double digit drop in the share price.

Subscriptions now bring in half the revenue

The steadier part of Coinbase is growing in importance. Subscription and services revenue made up 49% of net revenue in Q3. "Subscription and services revenue grew quarter over quarter and now represents nearly half of net revenue," CFO Alesia Haas said in the release.

Stablecoins do most of the lifting here. The Block reports stablecoin revenue of $328 million, up 3% from the second quarter, including $21 million tied to USDC held in corporate balances. Average USDC in Coinbase products hit $22 billion, which the company says is about 30% of USDC's average market cap. Coinbase also says it captured roughly half of all USDC economics over the past year, a share that matters as rivals push their own dollar tokens, including the RLUSD listing that went live on Coinbase this week.

Two other numbers point the same way. Paid Coinbase One subscribers reached an all time high, up 24% year over year, and the average daily loan book balance rose 74% from a year earlier.

Prediction markets doubled in a single quarter

The fastest growing line was not crypto trading at all. Prediction markets passed $200 million in annualized revenue, roughly double the $100 million pace of the prior quarter, according to The Block. Coinbase says the product has grown at an 82% quarterly compound rate since launch and that daily traders rose more than 60% from the second quarter.

In a note cited by The Block, Bernstein estimated that prediction markets and derivatives together made up about 25% of transaction revenue, or about 12% of total revenue. Derivatives volume fell 7% to roughly $986 billion. Bernstein kept an Outperform rating with a $250 price target, and William Blair also reiterated Outperform.

A bigger slice of a smaller market

Coinbase's share of crypto trading volume rose to 10.7%, its fourth straight quarterly gain. Assets on the platform equaled 12.5% of the total crypto market cap. Put simply, Coinbase is winning more of the business that exists, even as there is less of it to go around.

For people who use the app rather than own the stock, nothing in the report changes how accounts work. If you were caught up in the recent Amplitude contact data incident or want a refresher on moving money out of Coinbase, those guides still apply. More crypto coverage lives on our crypto page.

The harder test comes in three months. October brought the Binance theft, a selloff that CoinDesk says wiped out about $1.5 billion in leveraged bets, and steady bitcoin ETF outflows. All of that lands in Coinbase's fourth quarter.