Coinbase Net Income Rises 66% as Revenue Falls 35%

Coinbase net income rose 66% to $718.7m in the third quarter of 2026, from $432.6m a year earlier, even as total revenue fell 35% to $1.22bn from $1.87bn, according to its quarterly report filed with the SEC on 29 October. Diluted earnings per share rose to $2.51 from $1.50.

Coinbase net income and revenue point in opposite directions because almost all of the profit came from the crypto Coinbase holds on its own balance sheet, not from customers trading. The company booked a $715.0m gain on “crypto assets held for investment”, which its filing says reflects “fair value remeasurement of these assets, mainly Bitcoin and Ethereum”. Operating income, which measures the exchange business itself, fell to $61.7m from $480.5m.

In brief

Coinbase net income rose 66% to $718.7m, helped by a $715.0m gain from revaluing crypto the company holds; adjusted net income was $77.7m.
Transaction revenue fell 44% to $590.2m as consumer spot trading volume dropped 59% from a year earlier.
Prediction markets passed $200m in annualised revenue, and average USDC held in Coinbase products reached a record $22bn.

Coinbase net income rests on a $715m revaluation gain

Under US accounting rules, Coinbase marks the crypto it holds as an investment to market value each quarter and puts the change through its profit and loss account. In the third quarter that gain was $715.0m, up from $423.9m a year earlier. A further swing helped: other items turned into $66.7m of income, including $39.2m of investment gains, against a $380.5m expense a year earlier, which included $400.3m of investment losses. Pre-tax income was $823.9m and the tax charge $105.2m.

Coinbase’s own earnings presentation strips these items out of Coinbase net income. On its adjusted measure, which removes the crypto investment gains and other investment gains and adjusts for tax, net income was $77.7m, down from $420.7m. The company’s investor release leads with both: “net income of $719 million and Adjusted net income of $78 million”. Adjusted EBITDA was $333m, up 60% from the second quarter and Coinbase’s 15th positive quarter in a row, it said.

Transaction revenue fell 44% as trading volumes dropped

Transaction revenue, the fees from trading, fell to $590.2m from $1.05bn. Consumer transaction revenue fell to $450.1m from $843.5m. The 10-Q attributes that to “a 59% … decrease in consumer Crypto Spot Trading Volume, offset in part by the launch of prediction markets trading and growth in derivatives trading volume”. Institutional transaction revenue fell to $91.7m from $135.0m, which Coinbase links to a 53% drop in institutional spot volume. Monthly transacting users fell to 7.4m from 9.3m, which it puts down to fewer trading users, “influenced by overall market conditions”.

Subscription and services revenue fell 20% to $570.2m. Stablecoin revenue, mostly Coinbase’s share of interest on USDC reserves, slipped to $306.9m from $324.5m: higher average USDC balances added $84.6m, but lower interest rates took off $52.8m, the filing says. Blockchain rewards from staking fell to $85.7m from $184.6m, mainly because of “lower average crypto asset prices, driven primarily by Solana and Ethereum”.

The presentation describes a quiet market. Industry spot volume fell 6% and derivatives volume 11% from the second quarter, and volatility fell 15% to multi-year lows, which Coinbase says suppressed trading activity, even though total crypto market capitalisation rose 37% over the same period, Coinbase says.

Against the second quarter, Coinbase’s own picture is flatter. Total revenue was $1.216bn against $1.220bn, and Coinbase says its share of crypto trading volume rose to 10.7%. Its presentation also says prediction markets, which the 10-Q lists as a new source of consumer trading revenue, now run at more than $200m of annualised revenue, and that paid Coinbase One subscribers are at a record, up 24% year on year.

Accounting gains mask a weaker trading quarter

Coinbase is not the only crypto company whose headline profit now moves with the price of the assets it holds. Galaxy’s third-quarter results also leaned on gains in its own investment portfolio. For Coinbase the split matters more than usual, because the two halves point in opposite directions. The exchange business earned $61.7m from operations on $1.22bn of revenue. Most of the rest of Coinbase net income came from revaluing bitcoin and ether that the company still holds. No cash changed hands, and the same rule that produced this gain will record a loss in any quarter when those prices fall.

The steadier signal is the revenue mix. Subscription and services made up 49% of net revenue, according to the presentation, close to half the business, and those lines depend on balances such as USDC and on staking rather than on how busy traders are. That cushions Coinbase against a quiet market, but it also ties a large part of revenue to interest rates and token prices, both of which fell this quarter. Payment deals such as its stablecoin payout link with Thunes and derivatives access through Deribit aim to widen that base. Prediction markets are the clearest new source of trading fees, although the income statement does not show them as a separate line.

Regulatory costs remain part of the picture: Coinbase’s Irish arm was fined €3.25m by the Central Bank of Ireland this month.

Coinbase told investors that transaction revenue was about $165m in October up to 25 October, and that it expects fourth-quarter subscription and services revenue of $550m to $630m.