Coinbase's $719 million profit comes from gains on its own crypto, not from operations

Coinbase Global (Nasdaq: COIN) reported net income of $718.7 million for the third quarter, but $715.0 million of it was a gain on crypto it holds as an investment, while operating income fell to $61.7 million, according to its quarterly report filed with the SEC on October 29.

What happened

Total revenue was $1.216 billion in the quarter ended September 30, down 35.0% (computed) from $1.869 billion a year earlier and roughly flat on the second quarter's $1.220 billion, according to the company's earnings presentation. Operating income was $61.7 million, against $480.5 million in the third quarter of 2025.

Below operating income, Coinbase booked net gains of $715.0 million on crypto assets held for investment, up from $423.9 million a year earlier. The filing says the change was primarily due to fair value remeasurement of these assets, mainly bitcoin and ether. Those gains equal 86.8% (computed) of the $823.9 million pre-tax income. The company recorded income tax of $105.2 million.

Transaction revenue was $590 million and subscription and services revenue was $570 million, which Coinbase said was 49% of net revenue. Monthly Transacting Users, consumers who transact on the platform in a rolling 28-day period, were 7.4 million, compared with 9.3 million a year earlier, a decline of 20.4% (computed). The company attributed that to fewer trading users, influenced by overall market conditions.

Why it matters

The profit ended two quarters of losses. The presentation shows net losses of $394 million in the first quarter and $359 million in the second, so the $719 million profit follows two losses. For the nine months to September 30, Coinbase still reports a net loss of $34.9 million, against net income of $1.93 billion a year earlier.

The company's own explanation for the soft trading line is low volatility. It said crypto asset volatility fell 15% from the second quarter to new multi-year lows, and that total market crypto spot and derivatives trading volumes declined 6% and 11% from the prior quarter. Total crypto market capitalization was up 37% from the second quarter, the presentation says, because prices rebounded in September.

Two lines grew. Coinbase said its prediction markets product reached more than $200 million in annualized revenue, measured on when it first generated $200 million in quarterly annualized net revenue, with 82% quarterly compound growth since launch. Average USDC held in Coinbase products reached a record $22 billion. Stablecoin revenue was $307 million, up 5% from the second quarter.

The cost side moved the other way. Adjusted expenses were $975 million, below the $980-$1,080 million range the company gave in July. The company had 4,204 full-time employees at the end of the quarter, down from 4,795 a year earlier.

Coinbase reported a day after two other listed crypto businesses. As FinanceInTime reported, crypto trading was not the main earner at Robinhood or Galaxy in the third quarter.

What to watch

For the fourth quarter, Coinbase gave an outlook for transaction revenue of about $165 million for the period to October 25, and subscription and services revenue of $550-$630 million. It cautioned against extrapolating the transaction figure.

The company said it completed the integration of its international derivatives exchange and Deribit in October and expects some near-term volatility in volumes as participants adjust. It also plans to relaunch Coinbase Pro in the fourth quarter. Because the investment gains come from remeasuring bitcoin and ether holdings, they depend on crypto prices at the end of each period.