TLDR
- Coinbase reported Q3 earnings of $2.51 per share, while FactSet analysts had expected a loss of 23 cents.
- The stock fell after hours Thursday and is down 54% over the past 12 months.
- Most of the $718.7 million net profit came from unrealized crypto gains. Adjusted net income was $77.7 million.
- Prediction markets now bring in $200 million in annualized revenue, with 82% compound quarterly growth since launch.
- Spot trading volume was $134.5 billion, roughly half of last year’s level.
Coinbase (COIN) stock fell in after-hours trading Thursday after the company reported a surprise third-quarter profit. One report put the drop at 3% to $156.23, while CNBC showed a decline of about 5%.
The stock closed near $158 in regular trading. It is down 54% over the past 12 months.
Coinbase earned $2.51 per share in the quarter. FactSet analysts had expected a loss of 23 cents.
Revenue was $1.22 billion, according to FactSet, ahead of the $1.21 billion forecast. CNBC reported $1.20 billion, short of the $1.233 billion LSEG analysts expected.
Net income was $718.7 million, up 66% from $433 million a year ago. Most of it came from unrealized gains on crypto held for investment.
Where the Profit Came From
Bitcoin rose 39% in the quarter ended Sept. 30. That lifted the value of Coinbase’s investment portfolio.
Back those gains out and adjusted net income was $77.7 million. A year ago it was $420.7 million.
Spot trading volume came in at about $134.5 billion. Analysts expected $137 billion, and last year’s figure was roughly double.
Coinbase’s share of trading volume rose to 10.7% from 5.6%. It is a bigger slice of a much smaller pie.
Mizuho analyst Dan Dolev called the report “better than feared.” He added that the crypto market remains challenged.
Looking Beyond Crypto Trading
Prediction markets launched in January and now bring in $200 million in annualized revenue. Traders on those markets rose 60% from the second quarter.
Subscription and services revenue, which includes USDC, was $570 million. That is down from $717 million a year ago, but it made up about half of net revenue versus 41% last year.
Chief Business Officer Shan Aggarwal said new products are “less correlated with crypto market volatility.” He said the diversification is showing up in results.
Aggarwal said fee compression could come as adoption grows, but Coinbase has not seen it yet. Some analysts expect Wall Street firms entering crypto to put pressure on fees.
The Clarity Act, which Coinbase backed, failed to advance in the Senate in September. Bitcoin traded near $80,400 on Wednesday, down from above $122,000 last October.
Coinbase for Agents launched in early October for users of AI agents. The stock closed near $158 Thursday before slipping after hours.
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