Coinbase Global reported a sharp decline in third-quarter net revenue as a prolonged industry slump dampened transaction sales, pushing shares down in extended trading.
Net revenue for the quarter totaled $1.16 billion, representing a 34% drop from $1.76 billion during the same period a year ago. Following the earnings release on Thursday, company shares sank 2% in extended trading.
Despite the revenue contraction, the cryptocurrency exchange posted net income of $719 million, or $2.15 per share, rebounding from a profit of $433 million a year earlier. The bottom-line figures surpassed Wall Street expectations, where analysts had anticipated a net loss of $35 million alongside revenue of $1.21 billion.
However, a substantial portion of the quarterly profit stemmed from a $715 million gain on cryptocurrency investments. When excluding those investment gains and associated tax effects, Coinbase’s adjusted net income dropped to $78 million. Adjusted earnings before interest, taxes, depreciation, and amortization fell 58% year-over-year to $333 million, though that figure marked a 60% increase compared with the second quarter.
The latest financial results arrive as Coinbase stock has tumbled 29% through the year as of its Thursday close, putting its yearly trajectory on track for its worst performance since the 2022 market crash, when shares plummeted 86%.
Transaction revenue, which serves as a primary barometer for platform trading activity, dropped 44% from the prior year to $590 million. The decline coincided with multiyear lows in cryptocurrency volatility, even as bitcoin climbed within a range from $60,000 to $83,000.
To counter core trading volatility, Coinbase has pushed to diversify its offerings, aiming to build a crypto-focused all-in-one financial application similar to models pursued by competitors such as Robinhood. The company highlighted its emerging prediction markets segment, stating that the product line has surpassed $200 million in annualized revenue, while daily active traders on the platform surged more than 60% from the preceding quarter.
“Prediction markets have been one of the fastest-growing products in Coinbase history, growing even through slower sports months driven by crypto contracts where we have a strong right to win,” CEO Brian Armstrong said in a press release.
Wall Street analysts offered a mixed view of the earnings. In an initial note to clients, Mizuho analyst Dan Dolev described the performance as “better than feared but crypto remains challenged.”
Beyond product expansion, the company faces a pivotal political test with the upcoming midterm elections. Coinbase has invested tens of millions of dollars into political action groups as the digital asset sector lobbies Washington for clearer regulatory frameworks.
A June analysis by Public Citizen showed that Coinbase contributed at least $35 million during the current election cycle, positioning the firm among the industry’s largest political donors. The company remains a principal financial backer of Fairshake, a crypto-aligned super PAC that has supported congressional candidates across both major political parties.
