Coinbase Global swung to a profit in the third quarter after a three-quarter losing streak, driven by a rebound in bitcoin and broader digital-asset prices between July and September.
The largest crypto exchange in the U.S. on Thursday posted a profit of $719 million, or $2.51 a share, compared with a profit of $433 million, or $1.50 a share, a year earlier. Net income was lifted by a $715 million unrealized gain on the value of crypto assets held for investment.
The results beat expectations from analysts surveyed by FactSet, who had projected a third-quarter loss of $51 million, or 23 cents a share.
Revenue fell to $1.2 billion from $1.9 billion a year ago, which was roughly in line with analyst expectations.
Crypto trading activity has stagnated as traders pivoted to more volatile and buzzy assets such as AI stocks and prediction markets. Coinbase generated $590 million in transaction revenue for the quarter, down 41% year-over-year. As the exchange pushes into more predictable revenue streams, its subscription and services segment brought in $570 million, accounting for nearly half of total revenue, though that remains down from $717 million a year ago.
As part of its broader push to become an "everything exchange," Coinbase has rolled out new financial products such as stock trading and prediction markets. The exchange said that annualized revenue for its prediction-markets business surpassed $200 million in the third quarter.
Alesia Haas, chief financial officer of Coinbase, said the company hasn't seen traders shift from trading crypto assets to prediction markets on its platform. "We have seen low volatility in crypto, but we absolutely believe there's an opportunity to continue to grow and provide higher-beta stocks, options and derivatives to our customers," she said in an interview.
Shares were down more than 2% in recent after-hours trading.
Comments