Coinbase Q3 Review: Back to High Growth, Watch December Catalysts

Coinbase’s third-quarter revenue rose 55% year over year to $1.9 billion, beating the $1.8 billion analyst consensus.

Adjusted EBITDA was $801 million, and the EBITDA margin improved quarter over quarter to 42.9%.

Adjusted net income was $421 million; on an annualized basis, Coinbase’s net profit currently runs around $1.6–$2.0 billion, implying a forward P/E of roughly 40–50x.

The company posted $295 billion in trading volume for the quarter, and that momentum appears to be carrying into Q4.

Transaction revenue was $1.046 billion (up 37% Q/Q). The newly acquired options venue Deribit contributed $52 million of revenue this quarter, supported by continued growth in options activity and record notional volumes; during the period, combined derivatives notional for Deribit and Coinbase exceeded $840 billion.

The pressure point remains retail commission rates: as flagged in the preview, crypto brokerage is gravitating toward incentives, and if take rates keep compressing, transaction revenue could face headwinds.

Subscriptions & Services (S&S) revenue grew 13% Q/Q: stablecoin revenue was $355 million (up 7% Q/Q), with average USDC balances of $15 billion on-platform and $53 billion off-platform; blockchain rewards were $185 million (helped by ETH and SOL price gains); interest and fees were $65 million (with institutional loans averaging a record $1.2 billion). Custody-related items were included in “Other S&S,” and Assets Under Custody ended the quarter at $300 billion.

– Continued building the foundation of the Everything Exchange

On product, Coinbase continued to advance across the three stages of crypto adoption: broadening spot coverage (including integrated DEX access), expanding access to U.S. perpetual futures, adding a global options platform via Deribit, and strengthening custody. As a financial service, the company aims to make pay, earn, borrow, and run-a-business simple. As a new application platform, it is pushing sub-second, sub-cent transactions on Base, ideally paired with stablecoins to enable seamless payments.

– Mark your calendar for the December 17 product showcase

On the earnings call, CEO Brian Armstrong said Coinbase will share more details on stock tokenization and prediction markets at a December 17 product event. He added, “We’ve been heads-down building for what’s next,” reiterating the vision to become an “everything app” that delivers the full suite of consumer financial functions.

He also emphasized that payments are crypto’s next major use case, and that Coinbase is well positioned with USDC, new partnerships, Coinbase Business for enterprises, Base, in-app payments, and the newly launched Coinbase One Card.

– Q4 guidance—S&S not especially eye-popping

Management raised the outlook for Q4 Subscriptions & Services revenue to $710–$790 million, a step up from Q3 but not particularly eye-catching on its own.

– management flagged ongoing competition and the need to “make sure we’re executing well” as more players enter the space

– USDC revenue is sensitive to interest rates: if rate cuts come faster than expected, stablecoin income will be pressured.