Coinbase Earnings: Higher Trading Volume and Cryptocurrency Prices Drives a Recovery in Earnings

Key Morningstar Metrics for Coinbase Global

What We Thought of Coinbase Global’s Earnings

Coinbase Global COIN reported decent third-quarter results as improved cryptocurrency market conditions drove transaction revenue higher. Net revenue rose 58.8% from last year and 26.3% from last quarter to $1.79 billion. Adjusted net income rose to $420.7 million from $167.8 million last year.

Why it matters: These results are in line with our expectations, as we anticipated improved performance from Coinbase thanks to rising cryptocurrency prices. Coinbase’s results are highly correlated to cryptocurrency markets as the firm’s trading and custody businesses benefit from higher prices.

• The firm’s transaction revenue rose 84% from last year to $1.05 billion thanks to a 73.5% and 56% increase in retail and institutional trading volume, respectively. That said, trading activity is still below its early 2025 highs, despite high cryptocurrency prices.
• On a positive note, Coinbase’s stablecoin revenue rose 43.6% from last year. Coinbase’s stablecoin revenue comes from interest income so falling interest rates will be a headwind. However, we expect rising stablecoin usage at Coinbase to more than offset the impact of lower interest rates.

The bottom line: As we incorporate these results, we will maintain our $205 fair value estimate for no-moat-rated Coinbase. We see the shares as significantly overvalued, and we believe that the market is projecting too much future growth.

• Cryptocurrency prices and trading activity are inherently volatile, which contributes considerable volatility to Coinbase’s quarterly results. While Coinbase’s annual and sequential growth look good, we caution investors against extrapolating these growth rates out.
• Additionally, while we think regulatory clarity for cryptocurrency and stablecoins will remain a positive tailwind for volume, it will also likely lead to additional competition. While Coinbase’s scale and first-mover advantage should give it a strong position, its premium pricing will likely face increasing pressure.