Coinbase’s Earnings Beat Signals That the Crypto Firm Has Broken Out of Its Slump

Coinbase said revenue rose 55% from the same time a year ago. (Dreamstime)

Coinbase Global reported robust third-quarter earnings Thursday afternoon, beating earnings and revenue expectations on higher transaction revenue.

The stock was rising 0.4% in after-hours trading, after closing down 5.8% to $328.51 in regular trading on Thursday, though it remains up 32% in 2025.

Coinbase reported third-quarter revenue of $1.9 billion, up 55% from the year-ago quarter, and earnings of $1.50 a share.

Transaction revenue of $1.0 billion was up 37% from the same time a year ago, and subscription and services revenue of $747 million rose 14%, while total operating expenses declined 9% to $1.4 billion.

Analysts expected Coinbase to report $1.8 billion in revenue for the quarter, on earnings of $1.13 a share, FactSet said. Analysts expected that growth to show up across the business, from consumer and institutional transactions to subscriptions and services.

Coinbase said it expects fourth-quarter subscription and services revenue of $710 million to $790 million.

Coinbase management will discuss results at a conference call at 5:30 p.m. on Thursday.

The cryptocurrency behemoth has been looking for a chance to get back on track in what has been a rough second half of the year.

Shares of Coinbase rocketed 52% higher through July, buoyed by rising crypto prices, regulatory momentum, and the company’s inclusion in the S&P 500. It’s been a slog since then. The stock plummeted 17% on Aug. 1 after second-quarter earnings results showed a 39% drop in transaction revenue —and Coinbase is yet to claw back those losses.

H.C. Wainwright, which downgraded Coinbase to a short-term Sell in July a few weeks before the stock’s pullback, double-upgraded shares to Buy in a research note Thursday. The firm also lifted its price target for Coinbase shares to $425 from $300.

Crypto trading volumes and the company’s “take rate” on transaction fees should drive revenue and profits higher than previously expected, H.C. Wainwright argued.

Coinbase’s $2.9 billion acquisition of crypto options exchange Deribit, which closed in August, may also bear fruit. H.C. Wainwright expects Coinbase to post meaningful derivatives trading revenue for the first time.

Looking beyond Thursday, further momentum in Washington, D.C., may be the most critical catalyst for Coinbase.

The Genius Act in late July established a regulatory framework for stablecoins, which are tokens pegged to assets like the U.S. dollar. Coinbase notably takes in revenue as a distribution partner for USDC, the stablecoin issued by Circle Internet Group.

Crypto companies are now waiting for the Senate to pass the Clarity Act, which would divide regulation between the Securities and Exchange Commission and the Commodity Futures Trading Commission. Many crypto industry insiders believe the bill, which passed in the House of Representatives in July, will unleash institutional adoption of digital assets. The Clarity Act will likely get the green light from the Senate by the end of 2025, giving a boost to Coinbase shares, H.C. Wainwright argued.

“Our stance has turned back to bullish,” H.C. Wainwright analyst Mike Colonnese wrote of Coinbase. “We expect rising crypto asset prices (driven by seasonal strength and accelerating institutional demand) and regulatory tailwinds to drive the stock higher in the last quarter of the year.”

H.C. Wainwright’s double-upgrade followed a similarly bullish outlook from J.P. Morgan, which upgraded Coinbase to Overweight from Neutral and raised its price target to $404 from $342 last week. Coinbase has many monetization opportunities beyond crypto trading, including its Coinbase One subscription offering, J.P. Morgan said.

That growing diversification means plenty of opportunities to impress—or disappoint—investors on Thursday.

Write to Nate Wolf at nate.wolf@barrons.com