Coinbase returns to profit as crypto investment gains offset trading weakness

In a turnaround, cryptocurrency exchange Coinbase Global returned to profitability in the third quarter following three quarters of losses. Lower operating expenses and gains from investments in crypto assets helped offset weaker trading activity. Transaction revenue declined 43 percent to $590.2 million, from $1.05 billion a year earlier, while prediction markets and derivatives accounted for about 25 percent of total transaction revenue.

Subscription and services revenue made up roughly 49 percent of total net revenue, which was a significant improvement. Coinbase's prediction markets had become one of the fastest-growing products in the company's history, driving additional spot trading volume. Chief Financial Officer Alesia Haas said that the company's investments in diversifying revenue streams beyond its core transaction business were starting to pay off. Shares of the crypto exchange were down 3.3 percent in trading after the bell.