Robinhood Falls Short on Profit Despite Record Revenue, With Prediction Markets Outearning Crypto

Robinhood Markets (NASDAQ: $HOOD) reported record third-quarter revenue of $1.42 billion on Tuesday, but earnings of $0.51 per share fell short of the roughly $0.55 analysts expected.

Net income fell 14% from a year earlier to $476 million, and 17% from the second quarter. The quarter included a $67 million unrealized loss, equal to $0.07 per share, mostly from marking down Robinhood Ventures Fund I. Adjusted earnings per share, a non-GAAP measure the company introduced this quarter, were $0.60, down 3%. Revenue came in about where analysts expected, at roughly $1.43 billion.

Prediction markets drove much of the growth. Event contracts revenue reached $173 million, more than six times a year earlier and up from $156 million in the second quarter, when it first passed crypto revenue of $100 million, according to Robinhood’s second-quarter earnings release. Customers traded a record 16.4 billion event contracts, over seven times last year’s level. Rothera, Robinhood’s prediction market exchange venture with Susquehanna International Group, topped $100 million in annualized revenue in its first full quarter, and Chief Financial Officer Shiv Verma called it a new business that has crossed that mark.

Crypto continued to lag. Crypto revenue was $120 million, down 55% from a year earlier but up from $100 million in the second quarter, per Decrypt. Crypto trading volume fell 38% to $50 billion, with $21 billion on the Robinhood app and $29 billion on Bitstamp.

Other businesses grew. Options revenue rose 31% to $399 million, and equities revenue rose 41% to $121 million. Net interest revenue fell 9% to $415 million, on lower securities lending and short-term interest rates. Operating expenses rose 16% to $739 million, driven by higher credit loss provisions as the credit card loan book grows, costs tied to Trump Accounts and Rothera, and marketing.

Customer numbers kept climbing. Funded customers rose 7% to 28.7 million, platform assets grew 19% to $396 billion, and net deposits were $15.7 billion. Gold subscribers reached a record 5.2 million. Verma said October net deposits had already topped $13 billion, including $6 billion from the Dell family’s contribution to Trump Accounts.

Robinhood lowered the top of its 2026 outlook for adjusted operating expenses and stock-based pay by $25 million, to a range of $2.675 billion to $2.75 billion, citing efficiency gains.

The company also said Robinhood Chain, its layer-2 network, became a top-five chain by revenue and volume in its first quarter on mainnet, with over $80 billion in decentralized exchange volume and more than $50 million in fees. Hours before the report, Robinhood announced a deal to bring Ripple’s RLUSD stablecoin to Robinhood Chain and Bitstamp.

Shares of Robinhood Markets (NASDAQ: HOOD) are currently trading at $94.56, down from a 52 week high of $150.47.