The broker Robinhood missed profit estimates for the third quarter of 2026, earning USD 0.51 per share versus an expected USD 0.55. At the same time, revenue from crypto trading plunged 55% to USD 120 million.
Robinhood Markets, the company behind the brand, is a US online broker. Its app lets retail investors trade stocks, options and cryptocurrencies. It earns money from transactions, interest on customer balances and subscriptions such as Robinhood Gold. In addition, the group owns the crypto exchange Bitstamp. The broker counts 28.7 million customers with funded accounts. Since the 2024 US election, Robinhood has also offered prediction markets, where customers bet on the outcome of events. Despite the crypto slump, net revenue rose 12% to a record USD 1.42 billion in the third quarter. However, the stock fell 7% in after-hours trading once the results were out.
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Crypto trading at Robinhood falls 55%
Crypto transaction revenue of USD 120 million was far below the prior-year quarter. The comparable figure works out to roughly USD 267 million. Trading volume shrank as well, though less sharply. Notional volume measures the total value of all cryptocurrencies traded. It fell 38% to USD 50 billion. Of that, USD 21 billion came from the Robinhood app, down 48%. On Bitstamp, on the other hand, volume dropped only 28% to USD 29 billion. The gap between the two channels stands out. Volume in the retail app thus fell more sharply than on the exchange. Moreover, revenue fell faster than volume, so Robinhood earned less per dollar traded.
The market environment explains part of this. Volatility and capital outflows weighed on cryptocurrencies during the quarter. This was especially so as inflation pressure and higher interest rates made bonds more attractive to investors. And less trading translates directly into lower transaction revenue for a broker. As a result, the crypto unit carries less weight within the group. It contributed only about 14% of the USD 867 million in transaction-based revenue.
Event contracts overtake crypto revenue
Even so, transaction-based revenue rose about 19% to USD 867 million. Options made the largest contribution at USD 399 million, up 31%. Equities brought in USD 121 million. The biggest jump, however, came from event contracts, which are contracts on the outcome of events in Robinhood's prediction markets. As the quarterly report filed with the SEC shows, their revenue grew more than sixfold to USD 173 million. Consequently, prediction markets generated more revenue than crypto trading at USD 120 million.
Likewise, the number of event contracts traded rose more than sevenfold to a record 16.4 billion. Furthermore, the prediction markets hub now offers contracts on companies' quarterly earnings. On top of that comes Rothera, a prediction market exchange that Robinhood runs with Susquehanna as a joint venture. Robinhood does not control it alone. The exchange posted annualized revenue of more than USD 100 million in its first full quarter. Since launch, more than 6.4 billion contracts have changed hands there.
Yet revenue is not quite keeping pace with trading. The number of contracts grew more than sevenfold, revenue by comparison only more than sixfold. The math thus points to slightly lower revenue per contract. Chief Financial Officer Shiv Verma nevertheless framed the size of the business positively on a media call.
"Prediction markets is almost a $500-million-a-year business already, and so growing incredibly nicely, and it's less than two years old because it came out at the start of the 2024 election." - Shiv Verma, CFO, Robinhood
Higher costs and provisions weigh on profit at Robinhood
Diluted earnings per share fell 16% year over year to USD 0.51. Analysts had expected USD 0.55, according to LSEG. The gap, however, does not stem from operations alone. Unrealized losses, mainly on Robinhood Ventures Fund I, cut earnings by USD 0.07 per share. This hit therefore exceeds the USD 0.04 gap to the estimate. Net income fell 14% to USD 476 million, and the net margin was 33%.
On the cost side, operating expenses rose 16% to USD 739 million. The drivers include, first, provisions for credit losses, which jumped 173% to USD 71 million. New businesses such as Trump Accounts and Rothera, along with higher marketing spending, added to costs as well. On the revenue side, net interest revenue fell 9% to USD 415 million. Less securities lending and lower short-term interest rates caused the decline. Other revenue, by contrast, grew 61% to USD 142 million, driven by service fees for Trump Accounts and Gold subscriptions.
Still, adjusted figures paint a friendlier picture. At USD 0.60, adjusted earnings per share held comparatively steady, 3% lower than a year earlier. Adjusted EBITDA rose 9% to USD 808 million, with a margin of 57%. Reuters measures the miss against the GAAP figure, while other reports cite a beat on adjusted earnings. Ultimately, it remains open whether the estimates are comparable. Finally, Robinhood lowered the top end of its 2026 expense outlook by USD 25 million. The range for adjusted operating expenses including share-based compensation is therefore USD 2.675 billion to USD 2.75 billion.
Trump Accounts and Robinhood Chain are set to drive new growth
While crypto trading is weak, capital keeps flowing onto the platform. Total platform assets grew 19% to USD 396 billion. Net deposits reached USD 15.7 billion in the quarter and more than USD 13 billion so far in October. Of the October inflows, USD 6 billion came from the Dell family's contribution to Trump Accounts, investment accounts for children. The US Treasury has started automatic enrollment for these accounts, covering nearly 70 million children. In addition, 25 million children each receive USD 250 from Susan and Michael Dell's USD 6.25 billion pledge. The number of Gold subscribers climbed 34% to 5.2 million.
In its crypto business, Robinhood is betting on its own blockchain. Robinhood Chain has completed its first quarter on mainnet, meaning in regular operation. By the company's own account, it ranks among the five largest chains by revenue and volume. The company cites more than USD 80 billion in volume on decentralized exchanges and more than USD 50 million in fees. Outside the US, Robinhood meanwhile launched crypto trading in the UK. In Dubai, it already holds a license from the financial regulator DFSA. Yet the rollout is not due to start until 2027. Robinhood also continued its share buybacks, spending USD 25 million in the quarter. Since the third quarter of 2024, buybacks total USD 1.3 billion.
