Key Notes
- Robinhood’s third-quarter revenue rose 12% to a record $1.424 billion as event-contract income increased more than sixfold.
- Cryptocurrency revenue fell 55% to $120 million, while event-contract trading reached a record 16.4 billion contracts.
- Net income declined 14% to $476 million, even as Robinhood Gold subscriptions reached a record 5.2 million.
Robinhood Markets (NASDAQ: HOOD) reported record third-quarter revenue of $1.424 billion as prediction markets, options and stock trading helped offset a sharp decline in cryptocurrency income. Revenue rose 12% from a year earlier, although higher costs and investment losses weighed on profit.
The company reported event-contract revenue of $173 million, more than six times the year-earlier level. Customers traded a record 16.4 billion event contracts, an increase of more than sevenfold. Those are separate measures: one tracks Robinhood’s income, while the other counts trading activity.
For HOOD investors, the results show a broader brokerage business generating record sales while one of its most volatile revenue streams contracts. The question is whether newer products and a growing customer asset base can support earnings as spending rises.
Prediction Markets Take a Bigger Role
Transaction-based revenue increased 19% to $867 million. Options remained the largest disclosed component at $399 million, up 31%, while equities contributed $121 million, an increase of 41%. Event contracts generated more revenue than cryptocurrencies during the quarter.
Trading activity also strengthened across conventional brokerage products. Equity notional volume reached a record $992 billion, up 53%, and customers traded 905 million options contracts, up 48%. The increases indicate that prediction markets were part of a wider rise in engagement rather than the only source of growth.
Robinhood has been adding products for active traders. At its September HOOD Summit, it announced AI trading agents and earnings-related event contracts, alongside plans for weekend stock trading. These initiatives widen its product offering, but their announcement alone does not establish future revenue.
Competition is drawing substantial investment across the sector. As we previously reported, Kalshi has been discussing a roughly $1 billion fundraising at an approximately $40 billion valuation. Those talks illustrate investor interest in prediction markets, while Robinhood’s latest report supplies a direct measure of its own monetization.
Crypto Revenue Falls Despite Broader Trading Growth
Cryptocurrency revenue dropped 55% year over year to $120 million. Crypto notional trading volume declined 38% to $50 billion, showing that the reduction in income was accompanied by substantially lower activity.
The total included $21 billion traded through the Robinhood app, down 48%, and $29 billion through Bitstamp, down 28%. The two platforms therefore contributed different amounts to the consolidated figure and experienced different rates of contraction.
Net interest revenue also weakened, falling 9% to $415 million. Robinhood attributed that decline primarily to lower securities-lending activity and short-term interest rates, partly offset by growth in interest-earning assets. Other revenue increased 61% to $142 million, supported by account-service and Gold subscription income.
Profit Declines as Costs and Investment Losses Rise
Net income fell 14% to $476 million, while diluted GAAP earnings per share declined to $0.51 from $0.61 a year earlier. The results included $67 million of unrealized losses, primarily associated with the valuation of investments in Robinhood Ventures Fund I.
Adjusted net income was $550 million, down 3%, and adjusted EPS fell to $0.60 from $0.62. Robinhood introduced these non-GAAP measures this quarter to present profitability before specified non-operating items. They supplement the reported accounts and should be distinguished from GAAP earnings.
Total operating expenses increased 16% to $739 million, outpacing revenue growth. The company cited higher credit-loss provisions as its card loan book expanded, spending on Trump Accounts and Rothera, and marketing and growth investments. Adjusted EBITDA nevertheless rose 9% to $808 million.
Gold Subscriptions and Customer Assets Grow
Robinhood Gold subscriptions increased 34% to a record 5.2 million. Funded customers rose 7% to 28.7 million, while total platform assets increased 19% to $396 billion, helped by deposits and higher equity valuations.
Quarterly net deposits totaled $15.7 billion. Retirement assets under custody reached $36.6 billion, up 51%, and the margin loan book grew 59% to $22.1 billion. These balances provide additional context for the company’s expansion beyond transaction fees, although they are customer assets or lending balances rather than revenue.
Expense Outlook Sets the Next Test for HOOD
Robinhood lowered the upper end of its full-year adjusted operating-expense and share-based-compensation outlook by $25 million. The revised range is $2.675 billion to $2.75 billion, compared with $2.675 billion to $2.775 billion previously.
That forecast excludes several potentially material items, including credit-loss provisions and certain acquisition, restructuring and regulatory costs. It therefore does not represent a ceiling on total GAAP expenses. Sustaining prediction-market growth while controlling those broader costs remains an important test after a quarter in which record revenue coincided with lower net profit.
