Robinhood shares fall as crypto slump weighs on profits, offsetting gains in new businesses
Brokerage reports earnings per share of 51 cents against 56 cents expected, despite growth in options and event contracts.
Quick Look
- Robinhood shares fell 8% in pre-market trading after Q3 earnings per share of 51 cents missed the 56-cent analyst estimate.
- While revenue met expectations at $1.42 billion, transaction-based revenue fell short, impacted by a 55% decline in crypto trading.
AI-generated summary
Why It Matters
Robinhood is transitioning from a retail brokerage app into a broader financial services platform. The company is actively diversifying revenue streams through options, event contracts, and wealth management.
Robinhood shares were down around 8% in pre-market trading on Wednesday as investors digested weaker-than-expected third-quarter earnings despite growth in options trading and prediction markets.
Here's how the brokerage performed in its quarter ended Sept. 30, compared with Wall Street estimates, based on a survey of analysts by LSEG:
Earnings per share: 51 cents vs. 56 cents expected
Revenue: $1.42 billion vs. $1.42 billion expected
Robinhood's net income fell to $468 million, or 51 cents per share, from $556 million, or 61 cents per share, a year ago. Revenue represented a 12% increase from $1.27 billion in the same quarter last year.
Despite that gain, transaction-based revenue of $867 million came in below Wall Street estimates from StreetAccount of $879 million, putting focus on whether Robinhood can sustain momentum across its trading businesses and reduce its reliance on volatile market activity.
Robinhood has been diversifying its business as it tries to expand its brokerage app into a broader financial services platform. Options trading and event contracts have become increasingly important sources of transaction revenue, while the company has continued to invest in wealth management, subscriptions and other offerings.
Transaction-based revenue grew 19% from the same period last year to $867 million, driven primarily by a more than 500% increase in event contracts revenue. Additionally, options revenue grew 31% to $399 million and equities revenue rose 41% to $121 million.
Those gains were partially offset by cryptocurrency revenue, which fell 55% to $120 million.
Chief Financial Officer Shiv Verma told CNBC event contracts on crypto movements did well in the quarter, offering investors another way to express a view on crypto despite the slump in prices and spot trading.
Net deposits on the Robinhood platform totaled $15.7 billion for the quarter, equal to a 17% annualized growth rate based on total platform assets at the end of Q2 2026. Over the past year, net deposits totaled $71 billion, representing 21% growth compared with total platform assets at the end of Q3 2025.
Open Questions
- Can Robinhood reduce reliance on volatile market activity?
- Will crypto trading revenue recover in future quarters?
