Robinhood shares declined after its third-quarter earnings missed profit expectations, even as record trading revenue and rapidly expanding prediction markets helped lift total revenue to $1.42 billion.
Robinhood Markets shares fell on Wednesday, October 28, 2026, after the online brokerage reported a sharp decline in cryptocurrency revenue and weaker-than-expected quarterly profits. The company posted record total revenue of $1.42 billion, but a 55% drop in crypto transaction revenue overshadowed strong growth in options trading and prediction markets.
Robinhood stock closed at $91.43, down 3.3% from the previous session, after falling more sharply in premarket trading. The decline followed the company’s October 27 earnings announcement, which showed that net income had fallen 14% from a year earlier despite higher overall revenue.
The results revealed an increasingly important shift in Robinhood’s business as traditional cryptocurrency trading weakened while newer financial products attracted more activity. Prediction markets generated $173 million in quarterly transaction revenue, surpassing the $120 million earned from cryptocurrencies.
Cryptocurrency Revenue Falls 55%
Robinhood reported cryptocurrency transaction revenue of $120 million for the third quarter, compared with $268 million during the same period in 2025. The decline reflected weaker trading activity across digital asset markets, where changing investor sentiment and competition have affected transaction volumes.
Total cryptocurrency trading volume fell 38% from a year earlier to $50 billion. Trading through the Robinhood app accounted for $21 billion, a decline of 48%, while Bitstamp generated $29 billion, down 28%.
The figures demonstrate how strongly Robinhood’s cryptocurrency business depends on trading activity rather than simply the number of digital assets available on its platform. When customers trade less frequently, transaction revenue can decline even if the company continues expanding its crypto services.
Cryptocurrency markets have faced pressure from shifting expectations about U.S. interest rates, investment outflows and periods of heightened market volatility. Reuters reported that these conditions contributed to Robinhood’s disappointing quarterly earnings and weakened investor confidence.
However, the quarterly results also showed some improvement compared with the preceding three months. Cryptocurrency revenue increased from $100 million in the second quarter to $120 million in the third, despite remaining substantially below the previous year’s level.
Robinhood continues developing its cryptocurrency infrastructure rather than withdrawing from the market. Its strategy includes expanding trading services internationally and introducing blockchain-based financial products.
Prediction Markets Become a Major Revenue Source
Prediction markets were among Robinhood’s fastest-growing businesses during the quarter, with event-contract revenue reaching $173 million. That compared with $27 million a year earlier, representing growth of more than sixfold.
Event contracts allow traders to take positions on the outcome of specific future events, with payouts determined by whether defined conditions occur. Robinhood offers access to contracts covering sports and other subjects through its prediction markets business.
The company reported that customers traded a record 16.4 billion event contracts during the quarter, more than seven times the volume recorded a year earlier. The increase demonstrated growing demand for an investment category that had been relatively small within Robinhood’s operations.
Robinhood also highlighted the performance of Rothera, its prediction markets joint venture with Susquehanna International Group. The business exceeded $100 million in annualized revenue during its first full quarter of operations and had processed more than 6.4 billion contracts since launching.
Annualized revenue represents the current revenue pace projected across a full year, rather than revenue already collected over twelve months. The distinction matters because Rothera’s rapid early growth does not guarantee that trading activity will continue at the same level.
During the earnings discussion, company executives indicated that prediction markets were approaching a $500 million annual revenue business. Both sports-related and other event contracts contributed to the expansion, although the long-term balance between those categories remains uncertain.
The growth also creates regulatory challenges because prediction markets operate within a complicated legal environment. Federal oversight, state restrictions and ongoing legal disputes could affect which contracts Robinhood can offer and where customers can trade them.
Options and Stock Trading Support Record Revenue
Although cryptocurrency revenue fell, other trading categories helped Robinhood deliver record transaction-based revenue of $867 million. That represented a 19% increase from the third quarter of 2025, reflecting stronger activity in options, equities and event contracts.
Options trading produced $399 million in revenue, an increase of 31% from a year earlier. Equity trading revenue rose 41% to $121 million, supported by greater activity among customers buying and selling stocks.
Robinhood also reported record equity trading volume of $992 billion, up 53% year over year. Options activity reached 905 million contracts, representing an increase of 48%.
The figures suggest that active traders remain an important source of revenue for Robinhood even as cryptocurrency activity slows. The company’s continued introduction of advanced trading features is intended to attract customers who frequently use multiple financial products.
Net interest revenue presented a different challenge, falling 9% to $415 million. Robinhood attributed the decline primarily to lower securities lending activity and short-term interest rates, partially offset by growth in assets that generate interest.
Interest income is important because the company earns revenue from several activities connected to customer balances and financing. Changes in market interest rates can therefore affect profitability even when trading volumes remain strong.
Profit Declines Despite Record Revenue
Robinhood’s total quarterly revenue increased 12% to approximately $1.42 billion, exceeding the previous year’s performance. However, net income declined 14% to $476 million as higher expenses and investment-related losses reduced profitability.
Diluted earnings per share fell 16% to $0.51, below analysts’ expectations of approximately $0.55. The earnings miss contributed to the negative market reaction despite the company’s record revenue.
The company reported adjusted earnings of $0.60 per share, slightly above some analysts’ estimates. That adjusted figure excludes certain items and should be distinguished from the $0.51 earned under standard accounting rules.
Robinhood recorded $67 million in unrealized losses primarily associated with changes in the valuation of Robinhood Ventures Fund I. Those losses reduced reported net income even though they did not represent the same type of expense as ordinary operating costs.
Total operating expenses increased 16% to $739 million during the quarter. Robinhood cited higher credit-loss provisions, investments in new businesses and increased marketing and growth spending.
The company also reported adjusted earnings before interest, taxes, depreciation and amortization of $808 million, up 9% from a year earlier. That measure provides another view of operating performance but does not replace net income under generally accepted accounting principles.
Customer Assets and Gold Subscriptions Continue Growing
Robinhood’s customer base continued expanding despite the decline in cryptocurrency activity. Funded customers increased by 1.9 million over the preceding year to 28.7 million, while the number of investment accounts reached 30.4 million.
Total platform assets increased 19% to $396 billion, supported by customer deposits and higher equity valuations. The company recorded approximately $15.7 billion in net deposits during the quarter, indicating continued additions to customer accounts.
Robinhood Gold subscriptions also reached a record 5.2 million, an increase of 34% from the previous year. The paid membership service provides access to financial benefits and features that can generate recurring revenue beyond individual trading transactions.
The company reported that its Gold credit card had reached 1.3 million customers, with annualized payment volume exceeding $19 billion. Its banking business also continued expanding, accumulating nearly $5 billion in deposits from more than 350,000 funded customers.
These developments illustrate Robinhood’s effort to become a broader financial services company rather than relying primarily on securities and cryptocurrency trading. Subscription services, banking and credit products could provide additional revenue sources, although they also create operating costs and financial risks.
International Expansion and Blockchain Investments Continue
Robinhood is continuing to expand internationally, including through the launch of cryptocurrency trading in the United Kingdom. The company also received authorization from the Dubai Financial Services Authority to offer trading and custody services covering ten approved categories of financial assets.
The Dubai authorization includes equities, cryptocurrencies, exchange-traded funds and investment tokens. Robinhood plans to begin introducing its products in the region during 2027, subject to its operational rollout.
The company also highlighted progress with Robinhood Chain, its blockchain infrastructure initiative. During its first quarter on mainnet, the network generated more than $80 billion in decentralized exchange trading volume and over $50 million in blockchain fees.
Those figures reflect network activity and should not be confused with Robinhood’s reported corporate revenue. The company continues evaluating how blockchain services, digital assets and tokenized investments might support future business expansion.
At its September HOOD Summit, Robinhood also introduced several proposed trading capabilities, including around-the-clock trading in selected U.S. equities and perpetual futures for eligible American customers. The timing and commercial impact of those products will depend on implementation and regulatory requirements.
Investors Weigh Growth Against Financial Risks
The decline in Robinhood shares showed that investors remained concerned about profitability despite the company’s growing range of products. The stock had fallen roughly 8% in premarket trading before recovering part of those losses during Wednesday’s regular session.
Some analysts remain focused on whether prediction markets can bring new customers to Robinhood or primarily encourage existing traders to shift their activity between products. That distinction could influence how much additional revenue the rapidly growing business ultimately generates.
Competition also remains significant across online brokerage services, cryptocurrency platforms and newer event-contract markets. Companies such as Interactive Brokers compete for trading customers, while cryptocurrency exchanges and specialized prediction platforms seek participants in overlapping markets.
Robinhood has identified further international expansion, financial subscriptions and advanced trading technology as important growth opportunities. However, these investments may take time to generate returns and could contribute to higher expenses while the businesses develop.
The company’s next quarterly results will provide another measure of whether stronger options activity and prediction-market revenue can compensate for cryptocurrency volatility. For now, Robinhood enters the fourth quarter with record total revenue, growing customer assets and a challenging profit outlook shaped by changing trading behavior.
IMAGE: NEW YORK, NY – MAY 10: Co-founder and co-CEO of Robinhood Vladimir Tenev (L) and founder and CEO of Betterment Jon Stein speak onstage during TechCrunch Disrupt NY 2016 at Brooklyn Cruise Terminal on May 10, 2016 in New York City. (Photo by Noam Galai/Getty Images for TechCrunch). Photo: TechCrunch / Wikimedia, taken 2016-05-10, CC BY 2.0