Robinhood Q3 Profit Falls 14% as Crypto Revenue Slumps Despite Prediction Market Growth

US online broker Robinhood Markets (HOOD) reported its third-quarter financial results on October 27, 2026. Although record trading volumes in stocks, options, and prediction markets drove total revenue up 12% year-over-year to $1.42 billion, net income fell 14% to $476 million. Diluted earnings per share came in at $0.51, missing analyst estimates of $0.57. Shares dropped approximately 4% in after-hours trading following the release.

Shifts in revenue composition were central to the report. Crypto trading revenue, previously a key growth driver, plunged 55% year-over-year to $120 million due to slower market activity. Net interest revenue also declined 9% to $415 million, attributed partly to reduced securities lending. Conversely, emerging segments performed strongly: event contract (prediction market) revenue surged to $173 million, up 11% quarter-over-quarter and more than six times higher than a year ago, while options trading revenue rose 31% to $399 million.

Rising costs and non-operating losses further compressed margins. Operating expenses increased 16% to $739 million, and provisions for credit losses nearly tripled to $71 million as the company expanded its credit card business. Additionally, a $67 million unrealized investment loss from the Robinhood Ventures Fund I reduced earnings per share by approximately 7 cents. CFO Shiv Verma stated that the core business remains robust, noting strong momentum entering Q4 with over $13 billion in net deposits already recorded in October, including contributions from the Dell family to Trump Accounts.