Robinhood reported third-quarter revenue of $1.42 billion, falling short of the approximately $1.43 billion expected by Wall Street. Earnings per share came in at $0.51, missing the $0.55 projection and declining from $0.61 a year earlier. Net income totaled $476 million, representing a 14% decrease from the prior year and a 17% drop from the second quarter. The company attributed part of this decline to a $67 million unrealized loss on its Ventures Fund I, which impacted earnings by $0.07 per share.
Despite the overall miss, specific business lines showed growth. Revenue from event contracts, which allow users to bet on outcomes like sports games and elections, rose to $173 million from $156 million in the previous quarter. Customers traded a record 16.4 billion event contracts, more than seven times the volume from a year ago. Crypto trading revenue increased to $120 million from $100 million in the second quarter but remained down 55% compared to the $268 million earned in the third quarter of 2025. Total crypto trading volume for the quarter was $50 billion, a 38% decrease year-over-year.
Robinhood also updated its financial outlook, narrowing its 2026 guidance for adjusted operating expenses and stock-based pay to a range of $2.675 billion to $2.75 billion. This adjustment trims the upper limit of the previous range set in July. Following the report, Robinhood shares closed at approximately $94.61 and slipped in after-hours trading. The stock has declined roughly 18% this year and sits about 37% below its 52-week high.
The divergence between Robinhood’s top-line miss and the robust growth in its prediction market segment highlights a strategic pivot in how the platform monetizes retail engagement. While traditional crypto trading volumes contracted significantly, the surge in event contract activity suggests that users are increasingly drawn to speculative instruments with clearer, near-term outcomes rather than volatile asset classes. This shift underscores the viability of prediction markets as a distinct revenue stream capable of offsetting cyclical downturns in digital asset trading.
From an operational risk perspective, the narrowing of cost guidance indicates management’s intent to tighten spending amidst softer earnings performance. However, the reliance on high-volume, low-margin event contracts may pressure profitability if regulatory scrutiny intensifies or if customer acquisition costs rise. The integration of Ripple’s RLUSD stablecoin onto Robinhood Chain further signals an effort to deepen infrastructure utility, yet the immediate financial impact remains secondary to the broader challenge of sustaining user growth across diverse product lines amid a cooling crypto market.
