Robinhood posts record $1.4 billion revenue, but a 14% profit drop exposes hidden portfolio losses
Robinhood’s event-contract income exceeded crypto income for the second consecutive quarter, reaching $173 million within the third quarter, up from $120 million within the second quarter, based on the corporate’s outcomes.
Each companies grew from the second quarter, with Robinhood’s crypto income rising from $100 million to $120 million quarter-on-quarter. Income from prediction markets rose from $156 million to $173 million in the identical interval.
12 months over yr, cryptocurrency income fell 55%, whereas event-contract income grew greater than sixfold. That progress raises the stakes within the dispute over whether or not states can limit federally regulated prediction markets.
Complete web income reached a file $1.4 billion, up 12% yr over yr. Transaction-based income rose 19% to $867 million, supported by choices, equities and occasion contracts.
Web revenue fell 14% yr over yr to $476 million, whereas diluted earnings per share declined 16% to 51 cents. Robinhood stated the consequence included $67 million in unrealized losses, primarily associated to Robinhood Ventures Fund I.
The lead over crypto was already evident in Robinhood’s second-quarter income combine. These companywide figures present how Robinhood earns cash throughout merchandise, however they do not present whether or not particular person prospects switched from cash to end result contracts.
Crypto buying and selling exercise additionally recovered from the second quarter however remained under its year-earlier degree. Robinhood reported about $50 billion in crypto notional quantity, down 38% yr over yr however above the company-rounded $40 billion reported for the second quarter.
Throughout the third-quarter whole, the Robinhood app accounted for about $21 billion, down 48% from the prior yr. Bitstamp contributed about $29 billion, down 28%.
The app’s steeper proportion contraction exhibits why separating the 2 quantity streams provides a clearer view of retail exercise than the mixed determine alone.
In the meantime, prospects traded a file 16.4 billion occasion contracts, greater than seven occasions the year-earlier rely. Choices remained the most important of the reported buying and selling income traces at $399 million, up 31% yr over yr. Equities generated $121 million, up 41%.
A rising income line faces state enforcement
Robinhood’s prediction-market growth creates a income alternative alongside an working threat consisting of restrictions on which contracts it could possibly supply.
In its third-quarter risk disclosure, Robinhood stated it had beforehand stopped sure new occasion contracts following precise or threatened state enforcement. It warned that litigation, enforcement actions and modifications in legislation might stop it from providing the merchandise, so continued entry is a part of the expansion outlook alongside buyer demand.
On the identical day as Robinhood’s outcomes, the CFTC announced a lawsuit against Utah in search of to dam state enforcement towards CFTC-registered contract markets. The company stated it had additionally initiated authorized proceedings towards 9 different states because it defended its jurisdiction over these markets.
The lawsuit seeks to guard entry to federally registered markets whereas the jurisdictional dispute stays unresolved. State enforcement can interrupt product choices at the same time as occasion contracts generate considerably extra income than a yr earlier.
Robinhood additionally stated Robinhood Chain generated greater than $80 billion in decentralized change quantity and greater than $50 million in chain charges in its first quarter on mainnet.
Robinhood described the community as a top-five chain by income and quantity. Community DEX quantity and chain charges measure exercise on the blockchain, whereas brokerage notional quantity throughout the app and Bitstamp and company-recognized crypto income are separate working and accounting measures.
The corporate additionally reported launching crypto buying and selling within the UK and receiving Dubai Monetary Providers Authority authorization protecting buying and selling and custody throughout all ten DFSA-approved asset lessons. Robinhood stated it plans to start rolling out its product suite beneath that authorization in 2027.
