Robinhood Revenue Hits $1.424 Billion as Event Contracts Surge
Key Facts
Robinhood reported on October 27 that total net revenue was $1.424 billion in the third quarter ended September 30, up 12% from the same period a year earlier and 9% from the second quarter. The record result came with a clear shift in the revenue mix: transaction revenue rose to $867 million, while crypto revenue and net interest revenue declined. Chief Financial Officer Shiv Verma said customers were entrusting the company with more of their assets as it advanced its product roadmap, and that the expansion of Rothera added a new activity whose annualized revenue exceeded $100 million during the quarter. The company had also posted record revenue of $1.31 billion in the second quarter, up 32% year over year. Third-quarter results highlight continued revenue expansion, but lower profitability than a year earlier.
Transaction revenue rose 19% year over year to $867 million, supported mainly by event contracts, options and equities. Event contracts generated $173 million, more than six times the level a year earlier, while options revenue reached $399 million, up 31%, and equities revenue was $121 million, up 41%. In terms of activity, event contracts traded more than seven times higher at a record 16.4 billion contracts. Notional equity trading volume set a record at $992 billion, up 53% year over year, while options contracts traded rose 48% to a record 905 million. The figures show broader activity across trading categories that boosted the company’s revenue during the quarter.
Rothera stood out in the growth of event contracts, with 3.4 billion contracts traded in the third quarter, compared with 2.1 billion in the second quarter. Robinhood said Rothera generated annualized revenue of more than $100 million in its first full quarter of operation, after more than 6.4 billion contracts had traded since its launch. The company did not say in its earnings release or publicly available presentation that Rothera is a joint venture with Susquehanna. In crypto, revenue fell 55% year over year to $120 million, alongside a 38% decline in notional trading volumes to $50 billion. The drop was split between trading volume on the Robinhood app, which fell 48% to $21 billion, and Bitstamp volume, which declined 28% to $29 billion. Event contracts, options and equities therefore partly offset crypto’s weaker contribution to transaction revenue.
Net interest revenue fell 9% year over year to $415 million, with the company attributing the decline mainly to lower securities lending activity and short-term interest rates, partly offset by growth in interest-earning assets. Other revenue, meanwhile, rose 61% to $142 million, driven by Trump Accounts services and higher Robinhood Gold subscription revenue. Gold subscribers increased 34% to a record 5.2 million, while average revenue per user rose 5% to $200. Investment accounts grew 9% to 30.4 million, and funded customers increased 7% to 28.7 million. Growth in the customer base came alongside higher assets and deposits, while company income remained sensitive to fluctuations in trading activity and interest rates.
Platform assets expanded 19% year over year to $396 billion, with the company attributing the increase to continued net deposits and higher equity valuations, which partly offset lower crypto valuations. Net deposits totaled $15.7 billion during the quarter, equivalent to an annualized growth rate of 17% relative to platform assets at the end of the second quarter. In the 12 months ended in the third quarter, net deposits reached $71 billion, a 21% growth rate relative to platform assets at the end of the third quarter a year earlier. Managed retirement account assets also rose 51% to a record $36.6 billion, and margin book balances climbed 59% to a record $22.1 billion. The indicators reflect growth in assets and customers, while equity and crypto valuations remained factors in changes to the platform’s total value.
Revenue growth was not matched by a similar increase in net income, which fell 14% year over year to $476 million, while diluted earnings per share declined 16% to $0.51. Net income included unrealized losses of $67 million, or $0.07 per share, mainly related to the mark-to-market valuation of Robinhood Ventures Fund I. Adjusted earnings per share fell 3% to $0.60. The company said it added adjusted net income and adjusted earnings per share measures this quarter to show profitability before certain non-operating items. Operating expenses rose 16% to $739 million, driven by credit loss provisions as its card loan book grew, expenses related to Trump Accounts and Rothera, and marketing and growth investments. Adjusted EBITDA, meanwhile, increased 9% to $808 million.
Robinhood lowered the high end of its 2026 guidance for adjusted operating expenses and stock-based compensation by $25 million, setting the range at $2.675 billion to $2.75 billion, and said the revision reflected ongoing efficiency gains. After its second-quarter results on July 29, it had set the previous range at $2.675 billion to $2.775 billion. The company did not provide guidance for total operating expenses under GAAP, explaining that it could not reasonably predict certain items, including credit loss provisions and significant regulatory expenses. It said net deposits since the start of October exceeded $13 billion through October 27, including a $6 billion contribution from the Dell family to Trump Accounts. On geographic expansion, it announced that it had received authorization from the Dubai Financial Services Authority covering trading and custody across the 10 approved asset classes, and plans to begin rolling out its products in the region during 2027.