Robinhood Revenue Rises 12% to $1.42 Billion Despite Profit Decline
Key Facts
Robinhood reported results on October 27 for the third quarter ended September 30, posting net revenue of $1.42 billion, up 12% year over year. Net income, by contrast, fell 14% to $476 million, and diluted earnings per share declined 16% to $0.51. Reuters reported that the company earned 51 cents a share, compared with 61 cents in the same period a year earlier. The stock fell 3.4% after trading closed on October 27, according to a Reuters report published via MarketScreener. The results reflect broader revenue growth alongside continued pressure on earnings, in a quarter when the company posted its highest quarterly revenue.
Transaction-based revenue was the biggest growth driver, rising 19% to $867 million. The increase was driven by event-contract revenue of $173 million, more than six times its level a year earlier. Options generated $399 million, up 31%, while equities revenue rose 41% to $121 million. Crypto revenue, by contrast, fell 55% to $120 million, limiting the impact of growth in other trading categories. The figures show a divergence between activity tied to newer products and traditional brokerage on one hand, and the sensitivity of digital-asset revenue to a decline in trading on the other.
Growth in activity exceeded revenue growth: event contracts traded rose more than sevenfold year over year to a record 16.4 billion contracts. Options trading volume also increased 48% to a record 905 million contracts. JPMorgan analyst Kenneth Worthington said the company’s traditional brokerage business continues to perform well in what he described as an "almost perfect environment for retail traders." Meanwhile, Reuters reported that bitcoin had fallen about 28% in the three months before its report on October 28. The coverage linked the crypto market’s retreat to changing expectations for U.S. interest rates, outflows from bitcoin exchange-traded funds and waves of risk aversion.
On revenue not directly tied to transactions, net interest revenue fell 9% to $415 million. The company said the decline was mainly due to lower securities-lending activity and short-term interest rates, partly offset by growth in interest-earning assets. Other revenue rose 61% to $142 million, driven mainly by Trump Accounts services revenue and an increase in Robinhood Gold subscriptions. Gold subscribers increased 34% year over year to a record 5.2 million. Average revenue per user also rose 5% to $200, according to company data.
Operating expenses rose 16% to $739 million during the quarter. The company attributed the increase to higher credit-loss provisions as its credit-card portfolio grew, expenses related to Trump Accounts and Rothera, and marketing and growth investments. Robinhood said Rothera exceeded $100 million in annualized revenue in its first full quarter of operations. The results included unrealized losses of $67 million, or $0.07 in diluted earnings per share. Those losses were mainly tied to the mark-to-market revaluation of Robinhood Ventures Fund I.
Total assets on the platform stood at $396 billion on September 30, up 19% year over year. Net deposits during the quarter reached $15.7 billion, equivalent to an annualized growth rate of 17% relative to assets at the end of the second quarter. The chief financial officer said net deposits since the start of October had exceeded $13 billion through October 27, including a $6 billion contribution from the Dell family to Trump Accounts. On regional expansion, the company said the Dubai Financial Services Authority authorization covers trading and custody across its 10 approved asset classes. Robinhood plans to begin rolling out its product suite in the region during 2027.