Robinhood Crypto Revenue Falls 55%; Shares Drop 8% Before Market Open

Key Facts

Robinhood shares fell 8% in premarket trading on Wednesday, October 28, after third-quarter earnings came in below Wall Street expectations, according to a Reuters report. The company’s statement showed net income down 14% year over year to 476 million dollars and diluted earnings per share down 16% to 0.51 dollars. This came as the company recorded strong growth in some transaction revenue sources, including event contracts, options and equities. But that growth did not offset declines in cryptocurrency transaction revenue and net interest revenue. In the previous regular session, HOOD shares closed at 94.56 dollars on October 27, according to EL7 data.

Cryptocurrency transaction revenue was 120 million dollars in the third quarter, down 55% from the same period a year earlier, according to Robinhood’s statement. Notional cryptocurrency trading volume fell 38% to 50 billion dollars. That included 21 billion dollars through the Robinhood app, down 48%, and 29 billion dollars through Bitstamp, down 28%. The figures show that the contraction affected trading activity both through the app and on the platform the company acquired, not just the revenue line. Reuters said Bitcoin had fallen about 28% in the three months before its report, amid pressures that included changing U.S. interest rate expectations, outflows from spot Bitcoin exchange-traded funds and bouts of risk aversion.

In another category, net interest revenue fell 9% year over year to 415 million dollars. Robinhood attributed the decline mainly to lower securities lending activity and short-term interest rates, partly offset by growth in interest-earning assets. The company’s statement did not link this decline to narrower profit margins. Meanwhile, total transaction revenue rose 19% to 867 million dollars, supported by growth in event contracts, options and equities, partly offset by lower cryptocurrency revenue. Operating expenses were 739 million dollars, up 16% year over year, driven by credit loss provisions, Trump Accounts and Rothera expenses, and marketing and growth investments.

Event contracts were the standout growth driver, generating 173 million dollars in revenue, more than six times the level a year earlier. The number of contracts traded also rose more than sevenfold to a record 16.4 billion contracts. Options revenue was 399 million dollars, up 31%, while equities revenue rose 41% to 121 million dollars. The figures present a mixed picture of the brokerage business: strong activity in event-linked products and traditional markets, against a broad decline in cryptocurrency trading. JPMorgan analyst Kenneth Worthington said the company’s traditional brokerage business continued to perform well in what he described as an almost ideal environment for retail traders.

Across its customer base and assets, total platform assets rose 19% year over year to 396 billion dollars. The company attributed this to continued net deposits and higher equity valuations, partly offset by lower cryptocurrency valuations. Net deposits were 15.7 billion dollars during the quarter, equivalent to an annualized growth rate of 17% compared with platform assets at the end of the second quarter. Net deposits over the twelve months also reached 71.0 billion dollars. Robinhood Gold subscribers rose to a record 5.2 million, up 34% year over year, while net earnings included unrealized losses of 67 million dollars, or 0.07 dollars in diluted earnings per share, mainly related to the revaluation of Robinhood Ventures Fund I.

Robinhood said net deposits since the start of October exceeded 13 billion dollars through October 27, including a 6 billion dollar contribution from the Dell family to Trump Accounts. The company plans to begin rolling out its suite of products in the Dubai region during 2027, after receiving authorization from the Dubai Financial Services Authority. The timeline places regional expansion among the company’s future plans, while the quarter’s results came as cryptocurrency and interest revenue were under pressure. Deposit, asset and Gold subscriber figures remain indicators of continued growth in the platform’s base alongside a varied mix of income sources. Reuters said the stock was down 8% in premarket trading after the results were announced.