Robinhood Lowers 2026 Expense Cap to $2.75 Billion
Key Facts
On October 27, Robinhood lowered the top end of its 2026 forecast for adjusted operating expenses and stock-based compensation to $2.75 billion from $2.775 billion, while keeping the bottom end at $2.675 billion. The company said the $25 million adjustment reflected "continued efficiency gains" in its business. The midpoint of the new range is $13 million below the midpoint of its previous guidance. The metric covers adjusted operating expenses and stock-based compensation, and is a non-GAAP measure. The company did not forecast total operating expenses for 2026 or reconcile this guidance with the closest GAAP measure, citing the difficulty of reasonably predicting some items without disproportionate effort.
Adjusted operating expenses and stock-based compensation totaled $1.91 billion from the start of the year through the end of the third quarter, and the company said the figure was below the quarterly average implied by its previous guidance. The new annual range means the company expects to record about $765 million to $840 million in the fourth quarter. In the third quarter alone, these expenses totaled $664 million, up 8% year over year and 4% from the previous quarter. Total operating expenses under GAAP reached $739 million, up 16% year over year. Management said it would continue investing to grow new and existing products while delivering efficiencies and carefully managing costs through the rest of the year.
The forecast revision came in a quarter when Robinhood posted record net revenue of $1.424 billion, up 12% from the same period a year earlier and 9% from the previous quarter. Adjusted earnings before interest, taxes, depreciation and amortization were $808 million, with a 57% margin. Total platform assets rose 19% year over year to a record $396 billion. The company attributed asset growth to continued net deposits and higher equity valuations, partly offset by lower cryptocurrency valuations. But cryptocurrency transaction revenue fell 55% to $120 million, despite higher revenue from stock, options and event contract transactions.
Revenue growth was not matched by similar improvement in net income, which came in at $476 million in the third quarter, down 14% year over year and 17% quarter over quarter. The result included $67 million in unrealized losses, mainly tied to the mark-to-market valuation of Robinhood Ventures Fund I. After the results were announced, the stock fell 3.4% in after-hours trading, according to a Reuters report published on October 27. EL7 data showed the stock closed at $92.84 on October 26. From October 21 to October 26, daily closing prices fell from $101.93 to $92.84, passing through $96.58 on October 22 and $95.07 on October 23.
The 2026 expense guidance excludes credit loss provisions and costs related to pending acquisitions, along with items related to stock adjustments, restructuring and executive awards tied to the CFO transition, as well as certain large expenses that are difficult to predict. Robinhood announced on September 29 a plan to expand trading to selected U.S. stocks around the clock, including weekends, but the launch remains subject to regulatory review. The company said weekend trading would begin with a curated list of stocks and ETFs and operate through the Bruce ATS system. Robinhood's current trading window covers hundreds of stocks and ETFs from Sunday at 8 p.m. through Friday at 8 p.m. Eastern Time. The company has not set a date for the launch of weekend trading.