Earnings · $HOOD
Robinhood Shares Slide After Crypto Slump Drives Third-Quarter Profit Miss
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Record revenue of $1.42 billion could not offset a 55% drop in crypto revenue, and the stock fell 8% before the bell.
By Emmanuel Cruz ·
Robinhood Markets shares fell 8% in premarket trading on Wednesday after the online brokerage's third-quarter profit came in below Wall Street estimates, as a sharp decline in cryptocurrency trading outweighed strength in options, stock trading and prediction markets [1].
The company reported on Tuesday that total net revenues rose 12% from a year earlier to a record $1.42 billion [2]. Net income fell 14% to $476 million, and diluted earnings per share fell 16% to 51 cents [2]. That was below the 55-cent consensus estimate compiled by LSEG [1]. On an adjusted basis, earnings were 60 cents per share, down 3% [2].
The breakdown of transaction revenue showed a business moving in two directions. Transaction-based revenues rose 19% to $867 million, with options revenue up 31% to $399 million and equities revenue up 41% to $121 million [2]. Revenue from event contracts, Robinhood's prediction-market product, reached $173 million, more than six times the level a year earlier [2]. Cryptocurrency revenue, however, fell 55% to $120 million [2]. Net interest revenues declined 9% to $415 million [2].
The crypto weakness reflects a broader cooling in digital assets. Bitcoin has fallen nearly 28% over the past three months, pressured by shifting expectations for U.S. interest rates, outflows from bitcoin exchange-traded funds and general risk aversion, Reuters reported [1]. Rising oil prices and geopolitical tensions have added to the strain, and retail traders have pulled back from speculative bets [1].
Customer and asset metrics continued to grow. Funded customers rose 7% to 28.7 million, Robinhood Gold subscribers increased 34% to 5.2 million, and total platform assets climbed 19% to $396 billion [2]. Net deposits were $15.7 billion in the quarter, and the company said October net deposits so far had exceeded $13 billion [2].
On costs, Robinhood narrowed its 2026 outlook for adjusted operating expenses and share-based compensation to a range of $2.675 billion to $2.75 billion, trimming $25 million from the top of the previous range [2]. It repurchased $25 million of its shares during the quarter, bringing cumulative buybacks since the third quarter of 2024 to $1.3 billion [2].
Some analysts emphasized the core brokerage. J.P. Morgan analyst Kenneth Worthington wrote that the legacy brokerage business is "continuing to perform well" in a favorable environment for retail traders [1]. Analysts remain optimistic about Robinhood's longer-term growth as it expands into a broader financial services company, according to Reuters [1].
Why it matters: Robinhood's results offer a window into retail trading activity, and its crypto revenue reflects individual investors' appetite for digital assets. The quarter showed that growth in options, stocks and event contracts was not enough to keep profit in line with expectations as crypto activity slumped [1][2].
What to watch next: whether the premarket decline holds in regular trading, how crypto prices move in the coming weeks, and the Federal Reserve's rate decision on Wednesday, which bears on both crypto sentiment and Robinhood's interest income [1][3]. Traders also expect at least three more quarter-point Fed rate increases by late 2027, according to LSEG data [3].
Sources:
[1] Reuters via Investing.com, "Robinhood shares fall as crypto markets chill drives profit miss", October 28, 2026. https://www.investing.com/news/economy-news/robinhood-shares-fall-as-crypto-markets-chill-drives-profit-miss-4977880
[2] Robinhood Markets, "Robinhood Reports Third Quarter 2026 Results", October 27, 2026. https://investors.robinhood.com/news-releases/news-release-details/robinhood-reports-third-quarter-2026-results
[3] Reuters via SRN News, "Nasdaq futures rise as SK Hynix boosts chips before Fed decision, earnings", October 28, 2026. https://srnnews.com/nasdaq-futures-rise-as-sk-hynix-boosts-chips-before-fed-decision-earnings/
This article was produced with AI assistance. It is for informational purposes only and is not financial advice. StockVolt and its authors may hold positions in securities mentioned.