Robinhood Markets (NASDAQ: HOOD) shares fell more than 8% to $86.78 in premarket trading Wednesday after the online brokerage reported record third-quarter revenue that missed Wall Street estimates, amid weaker cryptocurrency trading and higher operating expenses.
Revenue rose 12% year over year to a record $1.42 billion for the quarter ended Sept. 30, below the Wall Street consensus estimate of $1.43 billion. Adjusted earnings per share (EPS) reached $0.60.
However, diluted earnings under generally accepted accounting principles (GAAP) fell from $0.61 to $0.51 per share year over year, missing the $0.55 consensus estimate compiled by LSEG. Net income fell 14% to $476 million, including $67 million in unrealized losses mainly tied to the valuation of Robinhood Ventures Fund I.
Robinhood introduced adjusted EPS as a non-GAAP measure this quarter, adjusting for investment gains and losses, certain share-based compensation tied to the CFO transition, intangible-asset amortization, and related tax effects.
Crypto Revenue Falls 55% as Operating Costs Rise
Cryptocurrency transaction revenue plunged 55% year over year to $120 million. The reported total was 20% above the second quarter’s $100 million, but included $26 million attributable to Robinhood Chain. Excluding Chain, third-quarter crypto revenue was $94 million, down 6% from the prior quarter.
Combined crypto trading volume across the Robinhood app and Bitstamp declined 38% year over year to $50 billion, comprising $21 billion from the app and $29 billion from Bitstamp.
Other trading businesses posted stronger results. Options revenue was up 31% to $399 million, while event-contract revenue, including prediction markets, reached $173 million, more than six times the year-earlier level.
Total transaction-based revenue climbed 19% to $867 million, although net interest revenue declined 9% to $415 million, partly reflecting lower securities-lending activity and short-term interest rates.
Operating expenses rose 16% to $739 million, while the provision for credit losses climbed to $71 million from $26 million a year earlier. Robinhood attributed the higher costs partly to growth in its credit-card lending business, spending on newer operations and marketing investments.
The company also lowered the upper end of its full-year 2026 outlook for adjusted operating expenses and share-based compensation by $25 million, bringing the forecast to $2.675 billion to $2.75 billion. The non-GAAP outlook excludes credit-loss provisions, certain acquisition-related costs, and other specified expenses, making it different from reported GAAP operating expenses.
Robinhood reported $15.7 billion in quarterly net deposits, while funded customers increased 7% year over year to 28.7 million.
Robinhood Stock Extends Decline From September Levels
Robinhood shares gained 1.85% to close Tuesday’s regular session at $94.56, ending a three-session losing streak before the earnings release.
The stock had already fallen nearly 16% from its Sept. 30 price of $112.50. Wednesday’s pre-market price placed it about 23% below that level, extending its recent retreat despite the previous session’s rebound.
Separately, Robinhood Tokenized bStocks (HOODB), a tokenized instrument distinct from Nasdaq-listed HOOD shares, traded at $86.91, down 6.31% over 24 hours, according to CoinMarketCap.
The earnings report also followed a separate Tuesday announcement that Robinhood had partnered with Ripple to integrate the RLUSD stablecoin across its retail and institutional platforms.
RLUSD is already available on Robinhood Chain and Bitstamp by Robinhood and is expected to become available in the Robinhood app later this year. Robinhood also plans to use the stablecoin on the XRP Ledger for institutional settlement through Bitstamp’s institutional business.