Robinhood shares fell 4% in after-hours trading as investors digested weaker-than-expected third-quarter earnings despite growth in options trading and prediction markets.
Here's how the brokerage performed in its quarter ended Sept. 30, compared with Wall Street estimates, based on a survey of analysts by LSEG:
- Earnings per share: 51 cents vs. 56 cents expected
- Revenue: $1.42 billion vs. $1.42 billion expected
Robinhood's net income fell to $468 million, or 51 cents per share, from $556 million, or 61 cents per share, a year ago. Revenue represented a 12% increase from $1.27 billion in the same quarter last year.
Despite that gain, transaction-based revenue of $867 million came in below Wall Street estimates from StreetAccount of $879 million, putting the focus on whether Robinhood can sustain momentum across its trading businesses and reduce its reliance on volatile market activity.
Robinhood has been diversifying its business as it tries to expand its brokerage app into a broader financial services platform. Options trading and event contracts have become increasingly important sources of transaction revenue, while the company has continued to invest in wealth management, subscriptions and other offerings.
Transaction-based revenue grew 19% from the same period last year to $867 million, driven primarily by a more than 500% increase in event contracts revenue. Additionally, options revenue grew 31% to $399 million and equities revenue rose 41% to $121 million.
Those gains were partially offset by cryptocurrency revenue, which fell 55% to $120 million.
Chief Financial Officer Shiv Verma told CNBC event contracts on crypto movements did well in the quarter, offering investors another way to express a view on crypto despite the slump in prices and spot trading.
Net deposits on the Robinhood platform totaled $15.7 billion for the quarter, equal to a 17% annualized growth rate based on total platform assets at the end of Q2 2026. Over the past year, net deposits totaled $71 billion, representing 21% growth compared with total platform assets at the end of Q3 2025.
—With reporting from CNBC's Robert Hum and Kate Rooney