Robinhood hits record $1.42 billion Q3 revenue as prediction markets overtake crypto

Robinhood Markets reported record third-quarter revenue of $1.42 billion as prediction markets and options trading offset a sharp decline in cryptocurrency revenue. However, higher operating expenses and investment-related losses weighed on profits, while the company’s reported earnings per share fell short of Wall Street expectations.

In its Q3 2026 earnings release, published on October 27, Robinhood said total net revenue increased 12% year over year. Net income fell 14% to $476 million, while diluted earnings per share declined 16% to $0.51.

The results highlighted a significant change in Robinhood’s revenue mix. Prediction markets generated $173 million during the quarter, surpassing the $120 million contributed by cryptocurrency transactions. Crypto revenue fell 55% from the same period last year, even as Robinhood expanded its blockchain infrastructure.

Robinhood Chain also recorded its first full quarter on mainnet, generating $26 million in revenue. The network processed more than $80 billion in DEX volume, giving the company another potential source of growth beyond traditional brokerage activity.

Prediction markets become a bigger revenue driver

Prediction markets were among the strongest performers in Robinhood’s latest quarter.

Event contracts generated $173 million in revenue, increasing more than sixfold from the year-earlier period and rising 11% from the second quarter. Users traded a record 16.4 billion contracts, reflecting growing demand for markets tied to sports, politics, economics, and other real-world events.

The segment’s performance put it ahead of cryptocurrency transactions, which generated $120 million.

The growth reflects Robinhood’s efforts to expand beyond its traditional stock and crypto brokerage business. Event contracts allow users to trade on the outcome of specific events, creating a product category that overlaps with financial markets while attracting customers interested in forecasting real-world developments.

Robinhood has also expanded its prediction market offering through new products and partnerships. At its September HOOD Summit, the company announced additional features, including earnings contracts, as part of a broader push to attract active traders.

However, prediction markets face regulatory scrutiny, particularly where contracts linked to sporting events overlap with state gambling rules. Maintaining growth will depend on user demand, product expansion, and the company’s ability to navigate the changing regulatory environment.

Altcoin Buzz previously covered this trend in Robinhood’s expansion of event contracts and CEO Vlad Tenev’s prediction that crypto-related contracts will outgrow sports.

Crypto revenue falls 55% despite Robinhood Chain’s debut

Robinhood’s cryptocurrency business delivered a weaker year-over-year performance.

Crypto transaction revenue dropped 55% to $120 million, while cryptocurrency trading volume declined 38% to approximately $50 billion. Trading volume through the Robinhood app fell 48% to $21 billion, while Bitstamp recorded $29 billion, down 28%.

The comparison comes against a stronger crypto market during the third quarter of 2025. Lower trading activity and softer market conditions have reduced the revenue Robinhood generates from buying and selling digital assets.

There was some improvement compared with the previous quarter. Crypto revenue increased 20% from $100 million in Q2 to $120 million in Q3. However, the recovery was not enough to reverse the annual decline.

Robinhood Chain added another dimension to the company’s crypto business. The Ethereum Layer 2 network launched on July 1 and generated $26 million in revenue during its first quarter on mainnet.

The network also processed more than $80 billion in decentralized exchange volume and generated over $50 million in chain fees, according to the company’s earnings highlights.

These figures measure different activities and should not be treated as interchangeable. Chain revenue, fees paid by users, and Robinhood’s cryptocurrency transaction revenue represent different parts of the business.

The early results nevertheless suggest that Robinhood’s blockchain infrastructure is becoming an important part of its broader digital asset strategy.

Robinhood Chain pushes the company toward onchain finance

Robinhood Chain is an Ethereum Layer 2 built using Arbitrum technology. It is designed to support tokenized stocks, other real-world assets, and decentralized financial applications.

The network gives Robinhood a way to expand from operating a brokerage platform into providing infrastructure for blockchain-based financial products. Tokenized assets can potentially trade through decentralized exchanges and connect with other onchain applications, depending on their design and applicable restrictions.

The company’s first-quarter results have attracted attention because the network generated substantial trading activity shortly after launch. More than $80 billion in DEX volume points to considerable market activity, although volume alone does not establish how much demand will persist or how much profit Robinhood will ultimately retain.

Altcoin Buzz previously examined this development in Robinhood Chain’s first-quarter revenue compared with Ethereum. The report discussed the network’s early revenue performance and the possibility that elevated fees could decline as congestion and network conditions change.

The company’s longer-term challenge is turning early trading activity into sustainable usage. Tokenized stocks and other real-world assets could become important applications, but network activity can also be driven by speculative trading and short-lived token launches.

Robinhood’s chain therefore offers growth potential, but its initial performance should not automatically be interpreted as a stable long-term revenue run rate.

Higher expenses weigh on profits

Despite record revenue, Robinhood’s profitability weakened.

Net income fell 14% year over year to $476 million, while diluted earnings per share dropped to $0.51 from $0.61. That missed analysts’ reported expectations of approximately $0.55 per share.

Adjusted earnings presented a somewhat stronger picture. Robinhood reported adjusted earnings per share of $0.60, down 3% year over year, compared with market expectations of roughly $0.56. The distinction matters because adjusted earnings exclude certain items that affect the company’s reported results.

Operating expenses increased 16% to $739 million. Robinhood attributed the increase to higher credit-loss provisions as its credit card business expands, costs associated with Trump Accounts and Rothera, and additional marketing and growth investments.

Net income also included $67 million in unrealized losses, primarily associated with the mark-to-market valuation of Robinhood Ventures Fund I.

The results show that revenue growth alone does not guarantee higher profits. Robinhood is investing in new businesses and products, but those investments are adding costs while its crypto trading revenue remains below year-earlier levels.

What Robinhood’s results mean for its crypto strategy

Robinhood’s third-quarter results reveal a company diversifying its revenue sources while continuing to invest in blockchain infrastructure.

Prediction markets have become a major contributor to transaction-based revenue, while options trading also recorded strong growth. At the same time, falling crypto revenue highlights the risks of relying heavily on trading activity that can change with market conditions.

Robinhood Chain offers a different opportunity. Rather than depending entirely on brokerage transactions, the company is building infrastructure that can support tokenized assets and decentralized applications. Its initial DEX volume and reported chain revenue indicate early adoption, but sustained demand will be the more important measure over time.

The company is also expanding internationally. During the quarter, Robinhood launched crypto trading in the United Kingdom and received authorization from Dubai’s financial regulator to operate across approved asset classes, with a regional rollout planned for 2027.

For now, the business is showing two contrasting trends: prediction markets and new financial products are growing rapidly, while traditional crypto trading remains under pressure. Whether Robinhood can turn its expanding product lineup and onchain infrastructure into consistent earnings growth will be a key question in the coming quarters.