Robinhood (HOOD) Q3 2026 earnings review
Robinhood betting revenue hits a record, while crypto trading halves
Robinhood's newer betting, options and subscription lines kept growing while its crypto and interest income shrank. Total revenue rose 12% from a year ago to a record $1.42 billion, or 30% outside crypto by our math, as finance chief Shiv Verma pointed to rapid scaling at its Rothera prediction-market exchange. Reported profit fell 16% because of paper losses on a venture fund and rising credit card loan losses, though management trimmed its full-year cost ceiling.
| Revenue outside crypto trading | +30% from a year ago (by our math; total revenue +12%) |
|---|---|
| Profit per share, excluding one-offs | $0.60 -3% from a year ago (reported: $0.51, -16%) |
| Event-contract trading revenue | $173M +11% from last quarter; over 6x a year ago |
| Full-year cost outlook | Trimmed $12.5M top end lowered $25M to $2.675–2.75B |
⚖️ Verdict: 🟢 Bullish
The story got better because event-contract revenue rose 11% from last quarter to $173 million even after the World Cup ended, proving the business is not a one-tournament spike. Government-backed children's accounts also brought in $6 billion of October deposits from the Dell family. One caution: credit card loan losses nearly tripled to $71 million and sit outside the company's guided cost target.
The question now is whether event contracts and government accounts can keep offsetting lower interest rates, rising card defaults and state legal challenges. One view is that owning the Rothera exchange and adding 70 million children's accounts builds steady fee income; the other is that state regulators could restrict sports betting while rate cuts squeeze interest profit. The third-quarter filing's legal and credit footnotes and fourth-quarter interest revenue will tell.
🐂 Bull Case
Prediction Markets Grow Past the World Cup
Robinhood lets users trade event contracts, which are yes-or-no bets on sports, politics and company earnings. Last quarter included the men's soccer World Cup, so this quarter tested whether trading would hold up without a global tournament. Finance chief Shiv Verma said the company "added a new business cylinder with over $100 million in annualized revenues this quarter as Rothera scaled rapidly." Rothera is the prediction-market exchange Robinhood owns with trading firm Susquehanna.
- Event-contract revenue: $173 million, up 11% from last quarter and more than six times a year ago
- Event contracts traded: 16.4 billion, up from 13.6 billion last quarter
- Rothera volume: over 6.4 billion contracts traded since its June launch
- Options and stock trading revenue: $399 million (up 31% from a year ago) and $121 million (up 41%)
This matters because routing trades through Rothera lets the brokerage keep the exchange fee instead of splitting it with outside venues. Growing revenue after the World Cup shows that football and election markets can carry the volume. What to watch: the legal proceedings note in the third-quarter filing. State regulators have challenged sports contracts, and any new state ban would cap this business.
Subscriptions, Banking and Government Accounts Scale Up
Robinhood is building products outside trading so revenue relies less on market swings. That includes Robinhood Gold, a paid membership with higher interest and card rewards, and Trump Accounts, the U.S. Treasury investment accounts for children where the brokerage serves as trustee. "Customers are trusting us with more of their assets as we deliver on our product roadmap, leading to our highest quarter ever for revenues," Verma said.
- Other revenue (mostly Gold subscriptions and Trump Account fees): $142 million, up 61% from a year ago
- Gold subscribers: 5.2 million, up 34% from a year ago, or 18% of all 28.7 million funded customers
- Banking and advisory: nearly $5 billion in Robinhood Banking deposits and over $2 billion in Robinhood Strategies managed portfolios
- Robinhood Chain, its blockchain network: over $80 billion in trading volume and over $50 million in fees in its first quarter
These newer lines helped lift revenue outside crypto by 30% from a year ago, by our math. In October, the U.S. Treasury started automatic enrollment for nearly 70 million children, and a pledge from the Dell family added $6 billion to October deposits. What to watch: fourth-quarter Other revenue. It will show how much fee income the brokerage earns on those government accounts once automatic enrollment is running.
Robinhood Trims Its Cost Ceiling Again
Management guides on a custom cost measure: operating expenses and share-based pay, excluding one-offs and loan losses. The company cut the top of its full-year range by $25 million, to $2.675–2.75 billion, "to reflect ongoing efficiency gains across our business". Third-quarter costs on that measure were $664 million, up 8% from a year ago, as general and administrative costs (corporate overhead) fell 3.1 percentage points of revenue.
By our math, third-quarter spending came in 10% below the second-half quarterly pace the prior outlook implied. Because the first three quarters totaled $1.91 billion, the new full-year midpoint still leaves $801 million for the fourth quarter, a 21% jump from the third quarter. What to watch: fourth-quarter operating expenses excluding one-offs. Finishing near the $2.675 billion bottom of the range would show the June staff cuts created lasting savings.
🐻 Bear Case
Credit Card Loan Losses Nearly Triple
While management lowered its custom cost outlook and pointed to efficiency, total GAAP operating expenses rose 16% from a year ago to $739 million, faster than the 12% revenue gain. Total operating margin slipped by 1.8 percentage points. The company attributed the cost increase to "higher provisions for credit losses as we grow the credit card loan book, expenses related to Trump Accounts and Rothera, and marketing and growth investments".
- Provision for credit losses (money set aside for unpaid customer loans): $71 million, up 173% from $26 million a year ago
- Credit losses as a share of revenue: 5.0%, up from 2.0% a year ago (a 3.0 percentage point increase)
- Operations expense (customer support and account servicing): $79 million, up 139% from $33 million a year ago, or up 3.0 percentage points of revenue
- Gold Card holders: 1.3 million, with over $19 billion in annualized card spending
Robinhood leaves credit losses out of its guided cost measure because it calls them unpredictable. Yet loan losses are a normal cost of running a credit card business, and they have grown every quarter this year as cardholders passed 1.3 million. What to watch: the credit-card delinquency and credit-score tables in the third-quarter filing. Rising past-due rates would mean card growth is coming from riskier borrowers.
Lower Rates and Crypto Slump Cut Revenue
Two outside forces held back top-line growth to 12%: lower short-term interest rates and quieter cryptocurrency markets. Net interest revenue, which is what the brokerage earns on cash and loans minus what it pays out, fell 9% from a year ago to $415 million. That happened even though the margin book — loans to customers for buying stocks — rose 59% to a record $22.1 billion.
Lower rates and less stock-lending income outweighed the bigger loan book. At the same time, cryptocurrency trading revenue dropped 55% from a year ago to $120 million. Crypto trading volume fell 48% on the main Robinhood app to $21 billion and 28% on its Bitstamp exchange to $29 billion. What to watch: fourth-quarter net interest revenue. It will show whether record margin loans can offset another Federal Reserve rate cut.
Risks this quarter didn't answer
Several standing risks from prior quarters depend on footnotes that only appear in the quarterly filing or on the conference call, neither of which is in the release.
- State lawsuits over sports betting contracts: the third-quarter filing's legal note will show if any state beyond Nevada forced a halt.
- Market-maker concentration: the revenue-concentration table in the filing will show if reliance on Citadel Securities rose above last quarter's 16%.
- International revenue share: the company received a Dubai license and launched UK crypto trading, but still does not disclose non-U.S. revenue.
- Robinhood Social rollout: management aimed to open the social feature to all users by the end of the third quarter, and the release did not mention it.
👓 Other Themes
New Profit Measure Strips Out Fund Losses
Robinhood introduced Adjusted Net Income and Adjusted EPS this quarter to show profit before non-operating items. GAAP net income fell 14% from a year ago to $476 million ($0.51 per share), weighed down by $67 million ($0.07 per share) of paper losses on Robinhood Ventures Fund I. Last quarter, a $129 million gain on the same fund lifted GAAP profit; excluding those swings, profit per share fell 3% to $0.60.
💲 Other KPIs
Total Platform Assets — all customer stocks, options, crypto and cash held on the platform — rose 19% from a year ago and $27 billion from last quarter. Net Deposits (new cash and assets customers brought in) slowed to $15.7 billion, a 17% annualized pace, down from $21.7 billion last quarter. October deposits then passed $13 billion, including $6 billion from the Dell family's gift to Trump Accounts.
Robinhood raised another $500 million in long-term debt during the quarter, taking total borrowings to $2.66 billion against $5.83 billion of corporate cash. At the same time, management slowed share buybacks to $25 million (0.2 million shares at about $105 each), down from $414 million last quarter. Diluted shares fell 0.8% from a year ago to 911 million.
Annualized revenue per funded customer reached $200, up 5% from $191 a year ago and up from $187 last quarter. Funded customers — people with an active or funded account — grew by 300,000 in the quarter to 28.7 million, a slower addition than last quarter's jump.
🔮 Guidance
Lowered at the top end (an improved cost outlook). The middle of the range came down by $12.5 million, implying a 20% cost increase from 2025. By our math, that leaves $763–838 million for the fourth quarter, or $801 million at the middle — up 21% from the third quarter and 34% from a year ago. In the three quarters since opening the 2026 plan, management moved the midpoint +$100M, -$37.5M and -$12.5M.
❓ Key Questions
How much of event-contract volume now runs on Rothera?
Rothera passed $100 million in annualized revenue and 6.4 billion contracts since launch, while total event contracts hit 16.4 billion in Q3. Disclosing the share routed through Rothera would show how much exchange-fee upside remains.
Why are credit card loan losses growing so fast?
Provisions for credit losses rose 173% from a year ago to $71 million and sit outside the company's guided cost measure. Investors need to know the charge-off rate and whether underwriting standards have tightened.
What are the fee rates on Trump Accounts?
The U.S. Treasury enrolled nearly 70 million children and the Dell family contributed $6 billion in October. Management has not disclosed how much revenue Robinhood earns per account or per dollar held.
Did Robinhood Social roll out to all customers?
Last quarter, chief executive Vlad Tenev aimed to open Robinhood Social to every customer by the end of the third quarter. The earnings release listed 17 new trader tools from the September summit but did not mention Social.