Robinhood (HOOD.US) released its third-quarter 2026 earnings report on Tuesday. The data showed that total net revenue for the quarter reached $1.424 billion, a record high, up 12% year-over-year and 9% quarter-over-quarter; net profit was $476 million, down 14% year-over-year and 17% quarter-over-quarter; diluted earnings per share came in at $0.51, below $0.61 in the same period last year, a decline of 16%. Non-GAAP adjusted net profit was $550 million, down 3% year-over-year; adjusted earnings per share was $0.60, a decrease of approximately 3% from $0.62 in the prior-year period. Meanwhile, adjusted EBITDA reached $808 million, up 9% year-over-year.
Robinhood stated that although its cryptocurrency trading business performed weakly, continued growth in options, equities, and prediction market trading activity drove the company's quarterly revenue to a record high.
Options and Prediction Market Businesses Grow Strongly as Crypto Trading Revenue Falls Sharply
Breaking down by business segment, Robinhood's third-quarter transaction-related revenue reached $867 million, up 19% year-over-year, serving as the main driver of revenue growth. Among this, options trading revenue reached $399 million, up 31% year-over-year; equities trading revenue was $121 million, up 41% year-over-year. Prediction market-related event contract revenue reached $173 million, up more than fivefold year-over-year, meaning the revenue scale reached more than six times that of the same period last year. In contrast, cryptocurrency trading revenue plunged 55% year-over-year to $120 million, becoming the main drag on the transaction business.
In terms of trading volume, Robinhood's third-quarter equity notional trading volume reached $992 billion, up 53% year-over-year; options contract trading volume reached 905 million contracts, up 48% year-over-year, with both metrics hitting record highs. The prediction market business grew particularly significantly. Third-quarter event contract trading volume reached 16.4 billion contracts, up more than sixfold year-over-year, setting a record. Meanwhile, cryptocurrency notional trading volume fell 38% year-over-year to $50 billion. Among this, cryptocurrency trading volume within the Robinhood app dropped 48% year-over-year to $21 billion, while Bitstamp platform trading volume fell 28% year-over-year to $29 billion.
In terms of other revenue, Robinhood's third-quarter net interest income was $415 million, down 9% year-over-year, mainly affected by reduced securities lending activity and lower short-term interest rates, though growth in interest-earning assets partially offset these unfavorable factors. Other revenue reached $142 million, up 61% year-over-year, mainly driven by Trump Accounts-related service revenue and growth in Robinhood Gold subscription revenue.
Operating Expenses Rise 16% as Credit Loss Provisions Increase Substantially
In terms of profitability, Robinhood's third-quarter total operating expenses reached $739 million, up 16% year-over-year. Among this, credit loss provisions increased from $26 million in the same period last year to $71 million, a substantial year-over-year increase of 173%, mainly related to the expansion of the company's credit card lending business. The company stated that the increase in operating expenses was also driven by Trump Accounts and Rothera-related costs, as well as investments in marketing and business growth.
Additionally, Robinhood recognized $67 million in unrealized losses in the third quarter, mainly related to fair value changes in Robinhood Ventures Fund I, equivalent to a reduction of approximately $0.07 in diluted earnings per share. After excluding certain non-operating items, the company's third-quarter adjusted net profit was $550 million, with adjusted earnings per share of $0.60. It is worth noting that adjusted net profit and adjusted earnings per share are non-GAAP financial metrics newly introduced by Robinhood this quarter.
Client Assets Grow 19% as Gold Subscribers Reach 5.2 Million
In terms of users and asset scale, Robinhood's third-quarter funded account customers reached 28.7 million, up 7% year-over-year, an increase of 1.9 million from the same period last year. Investment accounts reached 30.4 million, up 9% year-over-year, an increase of 2.5 million. As of the end of the third quarter, the company's total platform assets reached $396 billion, up 19% year-over-year, mainly driven by continued net customer deposits and rising equity asset valuations, though declining cryptocurrency valuations partially offset the growth.
Third-quarter net customer deposits reached $15.7 billion, equivalent to a 17% annualized growth rate calculated based on total platform assets at the end of the prior quarter. Over the past 12 months, Robinhood's cumulative net deposits reached $71 billion. Meanwhile, the number of Robinhood Gold paid subscribers reached a record 5.2 million, up 34% year-over-year, an increase of 1.3 million from the same period last year. The company stated that Gold subscription penetration among overall customers reached 18%, with penetration among new customers at approximately 40%. Third-quarter average revenue per user (ARPU) reached $200, up 5% year-over-year.
In terms of other businesses, Robinhood's retirement account assets under custody reached $36.6 billion, up 51% year-over-year; margin lending balances reached $22.1 billion, up 59% year-over-year, both hitting record highs.
Accelerating Expansion of Prediction Markets and Global Business Footprint
Robinhood stated that the company currently has 14 business lines with annualized revenue reaching or exceeding $100 million. Among these, Rothera achieved over $100 million in annualized revenue in its first full quarter of formal operations, with cumulative trading contracts exceeding 6.4 billion since launch. In the prediction markets and active trading space, the company continues to launch new products, including perpetual futures for eligible U.S. customers, round-the-clock trading for certain U.S. equities, and earnings event contracts in prediction markets.
Additionally, Robinhood stated that approximately 200,000 customers have opened Agentic Trading Accounts, driving cumulative notional trading volume of over $1.6 billion. On the international front, the company has launched cryptocurrency trading services in the United Kingdom and obtained authorization from the Dubai Financial Services Authority (DFSA), with plans to gradually roll out products and services locally starting in 2027.
Lowering the Upper End of Full-Year Adjusted Expense Guidance
Looking ahead to the full year 2026, Robinhood narrowed its combined adjusted operating expense and stock-based compensation expense guidance range from the previous $2.675 billion to $2.775 billion to $2.675 billion to $2.750 billion, lowering the upper end of the range by $25 million. The company stated that this adjustment reflects continued improvement in business operating efficiency. However, the above expense guidance excludes credit loss provisions, costs related to pending acquisitions, certain restructuring and executive compensation adjustment expenses, and potential significant regulatory matters.
Robinhood Chief Financial Officer Shiv Verma stated that as the company continues to advance its product development roadmap, customers are entrusting more assets to Robinhood's management, driving the company to achieve its highest-ever quarterly revenue. He also noted that the company maintains strong growth momentum entering the fourth quarter. As of the October earnings release, net customer deposits during the month had exceeded $13 billion, including $6 billion injected by the Dell family into Trump Accounts.
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