Robinhood reported record total net revenue of $1.4 billion for the third quarter, up 12% year over year, according to the company's results. However, net income fell 14% to $476 million, and diluted earnings per share declined 16% to 51 cents. The company said the profit figure included $67 million in unrealized losses, primarily related to Robinhood Ventures Fund I.
Event contracts outpace crypto revenue
For the second consecutive quarter, Robinhood's event-contract revenue exceeded its cryptocurrency revenue. Event-contract revenue reached $173 million in the third quarter, up from $120 million in the second quarter. Crypto revenue rose from $100 million to $120 million over the same period.
Year over year, cryptocurrency revenue fell 55%, while event-contract revenue grew more than sixfold. The growth raises the stakes in the dispute over whether states can restrict federally regulated prediction markets.
Transaction-based revenue rose 19% to $867 million, supported by options, equities, and event contracts. Options remained the largest reported trading revenue line at $399 million, up 31% year over year. Equities generated $121 million, up 41%.
Crypto trading volume recovers from Q2 but remains below year-ago levels
Robinhood reported about $50 billion in crypto notional volume, down 38% year over year but above the company-rounded $40 billion reported for the second quarter. Within the total, the Robinhood app accounted for about $21 billion, down 48% from the prior year, while Bitstamp contributed about $29 billion, down 28%.
Customers traded a record 16.4 billion event contracts, more than seven times the year-earlier count.
Prediction-market expansion carries regulatory risk
In its third-quarter risk disclosure, Robinhood said it had previously stopped certain new event contracts following actual or threatened state enforcement. It warned that litigation, enforcement actions, and changes in law could prevent it from offering the products.
On the same day as Robinhood's results, the CFTC announced a lawsuit against Utah seeking to block state enforcement against CFTC-registered contract markets. The agency said it had also initiated legal proceedings against nine other states as it defended its jurisdiction over those markets.
Robinhood Chain and international expansion
Robinhood said Robinhood Chain generated more than $80 billion in decentralized exchange volume and more than $50 million in chain fees in its first quarter on mainnet. The company described the network as a top-five chain by revenue and volume.
Robinhood also reported launching crypto trading in the UK and receiving Dubai Financial Services Authority authorization covering trading and custody across all ten DFSA-approved asset classes. The company plans to begin rolling out its product suite under that authorization in 2027.
