Robinhood revenue rises 12% to $1.42 billion as crypto revenue halves

Robinhood's crypto revenue fell 55% year over year in the third quarter, dragging shares down 4.7% in after-hours trading Tuesday even as total revenue climbed 12% to $1.42 billion.

The miss was real. Analysts polled by FactSet had expected earnings of 56 cents a share on $1.44 billion in revenue. Robinhood delivered 51 cents, down 16% from the same quarter last year. The stock is down 16.4% so far this year as of Tuesday's close.

The offset tells the story. Big gains in prediction markets, stocks, options and services tied to the government's new Trump accounts absorbed the crypto slump. Event-contracts revenue — money from prediction markets — jumped more than sixfold to $173 million. Options revenue rose 31% to $399 million. Equities revenue came in at $121 million, up 41%.

What did traders do amid the chip-stock chaos?

Semiconductor stocks have been on a wild ride this year, upended by concerns about artificial-intelligence spending. That volatility didn't scare Robinhood's customers off. It pulled them in.

CFO Shiv Verma told MarketWatch on Tuesday that platform traders bought the dip in chip stocks during the third quarter. "There was a lot of volatility for semis in the quarter," he said. "When we saw that, we saw our customers engage, and then use that as buying opportunities for a lot of these names that they had really done research on."

The caveat for practitioners: some individual traders making big, leveraged bets on chips have gotten hit hard recently. The dip-buying Verma describes isn't painless.

Where is Robinhood's growth actually coming from?

Prediction markets are the standout. Analysts have zeroed in on the business following this summer's World Cup and the start of the NFL season. Verma said election-related bets are picking up steam as the U.S. midterms approach.

Robinhood is also layering on new products to compete with rival platforms:

• AI trading agents, launched recently
• Stock tokens
• A social-trading platform
• 24/7 trading for some stocks, pending regulatory review

The Trump accounts are another engine. Robinhood's "other revenues" segment jumped 61% to $142 million, lifted by services tied to those accounts plus revenue from Robinhood Gold, its subscription service.

CEO Vlad Tenev, in the earnings release, said net deposits so far in October had surpassed $13 billion. Roughly $6 billion of that came from Dell CEO Michael Dell and his wife, Susan Dell, contributing to the Trump accounts — the investment accounts rolled out by the government this year for U.S. citizens born between 2025 and 2028. Robinhood serves as the brokerage and initial trustee for those accounts.

What does this change for the business?

Not every line is compounding. Net interest revenues fell 9% to $415 million amid lower securities lending and short-term rates. Operating expenses rose 16%, driven by Trump-account costs and Rothera, the prediction-market platform Robinhood built with Susquehanna International.

The macro backdrop hasn't helped. Broader markets have worried about higher oil prices and AI spending, and Robinhood has dealt with slumping crypto prices for much of the year — bitcoin remains well off the highs it hit last summer.

For investors, the quarter reframes the bet. Robinhood is no longer a crypto-revenue story; it's a prediction-markets and account-services story, with diversification strong enough to grow the top line 12% even as its former flagship line got cut in half. Whether that mix holds up through the midterms and a soft crypto market is the question the fourth quarter will answer.