Robinhood posts record $1.4 billion revenue, but a 14% profit drop exposes hidden portfolio losses
Prediction markets generated $173 million against crypto's $120 million in Q3, raising the stakes of a continuing state-federal regulatory fight. Read the full story on CryptoSlateUnderstand the crypto stories that matter and what to watch next. Get The Catalyst in your inbox
Robinhood's event-contract revenue exceeded crypto revenue for the second consecutive quarter, reaching $173 million in the third quarter, up from $120 million in the second quarter, according to the company's results.
Both businesses grew from the second quarter, with Robinhood's crypto revenue rising from $100 million to $120 million quarter-on-quarter. Revenue from prediction markets rose from $156 million to $173 million in the same period.
Year over year, cryptocurrency revenue fell 55%, while event-contract revenue grew more than sixfold. That growth raises the stakes in the dispute over whether states can restrict federally regulated prediction markets.
Total net revenue reached a record $1.4 billion, up 12% year over year. Transaction-based revenue rose 19% to $867 million, supported by options, equities and event contracts.
Net income fell 14% year over year to $476 million, while diluted earnings per share declined 16% to 51 cents. Robinhood said the result included $67 million in unrealized losses, primarily related to Robinhood Ventures Fund I.
The lead over crypto was already evident in Robinhood's second-quarter revenue mix. These companywide figures show how Robinhood earns money across products, but they don't show whether individual customers switched from coins to outcome contracts.
Crypto trading activity also recovered from the second quarter but remained below its year-earlier level. 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 third-quarter total, the Robinhood app accounted for about $21 billion, down 48% from the prior year. Bitstamp contributed about $29 billion, down 28%.
The app's steeper percentage contraction shows why separating the two volume streams gives a clearer view of retail activity than the combined figure alone.