Robinhood has another engine for trading revenue
Robinhood’s customers traded 16.4 billion event contracts last quarter, generating more revenue than cryptocurrency transactions. A business built around trading outcomes is becoming a substantial contributor to a platform once closely associated with stocks and crypto.
Robinhood Markets (NASDAQ: HOOD) generated record third-quarter revenue of $1.42 billion, up 12% year over year. Its transaction businesses moved in markedly different directions:
| Selected trading businesses | Third-quarter revenue | Year-over-year change |
|---|---|---|
| Options | $399 million | +31% |
| Prediction markets | $173 million | +500% |
| Equities | $121 million | +41% |
| Cryptocurrency | $120 million | −55% |
Options remained the largest transaction business, while event contracts helped offset crypto’s decline.
Robinhood is becoming better equipped to retain trading activity when customer attention changes. More products give users additional reasons to open the app, although earnings remain sensitive to their willingness to keep transacting.
A retail slowdown can coexist with record platform activity
Across the broader market, retail equity-trading volumes have declined roughly 20% since midsummer and more than 40% since late 2025. Activity in leveraged index ETFs has also been running at roughly twice that of comparable unleveraged funds.
Robinhood’s own equity dollar volume, however, rose 53% year over year to $992 billion. The figures cover different populations, measures and comparison periods, so they cannot establish that Robinhood customers are collectively abandoning stocks.
Investor sentiment provides another useful distinction. In an October survey, 42% of respondents were bearish, up four percentage points from the previous quarter. Yet 42% also planned no portfolio changes over the next six months.
Caution and active trading can coexist. Options can express bearish views or hedge existing holdings, while leveraged products concentrate exposure. Many leveraged ETFs also target daily returns, making their longer-term performance dependent on compounding and the path markets take.
The emerging picture is a fragmented retail market, with some investors waiting and others seeking more targeted ways to trade.
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More ways to trade still need to produce more profit
Robinhood’s record revenue did not carry through to its bottom line.
Net income fell 14% to $476 million. Results included $67 million in unrealized investment losses, but adjusted net income also declined 3% to $550 million. Operating expenses increased 16% to $739 million, while net interest revenue fell 9% to $415 million.
Those figures expose the shareholder test. Growth in event contracts must generate enough additional income to cover expansion costs and weakness elsewhere.
Subscriptions provide another route. Robinhood Gold subscribers reached 5.2 million, up 34% year over year, broadening revenue beyond individual trades. Prediction markets, meanwhile, carry regulatory exposure that could restrict which contracts remain available.
The next useful signal is whether revenue growth begins outpacing expenses while recurring income expands. Robinhood has demonstrated that it can capture customers’ changing interests. Its next earnings reports need to show how much profit remains after serving them.
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