Robinhood Falls 7% as Crypto Revenue Drops 55%, but a $0.07 Fund Loss Drives the EPS Miss

Robinhood Markets (HOOD) reported record third-quarter net revenue of $1.42 billion, up 12% from a year ago, but shares fell about 7% in after-hours trading on Oct. 27 to roughly $87.70, from a regular-session close of $94.56. Revenue landed just under the $1.43 billion Wall Street expected, and GAAP diluted earnings per share fell 16% to $0.51, below estimates of about $0.55 to $0.57. The causes are specific: crypto transaction revenue dropped 55%, net interest revenue fell 9%, operating expenses rose faster than sales, and a $67 million unrealized loss on Robinhood Ventures Fund I weighed on the bottom line.

The quarter in numbers

Source: Robinhood Q3 2026 results. Adjusted EBITDA margin was 57%, compared with 58% a year earlier.

Where the pressure came from

Crypto. Crypto notional volume fell 38% to $50 billion. Volume on the Robinhood app dropped 48% to $21 billion and Bitstamp volume fell 28% to $29 billion. Crypto revenue of $120 million is now roughly 8% of net revenue, versus about a fifth a year ago by our calculation (implied by the 55% decline).

Interest income. Net interest revenue declined 9% to $415 million on lower securities lending activity and lower short-term interest rates.

Costs and credit. Total operating expenses rose 16% to $739 million, ahead of the 12% revenue growth. The provision for credit losses jumped 173% to $71 million from $26 million as the credit card loan book grew. Robinhood's 2026 outlook for adjusted operating expenses and stock-based compensation was trimmed at the top by $25 million, to $2.675 billion to $2.75 billion, and excludes the credit-loss provision.

Why the EPS miss looks smaller underneath

Robinhood said $67 million of unrealized losses, mainly from marking Robinhood Ventures Fund I to market, cost $0.07 per diluted share. Adding that back gives about $0.58 by our calculation, which is at or above the $0.55 to $0.57 estimates. Adjusted EPS of $0.60 fell only 3%. The mark-to-market loss is non-cash and can reverse, which is why investors are looking past it to the slower crypto and interest lines for the trend.

What is working

Activity outside crypto set records. Equity notional volume rose 53% to $992 billion, options contracts rose 48% to 905 million, and event contracts traded rose more than sevenfold to 16.4 billion. Rothera, the prediction-market joint venture with Susquehanna, passed $100 million in annualized revenue in its first full quarter. Our Bernstein coverage looks at the prediction-markets case in more detail.

The customer base is growing too. Funded customers rose 7% to 28.7 million, Gold subscribers rose 34% to 5.2 million, total platform assets rose 19% to $396 billion, and net deposits were $15.7 billion for the quarter. Average revenue per user rose 5% to $200. The margin book hit a record $22.1 billion, up 59%. October net deposits already exceeded $13 billion month to date, including $6 billion from the Dell family's contribution to Trump Accounts.

What it means

Robinhood is becoming less dependent on crypto, but the pivot is not yet large enough to hide a weak crypto quarter. With transaction revenue at $867 million and crypto at $120 million, equities, options and event contracts now carry the top line. The risks to watch are the credit card book, where provisions are growing quickly, expense growth that outpaces revenue, and prediction markets, which the company flags as subject to potential significant regulatory matters. The buyback was small at $25 million, at about $105 a share, versus $107 million a year ago.

Sources: Robinhood Markets third-quarter 2026 results release (Oct. 27). After-hours price and estimate ranges are from market data. This is informational, not a recommendation to buy or sell.