Observed Signal · Oct 27, 2026 · Earnings Report · Source: CNBC Technology · Impact: 4/5 · Sentiment: Neutral
Robinhood revenue rises 12% as event contracts offset crypto slump
Robinhood reported third-quarter revenue of $1.42 billion, matching Wall Street expectations and marking a 12% year-over-year increase. Despite a 55% drop in cryptocurrency revenue to $120 million, transaction-based revenue grew 19% to $867 million, driven by a 500% surge in event contracts revenue and strong options trading (up 31% to $399 million). Shares fell about 3% in after-hours trading as total transaction revenue slightly missed estimates. The company continues to diversify its brokerage app into a broader financial services platform, investing in wealth management, subscriptions, and event contracts. Net deposits reached $15.7 billion in the quarter, representing a 17% annualized growth rate. CFO Shiv Verma noted that event contracts on crypto movements provided an alternative for investors amid the crypto slump.
Robinhood's earnings illustrate the growing importance of event contracts and options trading as alternatives to crypto revenue, reflecting broader trends in consumer finance and trading platforms that could impact advertising strategies for such platforms.
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Key Takeaways & Evidence Grounding
- Robinhood's Q3 2026 revenue was $1.42 billion, up 12% year-over-year, matching analyst expectations.
- Transaction-based revenue grew 19% to $867 million, with event contracts revenue surging over 500% and options revenue up 31% to $399 million.
- Cryptocurrency revenue fell 55% to $120 million in the quarter.
- Net deposits totaled $15.7 billion in Q3, representing a 17% annualized growth rate.
- Shares dropped about 3% in after-hours trading as total transaction revenue slightly missed StreetAccount estimates.
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10-Q Financial Filing Analysis for Robinhood (2026-10-28)
Robinhood Markets, Inc. delivered strong top-line momentum in Q3 2026, with total net revenues rising 12% year-over-year to $1.424 billion, propelled by a 19% growth in transaction-based revenues to $867 million. Performance was highlighted by exceptional expansion in event contracts (surging 541% to $173 million) and solid options growth (up 31% to $399 million), which offset a 55% contraction in crypto transaction revenues. However, GAAP net income declined 14% to $476 million ($468 million attributable to common shareholders, or $0.51 diluted EPS), impacted by a $60 million net other expense—primarily mark-to-market losses on venture fund holdings—and elevated operating expenses of $739 million driven by credit loss provisions and platform scaling costs.
Bernstein says Robinhood to rally on prediction markets
Bernstein reiterates an outperform rating on Robinhood Markets with a $160 price target, implying roughly 69% upside. Analyst Gautam Chhugani highlights prediction markets and new products as key growth drivers. Prediction market revenue surged six-fold year-over-year in Q3, with non-sports contracts up 30%. Rothera, a derivatives exchange and clearinghouse, became Robinhood's 14th business to cross $100 million in annualized revenue. The crypto business is evolving into an infrastructure play, with HOOD chain seeing $100 billion in on-chain exchange volumes and about 200 equity tokens live. Of 33 analysts, 27 rate the stock buy or strong buy. Shares slipped 7% premarket after Q3 report.
Deutsche Bank Raises Robinhood Price Target on Crypto Chain Revenue
Deutsche Bank analysts reiterated a 'buy' rating on Robinhood Markets and raised its price target from $115 to $136, implying a 9% upside, driven by the strong early performance of Robinhood Chain, a blockchain launched earlier this year for cryptocurrency trading. Analyst Brian Bedell noted that daily fee revenue from Robinhood Chain surged past expectations, totaling $10.8 million over the last five days, with an estimated $5.4 million in fee revenue to HOOD, surpassing the firm's prior third-quarter estimate of $4.6 million. The bank acknowledges limited visibility into the durability of this momentum but sees it as a positive driver. The stock has risen 20% this week and 41% over the past three months, with 24 of 29 analysts rating it a buy or strong buy.
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