Robinhood's Profit Fell 14% Even as Revenue Hit a Record
Robinhood set a record for revenue, yet net income fell 14% as crypto revenue plunged and costs rose, leaving EPS below consensus and the stock down about 4% after hours.
Robinhood reported a quarter where the top line set records even as profit slid. Total net revenues rose 12% year over year to $1.42 billion, fueled by stronger trading across equities, options, and event contracts. Net income fell 14% to $476 million, and diluted earnings per share dropped 16% to $0.51.
The gap between a record revenue number and a smaller bottom line came down to what drove the revenue and which costs climbed faster. Customer engagement was strong, but the collapse in crypto revenue, plus higher credit provisions and operating expenses, trimmed the profit margin and left the stock lower after the print.
Record volumes, a mixed mix
The platform's activity growth was unmistakable. Equity notional trading volume rose 53% to a record $992 billion, options contracts traded hit a record 905 million (up 48%), and event contracts volume climbed to a record 16.4 billion after rising more than 7x. Those flows fed transaction-based revenue, which rose 19% to $867 million, with options revenue up 31% to $399 million and equities revenue up 41% to $121 million. Robinhood Gold subscribers grew 34% to a record 5.2 million, and funded customers rose by 1.9 million, or 7%, to 28.7 million.
The one glaring hole was crypto. Cryptocurrencies revenue fell 55% to $120 million, and crypto notional trading volumes dropped 38% to $50 billion. Net interest revenue fell 9% to $415 million, a decline the company attributed to lower securities-lending activity and short-term interest rates. Together they removed a meaningful slice of transaction revenue even as other trading categories expanded.
Costs, provisions, and mark-to-market
Costs rose alongside the activity. Total operating expenses increased 16% to $739 million, and the provision for credit losses climbed to $71 million, up 173%, as the credit card loan book grew. The company also recorded $67 million of unrealized losses tied to the mark-to-market of Robinhood Ventures Fund I, an item that reduced diluted EPS by about $0.07.
On a non-GAAP basis, adjusted net income fell 3% to $550 million and adjusted EPS fell 3% to $0.60, while adjusted EBITDA rose 9% to $808 million with an adjusted EBITDA margin of 57%. Those adjusted figures point to underlying operating leverage, but they did not fully offset the headline hits to GAAP net income.
Deposits, assets, and the balance sheet
Several balance-sheet measures stayed strong. Net deposits totaled $15.7 billion for the quarter, lifting trailing-12-month net deposits to $71.0 billion. Total platform assets rose 19% to $396 billion, and the margin book expanded 59% to a record $22.1 billion. Average revenue per user rose 5% to $200.
The company also narrowed its expense outlook, lowering the top end of its 2026 adjusted operating expenses and share-based compensation range by $25 million to $2.675 to $2.75 billion.
CEO Vlad Tenev kept the emphasis on the longer-term mission, saying the company's goal is "to make everyone an owner, because broad ownership is essential to a free, stable, and prosperous society." CFO Shiv Verma added that "Customers are trusting us with more of their assets as we deliver on our product roadmap, leading to our highest quarter ever for revenues."
Still, the immediate reaction centered on the miss. Consensus compiled by LSEG had pegged diluted EPS at $0.56, and Robinhood delivered $0.51; shares fell roughly 4% in after-hours trading, according to market coverage.
How a record top line became a smaller bottom line
Robinhood grew where customers used the platform more, while losing a large slice of crypto activity. Gains in equities, options, and event contracts underpinned headline revenue and lifted average revenue per user, but the crypto decline and rising credit and operating costs absorbed much of the incremental top line, with unrealized mark-to-market losses trimming GAAP EPS further.
That combination explains how a record quarter on revenue and volumes could still produce a year-over-year profit decline. The open questions are whether crypto activity rebounds, whether the growth in options and event contracts persists, and whether the platform growth converts into steadier, less volatile profitability. Management tightened part of the expense outlook, but the near-term math will hinge on crypto's return or whether other products keep expanding fast enough to offset it.
