Robinhood just showed what happens when your old favorite product cools off and the new kids step up. The company posted third-quarter total net revenue of $1.42 billion, a 12% increase from the same period last year that landed in line with expectations.
The growth didn’t come from crypto. It came from options and event contracts, while crypto revenue fell by more than half.
Investors still found something to frown at. Shares dropped roughly 3% in after-hours trading because total transaction revenue came in slightly below Wall Street estimates compiled by StreetAccount.
The numbers behind the quarter
Robinhood released the results on October 27. Transaction-based revenue rose 19% year over year to $867 million, and that line did most of the heavy lifting.
Options trading was the single biggest contributor. It generated $399 million in the quarter, up 31% from a year earlier, while options contract volumes climbed 48%.
Event contracts were the breakout act. Revenue from them reached $173 million, representing growth of more than six times year over year.
Trading volume in event contracts rose to 16.4 billion.
Now for the part crypto watchers will notice first. Crypto revenue fell 55% to $120 million, as crypto notional trading volumes dropped 38% year over year to $50 billion.
Put those figures side by side and a shift becomes obvious. Event contracts, a newer business, out-earned crypto in the quarter, and options brought in more than three times what crypto did.
Profit slips even as the top line grows
Revenue growth didn’t translate into higher profit. Net income declined 14% to $476 million, or $0.51 per diluted share.
On an adjusted basis, earnings per share came in at $0.60.
Elsewhere in the report, Robinhood leaned on records. Robinhood Gold, the company’s paid subscription tier, hit 5.2 million subscribers, the highest figure it has reported.
Total platform assets rose to $396 billion. The company also said 14 separate business lines now each generate more than $100 million in annualized revenue.
Why the crypto slowdown matters
This quarter tested the reverse scenario. Crypto trading volume fell 38%, and crypto revenue dropped even more steeply at 55%.
The gap between those two declines is worth noting. Revenue falling faster than volume suggests Robinhood is earning less per dollar of crypto traded, though the source figures don’t break out the reason.
Despite the crypto decline, total revenue still grew 12%. Options and prediction markets absorbed the blow, which is roughly the opposite of the story Robinhood told during prior crypto booms.
Disclosure: This article was edited by Estefano Gomez. For more information on how we create and review content, see our Editorial Policy.