Robinhood Q3 crypto revenue falls 55% to $120M as prediction markets surge to $173M

Robinhood reported a steep decline in cryptocurrency trading revenue for the third quarter, even as the broader business grew. Crypto transaction revenue came in at $120 million, compared with about $267 million a year earlier. The figure was still above the $114.1 million that Wall Street analysts had projected.

Crypto made up 8.4% of the company's $1.42 billion in quarterly revenue, down from roughly 21% in the same period last year. Customers traded less across the company's platforms: total crypto volume fell 38% to $50 billion. The Robinhood app handled $21 billion, a 48% decrease, while the Bitstamp exchange processed $29 billion, down 28%.

Total revenue rose 12% from a year earlier to $1.424 billion, slightly under the Street estimate of $1.43 billion. Growth came from several lines. Options trading generated $399 million, up 31%, and equities revenue increased 41% to $121 million. Prediction markets contributed $173 million, more than six times the amount recorded a year before, which now places the product well ahead of crypto trading as a revenue source. Earnings per share were $0.51, short of the consensus forecast of $0.55.

Despite the weaker trading activity, the company continued to expand its digital asset operations. Robinhood Chain, its blockchain network, processed more than $80 billion in decentralized exchange trading volume during its first quarter on mainnet and produced over $50 million in chain fees. Those fees reflect on-chain activity and are separate from the reported crypto transaction revenue. The company did not say how much of the chain fees it recognized as revenue.

Shares fell about 5% in post-market trading following the release of the results.