exchange ·
Robinhood crypto revenue fell 55% but topped Street forecasts in third quarter
Robinhood's cryptocurrency trading revenue for the third quarter reached $120 million, marking a 55% decrease from the previous year.
This figure represented 8.4% of the firm's total revenue, a reduction from 21% in the prior year.
Despite the decline in crypto revenue, the $120 million figure surpassed the consensus expectations of $114.1 million provided by Wall Street analysts. However, the company's overall revenue and earnings per share missed analyst forecasts, causing shares to drop 5% during after-hours trading.
Total crypto trading volume experienced a 38% drop year-over-year, settling at $50 billion. Specifically, trading through the Robinhood application fell 48% to $21 billion, while volume via the crypto exchange Bitstamp decreased by 28% to $29 billion.
This contraction in crypto trading revenue occurred alongside growth in Robinhood's wider operations. Total revenue increased 12% year-over-year to $1.424 billion, slightly below the street estimate of $1.43 billion.
Growth drivers included options trading, which generated $399 million in revenue, up 31%, and equities revenue, which climbed 41% to $121 million. Furthermore, prediction markets contributed $173 million, exceeding the prior year's amount by more than six times.
Separately, Robinhood continued to advance its digital asset initiatives. Robinhood Chain, its blockchain network, handled over $80 billion in decentralized exchange trading volume and accrued over $50 million in chain fees during its first quarter on mainnet.
These chain fees reflect activity on the blockchain and must not be conflated with Robinhood's reported crypto transaction revenue. The firm did not specify how much of these chain fees it recognized as revenue.
The divergence between weakened crypto trading metrics and the expansion of other business segments illustrates a nuanced operational picture for the firm amid evolving market conditions.
Why it matters
Despite the significant drop in crypto trading revenue, the firm's overall business grew, driven by options and equities. This mixed performance highlights the current volatility in crypto market activity while showing growth in other regulated financial services offered by the platform.
