Robinhood posts record revenue as crypto trading declines and prediction markets grow

Robinhood reported record revenues, with transaction-based revenues growing 22% year-over-year. Crypto-related revenue was $120 million in the third quarter, up from $100 million in the previous quarter, representing 8% of total revenues. However, crypto trading revenue declined 6% in the last quarter, while revenue from the company’s prediction markets grew 11%. The new Robinhood Chain, launched in July, generated $26 million in revenue in its first quarter, with gross chain revenue of $50 million after a 50% split with Arbitrum.

CEO Vlad Tenev stated the company will double down on Robinhood Chain rather than increasing fees, aiming to transition from cyclical transaction-based revenue to a more stable, bank-like model. Shares fell 5% as new user acquisition dropped to 300,000 from nearly 1 million in the previous quarter. Analysts note that Robinhood is facing increased competition in the U.S. market from Nubank, which has 140 million users, and Revolut. Some analysts are skeptical of the current valuation, arguing that the crypto segment is too small to justify the stock trading as a crypto company, while others point to a shift in capital toward prediction markets and AI stocks.