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Robinhood reported $1.42 billion in third-quarter revenue, while crypto revenue fell 55% year over year to $120 million. Its stock dropped 10% after results, but Bernstein reiterated its outperform rating and $160 price target, and StoneX maintained its buy rating and $170 target.
Why it matters
Analysts are looking beyond the earnings miss to Robinhood’s expanding businesses. Bernstein sees prediction markets, perpetual futures and Robinhood Chain contributing roughly 25% of revenue by 2028, as the company moves beyond reliance on retail crypto trading.
Prediction markets generated $173 million in quarterly revenue. Non-sports contracts doubled their share to around 30%, led by crypto, commodities and financial contracts. Robinhood Chain added $26 million in net revenue in its first quarter on mainnet.
Market impact
StoneX’s Mark Palmer called the negative stock reaction an overreaction, noting an unrealized loss on Robinhood Ventures Fund I reduced earnings per share by $0.07. Excluding that loss and other items, EPS came in $0.60 above consensus.
Crypto revenue excluding Robinhood Chain was $94 million, down 6% from the prior quarter. Bernstein said Robinhood Earn, its stablecoin product, now holds more than $500 million in assets and brings in less revenue per dollar of activity than standard crypto trading. Excluding Earn, revenue per dollar traded was roughly unchanged quarter over quarter.
Frequently asked questions
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Why did analysts remain bullish after Robinhood's earnings miss?
Bernstein and StoneX pointed to growth in prediction markets, perpetual futures and Robinhood Chain, alongside the potential for those businesses to diversify revenue.
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How much revenue did Robinhood's prediction markets generate?
Prediction markets generated $173 million in quarterly revenue. Non-sports contracts doubled their share to around 30%.
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What did Robinhood Chain contribute in its first quarter on mainnet?
Robinhood Chain contributed $26 million in net revenue in its first quarter on mainnet.
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What drove the earnings-per-share shortfall?
StoneX analyst Mark Palmer said an unrealized loss on Robinhood Ventures Fund I reduced EPS by $0.07. Excluding that loss and other items, EPS was $0.60 above consensus.
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Why did Robinhood Earn weigh on crypto revenue per dollar of activity?
Robinhood Earn holds more than $500 million in assets, but it brings in less revenue per dollar of activity than standard crypto trading.
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