Robinhood Markets has reported weaker-than-expected third-quarter profits as declining cryptocurrency trading and rising operating costs weighed on its financial performance.
The company’s shares fell 7% in after-hours trading following the announcement, reflecting investor concerns over the slowdown in its crypto business.
Robinhood’s cryptocurrency transaction revenue dropped 55% year-on-year to $120 million. Market uncertainty, inflation pressures and higher interest rates have also made traditional investments more attractive than speculative digital assets.
However, the company recorded growth in other trading segments. Revenue from options trading increased by 31%, while event-contract revenue grew more than sixfold, helping push overall transaction-based revenue up approximately 19% to $867 million.
Despite these gains, operating expenses rose 16% to $739 million, driven by higher credit-loss provisions, marketing costs and investments in new businesses.
Robinhood’s results highlight the challenge of maintaining profitability as cryptocurrency activity weakens. Although prediction markets and options trading are providing alternative sources of growth, investors will be watching whether these businesses can sustain momentum and offset continued pressure on crypto revenue.
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