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Robinhood reported significant expansion of its prediction markets business during its third-quarter earnings report on Tuesday.
The brokerage firm announced $1.42 billion in total net revenue, up 12% from last year and 9% compared to Q2.
Financial performance and customer growth
Robinhood’s net income fell 14% year over year to $476 million, partly due to a $67 million decline in the reported value of its investments.
Funded customers reached a record 28.7 million, a year-over-year increase of 7%, and up 340,000 from the second quarter. Other details from the report:
- Net deposits for the third quarter totaled $15.7 billion.
- The Robinhood Gold subscription service reached 5.18 million subscribers, a 34% increase year over year.
- Robinhood has 14 business lines with $100 million or more in annualized revenues.
- Event contracts generated $173 million in transaction-based revenue, an increase of more than six times year over year.
Event contracts surge
During the third quarter, event contracts were a major factor in Robinhood’s growth. Chief Financial Officer Shiv Verma said during the company’s earnings call that “we are investing to be a leader in the space.”
Event contracts were the company’s second largest source of transaction revenue, behind options. Robinhood reported that users traded 16.4 billion event contracts in the quarter, more than a seven-fold increase compared to the same quarter last year.
Rothera, Robinhood’s prediction markets exchange joint venture with Susquehanna International Group, generated $28 million in revenue during its first full quarter of operation, putting it on pace to earn more than $100 million annually if that rate continues.
Non-sports event contracts also in focus
While most of Robinhood’s event contract trading was tied to sports, non-sports contracts accounted for about 30% of third-quarter activity, double their 15% share in the previous quarter, according to Verma.
CEO Vlad Tenev emphasized that the company wants to diversify its contract offerings.
“I think we’re less excited about doing what everyone else is doing, which is just all sports all the time, because I think that’s rapidly going to get commoditized, and is just, frankly, a little bit less differentiated from my standpoint.”
“As Vlad said, we’re starting to see adoption across some of these other asset classes, which is great to see,” added Verma.
In September, Robinhood partnered with Crypto.com and OG.com, which gives it equity stakes in the businesses. Verma discussed Robinhood’s plans to shift most of its event-contract trading away from competing exchanges and onto Rothera, Crypto.com, and OG.com by the end of 2026 or early 2027. The competing exchanges include Kalshi and ForecastEx.
“Rothera will be our primary exchange, and Crypto.com/OG.com will now be our main second exchange,” Verma said.
Expanded ventures include agentic trading
Answering a question from NASCAR driver Bubba Wallace, who races for Robinhood-sponsored 23XI Racing, Tenev discussed product plans for 2027, including agentic trading, which uses artificial intelligence to help customers research investments and execute trades.
“I do not think there’s really another game in town in terms of financial companies that are really investing in agentic trading and making that a first-class experience,” Tenev said. “I think we’re at the very beginning there, and we’re just continuing to invest in making the product experience really, really good.”
Robinhood customers have opened approximately 200,000 agentic trading accounts.
