Key Highlights

  • Robinhood Markets reported third quarter total net revenues of USD 1.42 billion, up 12% year over year.
  • Net income declined 14% year over year to USD 476 million, with diluted earnings per share down 16%.
  • Funded customers increased by 1.9 million, or 7%, year over year to 28.7 million.
  • Adjusted EBITDA rose 9% year over year to USD 808 million, even as total operating expenses increased 16%.

Revenue Grows as Expenses and Investment Losses Weigh on Net Income

Robinhood Markets (NASDAQ:HOOD) reported third quarter total net revenues of USD 1.42 billion, up 12% year over year, with transaction-based revenues up 19%. Net income declined 14% year over year to USD 476 million, and diluted earnings per share fell 16%, a decline that included USD 67 million, or USD 0.07 per diluted share, of unrealized losses primarily tied to the mark-to-market valuation of Robinhood Ventures Fund I.

Adjusted EBITDA, a non-GAAP measure, rose 9% year over year to USD 808 million. Total operating expenses increased 16% to USD 739 million, driven primarily by higher provisions for credit losses tied to the growing credit card loan book, expenses related to Trump Accounts and the company's Rothera joint venture, and increased marketing and growth investments.

Customer Growth and New Business Lines

Funded customers increased by 1.9 million, or 7%, year over year to 28.7 million. The company highlighted growth across newer business lines, including Robinhood Banking, which has attracted nearly USD 5 billion in deposits from more than 350,000 funded customers, with approximately 40% of customers signed up for direct deposit.

Robinhood Strategies grew to 350,000 funded customers with more than USD 2 billion in assets under management during the quarter, while Trust Accounts held more than USD 300 million in assets with an average account size exceeding USD 400,000. The Rothera joint venture also scaled rapidly, generating more than USD 100 million in annualized revenue during the quarter.

Guidance Update and Expense Trends

The company lowered the top end of its full year 2026 adjusted operating expense and stock-based compensation outlook to a range of USD 2.675 billion to USD 2.75 billion, from a prior range of USD 2.675 billion to USD 2.775 billion provided at its second quarter earnings release, reflecting ongoing efficiency gains across the business.

Continued growth in funded customers and newer business lines such as Robinhood Banking and Rothera could support further revenue diversification, while the pace of credit loss provisions tied to the expanding credit card loan book remains a variable that could affect expense growth in coming quarters.

Growth and Expense Metrics to Track

Funded customer growth relative to the 7% increase reported this quarter, the scaling pace of newer business lines including Robinhood Banking and the Rothera joint venture, and total operating expense growth relative to the lowered full year outlook are among the items the company has flagged for investors. The unrealized investment losses that affected this quarter's net income remain a variable tied to broader market valuations in future periods.