Robinhood Q3 Earnings Breakdown: The Legacy Business Is Shrinking, While the Self-Built Chain and Prediction Markets Emerge as New Growth Engines

Original author: Xiaobing

Robinhood's crypto business is finding a new way to make money.

After the U.S. market close on October 27, Robinhood released its third-quarter earnings report. Crypto revenue grew 20% quarter-over-quarter to $120 million. Robinhood Chain, which launched its mainnet on July 1, contributed $26 million in its first quarter; excluding this portion, crypto trading revenue fell 6% quarter-over-quarter to $94 million, and total crypto revenue remained 55% lower than the same period last year.

All the growth came from the new chain, while the old business is shrinking.

Where did the $26 million come from?

This was the first full quarter after Robinhood Chain launched its mainnet. From its July 1 launch through the end of September, this Arbitrum-based L2 chain processed over $80 billion in DEX trading volume and generated more than $50 million in on-chain fees, of which $26 million was recognized in Robinhood's crypto revenue.

Excluding Robinhood Chain's contribution, traditional crypto trading revenue was only $94 million, down about 6% quarter-over-quarter.

Looking at on-chain data, activity on this chain is highly concentrated: a 12-day frenzy from August 30 to September 10 contributed 74% of the entire quarter's fees. During that period, daily on-chain trading volume once topped $1.5 billion, and single-day fees surpassed those of the Ethereum mainnet and Base, briefly ranking first across the entire network.

What drove all of this was not the tokenized stocks and RWA envisioned by Vlad Tenev, but meme coins.

Within less than three weeks of launch, Robinhood Chain's daily active addresses surpassed those of Coinbase's Base, with more than 80% of its DEX trading volume coming from meme coin speculation.

Of the $50 million in on-chain fees, Robinhood recognized only $26 million in revenue, with most of the remainder flowing to Arbitrum DAO's revenue share and the on-chain application layer. This monetization rate of roughly 50% is not high, but for a new chain that has been live for only three months, it is already a considerable increment.

Crypto trading revenue is shrinking

Shifting our gaze from the chain back to the app, the picture is not encouraging.

Crypto trading revenue plunged 55% year-over-year, and its share of the company's total revenue fell from last year's high to 8.4%. Even as trading volume rose from $40 billion in Q2 to $50 billion in Q3, revenue instead contracted, meaning the monetization efficiency per trade continues to decline.

Competition and fee-rate pressure are obvious.

Crypto trading is no longer a pie that Robinhood alone can enjoy; Coinbase, various DEXs, and a growing number of brokerages are all competing for retail users' trading volume.

Prediction markets are the real new engine

The real growth story lies in event contracts (prediction markets). Q3 revenue was $173 million, up more than 6x year-over-year and 11% quarter-over-quarter, having surpassed crypto trading revenue for two consecutive quarters.

Robinhood currently has 14 business lines with annualized revenue exceeding $100 million, and the three added in 2026 are Rothera (its self-built prediction market exchange), credit cards, and Robinhood Legend (an advanced trading platform).

This shift is quite interesting: two years ago, Robinhood's growth narrative was "a beneficiary of the crypto bull market"; now, crypto trading accounts for only 8% of total revenue, and prediction markets and options are the largest sources of trading revenue.

Overall earnings: record revenue, declining profit

Q3 total revenue hit a record high of $1.42 billion, up 12% year-over-year. But net profit was $476 million, down 14% year-over-year; diluted EPS was $0.51, down 16% year-over-year and below the market expectation of $0.55.

Revenue is growing but profit is not, as expanding operating expenses are eroding profit margins.

Robinhood has been aggressively rolling out new business lines over the past two years: building its own chain, acquiring Bitstamp and WonderFi, launching the lending product Robinhood Earn, and securing a prediction market license. These investments began to show up on the cost side in Q3.

CFO Shiv Verma emphasized that net deposits in October had topped $13 billion (including $6 billion injected by the Dell family into Trump Accounts), and Gold membership reached a record 5.2 million. Users and assets are still growing, but the market clearly is not buying the profit slowdown.

What does this mean for the crypto industry?

Robinhood's earnings reflect a larger trend: for traditional financial platforms, "trading crypto" is becoming increasingly hard to profit from, but "building chains" is opening up new revenue windows.

Robinhood Chain's $26 million in revenue comes from redirecting users from in-app order matching to on-chain DEX trading, shifting from a trading commission model to a fee-sharing model on chain infrastructure. The former is squeezed by market cycles and fee wars, while the latter rises with on-chain activity.

This follows the same logic as Coinbase's Base chain. The difference is that Base has yet to directly contribute explicit revenue, whereas Robinhood Chain generated measurable GAAP revenue in its very first quarter.

The problem is also obvious: the bulk of Q3's on-chain revenue came from a 12-day meme coin frenzy, and whether this explosive activity can be sustained will directly determine whether Robinhood Chain is a genuine revenue engine or a highly volatile cyclical add-on.