Earnings Reaction · Q3 2026October 27, 2026 · reported after the close · video call 5:00 PM ET
Robinhood MarketsHOOD · NASDAQ
Record revenue, record Gold subscribers, $16B of net deposits and a new $100M business line — and net income fell 14% with a crypto line down 55%. The quarter is a transition from crypto to prediction markets and interest-earning assets, and the market is paying less per dollar of the new mix.
Last
$90.25
−4.6% after hours (close $94.56) · 52-wk $63.52–$150.47
Fair value (prob.-wtd)
$100
+11% vs AH · base $100
Q3 actual
$1,424M / $0.51
Street $1,431M / $0.55 · adj. EPS $0.60 (new metric)
Transaction rev
$867M · +19%
event contracts $173M (6×), options $399M (+31%), crypto $120M (−55%)
Net interest rev
$415M · −9%
lower sec-lending + rates; margin book $22.1B record
Net deposits
$15.7B
17% annualized; Oct MTD $13B incl. $6B Dell/Trump Accounts
Opex guide
$2.675–2.75B
top end trimmed $25M · provision for credit losses +173%
Valuation
41.6× / 30.5×
FY26E $2.17 · FY27E $2.96 · 5.1% short · 75% IV
Earnings reaction — record revenue, lower profit, −4.6% after hours. Net revenues $1,424M (+12% y/y, +9% q/q) vs. $1,431M consensus — a hair light. Transaction revenue $867M (+19%): event contracts $173M, up more than 6×, options $399M (+31%), equities $121M (+41%), crypto $120M, −55%. Net interest revenue $415M, −9% on lower securities lending and short rates despite a record $22.1B margin book. Other revenue $142M (+61%) on Trump Account servicing and Gold. GAAP EPS $0.51 vs. $0.55 Street (−16% y/y), including a $0.07 mark-to-market loss on Robinhood Ventures Fund I; the company introduced "Adjusted EPS" this quarter at $0.60 (−3% y/y). Operating expenses +16% to $739M: provision for credit losses $71M (+173%) as the Gold Card book grows, Trump Accounts and Rothera costs, marketing. Adjusted EBITDA $808M (+9%), 57% margin. KPIs are the bull case: funded customers 28.7M (+7%), platform assets $396B (+19%), net deposits $15.7B, Gold 5.2M (+34%), ARPU $200 (+5%), Rothera (the SIG prediction-markets JV) past $100M annualized in its first full quarter, and October net deposits already $13B including $6B from the Dell family's Trump Account pledge. Cash $5.8B; $2.66B of long-term borrowings now on the balance sheet (the converts); buybacks only $25M. Why −4.6%: revenue growth of 12% is the slowest in two years, net income fell, crypto — the 2025 engine — halved, net interest revenue is shrinking into a Fed that is not cutting, credit provisions are compounding, and a new adjusted-EPS metric arriving in the quarter GAAP EPS fell 16% is the kind of thing a 41× stock gets marked down for. The business is rotating from crypto to prediction markets and banking; the multiple on the new mix is lower.
What the quarter said
| Line | Q3 26 | Q3 25 | Y/Y | Read |
|---|
| Net revenues ($M) | 1,424 | 1,274 | +12% | Slowest growth in 8 quarters |
| Event contracts ($M) | 173 | ~27 | 6×+ | 16.4B contracts; Rothera JV >$100M annualized |
| Options ($M) | 399 | 305 | +31% | 905M contracts, record |
| Crypto ($M) | 120 | 267 | −55% | Notional −38%; app volume −48% |
| Net interest ($M) | 415 | 456 | −9% | Cash sweep −9%; margin book +59% |
| Provision for credit losses ($M) | 71 | 26 | +173% | Gold Card 1.3M customers, $19B APV |
| Net income ($M) | 476 | 556 | −14% | Incl. $67M RVI mark |
| Adj. EBITDA ($M) | 808 | 742 | +9% | 57% margin |
| Net deposits ($B) | 15.7 | — | — | Oct MTD $13B incl. $6B Dell |
The balance sheet doubled in nine months — total assets $58B from $38B — on segregated cash for Trump Accounts, receivables from users (margin) and securities borrowed. That is the business becoming a bank-broker hybrid: more interest-earning assets, more credit risk, more capital. The $2.66B of converts and a $25M buyback (vs. $1.3B cumulative at an average of $48) say management thinks the stock is no longer cheap enough to buy.
The one metric that matters
Revenue mix durability: can event contracts and net interest replace crypto? Crypto went from $267M to $120M in a year; event contracts went from ~$27M to $173M. The swap worked this quarter because prediction markets had an election-free but volatile tape; the regulatory risk on event contracts (state enforcement actions are named in the risk factors) is the one thing that can take the new engine away as fast as crypto left. Secondary: net interest revenue trajectory with the Fed on hold-or-hike and cash sweep still falling.
Where it touches the threads
- Retail participation read for the broader tape: record equity notional ($992B, +53%), record options (905M), record margin ($22.1B) — the retail bid is still fully engaged, which is a late-cycle marker on its own.
- Crypto down 55% at BTC ~$81K is the read-through to COIN (reports Thursday) and MSTR.
- Funding and capital: $2.66B of converts, a credit-card book with provisions tripling, and a buyback that stopped — the funding-strain thread at one remove.
Valuation and scenarios
At $90.25 after hours the stock is ~$81B of market cap (901M Class A+B shares), 41.6× FY26E ($2.17) and 30.5× FY27E ($2.96). The stock traded at $150 a year ago on crypto and prediction-market euphoria; it is 40% off that high and still 30× next year. Fair values are independent house estimates on FY27 earnings and a multiple that depends on whether the new mix (event contracts, banking, Gold) earns a fintech or a brokerage multiple.
Bull25% probability
$140+55%
- Event contracts keep compounding; crypto bottoms; NIR stabilizes
- Trump Accounts become a durable deposit franchise; Gold 6M+
- FY27 EPS ~$3.5 × 40× — growth multiple restored
Base50% probability
$100+11%
- Revenue +12–15%; EBITDA margin holds mid-50s
- Crypto flat, event contracts grow, credit provisions normalize
- FY27 EPS ~$2.95 × 34× — a premium brokerage multiple
Bear25% probability
$60-34%
- Event-contract regulation bites; crypto stays halved
- Credit losses rise with the card book; NIR falls with cash sweep
- FY27 EPS ~$2.4 × 25× — toward the 52-wk low
Probability-weighted fair value
$100
vs. after-hours $90.25
+11%
Modest upside on expected value, wide distribution. The 41× trailing multiple is the risk; the KPIs are the reason it has held.
What to watch
- Event-contract regulatory language on the 5 PM ET call
- October trends beyond net deposits — volumes, crypto
- Net interest revenue outlook with the Fed on hold
- Credit: Gold Card delinquencies and the provision run-rate
- Adjusted EPS — why now, and what it excludes
- Buyback pause: $25M vs. $107M a year ago
The desk read: the franchise is growing and the profit is not — yet. A 12% revenue quarter at 41× with a new adjusted metric is being sold on principle; the October deposit number is the bull's reply. Levels: $85 and $78 below; $95 (close) and $105 above.
Sources
- Robinhood Q3 2026 results, 8-K Exhibit 99.1 — https://www.sec.gov/Archives/edgar/data/1783879/000178387926000164/q32026robinhoodexhibit991.htm
- Filing index — https://www.sec.gov/Archives/edgar/data/1783879/000178387926000164/
- Pre-print consensus: Briefing/Schwab workbook. Prices and after-hours quotes: Schwab market data, Oct 27, 2026 ~4:15 PM CT.
For educational/entertainment purposes. Sikuli Research publishes independent opinions; nothing here is investment advice, a research report under FINRA rules, or a solicitation to buy or sell any security. Fair-value scenarios are the author's assumptions and may change without notice. Prices are as of the time stated and should be confirmed against a live feed. The author may hold positions, long or short, in securities mentioned.