Robinhood shares fall 4% as crypto slump weighs on profits, offsetting gains in new businesses

Key Points:

• Robinhood's shares dropped 4% in after-hours trading following third-quarter earnings that missed earnings per share expectations, reporting 51 cents versus the anticipated 56 cents, despite matching revenue estimates at $1.42 billion.
• Net income declined to $468 million from $556 million a year earlier, though revenue increased 12% year-over-year, driven by growth in options trading and event contracts.
• Transaction-based revenue totaled $867 million, slightly below the $879 million expected, highlighting concerns about Robinhood's ability to sustain momentum and reduce reliance on volatile market activity.
• Significant growth was seen in event contracts revenue (up over 500%), options revenue (up 31%), and equities revenue (up 41%), while cryptocurrency revenue fell 55% to $120 million.
• Net deposits grew 17% annualized to $15.7 billion for the quarter, with a 21% increase over the past year, reflecting continued platform asset growth despite challenges in the crypto segment.