The business that just overtook crypto
Robinhood reported third-quarter results on October 27. Event contract revenue rose more than sixfold to $173 million. Crypto revenue fell 55% from a year earlier to $120 million.1 Event contracts are bets on yes/no outcomes, and they now earn the company more than the crypto trading it is best known for. Total revenue rose 12% to a record $1.42 billion, so event contracts are roughly an eighth of the total (our arithmetic on the reported figures).1
The quarter was not a clean win. Net income fell 14% to $476 million. Diluted earnings per share fell 16% to $0.51, against $0.55 expected.1 The new product is growing fast, but profit is falling at the same time.
The financial backbone: from loss to profit in two years
The checked annual figures from SEC filings show how much changed before this quarter. Revenue was $1.865 billion in fiscal 2023, $2.951 billion in 2024 and $4.473 billion in 2025.2 That is more than a doubling in two years (our arithmetic). Net income went from a loss of $541 million in 2023 to a profit of $1.411 billion in 2024 and $1.883 billion in 2025.2 Earnings per share moved from -$0.61 to $1.56 to $2.05.2
Cash generation was bumpier than profit. Operating cash flow was $1.181 billion in 2023, then negative $157 million in 2024, then $1.638 billion in 2025.2 Profit looks smooth on paper, but the cash behind it swung. Anyone reading only the earnings line would have missed the 2024 dip.
The balance sheet shows a similar pattern. Year-end cash was $4.835 billion in 2023, $4.332 billion in 2024 and $4.261 billion in 2025.2 It stood at $5.362 billion in the second quarter of 2026.2 Stockholders' equity, the company's net worth on paper, rose from $6.696 billion to $7.972 billion between 2023 and 2024.2 Research and development spending stayed flat at $349 million, $323 million and $355 million across the three years.2 Revenue more than doubled while that spending barely moved, which suggests growth is coming from new products on the existing platform rather than from heavier engineering spend. That reading is our inference. The filings do not state it.
One seam is worth showing. Two records give Robinhood's cash at September 30, 2025 as $4.331 billion and $4.3 billion. The gap of about $31 million is rounding, not a real disagreement. We use the precise figure.2
Cboe and Robinhood push into company-specific contracts
On September 30, Cboe announced at Robinhood's HOOD Summit that it plans to launch binary contracts tied to company-specific key performance indicators. The launch was expected in October 2026, subject to regulatory approval, and Robinhood would be the first retail broker to offer them.3 The products are tied to 23 companies.3 Steve Quirk said: "Earnings contracts give retail investors another tool to inform their strategies and offer an even more precise way to trade on anticipated company KPIs."3
This is a press release from a company promoting its own product. We measured source reliability for this outlet at 53% of 6,520 checked claims holding up, so treat the framing as the sellers' view.3 Our dossier does not confirm whether the regulatory approval has arrived.
Regulators: litigating on one front, exploring on another
The rules are still being fought over. On October 27 the CFTC sued Utah to stop the state from using its own laws to shut down CFTC-registered contract markets. It said it has started legal proceedings against nine other states.4 For investors, the question of who regulates these products, federal or state authorities, is unresolved. That is a real risk to a revenue line that has just become material.
The same agency is also looking at longer hours. On October 28 the CFTC said it will host an industry roundtable on December 15 on whether derivatives markets could move to 24/7 trading.4 Nasdaq says the industry's move to a 23-hour trading day is expected on Sunday, December 6, 2026. That depends on the readiness of the shared market-data feed and on SEC rule changes. Subject to SEC approval, Nasdaq would add a 9 p.m. to 4 a.m. ET session.4
Stablecoins face a separate deadline. Coinbase set a three-day MiCA deadline, the European crypto rulebook. It is converting non-compliant stablecoins (USDT, PayPal and Trump-linked coins) to USDC automatically, and told users not to deposit them after October 30.4 In the US, Treasury Secretary Bessent said on October 27 that stablecoins and digital assets could reinforce dollar dominance. He said Treasury could coordinate with the SEC and CFTC on crypto rules.4
Event markets meet a real-world test: Brazil
Brazil's presidential runoff on October 25 was a live test. Prediction markets expected Bolsonaro to win, and he lost.4 Brazilian firms bought stablecoins to hedge currency risk. USDT volume on Mercado Bitcoin rose nearly 800% and Bitcoin volume rose 865%.4 Our dossier does not say how much was bet or lost on the Brazilian contracts. It does show a market's favorite losing, and money moving into dollar-linked coins afterward.
Money is flowing to the trust layer
Around-the-clock trading and automated agents raise a question: who is actually on the other end? Baselayer, a San Francisco startup that helps financial institutions verify businesses and assess fraud risk, raised $35 million for a Series A led by M13. It plans to extend its identity technology to AI agents.5 Founder Jonathan Awad said: "Agents spin up and they spin down. How can you trust this random one-task agent?"5 He added that without proof of acting for a legitimate person or business, "agents will just get blocked everywhere."5
He also described how slow this business is to build. Relationships with financial institutions typically take 12 to 18 months, and large merchant partnerships up to 24 months.5 That is slow revenue for a young company. Awad says: "We've essentially streamlined 10 years' worth of selling into two years."5 This is a company's own account of itself, in an outlet where we measured 49% of 41 checked claims holding up, so treat it as an assertion.5
An investor's caution on AI and numbers
Norwest's Sean Jacobsohn is a counterweight to the hype. On finance he said: "You don't want AI doing calculations because it is not good at math." He allowed that some workflows work where precise numbers are not needed, but "when you need precision, accuracy and calculations, you can't rely on AI for that."6 He also said he goes on sales calls with a founder's CEO before investing, because "that's a big way of assessing the potential of a company."6 The same source reliability caveat (49% of 41 checked claims) applies.6
This is the logic behind the piece you are reading. The numbers in the financial section come from SEC filings and have been checked against the filing. The opinions are attributed to the people who gave them.
What to watch
- Whether the CFTC's Utah suit and the nine other proceedings go its way. Event contracts are now a visible slice of Robinhood's revenue (see above).
- The December 6 and December 15 dates. Nasdaq's longer session needs SEC approval, and the CFTC roundtable will show how seriously 24/7 derivatives are being considered.
- Whether event-contract growth can offset falling crypto revenue and profit. Net income fell 14% in the quarter even as revenue hit a record.
- Cboe's KPI contracts. Approval was still pending in the dossier.