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Key Takeaways
- Robinhood reports third-quarter results after the close on Tuesday, Oct. 27, with 13 business lines now running at $100 million or more of annualized revenue.
- The report shows whether the expansion still widens operating margins, after costs grew faster than revenue in the first half of 2026.
- Robinhood’s GAAP operating margin rose to 47% in 2025 from 36% in 2024, then slipped to 44% in the second quarter of 2026.
- Analysts expect normalized EPS to jump 34% in 2027, which only works if this spending starts turning into profit.
Robinhood (HOOD) has spent the last two years adding businesses as fast as it can launch or buy them. Its third-quarter report comes out after the close on Tuesday, Oct. 27, and it will show whether those businesses are still paying their way.
Thirteen lines and counting
In its second-quarter results, Robinhood said 13 of its business lines were running at $100 million or more of annualized revenue. (That’s one quarter’s revenue times four, so these aren’t 13 mature $100 million businesses.) Options and crypto trading sit alongside event contracts, margin lending, Gold subscriptions and the credit card. Newer bets like the Rothera exchange, WonderFi and Trump Accounts come after them.
All that breadth has shown up in revenue. It climbed from $1.87 billion in 2023 to $4.47 billion in 2025, including a 52% jump last year.
The margin was the payoff
For a while, most of each new dollar went straight to operating profit. After operating losses in 2021 and 2022, Robinhood’s GAAP operating margin reached 46.8% in 2025, up from 35.7% in 2024…
2026 has been tougher. In the first half, GAAP operating expenses rose 26% while revenue grew 24%. About 38 cents of each extra revenue dollar reached operating profit, down from about 68 cents in 2025.
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New businesses account for part of that. So do credit-loss provisions, which doubled to $56 million in the second quarter, and $23 million of restructuring charges from June’s 10% staff cut. The second-quarter operating margin slipped to 43.9%, from 44.4% a year earlier.
What Oct. 27 has to show
In July, Robinhood cut its 2026 range for adjusted operating expenses plus stock-based compensation to $2.675 billion to $2.775 billion. It spent $1.25 billion in the first half, which leaves roughly $715 million to $765 million a quarter for the rest of the year.
A good report would have spending at the low end of that range or below, and revenue at or above the $1.43 billion analysts expect. The operating margin would also climb back above 43.9%. Last year’s third quarter set a higher bar still, with a 49.8% margin.
Watch the cost line, too
Trading still drives the quarter. Transaction revenue made up 59% of second-quarter revenue, up from 55% a year earlier, and the mix within it swings hard. Crypto revenue fell 38% to $100 million, while event contracts jumped to $156 million from $10 million.
A hot quarter for options and event contracts could lift the margin with no help from cost control, and a cold one could sink it. That makes spending against guidance the cleaner read on whether the expansion pays.
Wall Street is already counting on it
Analysts expect normalized EPS to rise 9% this year to $2.54, then 34% to $3.42 in 2027 and on to $4.39 in 2028.
That 2027 jump assumes expenses again grow well below revenue, which analysts expect to rise 29% that year. (Only seven analysts make the 2026 and 2027 EPS estimates.)
My take: Robinhood’s expansion has paid for itself so far. But in the first half of 2026 its costs grew faster than its sales, and the 2027 estimates leave little room for that to continue. If third-quarter spending lands at the low end of guidance and the margin gets back above 44%, the expansion is paying its way again. If spending runs to the top of the range while the margin slips further, those estimates look too high.
Of course, one quarter won’t settle it. The 2027 expense outlook, likely out with fourth-quarter results early next year, is the bigger test.
So what is Robinhood stock actually worth?
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any of the stocks mentioned. Thank you for reading, and happy investing!
