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HOOD's Securities Lending Revenues Slide 43% in October: Q4 at Risk?
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Key Takeaways
Robinhood reported $34 million of securities-lending revenues in October, down 43% year over year.
Securities-lending net revenues were negative $12M against positive revenues of $24M a year earlier.
Margin balances rose 39% year over year to $22.9B, offering support amid securities-lending weakness.
Robinhood Markets, Inc. (HOOD - Free Report) reported a 43% year-over-year decline in total securities-lending revenues in October 2026, raising concerns about the business’ growth prospects in the fourth quarter. Revenues from securities lending totaled $34 million, down from $60 million in the year-ago period. However, the metric increased 6% sequentially, indicating a modest recovery from September levels.
Notably, securities-lending net revenues turned negative at $12 million against positive net revenues of $24 million in October 2025. This could weaken the business’ contribution to net interest revenue (NIR) growth, limiting its role in diversifying Robinhood's revenue streams.
The weakness in securities lending follows a decline in Robinhood's third-quarter 2026 NIR, which fell 9% year over year to $415 million. Lower securities-lending activity and short-term interest rates more than offset growth in interest-earning assets. This highlights continued pressure on the company's interest-related revenue stream. The further decline in October securities-lending revenues is likely to add to pressure on NIR in the fourth quarter.
On the other hand, Robinhood's margin lending business continues to gain momentum, offering some support amid the weakness in securities lending. Margin balances reached $22.9 billion at the end of October, up 4% sequentially and 39% year over year. The growth points to increased customer borrowing activity and is likely to offer some support to the company's NIR.
What's Ahead for HOOD?
Robinhood's October operating data presents a mixed picture. While strong margin balance growth is encouraging, the decline in securities-lending revenues is putting pressure on the company's interest-related business.
Despite this weakness, Robinhood's total net revenues increased 12% year over year to $1.42 billion in the third quarter of 2026, supported by growth in transaction-based and other revenues. This highlights the strength of its broader revenue streams, although the sustainability of interest-related revenue growth remains a concern.
Ultimately, Robinhood's ability to sustain margin lending growth while improving securities-lending performance will be important in supporting its revenue mix and fourth-quarter results.
Over the past six months, shares of HOOD have gained 0.9% compared with the industry’s 5.4% growth.
What’s Driving Steady Revenue Growth at HOOD’s Peers?
Two close peers of HOOD are Morgan Stanley (MS - Free Report) and Interactive Brokers Group (IBKR - Free Report) .
Morgan Stanley's revenue growth is supported by strength in Wealth Management, Institutional Securities and higher net interest income (NII). In the third quarter of 2026, net revenues increased 11.6% year over year to $20.34 billion. NII surged 30.5% to $3.25 billion. Institutional Securities revenues increased 17.7% to $10.03 billion, driven by a 40.9% jump in equity revenues and higher advisory activity.
Wealth Management revenues grew 10.1% to a record $9.07 billion, supported by higher asset management fees and net interest income. However, Investment Management revenues declined 11.6% to $1.46 billion, partly limiting the overall growth. Continued strength in wealth management, equity trading and NII is expected to support Morgan Stanley's revenue performance.
Interactive Brokers is also benefiting from growth in interest income and trading-related revenues. In the third quarter of 2026, total net revenues increased 15.7% year over year to $1.91 billion, while adjusted net revenues rose 16.3% to $1.87 billion. Net interest income increased 19.3% to $1.15 billion, primarily driven by higher average customer margin loans and credit balances.
Further, IBKR’s commission revenues grew 12.1% to $602 million, supported by an 18.2% increase in daily average revenue trades, while other fees and services rose 33.3% to $88 million. Continued growth in customer accounts, trading activity and interest-earning balances is expected to support further revenue expansion.
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HOOD's Securities Lending Revenues Slide 43% in October: Q4 at Risk?
Key Takeaways
Robinhood Markets, Inc. (HOOD - Free Report) reported a 43% year-over-year decline in total securities-lending revenues in October 2026, raising concerns about the business’ growth prospects in the fourth quarter. Revenues from securities lending totaled $34 million, down from $60 million in the year-ago period. However, the metric increased 6% sequentially, indicating a modest recovery from September levels.
Notably, securities-lending net revenues turned negative at $12 million against positive net revenues of $24 million in October 2025. This could weaken the business’ contribution to net interest revenue (NIR) growth, limiting its role in diversifying Robinhood's revenue streams.
The weakness in securities lending follows a decline in Robinhood's third-quarter 2026 NIR, which fell 9% year over year to $415 million. Lower securities-lending activity and short-term interest rates more than offset growth in interest-earning assets. This highlights continued pressure on the company's interest-related revenue stream. The further decline in October securities-lending revenues is likely to add to pressure on NIR in the fourth quarter.
On the other hand, Robinhood's margin lending business continues to gain momentum, offering some support amid the weakness in securities lending. Margin balances reached $22.9 billion at the end of October, up 4% sequentially and 39% year over year. The growth points to increased customer borrowing activity and is likely to offer some support to the company's NIR.
What's Ahead for HOOD?
Robinhood's October operating data presents a mixed picture. While strong margin balance growth is encouraging, the decline in securities-lending revenues is putting pressure on the company's interest-related business.
Despite this weakness, Robinhood's total net revenues increased 12% year over year to $1.42 billion in the third quarter of 2026, supported by growth in transaction-based and other revenues. This highlights the strength of its broader revenue streams, although the sustainability of interest-related revenue growth remains a concern.
Ultimately, Robinhood's ability to sustain margin lending growth while improving securities-lending performance will be important in supporting its revenue mix and fourth-quarter results.
Over the past six months, shares of HOOD have gained 0.9% compared with the industry’s 5.4% growth.
6-Month Price Performance
Image Source: Zacks Investment Research
Robinhood currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
What’s Driving Steady Revenue Growth at HOOD’s Peers?
Two close peers of HOOD are Morgan Stanley (MS - Free Report) and Interactive Brokers Group (IBKR - Free Report) .
Morgan Stanley's revenue growth is supported by strength in Wealth Management, Institutional Securities and higher net interest income (NII). In the third quarter of 2026, net revenues increased 11.6% year over year to $20.34 billion. NII surged 30.5% to $3.25 billion. Institutional Securities revenues increased 17.7% to $10.03 billion, driven by a 40.9% jump in equity revenues and higher advisory activity.
Wealth Management revenues grew 10.1% to a record $9.07 billion, supported by higher asset management fees and net interest income. However, Investment Management revenues declined 11.6% to $1.46 billion, partly limiting the overall growth. Continued strength in wealth management, equity trading and NII is expected to support Morgan Stanley's revenue performance.
Interactive Brokers is also benefiting from growth in interest income and trading-related revenues. In the third quarter of 2026, total net revenues increased 15.7% year over year to $1.91 billion, while adjusted net revenues rose 16.3% to $1.87 billion. Net interest income increased 19.3% to $1.15 billion, primarily driven by higher average customer margin loans and credit balances.
Further, IBKR’s commission revenues grew 12.1% to $602 million, supported by an 18.2% increase in daily average revenue trades, while other fees and services rose 33.3% to $88 million. Continued growth in customer accounts, trading activity and interest-earning balances is expected to support further revenue expansion.