Robinhood's Third Quarter Report Expectations Exceeded!

Robinhood (HOOD) announced on Wednesday in its third-quarter report that earnings per share and total revenue exceeded expectations. According to the company, its CFO Jason Warnock will retire next year and will hand over his duties in the first quarter.

In the third quarter, Robinhood recorded earnings of $0.61 per share, which is significantly above the $0.53 expected by Wall Street. Total net revenue was reported as $1.27 billion, representing a 100% increase year-over-year and above the anticipated $1.2 billion.

The increase in transaction-based revenue was driven by more than 300% growth in cryptocurrency revenues. Share revenue also rose by 132%.

Vlad Tenev, the CEO of Robinhood, stated in the earnings announcement, "The pace of our team's continuous product development delivered record business results for the third quarter, and we are not considering slowing down - Predictive Markets are growing rapidly, Robinhood Banking has just been launched, and Robinhood Ventures is on the way."

The company also announced that along with the third-quarter results, Robinhood's shares fell 2% in after-hours trading on Wednesday. However, this Menlo Park, California-based company’s stock has risen 40% since joining the S&P 500 index in September and has increased by 280% since the beginning of the year. This situation has established Robinhood as the best performer in the S&P 500 this year.

The stock’s rise is supported by this year's new product launches, from tokenized stocks to predictive markets and cryptocurrency staking services; Robinhood is aiming to increase customer spending.

Paul Brody, EY global blockchain leader, stated on Wednesday, "I see many companies taking a cue from Robinhood" and noted that "it will integrate by offering extra services and reach end customers with a useful user experience."

Compass Point analyst Ed Engel and his team indicated that they expect the company's "October trends to remain above fourth-quarter expectations." Analysts highlighted the tremendous growth of the predictive markets launched earlier this year. This service allows investors to predict the outcomes of major events like football games and Nvidia earnings.

Moreover, Vlad Tenev mentioned in a statement on the X platform in September that the active contracts for predictions surpassed 4 billion, with more than 2 billion of them coming in just the third quarter. Analysts observe that the trading platform earns $0.01 per contract, yielding approximately $40 million in revenue. Engel emphasized that these numbers could rise further as the NFL season is still ongoing.

Cryptocurrency revenues are also expected to increase with higher fees and staking services. Staking allows token holders to lock up their digital assets in exchange for rewards, providing income akin to dividends or yields. Engel notes that the forecasts regarding Robinhood’s crypto revenues for the second half of 2025 or 2026 have not been accurately made to include higher fee rates and staking income.