Robinhood's Third Quarter Results Exceeded Expectations

Robinhood's Third Quarter Performance

Robinhood (HOOD) drew attention by surpassing Wall Street estimates with the financial results announced on Wednesday. In the third quarter, earnings per share were$0.61, higher than analysts' expectations of $0.53. Total net revenue was recorded at $1.27 billion, reflecting a 100% increase compared to the previous year and exceeding the $1.2 billion forecast.

Transaction-based revenues showed a 300% increase thanks to cryptocurrency revenues. Stock revenue also rose by 132%. CEO Vlad Tenev stated, "The speed of our products enabled us to achieve record business results in the third quarter, and we will not pause; the prediction markets are growing rapidly, Robinhood Banking is starting to roll out, and Robinhood Ventures is on the way."

CFO Change and Stock Performance

Alongside the third quarter results, the company announced that CFO Jason Warnick would retire next year, passing on his duties in the first quarter of 2024. Insider Shiv Verma will succeed Warnick. Robinhood shares declined by about 2% in post-announcement trading.

The Menlo Park, California-based company's shares jumped by 40% after entering the S&P 500 index in September and gained a total of 280% year-to-date. This rise has been supported by the company's new product launches aimed at increasing customer wallet share with services such as tokenized stocks in Europe, prediction markets, and crypto staking.

EY Global Blockchain Leader Paul Brody stated, "I see many companies being inspired by Robinhood to offer these additional services and enhancing user experience by integrating them." Compass Point analyst Ed Engel and his team expect Robinhood's October trends to be above fourth-quarter expectations.

The Rapid Growth of Prediction Markets

Analysts highlight the solid growth of the prediction markets launched by the platform this year. This service allows traders to place bets on the outcomes of significant events, from football games to Nvidia’s earnings results, the duration of government shutdowns, and Bitcoin’s year-end price target. Vlad Tenev noted in a statement on the X platform in September that the contracts used in predictions exceeded 4 billion, with 2 billion of them made in the third quarter.

Analysts mention that the trading platform earns $0.01 per contract, which could result in about $40 million in revenue. This figure is expected to rise further with the start of the NFL season. Cryptocurrency revenues are also anticipated to increase due to high fees and staking services. Staking allows token holders to lock their digital assets to earn rewards.

Analysts stated, "The Street does not believe Robinhood accurately forecasts its cryptocurrency revenues for the second half of 2025 or 2026; this includes higher fee rates and staking income."

In a previous version of this article, Robinhood CFO Jason Warnick's surname was misspelled. We apologize for the error.