Retail trading giant Robinhood's earnings surpass expectations, but cryptocurrency revenue falls short of forecasts.

Authors: He Hao and Long Yue, Wall Street Insights

“America’s Internet Celebrity Broker” Robinhood Delivers Impressive Q3 Results

The online brokerage firm announced its third-quarter earnings on Wednesday, exceeding Wall Street expectations in both revenue and profit. Thanks to a broad increase in cryptocurrency, options, and stock trading volumes, the company’s trading-based revenue more than doubled year-over-year, boosting net income from $150 million last year to $556 million. Meanwhile, cryptocurrency revenue surged 300%, though it fell short of forecasts.

Despite strong performance, Robinhood’s stock dipped slightly in after-hours trading. The company also announced a significant executive change: CFO Jason Warnick, who has served for over seven years, plans to retire in 2026. The company has appointed Senior Vice President of Finance and Strategy Shiv Verma as his successor. This smooth transition aims to ensure strategic continuity.

Since the beginning of the year, Robinhood’s stock has risen nearly 270%, and the firm was included in the S&P 500 index in the third quarter. What was once seen as a pandemic-driven retail trading frenzy now appears to be shaping market dynamics, and Robinhood is successfully capitalizing on this trend.

Key Highlights of Robinhood’s Q3 Earnings: Outperforming Expectations, Trading Revenue Doubles

Major Financial Figures:

Revenue: $1.27 billion in Q3, versus analyst expectations of $1.21 billion;

Adjusted EBITDA: $742 million in Q3, compared to $726.9 million expected;

Earnings per Share: $0.61, versus $0.53 expected; last year’s EPS was $0.17.

Net Income: $556 million, significantly up from $150 million last year.

ARPU (Average Revenue Per User): $191 in Q3, versus $182 forecast.

Monthly Active Users: 13.8 million in Q3, versus 13.31 million expected.

Segment Data:

Trading Revenue: $730 million in Q3, versus $725.8 million forecast;

Cryptocurrency Revenue: $268 million, up 300%, but below the expected $287.2 million;

Options Revenue: $304 million, versus $301.3 million forecast.

The core driver of growth was a robust rebound in trading activity. In Q3, trading-based revenue hit $730 million, more than doubling year-over-year. Stock trading revenue increased 132%, options trading revenue rose 50%, and cryptocurrency trading revenue soared 300% to $268 million, though it still fell short of analyst estimates.

“Event Contracts” Become New Growth Engine

One of the most notable highlights in the earnings report was the explosive growth of the “Prediction Markets” business. Trading volume on this platform surged to 2.3 billion contracts in Q3, more than doubling from the previous quarter.

According to CFO Jason Warnick, who is set to retire, the fourth quarter has started even stronger, with October alone surpassing 2.5 billion contracts, including about $25 million in platform revenue from prediction markets.

Recently, Robinhood expanded the scope of its prediction markets beyond sports and finance to include politics, entertainment, and technology. Through a partnership with Kalshi, users can bet on the outcomes of future events in these categories with yes/no options.

Warnick stated that prediction markets have become one of the company’s new revenue streams, generating an estimated annualized income of around $100 million. Incoming CFO Shiv Verma emphasized in an interview, “This is a new asset class. We want to be at the forefront, and it’s one of our key areas of investment.”

While prediction markets still constitute a small part of Robinhood’s overall revenue, recent weeks have seen rapid growth: Piper Sandler analysts estimate that trading volumes on Kalshi and competitor Polymarket nearly doubled in October. They also noted that this past weekend marked the most active trading days since the 2024 election.

However, these prediction markets—especially those related to sports and entertainment—have sparked controversy, as they blur the lines between investing and gambling.

Executive Remarks: Launching Banking and Venture Capital Services

Robinhood CEO Vlad Tenev stated:

“Our team continues to rapidly roll out new products, driving record-breaking performance in Q3, and we’re not slowing down—prediction markets are growing quickly, Robinhood Banking is starting to go live, and Robinhood Venture Capital is about to launch.”

CFO Jason Warnick added:

“Q3 once again delivered strong, profitable growth. We’re continuing to diversify our business, adding two new revenue streams each generating approximately $100 million or more annually—Prediction Markets and Bitstamp.”

CFO Retirement and Internal Succession

Robinhood announced that CFO Jason Warnick will retire in 2026. An executive with over seven years at Robinhood and prior experience at Amazon, Warnick has been a key figure in the company’s growth.

He is expected to complete the transition in the first quarter of 2026 and will serve as a strategic advisor until September 1, 2026. The company has appointed Senior Vice President of Finance and Strategy Shiv Verma as his successor, an internal promotion aimed at ensuring a smooth financial strategic transition.

Analysis & Outlook: Diversification Strategy Paying Off, Moving Toward a Fintech Powerhouse

Robinhood has been actively diversifying its revenue streams to reduce reliance on trading. Earlier this week, the company announced a partnership with Sage Home Loans to offer mortgage services. It also plans to launch a closed-end fund to give retail investors access to private companies.

Analysts note that Robinhood’s Q3 results exceeded Wall Street expectations, continuing its strong performance this year and making it one of the standout large-cap tech stocks in the U.S. Robinhood is betting that the next generation of investors will want to do more than just trade stocks—they’ll also want to bet on sports, culture, and politics on the same platform. So far, this gamble seems to be paying off.

As Robinhood expands into comprehensive wealth management, it is gradually narrowing the gap with Coinbase. The company has been actively attracting clients from Fidelity and Charles Schwab through deposit matching offers and has grown its assets under management via the acquisition of TradePMR.

Primarily targeting retail investors, Robinhood initially gained fame for its user-friendly platform that made stock trading accessible to beginners. Today, its trading business has significantly expanded: nearly 90% of Q3 trading-related revenue came from categories beyond stocks, including options, futures, and cryptocurrencies.

Zacks Investment Research strategist David Bartosiak commented in a morning report, “This is no longer the Robinhood of the pandemic. It’s now leaner, more diversified, and quietly evolving into a true fintech competitor.”