Robinhood Q3 revenue doubles: forecast market becomes a new growth engine, why did the stock price fall instead of rise?

Author: Nancy, PANews

As October comes to an end, publicly traded companies are gradually releasing their Q3 earnings reports. U.S. online broker Robinhood delivered an unexpectedly strong financial report, with revenue and profit both hitting record highs. Its diversification strategy is beginning to show results, accelerating its transformation into a fintech company. However, despite impressive performance, Robinhood’s stock price declined after the earnings release, defying the market trend.

Cryptocurrency trading is the core growth driver, with predicted trading becoming a new growth engine

In Q3 2025, Robinhood reported outstanding results. Total platform revenue reached $1.27 billion, up 100% year-over-year; net profit was $556 million, up 271%; and diluted EPS was $0.61, up 259%. Meanwhile, the quarter added 2.5 million funded accounts, bringing the total to 26.8 million. Data shows that after years of early gains from commission-free trading waning, Robinhood has clearly found new growth avenues, transforming from a single trading platform into a diversified fintech group.

Despite strong growth, the results fell short of market expectations, causing Robinhood’s stock to decline after the earnings announcement amid investor concerns about its future profitability.

Structurally, Robinhood’s current revenue mainly comes from trading income (57%), net interest income (36%), and subscription-based other income (7%). Among these, cryptocurrency trading has become the core growth driver this quarter. Revenue from this business reached $268 million, an increase of over 300%, accounting for more than one-third of trading income.

This year, Robinhood expanded its crypto business by acquiring the exchange Bitstamp and partnering with predictive market platform Kalshi. These have become two major drivers of revenue breakthroughs this quarter and are listed as key business lines with annualized revenue exceeding $100 million. The crypto market rebound has boosted retail and institutional activity, while Bitstamp’s integration has contributed to institutional and derivatives trading, and the launch of predictive markets has attracted a large number of new users, driving growth in crypto trading revenue. However, crypto revenue still slightly below market expectations of $287.2 million.

The addition of Bitstamp significantly increased trading volume. The earnings report shows that in October, Robinhood’s nominal cryptocurrency trading volume exceeded $32 billion, with Bitstamp contributing $18 billion (mainly institutional trading). Going forward, Bitstamp will also serve as Robinhood’s main platform for tokenized stock services. However, while Bitstamp’s institutional trading has driven a surge in transaction volume, its revenue contribution remains limited due to relatively low fees, raising concerns about revenue growth.

Meanwhile, the predictive markets business also grew rapidly. In Q3, Robinhood’s predictive contract trading volume doubled to 2.3 billion contracts (each valued at $1), making it the third-largest active trading category after stocks and options. In October, trading volume reached $2.5 billion, with an estimated profit of about $25 million for the platform that month.

In addition to crypto and predictive markets, Robinhood’s stock trading revenue grew by 132%, and options trading revenue increased by 50%. However, these trading activities are generally viewed as cyclical. Rothschild & Co Redburn analyst Charles Bendit rated Robinhood as a “sell,” noting that the company has performed well in product execution, but current performance may reflect a cyclical peak, while market valuation implies unverified long-term stability.

Becoming a standout in the S&P 500 this year, preparing for banking and investment businesses

In 2025, Robinhood became one of the best-performing stocks in the S&P 500, with its stock price increasing over 222% year-to-date, far outperforming the Nasdaq 100. The strong stock performance is not only due to market recognition of Robinhood’s growth story but also reflects its ongoing solid fundamentals.

Since launching its share repurchase program in 2024, Robinhood has repurchased approximately $810 million worth of shares. Meanwhile, CEO Vlad Tenev’s long-term incentive plan (if the stock price reaches $101.50 per share before 2025, the two founders will each receive 13.8 million shares) was fully vested in Q3. Currently, his annual cash compensation is only $40,000.

Robinhood’s robust financial performance also provides ample cash flow to support business diversification. The earnings report shows that as of the end of Q3, Robinhood held $4.3 billion in cash and equivalents, with shareholders’ equity around $8.57 billion. The projected full-year adjusted operating expenses for 2025 are about $2.28 billion, slightly higher than initially expected, mainly due to increased employee bonuses from better-than-expected results and ongoing investments in new businesses and technology platforms. Although operating expenses increased 31% year-over-year in Q3, revenue doubled, and profit margins continued to improve.

Robinhood remains optimistic about its future financial performance, noting a very strong start to Q4. In October, the platform’s monthly trading volume for stocks, options, predictive markets, and futures all hit record highs, and margin balances also reached new peaks. Currently, Robinhood has 11 business lines with annualized revenue of $100 million or more, with plans to introduce more asset classes.

“In terms of product strategy, we plan to make Robinhood a household financial hub,” Vlad Tenev revealed during the earnings call. Thanks to systematic adjustments in organization, culture, and technology over the past few years, the company’s product execution and iteration speed have significantly improved, establishing a core goal of “rapid product delivery.” The platform is actively pushing multiple business lines.

For example, in predictive markets, Robinhood’s predictive market segment is in rapid expansion, with over 1,000 contracts now available across sports, finance, entertainment, culture, and technology. The company is also engaging with overseas regulators, including the UK Financial Conduct Authority (FCA), to explore the feasibility of launching offshore predictive markets outside the U.S.

On the banking front, Robinhood Banking is being rolled out in phases, aiming to become the preferred platform for users’ paycheck deposits by offering diversified financial products and services.

In investment services, Robinhood is preparing Robinhood Ventures and has submitted documents to the U.S. SEC, focusing on investing in innovative projects to introduce new growth engines.

Additionally, in tokenized stocks, Robinhood has launched related services in over 30 countries, expanding to more than 400 products. The company plans to introduce related trading on the Bitstamp platform and integrate with DeFi ecosystems.

Beyond the U.S. market, Robinhood is planning international expansion, aiming for non-U.S. markets and institutional clients to contribute over 50% of revenue within the next decade, to shift away from its current retail-heavy structure. The company prefers organic growth but is open to acquisitions. International expansion is still in early stages.