Robinhood Q3 Earnings Top Analysts' Expectations as Crypto Revenue Surges Over 300%

Robinhood Markets generated $1.2 billion in revenue for its third quarter, a nearly 100% gain from the same period a year ago, the firm announced Wednesday, exceeding analysts' expectations and continuing the online brokerage's strong top-line growth.

Robinhood also surpassed forecasts with earnings per share of $0.61, a roughly 217% year-over-year rise, and $556 million in profits, per MarketScreener.

"Our team’s relentless product velocity drove record business results in Q3 and we’re not slowing down—prediction markets are growing rapidly, Robinhood Banking is starting to roll out, and Robinhood Ventures is coming,” said Robinhood Chairman and CEOVlad Tenev, in a statement.

In after-hours trading, Robinhood shares ticked down from their Wednesday closing price of $143.40, according to Yahoo Finance. The company’s stock price has skyrocketed about 260% year-to-date, outperforming crypto-native competitors like Coinbase, whose shares have jumped approximately 25% since January 1.

Menlo Park, California-based Robinhood's results come as the company has expanded its business and crypto transaction revenues regained momentum, rising to $268 million—a more than 300% increase from a year ago, same period. Robinhood totaled $160 million for Q2 in this segment and $252 million in Q1.

The company reported $730 million in transaction-based income, slightly lower than consensus predictions. Prediction markets, while still a lesser part of its business, were a bright spot.

Last quarter, Robinhood posted $989 million in total sales, up 45% from a year ago and surpassing analysts’ expectations of $913 million. Its earnings for share of $0.42 and profits of $386 million for the period also exceeded expectations.

In a note last month, investment bank Compass Point had highlighted the growth of this business among other factors in maintaining a "buy" rating and raising its price target to $161, which would exceed its previous record of $153, set in October.

Robinhood will likely generate $50 million in fourth-quarter revenue “alongside a full quarter of NFL season,” the analysts wrote, while referring to America’s most popular pastime.

Robinhood began letting customers wager on NFL and college football games in August through a partnership with prediction market Kalshi. Still, Robinhood currently offers prediction markets on other subjects, such as economics, culture, and technology.

Although Robinhood offers commission-free trading on stocks and cryptocurrencies, the firm charges customers a one cent fee on trades involving event contracts, the analysts wrote.

Crypto-focused companies have had to confront a less vibrant, more unpredictable digital asset market amid macroeconomic uncertainties. Bitcoin's price rose more than 6% in Q3, a tepid increase in the underlying asset after its 30% spike in the previous quarter.

The largest cryptocurrency by market value was recently trading at $103,644, up 4.4% over the past 24 hours, although it is down nearly 18% from its all-time high set a month ago, according to data provider CoinGecko.

In a Myriad prediction market, about 70% of respondents believe BTC will move to $115,000 rather than dip to $85,000. (Disclaimer: Myriad is a unit of Dastan, the parent company of Decrypt.)