Robinhood reported compelling earnings and revenue figures on Wednesday that exceeded market expectations, while also announcing a significant leadership change with the planned departure of its Chief Financial Officer, Jason Warnock, in the first quarter of next year.
For the third quarter, the popular trading platform announced earnings per share of $0.61, surpassing Wall Street’s forecast of $0.53, as indicated by Bloomberg data. The company’s total net revenue reached $1.27 billion, marking a remarkable 100% increase year-over-year and exceeding projections of $1.2 billion.
A substantial boost in transaction-based revenues, particularly from cryptocurrencies, drove these impressive results, with crypto revenue experiencing a staggering increase of over 300%. Equities revenue also showed robust growth, rising by 132%. “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,” stated CEO Vlad Tenev in the earnings release.
Along with these financial disclosures, the announcement regarding Warnock’s retirement was notable. Insider Shiv Verma is set to take on the CFO role following Warnock’s exit, indicating a planned transition within the company’s financial leadership.
Despite the positive earnings report, Robinhood’s stock saw a slight dip of 2% in after-hours trading immediately after the release. However, shares of the Menlo Park, California-based company have experienced a remarkable rise of nearly 40% since it entered the S&P 500 in September, and they have surged 280% year-to-date, positioning Robinhood as the top performer in the S&P 500.
The surge in stock price has been largely attributed to various new product launches this year, including offerings such as tokenized stocks in Europe, prediction markets, and crypto staking, all of which are aimed at increasing customer engagement.
Paul Brody, the EY global blockchain leader, noted the trend of companies replicating Robinhood’s strategies. “I see lots of companies copying from Robinhood, offering these additional services, integrating them together in a very nice user experience, and delivering them to their end customers,” he remarked.
In a recent note, Compass Point analyst Ed Engel and his team indicated that they anticipate the company will disclose trends for October that exceed their expectations for the fourth quarter, particularly highlighting the rapid growth of its prediction markets. These markets, which allow traders to bet on the outcomes of various events—from sports to major corporate earnings—have become increasingly popular.
CEO Vlad Tenev revealed on social media platform X earlier in September that event contracts for predictions surpassed 4 billion, with more than 2 billion contracts generated in just the third quarter. This growing engagement underscores Robinhood’s efforts to innovate and expand within the competitive fintech landscape.
