Author: Nancy, PANews

As October came to a close, listed companies began releasing their third-quarter earnings reports. Robinhood, the popular US brokerage firm, delivered a better-than-expected report, with both revenue and profit hitting record highs, demonstrating the initial success of its diversification strategy and accelerating its transformation into a fintech company. However, despite the impressive performance, Robinhood's stock price bucked the trend and fell after the earnings release.

Cryptocurrency trading is a core source of growth, and forecasting trading is becoming a new growth engine.

In the third quarter of 2025, Robinhood delivered a stellar performance. Total platform revenue reached $1.27 billion, a 100% year-over-year increase; net income reached $556 million, a 271% year-over-year increase; and diluted earnings per share (EPS) were $0.61, a 259% year-over-year increase. Meanwhile, 2.5 million new accounts were added during the quarter, bringing the total to 26.8 million. These figures demonstrate that, after years of waning early benefits from commission-free trading, Robinhood has clearly found a new growth path, transforming from a single trading platform into a diversified fintech group.

Despite strong earnings growth, the results still fell short of market expectations, and the company's stock price fell instead of rising after the earnings report was released, reflecting investors' concerns about the sustainability of its future profitability.

Structurally, Robinhood's current revenue primarily comes from transaction revenue (57%), net interest income (36%), and other subscription-based revenue (7%). Cryptocurrency trading was the core growth driver this quarter, generating $268 million in revenue, representing a year-over-year increase of over 300% and accounting for more than one-third of transaction revenue.

Robinhood expanded its crypto business this year, acquiring crypto exchange Bitstamp and partnering with prediction market Kalshi, which became two major drivers of revenue growth this quarter and were listed as one of its key business lines with annualized revenue exceeding $100 million. The recovery in the crypto market boosted retail and institutional activity, the consolidation of Bitstamp contributed to institutional and derivatives trading, and the launch of the prediction market attracted a large number of new users, all contributing to the growth in crypto trading revenue. However, crypto revenue still slightly fell short of market expectations of $287.2 million.

The addition of Bitstamp significantly boosted trading volume. Financial reports show that in October, Robinhood's platform saw over $32 billion in nominal cryptocurrency trading volume, with Bitstamp contributing $18 billion (primarily institutional trading). Going forward, Bitstamp will become Robinhood's main platform for advancing its tokenized stock business. However, while institutional trading on Bitstamp has driven a surge in trading volume, its relatively low fees have limited actual revenue contribution, raising concerns about revenue growth.

Meanwhile, the prediction market business also grew rapidly. In the third quarter, Robinhood's prediction contract trading volume more than doubled quarter-over-quarter to 2.3 billion contracts (each contract worth $1), becoming the third most active trading category after stocks and options. October trading volume reached $2.5 billion, with the platform expected to profit approximately $25 million that month.

Aside from crypto and prediction markets, Robinhood's stock trading revenue grew by 132%, and options trading revenue grew by 50%. However, these trading businesses are generally considered highly cyclical. Rothschild & Co Redburn analyst Charles Bendit gave Robinhood a "sell" rating, believing that while the company has performed well in product execution, current results may reflect a cyclical peak, while market valuations imply unproven long-term stability.

Becoming this year's dark horse in the S&P 500, it is preparing to launch banking and investment businesses.

In 2025, Robinhood became one of the best-performing stocks in the S&P 500, with its share price surging over 222% year-to-date, far outperforming the Nasdaq 100. This strong stock performance reflects not only market recognition of Robinhood's growth story but also its consistently better-than-expected fundamentals.

In fact, since launching its stock buyback program in 2024, Robinhood has repurchased approximately $810 million worth of shares. Meanwhile, Robinhood CEO Vlad Tenev's long-term incentive plan (which would grant each of the two founders 13.8 million shares if the stock price reaches $101.50 per share by 2025) was fully vested in the third quarter, and his current annual cash compensation is only $40,000.

Robinhood's strong financial performance has provided ample cash flow support for its diversified business expansion. Financial reports show that as of the end of the third quarter, Robinhood held $4.3 billion in cash and cash equivalents, and shareholders' equity of approximately $8.57 billion. Adjusted operating expenses for the full year 2025 are projected to be approximately $2.28 billion, slightly higher than previously expected, primarily due to increased employee bonuses resulting from better-than-expected performance, and continued investment in new businesses and technology platforms. Although operating expenses increased by 31% year-over-year in Q3, revenue more than doubled, allowing profit margins to continue to improve.

Robinhood is also optimistic about its future financial performance, noting a very strong start to the fourth quarter. In October, monthly trading volumes for stocks, options, prediction markets, and futures on the platform all reached record highs, as did margin balances. Currently, Robinhood has 11 business lines with annualized revenues of $100 million or more, and plans to launch more asset classes in the future.

"In terms of product strategy, we plan to build Robinhood into a family financial hub," Vlad Tenev revealed in the earnings call. He explained that due to systematic adjustments in organization, culture, and technology over the past few years, the company has significantly improved its product execution and iteration speed and established the core goal of "rapid product delivery." Currently, the platform is vigorously promoting multiple business lines.

For example, in its prediction business, Robinhood's prediction market segment is in a phase of rapid expansion, currently offering over 1,000 contracts covering sports, finance, entertainment, culture, and technology. The company is in discussions with overseas regulatory bodies, including the UK Financial Conduct Authority (FCA), to explore the feasibility of launching an offshore prediction market outside the United States.

In the banking sector, Robinhood Banking is being rolled out in phases , with the goal of becoming the preferred platform for users to receive their salaries by offering a diverse range of financial products and services.

In terms of investment, the company is preparing Robinhood Ventures and has filed documents with the U.S. SEC, which will focus on investing in innovative projects to introduce new growth engines for the platform.

In addition, Robinhood has launched tokenized stocks in more than 30 countries and expanded to more than 400 products. The next step is to promote related trading on the Bitstamp platform and integrate it into the DeFi ecosystem.

In addition to the US market, Robinhood is planning international expansion, aiming to have markets outside the US and institutional clients contribute more than 50% of its revenue within the next decade, in order to change its current structure where retail business accounts for too large a share. While it prefers organic growth for expansion, it does not rule out mergers and acquisitions. Its internationalization is currently in its early stages.