The "U.S. Internet-Famous Broker" Robinhood delivered a stellar third-quarter report.

The online broker's Q3 earnings report released on Wednesday showed that both its revenue and profit exceeded Wall Street expectations. Benefiting from comprehensive growth in cryptocurrency, options, and stock trading volume, the company's transaction-based revenue more than doubled year-over-year, driving net profit up from $150 million in the same period last year to $556 million. Meanwhile, cryptocurrency revenue surged by 300% but fell short of expectations.

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

So far this year, Robinhood's stock price has risen nearly 270%, and it was included in the S&P 500 index in the third quarter. Retail investing, once seen as a pandemic-era frenzy, appears to have evolved into a market-shaping force, and Robinhood is successfully capitalizing on this trend.

Key Points of Robinhood's Q3 Earnings Report: Overall Performance Exceeds Expectations, Trading Revenue Doubles

Key Financial Data:

• Revenue: Q3 net revenue of $1.27 billion, versus analyst expectations of $1.21 billion;

• EBITDA: Adjusted EBITDA of $742 million in Q3, versus analyst expectations of $726.9 million.

• Earnings Per Share: $0.61, versus expectations of $0.53, and $0.17 EPS in the same period last year.

• Net Profit: Net profit increased to $556 million, significantly higher than the net profit of $150 million in the same period last year.

• ARPU: Q3 ARPU (Average Revenue Per User) was $191, versus analyst expectations of $182.

• Monthly Active Users: Q3 MAUs of 13.8 million, versus analyst expectations of 13.31 million.

Segment Data:

• Q3 transaction-based revenue of $730 million, versus analyst expectations of $725.8 million;

• Q3 cryptocurrency revenue of $268 million, surged 300%, but fell short of analyst expectations of $287.2 million;

• Q3 options revenue of $304 million, versus analyst expectations of $301.3 million.

The core driver of performance growth came from the strong recovery in trading business. In the third quarter, the company's transaction-based revenue reached $730 million, more than doubling year-over-year. Specifically, equities transaction revenue grew 132%, options transaction revenue grew 50%, and cryptocurrency transaction revenue surged 300% to $268 million, though slightly missing analyst expectations of $287.2 million.

"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. In the third quarter, the volume of event contracts on the platform surged to 2.3 billion contracts, more than double the previous quarter.

According to the soon-to-retire CFO Jason Warnick, the fourth quarter started even stronger, with volume in October alone exceeding 2.5 billion contracts. This included approximately $25 million from the platform's prediction markets business.

Recently, Robinhood expanded the scope of event contracts from initially sports and finance to further include politics, entertainment, and technology. Through its partnership with Kalshi, Robinhood allows users to bet on "Yes/No" outcomes of future events in sports, politics, entertainment, and tech.

Warnick stated in the announcement that the prediction markets business has become one of the company's new business lines generating approximately $100 million in annualized revenue. Incoming CFO Shiv Verma also emphasized in an interview: "This is a new asset class, and we want to be at the forefront of it. This is one of our key areas of investment."

Event contracts still represent only a very small portion of Robinhood's overall revenue. But the prediction markets business has grown rapidly in recent weeks: Piper Sandler analysts estimated that trading volumes on Kalshi and competing platform Polymarket nearly doubled in October. The analysts also noted that this weekend saw the two most active trading days on these platforms since the 2024 election.

However, these prediction market contracts—particularly those related to sports and entertainment—have also sparked controversy as they blur the line between investing and gambling.

Executive Comments: Banking, Venture Capital Businesses to Launch Successively

Robinhood CEO Vlad Tenev said in a statement:

"Our team's continued rapid pace of new product launches drove record business performance in the third quarter, and we aren't slowing down – Prediction Markets is growing fast, Robinhood Bank is starting to roll out, and Robinhood Ventures is coming soon."

Chief Financial Officer Jason Warnick said in the announcement:

"The third quarter marked another quarter of strong, profitable growth as we continued to diversify our business, adding two new ~$100 million-plus annual revenue run rate businesses – Prediction Markets and Bitstamp."

CFO Announces Retirement Plan, Internal Successor Appointed

Robinhood announced in its earnings report that its CFO Jason Warnick will retire in 2026. The former Amazon executive, who has been with Robinhood for over seven years, is a key figure in the company's development.

According to the plan, Warnick will complete the transition in the first quarter of 2026 and will then continue as a strategic advisor until September 1, 2026. The company has appointed Shiv Verma, SVP of Finance and Strategy, as the next CFO. This move is seen as an internal promotion to ensure a smooth transition of the company's financial strategy.

Analyst Commentary: Diversification Strategy Pays Off, Evolving into a FinTech Company

Robinhood has been working to diversify its revenue sources to reduce reliance on its trading business. Earlier this week, the company announced a partnership with Sage Home Loans, allowing its customers to access mortgages. Additionally, the company plans to launch a closed-end fund providing U.S. retail investors access to pre-IPO companies.

Analysis said Robinhood's third-quarter results released on Wednesday beat Wall Street expectations, continuing its strong performance this year and making it one of the standout performers among large U.S. tech stocks this year. Robinhood is betting that a new generation of investors will want to not only trade stocks but also place bets on sports, culture, and political events, all on the same platform. For now, that bet appears to be paying off.

As Robinhood expands into comprehensive wealth management, the company is gradually narrowing the gap with Coinbase. The company has been actively offering deposit match promotions to attract clients from Fidelity and Schwab, and driving growth in its Assets Under Custody through the acquisition of TradePMR.

Robinhood primarily targets retail investors. Robinhood initially gained fame for its easy-to-use platform that allowed beginners to buy and sell stocks effortlessly. But today, its trading business has expanded significantly: nearly 90% of Robinhood's transaction-based revenue in Q3 came from categories other than stocks, including options, futures, and cryptocurrencies.

David Bartosiak, equity strategist at Zacks Investment Research, wrote in a morning note: "This isn't your pandemic-era Robinhood anymore. It's leaner, more diverse, and quietly growing into a true fintech contender."