Robinhood Q3 Earnings Soar on Crypto & Prediction Markets

Robinhood’s prediction markets have emerged as a powerhouse growth driver, with CEO Vlad Tenev describing them as “really on fire” during the company’s latest earnings call. The data supports his enthusiasm: prediction market volumes have doubled every quarter since launch, reaching 2.3 billion contracts in Q3 alone. Even more impressively, October’s activity surpassed the entire third-quarter total, indicating accelerating momentum.

The platform now lists more than 1,000 live contracts spanning sports, economics, politics, and culture, creating what Tenev calls “a new asset class” where customers “can price risk in pretty much anything.” When questioned by Piper Sandler analysts about competition, Tenev emphasized Robinhood’s unique advantage: “We have distribution, and we have lots of customers: 26 million plus funded accounts in the U.S. that are trading and using us for all sorts of things.” This existing user base provides immediate scale that new entrants cannot match.

Crypto trading continues to be a cornerstone of Robinhood’s success, generating approximately $268 million in revenue during the quarter. The company’s acquisition of Bitstamp, a major cryptocurrency exchange, appears to be integrating smoothly, with CFO Jason Warnick reporting that blended take rates have remained “in the same zone” – specifically in the “high-60-cent zone” per trade.

Responding to questions from KeyBanc Capital Markets analysts about the Bitstamp acquisition’s impact, Warnick expressed confidence in Robinhood’s crypto strategy, noting “really robust interest by customers” and effective “smart-exchange routing.” The steady take rates suggest Robinhood is maintaining its pricing power despite market competition, while the Bitstamp integration positions the company for continued crypto dominance in 2024 and beyond.

Robinhood’s financial performance exceeded all expectations, with third-quarter revenue reaching $1.27 billion – a 100% year-over-year increase that beat Wall Street forecasts. Transaction-based revenue surged 129% to $730 million, driven by strong crypto and options trading activity. The company ended the quarter with 26.8 million funded customers and $333 billion in platform assets, representing more than 100% growth compared to the same period last year.

User growth metrics were equally impressive, with Robinhood adding 2.5 million new accounts and seeing $20 billion in net deposits during Q3 alone. These figures demonstrate the platform’s expanding reach and deepening customer relationships, providing a solid foundation for future growth initiatives. The combination of rising user numbers and increased trading activity creates a powerful flywheel effect that supports Robinhood’s ambitious expansion plans.

Robinhood’s international strategy is showing early signs of success, with Tenev reporting promising results in the United Kingdom and European Union markets. The company has launched new marketing initiatives and expanded stock-token trading across 30 European countries, signaling a broader continental rollout. Tenev described this expansion as central to Robinhood’s long-term vision, noting that “unlike the U.S., when we expand into these markets, we don’t have an existing established customer base to cross-sell into.”

The CEO framed international growth as a “10-year vision” rather than a quick win, suggesting Robinhood is prepared to invest patiently in building its global presence. Tenev’s optimism was palpable as he predicted that “five to ten years from now, we’ll look back and we’ll say, ‘Man, we underestimated the growth of that.'” This measured approach to international markets contrasts with the explosive growth seen in domestic prediction markets and crypto trading, but reflects a strategic commitment to sustainable global expansion.