Three Big Crypto Takeaways From Robinhood’s Quarterly Announcement

Robinhood’s latest earnings call showed how the company is doubling down on crypto, with rising prediction-market activity, record trading revenues, and plans to expand its platform across Europe.

The reported third-quarter revenue of $1.27 billion represents a 100% year-on-year increase, beating Wall Street forecasts. Transaction-based revenue rose 129 percent to $730 million, buoyed by strong crypto and options trading, while crypto revenues hit approximately $268 million.

Prediction markets ‘on fire’

CEO Vlad Tenev said prediction markets “are really on fire,” with volumes doubling every quarter since launch to 2.3 billion contracts in Q3 and October alone surpassing that total.

Customers “really love the product, and we’re bringing them even more,” he said, adding that Robinhood now lists more than 1,000 live contracts spanning sports, economics, politics, and culture.

“We love being early to this new asset class, and some people are saying this could be one of the largest,” Tenev added. “You can price risk in pretty much anything.”

Asked by a Piper Sandler analyst about Robinhood’s strategy and new competitors, Tenev said the company’s strength comes from its scale and reach across assets.

“One of the advantages we have entering any market—prediction markets aren’t an exception—is that 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,” Tenev claimed.

Robinhood ended the quarter with 26.8 million funded customers and $333 billion in platform assets, up more than 100% compared to a year earlier. The company also added 2.5 million new accounts and saw $20 billion in net deposits in this year’s Q3 alone, according to data from its earnings presentation.

Crypto revenues and take rates

A KeyBanc Capital Markets analyst asked about Robinhood’s crypto revenues, take rates, and the impact of its Bitstamp acquisition in 2024.

“The blended take rate’s kind of in the high-60-cent zone, and we’re liking what we’re seeing for smart-exchange routing. Really robust interest by customers,” CFO Jason Warnick responded, adding that the take rate for Q4 so far has remained “in the same zone.”

A blended take rate is the average fee Robinhood earns on each trade made on its platform, combining all the ways it makes money (such as with spreads, routing, or exchange fees) into a single figure.

International expansion

Warnick’s optimism carried through to Tenev,  who said Robinhood’s international plan is still in its early stages yet remains central to its long-term strategy.

“It’s still early in our international plan,” Tenev said. “That’s why when we talk about this opportunity, it’s really a 10-year vision because, unlike the U.S., when we expand into these markets, we don’t have an existing established customer base to cross-sell into.”

Tenev claimed that activity in the U.K. and EU has been improving, leading to new marketing initiatives and a broader rollout of stock-token trading across 30 European countries.

“Five to ten years from now, we’ll look back and we’ll say, ‘Man, we underestimated the growth of that’,” he said.