Robinhood’s Prediction Markets “Are Growing Rapidly”, October Demand Eclipsed Q3

Robinhood (Nasdaq: HOOD) revealed that its prediction markets “are growing rapidly,” with 2.3 billion event contracts traded between July and September, and 2.5 billion in October alone.

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The broker, known for its commission-free model, launched event contracts earlier this year and faced regulatory hurdles in the early days. Now, it is one of its fastest-growing segments.Jason Warnick, Chief Financial Officer of Robinhood (Photo: Robinhood)

Although Robinhood did not specify earnings from prediction markets, its Chief Financial Officer, Jason Warnick, said that prediction markets and Bitstamp together generated “approximately $100 million or more in annualised revenues.”

Overall, quarterly revenue and earnings came in at $1.27 billion and 61 cents per share, respectively, beating market expectations.

According to LSEG, analysts expected 53 cents per share in earnings on $1.19 billion in revenue. The San Francisco-headquartered broker also doubled its Q3 revenue year-over-year.

Robinhood generated $730 million in transaction-based revenue, a 129 per cent yearly increase, signalling strong trading activity on the platform.

Crypto Remains a Revenue Driver

Revenue from cryptocurrency trading quadrupled to $268 million, while options trading revenue rose 50 per cent to $304 million. Equities revenue also surged 132 per cent to $86 million.

The notional crypto trading volume on the platform reached $80 billion, split evenly between the Robinhood app and Bitstamp, which the broker acquired last year.

In addition to trading revenue, Robinhood earned $456 million from interest income, up 66 per cent. Revenue from other sources, including subscriptions, also doubled to $88 million. The number of Robinhood Gold subscribers reached 3.9 million.

Net income climbed to $556 million, representing a 271 per cent yearly rise, while diluted earnings per share increased 259 per cent.

“Q4 is off to a strong start in October, with record monthly trading volumes across equities, options, prediction markets, and futures, and new highs for margin balances,” Warnick said.

Meanwhile, the company announced that Warnick will retire next year, with Shiv Verma set to take over as CFO.