Robinhood (HOOD) Q3 2025: Prediction Markets Hit $300M Run Rate, Diversifying Revenue Base
Robinhood’s Q3 was defined by rapid product launches, record trading activity, and the emergence of prediction markets as a major revenue stream. New businesses are scaling quickly, with Bitstamp and prediction markets each surpassing $100 million annualized revenue, supporting a more diversified business model. Leadership signals continued investment in global expansion and new asset classes, even as cost discipline remains a core focus for 2026 planning.
Summary
- Prediction Markets Scale: New asset class reached $300 million run rate, driving business diversification.
- Active Trader Engagement: Record equity and options volumes underscore product velocity and customer stickiness.
- International and Institutional Push: Expansion beyond U.S. retail set to reshape revenue mix over the next decade.
Performance Analysis
Robinhood delivered a quarter of transformation, with revenue doubling and margins expanding as new products rapidly scaled. The company’s platform saw record engagement, with equity and options trading volumes hitting all-time highs and October setting new single-day and monthly records. Notably, prediction markets, a new product category launched less than a year ago, doubled volume every quarter to 2.3 billion contracts in Q3 and is tracking toward a $300 million run rate based on October activity.
Bitstamp, Robinhood’s first scaled institutional business, posted over 60% quarter-over-quarter volume growth, signaling traction in the institutional crypto segment. Interest-earning assets rose over 50% year-over-year, with margin and cash sweep balances reaching new highs as Robinhood attracted larger, more active customers. Securities lending revenue also hit a record, benefiting from increased IPO activity. On the cost side, adjusted operating expenses and share-based compensation came in higher than prior guidance, mainly due to performance-driven bonus accruals and a one-time CEO award vesting.
- Business Diversification Accelerates: Eleven business lines now exceed $100 million annualized revenue, reducing reliance on core trading.
- Gold Subscriber Growth: Robinhood Gold, premium membership, surpassed 3.9 million subscribers, up over 75% year-over-year, capturing nearly 40% of new customers.
- Net Deposits Surpass Records: Net deposits exceeded last year’s full-year record with a quarter still to go, reflecting deepening wallet share.
Momentum entering Q4 is strong across trading, prediction markets, and crypto, positioning Robinhood to sustain rapid growth while navigating higher investment in emerging verticals.
Executive Commentary
"Prediction markets reach that milestone in less than a year. It's our fastest in history. And it's already tracking towards a $300 million run rate based on October volumes. So just really, really going fast."
Jason Warnick, Chief Financial Officer
"Active traders, we want active traders to feel like they are at a disadvantage if they trade anywhere other than Robinhood. And we've rolled out a ton of great new products for active traders... Innovation like this really has the active trader engine humming."
Vlad Tenev, Chairman and CEO
Strategic Positioning
1. Prediction Markets as a Growth Engine
Robinhood’s rapid scaling of prediction markets—from launch to $300 million run rate in under a year—marks a decisive bet on nontraditional asset classes. The company leverages its large U.S. customer base and multi-asset infrastructure to integrate prediction markets alongside equities, options, crypto, and futures. Leadership views this as a major competitive moat, with ongoing expansion into new contract categories (sports, culture, economics) and a focus on user experience and discoverability.
2. Institutional and International Expansion
Bitstamp’s 60%+ quarter-over-quarter volume growth positions Robinhood as a credible player in institutional crypto, while tokenized equities and stock tokens in the EU (now over 400 available) lay groundwork for global product breadth. Management’s ten-year vision targets over half of revenue from outside the U.S. and a shift toward non-retail institutional clients, with M&A and organic launches both in play for new markets.
3. Wallet Share and Super App Ambitions
Assets on platform now exceed $330 billion, with retirement assets more than doubling in a year and Robinhood Gold Card holders growing 5x since January. The product roadmap emphasizes family and household financial management, aiming to capture inflows from the $120 trillion generational wealth transfer. The super app strategy extends to banking, credit cards, and soon trust and custodial accounts, enhancing customer lifetime value.
4. Lean Culture and Capital Allocation Discipline
Leadership stresses a “lean and disciplined” culture, aiming for profitable growth and high ROI on investments. Expense guidance for 2025 incorporates both performance-driven compensation and increased investment in new growth areas, with a stated goal of expanding margins even as revenue diversifies.
5. Technology and Product Velocity
Robinhood credits its general manager model and early AI adoption for increased product velocity, with a focus on customer service and engineering productivity. The upcoming AI event is positioned as a showcase for further innovation in these areas.
Key Considerations
This quarter’s results reflect Robinhood’s evolution from a single-product disruptor to a diversified financial platform with multiple high-growth engines. Investors should weigh both the upside from new business lines and the complexity of managing rapid expansion across products, geographies, and customer segments.
Key Considerations:
- Prediction Market Sustainability: Robinhood’s ability to maintain growth and defend market share as competition intensifies will be tested by new entrants and evolving regulatory scrutiny.
- Institutional and International Execution: Success in scaling Bitstamp and launching tokenized assets globally depends on integration, product innovation, and navigating cross-border regulatory regimes.
- Cost Structure Flexibility: Performance-driven bonus accruals and one-time CEO awards drove Q3 expenses above plan, highlighting the need for ongoing cost discipline as the business diversifies.
- Super App Monetization: The company’s push into banking and family financial services must translate into deeper wallet share and retention, not just breadth of offerings.
- Leadership Transition: CFO transition to Shiv Verma is positioned as continuity, but any deviation in capital allocation or margin discipline will be closely watched.
Risks
Robinhood faces regulatory uncertainty, especially as it expands into prediction markets, tokenized assets, and international markets. The company’s rapid product launches increase operational complexity and potential for execution missteps. Expense growth tied to performance and new investments, if not matched by profitable scaling, could pressure margins. Interoperability and liquidity fragmentation in tokenized equities remain unresolved, and competitive intensity is rising across all business lines.
Forward Outlook
For Q4, Robinhood guided to:
- Continued record-setting trading activity across equities, options, and prediction markets
- Ongoing strong net deposit momentum and step up in crypto volumes
For full-year 2025, management maintained guidance:
- Adjusted OpEx plus share-based compensation around $2.28 billion, with potential for variance based on business performance and investment pace
Management highlighted several factors that will shape results:
- Further investment in prediction markets, Robinhood Ventures, and international expansion
- Cost control in legacy businesses to fund new growth initiatives
Takeaways
Robinhood’s Q3 demonstrates the company’s transformation into a multi-asset, multi-segment platform with accelerating product velocity and deepening customer engagement.
- Prediction Markets and Bitstamp Lead Diversification: New business lines are scaling rapidly, reducing dependency on core trading and supporting a more robust revenue base.
- Active Trader and Wallet Share Gains: Record trading volumes and net deposits reflect strong engagement and success in capturing larger, more valuable customers.
- Execution in New Verticals and Geographies: Investors should monitor the pace and profitability of international and institutional expansion, as well as the ability to manage costs while funding innovation.
Conclusion
Robinhood’s third quarter underscores a strategic pivot toward business model diversification, with prediction markets and institutional crypto emerging as credible growth engines. While execution risks remain, the company’s product velocity, customer engagement, and disciplined capital allocation position it well for the next phase of expansion.
Industry Read-Through
Robinhood’s rapid scaling of prediction markets and tokenized assets signals growing investor appetite for alternative asset classes and real-time, multi-asset trading platforms. Competitors in brokerage, fintech, and crypto must respond to the convergence of retail, institutional, and global product demands. The emphasis on wallet share and super app functionality foreshadows a broader industry shift toward holistic financial ecosystems, while the operational challenges of cost discipline and regulatory navigation will be critical for all players seeking to replicate Robinhood’s trajectory.